Document:

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                                  EXHIBIT 10.15

                                PALL CORPORATION
                               PROFIT-SHARING PLAN

                   as amended and restated as of July 1, 1998

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                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

ARTICLE 1 - DEFINITIONS........................................................1

         1.1. "Accounts" or "Plan Accounts"....................................1

         1.2. "Affiliated Company".............................................1

         1.3. "Beneficiary"....................................................1

         1.4. "Break in Service"...............................................2

         1.5. "Code"...........................................................2

         1.6. "Committee"......................................................2

         1.7. "Company"........................................................2

         1.8. "Compensation"...................................................2

         1.9. "Compensation Limit".............................................2

         1.10. "Designated Officer"............................................2

         1.11. "Disabled"......................................................3

         1.12. "Earnings"......................................................3

         1.13. "Employee"......................................................3

         1.14. "Employer"......................................................3

         1.15. "Employer Contribution Account".................................3

         1.16. "Employer Contributions"........................................3

         1.17. "ERISA".........................................................3

         1.18. "401(k) Contribution Account"...................................3

         1.19. "401(k) Contributions"..........................................3

         1.20. "401(k) Matching Account".......................................3

         1.21. "401(k) Matching Contributions".................................4

         1.22. "Highly Compensated Employee"...................................4

         1.23. "Hours of Service"..............................................4

         1.24. "Leave".........................................................6

         1.25. "Member"........................................................6

         1.26. "Mutual Fund"...................................................6

         1.27. "Normal Retirement Age".........................................6

                                      -i-
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         1.28. "Pall Stock Fund"...............................................6

         1.29. "Plan"..........................................................6

         1.30. "Plan Year".....................................................6

         1.31. "Reemployment Commencement Date"................................6

         1.32. "Rollover Account"..............................................6

         1.33. "Service".......................................................7

         1.34. "Termination of Service"........................................7

         1.35. "Trust".........................................................7

         1.36. "Trust Agreement"...............................................7

         1.37. "Trust Fund"....................................................7

         1.38. "Trustee".......................................................7

         1.39. "Vested Portion"................................................7

         1.40. "Voluntary Contribution Account"................................9

         1.41. "Voluntary Contributions".......................................9

         1.42. "Years of Service"..............................................9

ARTICLE 2 - PURPOSE, ELIGIBILITY AND PARTICIPATION.............................9

         2.1. Purpose..........................................................9

         2.2. Eligibility......................................................9

         2.3. Commencement of Membership.......................................9

         2.4. Membership After Reemployment...................................10

ARTICLE 3 - CONTRIBUTIONS AND ROLLOVERS.......................................10

         3.1. 401(k) Contributions............................................10

         3.2. Voluntary Contributions.........................................11

         3.3. Elections.......................................................11

         3.4. Employer Contributions..........................................12

         3.5. 401(k) Matching Contributions...................................13

         3.6. Time and Manner.................................................13

         3.7. Rollovers.......................................................14

                                      -ii-
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ARTICLE 4 - LIMITATIONS ON CONTRIBUTIONS......................................15

         4.1. Dollar Limit for 401(k) Contributions...........................15

         4.2. Nondiscrimination Limit for 401(k) Contributions................15

         4.3. Nondiscrimination Limit for Voluntary and 401(k) Matching
                Contributions.................................................15

         4.4. Special Rules for Nondiscrimination Limits......................16

         4.5. Deduction Limit.................................................17

         4.6. Section 415 Limits..............................................17

         4.7. Adjustments.....................................................19

         4.8. Corrective Distributions........................................19

         4.9. Other Rules.....................................................22

ARTICLE 5 - PLAN ACCOUNTS, ALLOCATIONS AND FORFEITURES........................22

         5.1. Plan Accounts...................................................22

         5.2. Forfeitures.....................................................23

ARTICLE 6 - INVESTMENTS AND EARNINGS..........................................24

         6.1. Investment of Accounts..........................................24

         6.2. Investment Elections............................................25

         6.3. Determination of Earnings.......................................27

         6.4. Voting Rights...................................................28

ARTICLE 7 - DISTRIBUTIONS, WITHDRAWALS AND LOANS..............................28

         7.1. Distributions...................................................28

         7.2. Hardship Withdrawals............................................31

         7.3. In-Service Withdrawals..........................................33

         7.4. Direct Rollovers................................................33

         7.5. Loans...........................................................34

ARTICLE 8 - PLAN ADMINISTRATION...............................................37

         8.1. Responsibility for Administering the Plan.......................37

         8.2. Responsibilities of the Committee...............................37

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         8.3. Duties and Powers of the Committee..............................38

         8.4. Reimbursement and Indemnification of the Committee..............39

         8.5. Responsibilities of the Trustee.................................40

         8.6. Responsibilities of the Company's Board of Directors............40

         8.7. Claims Procedure................................................40

         8.8. Agent for Service of Process....................................41

         8.9. Expenses........................................................41

ARTICLE 9 - AMENDMENT, MERGER AND TERMINATION.................................41

         9.1. Amendment.......................................................41

         9.2. Merger or Consolidation.........................................41

         9.3. Termination.....................................................42

         9.4. Termination of An Employer's Participation in the Plan..........43

ARTICLE 10 - TOP-HEAVY PROVISIONS.............................................44

         10.1. General........................................................44

         10.2. Minimum Benefit................................................44

         10.3. Minimum Vesting................................................45

         10.4. Maximum Compensation...........................................45

         10.5. Section 415 Limits.............................................45

         10.6. Definitions....................................................45

         10.7. Applicability..................................................47

ARTICLE 11 - SPECIAL RULES FOR GELMAN EMPLOYEES...............................47

         11.1. In General.....................................................47

         11.2. Transfer of Employment to Gelman...............................47

         11.3. Transfer of Employment From Gelman to an Employer..............48

         11.4. Plan Loans.....................................................49

         11.5. Article Ceases to Apply........................................49

ARTICLE 12 - MISCELLANEOUS....................................................49

         12.1. Plan Assets to be Held for Exclusive Benefit of Members........49

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         12.2. Nonassignability of Rights.....................................50

         12.3. Qualified Domestic Relations Orders............................50

         12.4. Military Leaves of Absence.....................................50

         12.5. Trust Fund as Sole Source of Benefit Payments..................50

         12.6. Right to Employment............................................50

         12.7. Gender and Number..............................................51

         12.8. Titles.........................................................51

         12.9. Notifications..................................................51

                                      -v-
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                                PALL CORPORATION
                               PROFIT-SHARING PLAN

                                    Foreword

         This document sets forth the Pall Corporation Profit-Sharing Plan, as
amended and restated as of July 1, 1998.

         Amendments to the following Plan sections that reflect the acquisition
of Gelman Sciences, Inc. and the merger of the Plan with the Gelman Sciences
401(k) Savings Plan are effective January 1, 1999: 1.38(d), 7.1(b), 7.1(f), 7.2,
7.2(b), 7.3(a), 7.3(b), 7.5(b), 7.5(n), 7.5(o), 11.5. Amendments to the
following Plan provisions that reflect the elimination of various forms of
benefits from the Gelman Sciences 401(k) Savings Plan and the Filtron Technology
Corporation 401(k) Savings Plan are effective January 1, 2002: 7.1(b), 7.1(f).

         Amendments to the following Plan sections that reflect the 401(k)
Matching Contribution feature are effective January 1, 1999: 1.20, 1.21,
1.38(a), 3.4, 3.5, 3.6, 4.3, 4.6(c), 4.6(d), 4.8, 4.8(d), 5.1, 6.2(c), 6.2(f),
7.5(b).

         Amendments to the following Plan sections that reflect changes to the
Investment Options listed in Section 6.1 are effective as follows: 6.1(d)-(f),
effective June 1, 1998; 6.1(i)-(m), effective June 1, 1999; 6.1(n), effective
October 16, 2000; 6.1(o)-(p), effective May 1, 2000; 6.2(f)(3), effective
October 15, 2001.

         Amendments to the following Plan sections that reflect telephonic
and/or electronic administration of the Plan are effective July 1, 1998 as
follows: 3.3 amendments apply to any deferral elections, and to any changes and
termination of deferral elections, made on and after such date; 7.1 amendments
apply to any Participant who terminates employment on or after such date; 6.2
amendments apply to any election made on or after such date.

         Amendments to the following Plan sections that reflect the provisions
of the Small Business Job Protection Act are effective as follows, except as
otherwise indicated in the text of the Plan: 1.22, 4.2, 4.3, 4.8(c), effective
January 1, 1997; 1.8, effective January 1, 1998, 12.4, effective January 1,
1995. Amendments to the following Plan sections that reflect provisions of the
Taxpayer Relief Act of 1997 are effective as follows: 7.1(c) (increase in
cashout threshold), effective January 1, 1998, 7.1(c) (elimination of the
"lookback rule"), effective for distributions after March 22, 1999.

         The amendments to Section 7.5 of the Plan apply to any loans made on or
after July 1, 1998.

         The amendment to Section 7.2(d) in connection with the establishment of
the Employee Stock Purchase Plan is effective November 1, 1999.

                                      -vi-
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         The amendments to Section 7.1(e)(2) and (3) are effective for
distributions on or after January 1, 2001.

         Each other amendment to the Plan reflected in this document is
effective January 1, 1998, except as otherwise indicated in the text of the
Plan.

         The rights under the Plan of any person who retired or otherwise
terminated employment with his or her employer before the effective date of a
particular amendment shall be determined solely under the terms of the Plan as
in effect on the date of his or her retirement or other termination of
employment, without regard to such amendment.

                                     -vii-
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                            ARTICLE 1 - DEFINITIONS

         As used herein, the following terms shall have the following meanings,
unless a different meaning is required by the context:

         1.1. "Accounts" or "Plan Accounts" - shall mean the separate accounts
established and maintained for a Member pursuant to Section 5.1.

         1.2. "Affiliated Company" shall mean (a) the Company, (b) any
corporation which is treated, under section 414(b) of the Code, as a member of a
controlled group of corporations of which the Company is also a member; (c) any
trade or business (whether or not incorporated) which is treated, under section
414(c) of the Code, as belonging to a group of trades or businesses under common
control, and which includes the Company; or (d) any other entity which, under
section 414(m) or 414(o) of the Code, is included, along with the Company, in a
group of employers, the employees of which are treated as employed by a single
employer. For purposes of Section 4.6(a), the preceding sentence shall be
applied by taking into account the requirement of section 415(h) of the Code.

         1.3. "Beneficiary" - shall mean the person or persons designated by a
Member to receive any amount distributable under Section 7.1 by reason of his
death, as indicated in the last written designation of a Beneficiary filed by
such Member with the Committee, on a form furnished by the Committee for such
purpose, prior to such Member's death.

         Notwithstanding the foregoing, if a Member who was married at the date
of his death, and who had been married to his spouse throughout the one-year
period ending on the date of his death, had designated any person other than
such spouse as his Beneficiary, such Member shall be deemed to have failed to
designate a Beneficiary unless such spouse consents to the designation of such
non-spouse Beneficiary. Said spousal consent shall be made in writing, shall
specifically identify the person designated as the Member's Beneficiary, and
shall acknowledge the effect of the spouse's consent to such designation on her
rights to benefits under the Plan. Further, such consent shall be signed by the
spouse, witnessed by a notary public and filed with the Committee. The consent
of a spouse to any designation of a non-spouse Beneficiary shall be irrevocable
as to such designation, and shall be effective only with respect to that spouse.
However, the consent of a Member's spouse to the Member's designation of a
non-spouse Beneficiary shall not be required if it is established to the
satisfaction of the Committee that such consent cannot be obtained because there
is no spouse, because the spouse cannot be located, or because of such other
circumstances as may be prescribed in the applicable Treasury regulations or in
rulings or notices issued by the Internal Revenue Service.

         If a Member has failed (or is deemed above to have failed) to designate
a Beneficiary, or if no Beneficiary designated by him survives to receive any
amount distributable hereunder upon the Member's death, the following person or
persons will be deemed to be such Member's Beneficiary with priority in the
order named: (a) his spouse; and (b) his estate.

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         1.4. "Break in Service" - shall mean a period consisting of one or more
consecutive Plan Years during each of which an Employee has not completed more
than 500 Hours of Service. A "5-Year Break in Service" shall mean a Break in
Service which includes five or more consecutive Plan Years during each of which
the Employee has not completed more than 500 Hours of Service.

         1.5. "Code" - shall mean the Internal Revenue Code of 1986, as amended
from time to time.

         1.6. "Committee" - shall mean the committee established by the Board of
Directors of the Company under Section 8.6(b) to control and manage the
operation and administration of the Plan.

         1.7. "Company" - shall mean Pall Corporation.

         1.8. "Compensation" - An Employee's Compensation, for any Plan Year,
shall mean the sum, for such Plan Year, of (a) the amount of the Employee's
gross income reported on Form W-2 by his Employer and (b) the 401(k)
Contributions and any before-tax elective contributions to a Code section 125
"cafeteria plan" made on behalf of the Employee by his Employer, and (c) after
December 31, 2000, amounts, if any, not includable in the Employee's gross
income by reason of section 132(f)(4) of the Code; provided, however, that for
purposes of Section 3.4, for any Plan Year, an Employee's Compensation shall
mean the sum, for such Plan Year, of the base pay, prior to reduction for the
amounts described in clause (b) above, bonuses and overtime pay paid by the
Employer to the Employee during the taxable year of the Employer which ends in
such Plan Year; and, provided further that in no case shall an Employee's
Compensation include any amount paid to the Employee as a severance benefit
without regard to the form or payment method of such severance.

         In addition to the foregoing, (1) an Employee's Compensation for any
Plan Year shall, except for purposes of Section 3.4, include any amount which is
described above, but which is paid or provided to, or on behalf of, the Employee
during such Plan Year by an entity which is not an Employer, but which is an
Affiliated Company, and (2) Compensation shall exclude any premium paid to any
Employee for service with a non-U.S. Affiliated Company.

         For any Plan Year, the amount of Compensation taken into account under
the Plan for any Employee shall not exceed the Compensation Limit in effect for
such Plan Year.

         1.9. "Compensation Limit" shall mean, for any Plan Year, $160,000, as
increased by the cost-of-living adjustment, if any, in effect for such Plan Year
under section 401(a)(17)(B) of the Code.

         1.10. "Designated Officer" shall mean any Member who is either (a) the
Corporate Secretary of the Company or (b) required to file reports with the
Securities Exchange Commission under section 16 of the Securities Exchange Act
of 1934.

                                      -2-
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         1.11. "Disabled" - The term "Disabled" shall have the meaning assigned
to it under section 72(m)(7) of the Code.

         1.12. "Earnings" - shall mean the Earnings attributable to the
investment of a Member's 401(k) Contribution Account, Voluntary Contribution
Account, Employer Contribution Account or Rollover Account, as determined under
Section 6.3 hereof.

         1.13. "Employee" - shall mean any individual who is employed by an
Employer as a common law employee. The term "Employee" shall not include any
individual who is (a) a "leased employee" within the meaning of section
414(n)(2) of the Code, (b) a non-employee consultant or independent contractor
who is not paid from the Employer's payroll, or (c) a Contract Worker as
hereinafter defined. A "Contract Worker" shall mean any person who provides
services to an Employer pursuant to a written agreement between the Employer and
any entity that is not one of the Affiliated Companies, unless the agreement
pursuant to which such person provides services to any Employer specifically
provides for such person to be covered under this Plan or under a program of
employee benefits maintained by such Employer that includes this Plan. A person
who is a Contract Worker, as so defined, shall be treated as a Contract Worker
for purposes of this Plan, notwithstanding any determination by any court or
administrative agency that such person is properly classified as a common law
employee of an Employer, rather than as an independent contractor.

         1.14. "Employer" - shall mean the Company or any Affiliated Company
which has
         adopted this Plan.

         1.15. "Employer Contribution Account" - shall mean the separate account
established and maintained for a Member under Section 5.1 to hold Employer
Contributions and the Earnings thereon.

         1.16. "Employer Contributions" - shall mean the contributions described
in Section 3.4.

         1.17. "ERISA" - shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time.

         1.18. "401(k) Contribution Account" - shall mean the separate account
established and maintained for a Member under Section 5.1 to hold 401(k)
Contributions and the Earnings thereon.

         1.19. "401(k) Contributions" - shall mean the contributions described
in Section 3.1.

         1.20. "401(k) Matching Account" - shall mean the separate account
established and maintained for a Member under Section 5.1 to hold 401(k)
Matching Contributions and Earnings thereon.

                                      -3-
<PAGE>

         1.21. "401(k) Matching Contributions" - shall mean the contributions
described in Section 3.5.

         1.22. "Highly Compensated Employee" - shall mean, for any Plan Year,
any individual who is in Service during such Plan Year, and who either:

         (a) was, at any time during such Plan Year or the immediately preceding
Plan Year, a five-percent owner, within the meaning of section 414(q)(2) of the
Code, of any Affiliated Company, or

         (b) for the immediately preceding Plan Year (1) had Compensation in
excess of $80,000, as increased by the cost-of-living adjustment, if any, in
effect for such preceding year under section 414(q)(1) of the Code, and (2) was
in the top-paid group of employees, within the meaning of section 414(q)(3) of
the Code.

         1.23. "Hours of Service" - an Employee shall be credited with Hours of
Service in accordance with the following rules:

         (a) Work Performed. An Employee shall be credited with one Hour of
Service for each hour for which he is paid, or entitled to payment, by an
Affiliated Company for the performance of duties for such company.

         (b) Paid Absences. An Employee shall be credited with one Hour of
Service for each hour for which he is paid, or entitled to payment, by an
Affiliated Company for a period of time during which no duties are performed by
him (irrespective of whether the employment relationship has terminated) due to
vacation, holiday, illness, incapacity (including Disability), lay-off, jury
duty or military duty. For this purpose, a payment shall be deemed to be made by
or due from an Affiliated Company regardless of whether such payment is made by
or due from such company directly, or indirectly through, among others, a trust
fund, insurer, or other entity to which such company contributes or pays
premiums and regardless of whether contributions made or due to the trust fund,
insurer or other entity are for the benefit of particular Employees or are on
behalf of a group of Employees in the aggregate. However, no Hours of Service
shall be credited hereunder with respect to (1) hours for which an Employee
receives payment under a plan maintained solely for the purpose of complying
with applicable workmen's compensation, unemployment compensation, or disability
insurance laws, or (2) hours for which an Employee receives a payment which
solely reimburses him for medical or medically-related expenses incurred by him.
No more than 501 Hours of Service shall be credited hereunder to an Employee on
account of any single continuous period during which he performs no duties
whether or not such period occurs within a single Plan Year.

         (c) Back Pay. An Employee shall be credited with one Hour of Service
for each hour for which back pay, irrespective of mitigation of damages, is
awarded or agreed to by an Affiliated Company. However, no Hours of Service
shall be credited hereunder if they are credited to the Employee under
subsection (a) or (b) above. Furthermore, crediting of Hours of Service
hereunder for periods described in subsection (b) above shall be subject to the
limitations therein set forth.

                                      -4-
<PAGE>

         (d) Special Rules for Crediting Hours of Service. Hours of Service to
be credited under subsection (b) above, and the periods to which Hours of
Service are to be credited under subsections (a), (b) and (c) above, shall be
determined under the rules set forth in ss.2530.200b-2(b) and (c) of the
regulations issued by the U.S. Department of Labor, as the same may be amended
from time to time.

         (e) Paid Leave. In the case of any Employee who incurs any paid Leave,
the Employee shall be credited, for the period during which he is on such Leave,
with the number of Hours of Service which otherwise normally would have been
credited to such Employee for such period under the Plan but for such Leave, as
determined by the Committee. However, no Hours of Service shall be credited
under this subsection (e) if they are credited to the Employee under subsection
(b) above.

         (f) Employees Exempt From the Fair Labor Standards Act. In the case of
any Employee who is not covered by the Fair Labor Standards Act, in lieu of
being credited with Hours of Service in the amount and in the manner described
in subsections (a) through (e) above, such Employee shall be credited with 45
Hours of Service for each week for which he would otherwise be credited with at
least one Hour of Service under subsections (a) through (e) above.

         (g) Maternity or Paternity Absence. Solely for purposes of determining
whether an Employee has incurred a Break in Service by reason of a Maternity or
Paternity Absence, such Employee shall be credited, during such absence, with
the same number of Hours of Service which otherwise normally would have been
credited to such Employee but for such absence, as determined by the Committee.
Notwithstanding the foregoing, the total number of hours so credited by reason
of any such Maternity or Paternity Absence shall not exceed 501 hours. Hours to
be credited hereunder shall be credited only in the Plan Year in which the
Maternity or Paternity Absence begins, if the Employee would be prevented from
incurring a Break in Service in such Plan Year solely because of the operation
of this subsection (g); otherwise, such Hours of Service shall be credited in
the immediately following Plan Year. For purposes of this subsection (g),
Maternity or Paternity Absence shall mean any period during which an Employee is
absent from work by reason of the Employee's pregnancy, the birth of a child of
the Employee, the placement of a child with the Employee in connection with the
Employee's adoption of such child, or the Employee's providing care for such
child for a period beginning immediately following such birth or placement. This
subsection (g) shall not apply to any Maternity or Paternity absence which is a
paid Leave.

         (h) FMLA Absence. Solely for purposes of determining whether an
Employee has incurred a Break in Service by reason of a leave of absence taken
under the Family Medical Leave Act of 1993 (an "FMLA Absence"), such Employee
shall be credited, for the period during which he is taking the FMLA Absence,
with the same number of Hours of Service which otherwise normally would have
been credited to such Employee but for such absence, as determined by the
Committee. This subsection (h) shall not apply to any FMLA Absence which is a
paid Leave.

                                      -5-
<PAGE>

         (i) Asset and Stock Acquisitions. In computing Hours of Service (and
Years of Service), to the extent determined by the Committee, any service
performed by an individual as an employee of a former employer (which is not
otherwise required to be taken into account under the Plan) shall be taken into
account under the Plan if such individual became an Employee:

                  (1) in connection with the acquisition of the assets of the
         former employer by his Employer;

                  (2) in connection with the acquisition of the stock of the
         former employer by, and the merger of the former employer with and
         into, his Employer;

                  (3) by the transfer of his employment to his Employer after
         the former employer became an Affiliated Company.

         1.24. "Leave" - shall mean any period during which an Employee is
absent pursuant to an authorized leave of absence, approved by his Employer on a
non-discriminatory basis under rules uniformly applicable to all of its
Employees which are similarly situated, for a period not to exceed two years.

         1.25. "Member" - shall mean (a) any Employee on January 1, 1998 who was
participating in the Plan on December 31, 1997 and (b) any other Employee whose
membership in the Plan commences, or resumes, on or after January 1, 1998. An
Employee who is or becomes a Member, as so defined, shall cease to be a Member,
as that term is used herein, on the date which is the later of (1) the date on
which he incurs a Termination of Service or (2) the date on which there is no
balance to his credit in his Plan Accounts.

         1.26. "Mutual Fund" - shall mean any fund or portfolio maintained by
any open-end investment company registered under the Investment Company Act of
1940.

         1.27. "Normal Retirement Age" - shall mean age 65.

         1.28. "Pall Stock Fund" - shall mean the investment fund established,
maintained and managed by the Trustee pursuant to the Trust Agreement the assets
of which are invested primarily in shares of common stock of Pall Corporation.

         1.29. "Plan" - shall mean the Pall Corporation Profit-Sharing Plan, as
set forth in this document and as the same may be amended from time to time.

         1.30. "Plan Year" - shall mean the calendar year.

         1.31. "Reemployment Commencement Date" - shall mean the date on which
an Employee first performs an Hour of Service upon his return to Service with an
Employer after a Termination of Service.

         1.32. "Rollover Account" - shall mean the separate account established
and maintained for a Member under Section 5.1 to hold Rollover Contributions and
the Earnings thereon.

                                      -6-
<PAGE>

         1.33. "Service" - shall mean employment with an Employer or any other
Affiliated Company.

         1.34. "Termination of Service" - An Employee shall be treated as having
incurred a Termination of Service on the first date as of which he is no longer
in the employ of any Employer or any other Affiliated Company. An Employee shall
not be treated as having incurred a Termination of Service as a result of his
absence from work unless such absence is due to his resignation, discharge,
retirement or death. However, an Employee who is on a Leave shall be treated as
having incurred a Termination of Service (and as having ceased to be an
Employee) (a) as of the expiration of such Leave, unless prior to such
expiration he resumes his active employment with his Employer, or (b) at such
earlier time as he notifies his Employer, in writing, that he does not intend to
resume his active employment with the Employer at the expiration of such Leave.

         1.35. "Trust" - shall mean the trust, created pursuant to a trust
agreement between the Company and the Trustee, which holds the assets of the
Plan.

         1.36. "Trust Agreement" - shall mean the agreement, between the Company
and the person named as trustee therein, setting forth the provisions of the
trust associated with this Plan.

         1.37. "Trust Fund" - shall mean the assets of the Plan held in trust,
pursuant to the Trust Agreement.

         1.38. "Trustee" - shall mean the person named as trustee in the Trust
Agreement.

         1.39. "Vested Portion" - shall mean the portion of a Member's Account
or Accounts in which the Member is vested, determined in accordance with the
rules set forth below.

         (a) Employer Contribution Account and 401(k) Matching Account. Except
as otherwise provided in this Section 1.39, a Member shall become vested in his
Employer Contribution Account and Matching Contributions made prior to January
1, 2002 to his 401(k) Matching Account in accordance with the schedule below:

                Years of Service           Vested Percentage
                ----------------           -----------------
                  less than 5                       0
                  5 or more                         100%

In the case of Matching Contributions made after December 31, 2001 to his 401(k)
Matching Account, a Member shall become vested in such contributions in
accordance with the schedule below:

                                      -7-
<PAGE>

                  Years of Service         Vested Percentage
                  ----------------         -----------------
                  less than 2                   0
                  2, but less than 3            20%
                  3, but less than 4            40%
                  4, but less than 5            60%
                  5 or more                     100%

         Notwithstanding the schedules above, a Member shall be 100% vested in
his Employer Contribution Account and his 401(k) Matching Account if while he is
in Service, he attains Normal Retirement Age or a higher age, dies or becomes
Disabled.

         (b) Fully Vested Plan Accounts. A Member shall, at all times, be 100%
vested in his 401(k) Contribution Account, Voluntary Contribution Account,
Rollover Account, RAI Transfer Account and Filtron Transfer Account.

         (c) Pall Well Technology. A Member who was employed at the Pall well
technology division on July 27, 1995, and incurred a Termination of Service
after such date shall be 100% vested in his Employer Contribution Account as of
such date.

         (d) Gelman Transfer Account. A Member who is a former employee of
Gelman Sciences, Inc. and whose account balance under the Gelman Sciences 401(k)
Savings Plan was transferred to a Gelman Transfer Account maintained under the
Plan, shall be 100% vested at all times in the Tax-Deferred Contributions,
Rollover Contributions and After-Tax Contributions Sub-Accounts of his Gelman
Transfer Account and shall vest in the Matching Contributions Sub-Account of his
Gelman Transfer Account in accordance with the schedule below.

           Years of Service with Gelman
           Sciences and the Company                   Vested Percentage
           ------------------------                   -----------------
           less than 1 year                                  0
           at least 1 year, but less than 2 years            20%
           at least 2 years, but less than 3 years           40%
           at least 3 years, but less than 4 years           60%
           at least 4 years, but less than 5 years           80%
           5 years or more                                   100%

         Notwithstanding the schedule above, a Member shall be 100% vested in
the Matching Contributions Sub-Account of his Gelman Transfer Account if while
he is in Service, he attains Normal Retirement Age or a higher age, dies or
becomes Disabled.

         (e) Oiltools Employees. A Member who was employed by the Company on
March 30, 1999, and who incurred a Termination of Service after such date to
become immediately thereafter an employee of Oiltools, Inc. shall be 100% vested
in his Employer Contribution Account and 401(k) Matching Account as of such
date.

                                      -8-
<PAGE>

         1.40. "Voluntary Contribution Account" - shall mean the separate
account established and maintained for a Member under Section 5.1 to hold
Voluntary Contributions and the Earnings thereon.

         1.41. "Voluntary Contributions" - shall mean the contributions
described in Section 3.2.

         1.42. "Years of Service" - An Employee's Years of Service shall be
determined in accordance with the following rules:

         (a) General Rule. An Employee's Years of Service shall mean the number
of Plan Years in each of which the Employee has completed at least 1,000 Hours
of Service.

         (b) Break in Service. In determining an Employee's Years of Service
under subsection (a) as of any date after he has returned to Service after
incurring a Break in Service, his Years of Service prior to such break shall not
be taken into account if (1) he did not have any balance to his credit in the
Vested Portion of his Accounts at the time such break commenced and (2) such
break was a 5-Year Break in Service.

         (c) Pre-1997 Employment. Notwithstanding the foregoing, an individual
who was an Employee on any date prior to January 1, 1997 shall not have fewer
Years of Service than he or she would have had under the provisions of the Plan
that were in effect on December 31, 1996.

               ARTICLE 2 - PURPOSE, ELIGIBILITY AND PARTICIPATION

         2.1. Purpose. This Plan is intended to qualify as a cash or deferred
defined contribution profit sharing plan under sections 401(a), 401(k) and
401(m) of the Code. Pursuant to section 401(a)(27) of the Code, the Plan is
intended to constitute a profit sharing plan under which contributions may be
made by the Employer whether or not the Employer has current or accumulated
profits.

         2.2. Eligibility. An Employee shall be eligible for membership in the
Plan if:

         (a) he is employed on a full-time basis, or he has completed, or is
expected to complete, at least 1,000 Hours of Service during any 12-consecutive
month period;

         (b) he has completed at least 30 consecutive days of Service;

         (c) his principal place of employment is not Puerto Rico; and

         (d) he is not covered under a collective bargaining agreement, unless
such agreement specifically provides for his participation in this Plan.

         2.3. Commencement of Membership. An Employee shall commence membership
in the Plan on the first day of the month coincident with or next following the
day on which he first meets each of the requirements of Section 2.2.

                                      -9-
<PAGE>

         2.4. Membership After Reemployment. An Employee who incurs a
Termination of Service, and who thereafter returns to Service, shall (a) if he
had become a Member prior to such Termination of Service, resume membership in
the Plan as of his Reemployment Commencement Date, or (b) if he is not described
in clause (a), commence membership as of the first day of the month coincident
with or next following the date on which he first meets each of the conditions
for eligibility set forth in Section 2.2 after his Reemployment Commencement
Date.

                    ARTICLE 3 - CONTRIBUTIONS AND ROLLOVERS

         3.1. 401(k) Contributions.

         (a) Subject to the limitations contained in Article 4, a Member may
elect to (1) have his Compensation for each pay period within the Plan Year
reduced by an amount equal to (i) any percentage thereof which is not less than
1% or greater than 15% for Plan Years prior to 2002 and 50% for Plan Years after
2001, and which is an integral multiple of 1% or (ii) a specific dollar amount
which, when aggregated with all other amounts by which Compensation is reduced
under this Section 3.1(a) during such Plan Year, is not greater than 15% of his
Compensation for such Plan Year occurring before 2002 and 50% of his
Compensation for such Plan Year occurring after 2001, and (2) have such amount
contributed by his Employer to the Plan on his behalf. The contributions made to
the Plan on behalf of a Member under this Section 3.1 shall be referred to
herein as "401(k) Contributions".

         (b) A Member who makes 401(k) Contributions pursuant to Section 3.1(a),
and who has attained or shall attain age 50 before the end of the calendar year
for which such contributions are made, may make additional 401(k) Contributions
in accordance with the rules set forth in this Section 3.1(b) and section 414(v)
of the Code in Plan Years after 2001. The contributions made to the Plan on
behalf of such a Member under this Section 3.1(b) shall be referred to herein as
"Catch-up Contributions."

                  (1) Dollar Limit. In any Plan Year, the total amount of
         Catch-up Contributions made on behalf of any Member to the Plan and any
         other plan of the Employer that is aggregated with this Plan for
         purposes of complying with Section 3.1(a) or Section 4.6 shall not
         exceed the dollar limit indicated below for such year:

            Plan Year                     Dollar Limit
            ---------                     ------------
            2002                          $1,000
            2003                          $2,000
            2004                          $3,000
            2005                          $4,000
            2006                          $5,000
            Years after 2006 $5,000       subject to cost-of-living adjustments

                                      -10-
<PAGE>

                  (2) Conditions. Notwithstanding any other provision of the
         Plan to the contrary, no 401(k) Contribution shall be determined to be
         a Catch-up Contribution unless the Member making such contribution
         shall have made the maximum amount of 401(k) Contributions that he or
         she may make pursuant to Sections 3.1(a), 4.1, 4.2, or 4.6.

         3.2. Voluntary Contributions. Subject to the limitations contained in
Article 4, a Member may elect to contribute to the Plan, by payroll deduction,
for each pay period within the Plan Year an amount equal to (a) any percentage
of his Compensation, after reduction for 401(k) Contributions, for the pay
period which is not less than 1% or greater than 10%, and which is an integral
multiple of 1% or (b) a specific dollar amount which, when aggregated with all
other amounts contributed by the Member under this Section 3.2 during such Plan
Year, is not greater than 10% of his Compensation, after reduction for 401(k)
Contributions, for such Plan Year. However, the percentage of Compensation the
Member elects to contribute to the Plan for any pay period under clause (a) of
the preceding sentence, when aggregated with the percentage of Compensation the
Member elects to have contributed to the Plan on his behalf for such pay period
under clause (1)(i) of Section 3.1(a), cannot exceed 15% of Compensation for
such pay period; and the specific dollar amount the Member elects to contribute
to the Plan for any Plan Year pursuant to clause (b) of the preceding sentence,
when aggregated with his 401(k) Contributions for such Plan Year, cannot exceed
15% of Compensation for such Plan Year. The maximum contribution limits set
forth in the preceding sentences of this Section 3.2 shall be in effect for Plan
Years after 2001, except that the 10% limitations in the second preceding
sentence and the 15% limitations in the preceding sentence shall be increased to
50%. The contributions that a Member elects to make to the Plan under this
Section shall be referred to herein as "Voluntary Contributions".

         3.3. Elections. The elections that a Member may make under Sections 3.1
and 3.2, and any change in or termination of such elections, shall be made in
accordance with the following rules:

         (a) Any election, and any change in or termination of any election,
shall be made in writing, on a form provided by the Committee for such purpose,
and filed with the Committee or with any person designated by the Committee to
receive such filings. Notwithstanding the foregoing, if the Committee so permits
(and subject to such rules as the Committee may have promulgated), any Member
may use the telephone service or electronic media made available by the Trustee
to communicate directly to the Trustee any election, or any change in or
termination of an election. The Member shall be provided with a written
confirmation of any election so made, or any change in or termination of an
election so made, in the manner provided in any written agreement between the
Committee and the Trustee.

         (b) A Member's initial election under Section 3.1 or 3.2 shall become
effective as soon as practicable after it has been made. Any election, or change
therein, shall remain in effect until such election is changed or terminated as
hereinafter provided.

                                      -11-
<PAGE>

         (c) A Member may, at any time, change his election so as to increase or
decrease the amount of 401(k) Contributions or Voluntary Contributions, as
applicable, to be contributed to the Plan by him or on his behalf. Any such
change in election shall become effective as soon as practicable after it has
been made.

         (d) A Member may terminate his election under Section 3.1 or 3.2 at any
time. Such termination of election shall become effective as soon as practicable
after it has been made. A Member who terminates an election under Section 3.1 or
3.2 may thereafter make a new election under Section 3.1 or 3.2 at any time.
Such new election shall become effective as soon as practicable after it has
been made.

         (e) A Member's elections under Sections 3.1 and 3.2 shall cease to be
effective upon, and no contribution shall be made by or on behalf of a Member
after, the close of the pay period in which he incurs a Termination of Service.

         3.4. Employer Contributions. Subject to the limitations contained in
Article 4, for each Plan Year, the Employers shall contribute to the Plan, in
addition to the 401(k) Contributions, an amount determined below.

         For each Plan Year, the Employers shall contribute to the Plan under
this Section 3.4 an amount which is equal to (a) the excess, if any, of (1)
7-1/2% of the combined "Net Earnings" for such Plan Year of all Employers over
(2) $500,000, less (b) the sum of (1) all forfeitures arising under Section
5.2(a) during such Plan Year, other than those applied to restore any
forfeitures under Section 5.2(b), (2) the expenses of administering the Plan and
Trust for such Plan Year, other than those paid out of the Trust Fund in
accordance with Section 8.9, (3) any amounts set aside, and any payments made,
by the Employers, for such Plan Year, under the Pall Corporation Supplementary
Profit-Sharing Plan, and (4) the aggregate amount of all 401(k) Matching
Contributions paid to the Plan for the fiscal year of the Employer that ends
within such Plan Year.

         Notwithstanding the preceding paragraph, the Board of Directors of the
Company reserves the right with respect to any Plan Year to direct the
Employers, by action taken no later than five and one-half months after the
close of such Plan Year, to make to the Plan under this Section 3.4 (i) no
contribution, (ii) a contribution in any amount less than the amount required to
be contributed under the preceding paragraph, or (iii) a contribution in any
amount greater than the excess of 7-1/2% of the combined Net Earnings for such
Plan Year of all Employers over $500,000.

                                      -12-
<PAGE>

         For purposes of this Section 3.4, the "Net Earnings" of an Employer for
any Plan Year shall be the net earnings and profits of such Employer for its
taxable year ending within such Plan Year, as determined by the accountants
employed by the Employer in accordance with generally accepted accounting
principles, before deducting any contributions to the Plan, any capital losses
and any taxes upon or with respect to income, but after deducting capital gains,
income from investments and any contributions to any employee benefit plan other
than the Plan. Solely for the purpose of determining the combined Net Earnings
of all Employers, each subsidiary of the Company which was incorporated in the
United States, is not otherwise an Employer, and, prior to 1999, had not adopted
the Gelman Sciences 401(k) Savings Plan shall be treated as an Employer.

         A Member shall be entitled to share in the allocation of the Employers'
contribution under this Section 3.4 for a Plan Year if (A) as of the first day
of such year, he had been in Service for at least six consecutive months and had
attained age 20 1/2 and (B) either (x) he is employed by any Employer or other
Affiliated Company on the last day of such year, (y) during such year, he
incurred a Termination of Service after attaining Normal Retirement Age or by
reason of death or disability or (z) he incurred a Termination of Service after
July 31 of such year, and the reason for such termination, as indicated on the
Employers' records, is "retirement" (Code 12). The Employers' contribution for a
Plan Year under this Section 3.4 shall be allocated to each Member entitled to
share therein in the proportion that each such Member's Compensation for such
Plan Year bears to the aggregate amount of Compensation of all such Members for
such Plan Year. Contributions made to the Plan under this Section 3.4 shall be
referred to herein as "Employer Contributions".

         3.5. 401(k) Matching Contributions. Subject to the limitations in
Article 4, for each Plan Year, the Employers shall contribute to the Plan, in
addition to Employer Contributions and 401(k) Contributions, an amount which is
equal to 100% of each Member's 401(k) Contributions not in excess of 3% of each
Member's Compensation for each pay period and for the Plan Year. The
contributions made to the Plan on behalf of a Member under this Section 3.5
shall be referred to herein as "401(k) Matching Contributions".

         3.6. Time and Manner. All contributions to be made under Sections 3.1,
3.2. 3.4 and 3.5 of the Plan shall be made in the form of cash payments by the
Company to the Trustee. 401(k) Contributions and Voluntary Contributions shall
be made as soon as possible after the date on which such contributions would
have been paid to the Employee but for his elections under Sections 3.1 and 3.2,
but in all events within 15 business days of the month immediately following the
month which includes such date. 401(k) Matching Contributions shall be made as
soon as practicable after each pay period for which such contributions are made.
The Employer Contribution to be made for any Plan Year shall be made no later
than by the due date of the tax return (with extensions) for the Employers'
taxable year that ends during the Plan Year to which such contribution relates.

         In respect of the contributions the Company pays to the Trustee under
the preceding paragraph for each Plan Year, each other Employer shall reimburse
the Company for (1) a portion of the Employer Contribution so paid by the
Company to the Trustee for such year, based on the ratio of (i) the aggregate
Compensation for such year of the Members employed by such Employer who shared
in the allocation of such Employer Contribution to (ii) the aggregate
Compensation for such year of all Members who shared in the allocation of such
Employer Contribution, and (2) the amount of the 401(k) Contributions, Voluntary
Contributions and 401(k) Matching Contributions so paid by the Company to the
Trustee for such year which are attributable to the Members employed by such
Employer.

                                      -13-
<PAGE>

         3.7. Rollovers. A Member, with the prior approval of the Committee, may
roll over into this Plan amounts that meet each of the following requirements:

         (a) The amount to be rolled over must represent either (1) part or all
of an "eligible rollover distribution", within the meaning of section 402(c)(4)
of the Code, from a trust qualified under section 401(a) of the Code or from an
employee annuity plan qualified under section 403(a) of the Code (such a trust
or plan shall be referred to below as a "Qualified Plan"), (2) the entire amount
of a distribution to the Member from an individual retirement account or
individual retirement annuity, as defined in section 408(a) or section 408(b) of
the Code, provided that no amount in such account, or no part of the value of
such annuity (such an account or annuity shall be referred to below as an
"IRA"), at the time of distribution to the Member, was attributable to any
source other than a "rollover contribution", as defined in section 402 of the
Code, from a Qualified Plan, (3) any distribution made to the Member after
December 31, 2001 from an IRA, an annuity contract described in 403(b) of the
Code, an eligible deferred compensation plan as described in section
457(e)(16)(A) of the Code, or (4) a death benefit distribution made to the
Member after December 31, 2001 from a plan described in 401(a), 403(b) or
457(e)(16)(A) of the Code on account of the death of the Member's spouse.

         (b) The amount to be rolled over must be (1) an amount which the Member
elected to have paid directly from a Qualified Plan to this Plan in accordance
with section 401(a)(31) of the Code or (2) an amount distributed, or deemed
distributed, to the Member from a Qualified Plan, or from an IRA, not more than
60 days prior to the date on which such amount is transferred to this Plan,
including any such amount representing (i) any portion of the Member's account
in a Qualified Plan that was applied to offset any outstanding balance of a loan
to the Member from such plan or (ii) income taxes withheld on a distribution to
the Member from a Qualified Plan.

         (c) The amount to be rolled over must not represent all or part of (1)
a distribution that is required to be made to the Member under section
401(a)(9), section 408(a)(6) or section 408(b)(3) of the Code, or (2) an amount
distributed to the Member in the Member's capacity as a beneficiary of another
individual.

         (d) The amount to be rolled over may not include (1) any part of a
distribution to the Member that would not be includible in the Member's gross
income for Federal income tax purposes, even if it were not rolled over, other
than a distribution of such type made to the Member after December 31, 2001 by
means of a direct trustee-to-trustee transfer to the Plan from the distributing
plan, or (2) any "accumulated deductible employee contributions" within the
meaning of section 72(o)(5)(B) of the Code. In the case of a trustee-to-trustee
rollover described in (1) of the preceding sentence, the Plan shall separately
account for that portion of such rollover which is includible in the Member's
gross income and that portion which is not so includible.

         (e) The amount to be rolled over must consist entirely of cash, and
shall be paid to the Plan only by means of a check made payable to, or endorsed
over to, the Trustee.

                                      -14-
<PAGE>
         The Committee may adopt such procedures, and may require a Member to
furnish such information or documentation, as the Committee, in its sole
discretion, deems necessary to ensure that the amount the Member requests to
roll over to this Plan will meet all the foregoing requirements.

                    ARTICLE 4 - LIMITATIONS ON CONTRIBUTIONS

         4.1. Dollar Limit for 401(k) Contributions. For any Plan Year, the
total amount of 401(k) Contributions, other than Catch-up Contributions, to be
made on behalf of any Member, when aggregated with the total amount deferred by
such Member under other plans or arrangements described in Code section 401(k),
408(k) or 403(b) maintained by his Employer or by any other Affiliated Company,
shall not exceed $10,000, as increased by the cost-of-living adjustment, if any,
in effect for such year under regulations, rulings or notices issued under
section 402(g)(5) of the Code.

         4.2. Nondiscrimination Limit for 401(k) Contributions. The Actual
Deferral Percentage, for any Plan Year, for the group of Members who are Highly
Compensated Employees shall not exceed the greater of the following percentages:

         (a) a percentage that is equal to 125% of the Actual Deferral
Percentage, for such Plan Year, for the group of all other Members; or

         (b) a percentage that is not more than 200% of the Actual Deferral
Percentage, for such Plan Year, for the group of all other Members, and that is
not more than 2 percentage points higher than the Actual Deferral Percentage,
for such Plan Year, for the group of all other Members.

         For these purposes, the term "Actual Deferral Percentage", for any
group of Members for any Plan Year, shall mean the average of the ratios,
calculated separately for each Member in such group, of (1) the 401(k)
Contributions, other than Catch-up Contributions, made on behalf of such Member
for such year to (2) such Member's Compensation for such year.

         4.3. Nondiscrimination Limit for Voluntary and 401(k) Matching
Contributions. The Contribution Percentage, for any Plan Year, for the group of
Members who are Highly Compensated Employees shall not exceed the greater of the
following percentages:

         (a) a percentage that is equal to 125% of the Contribution Percentage,
for such Plan Year, for the group of all other Members; or

         (b) a percentage that is not more than 200% of the Contribution
Percentage, for such Plan Year, for the group of all other Members, and that is
not more than 2 percentage points higher than the Contribution Percentage, for
such Plan Year, for the group of all other Members.

                                      -15-
<PAGE>

         For these purposes, the term "Contribution Percentage", for any group
of Members for any Plan Year, shall mean the average of the ratios, calculated
separately for each Member in such group, of (1) the Voluntary Contributions
made by such Member for such year plus the 401(k) Matching Contributions made on
behalf of such Member for such year to (2) such Member's Compensation for such
year.

         For purposes of determining the contribution percentages above, all or
a portion of the 401(k) Contributions for a Plan Year may be treated as
Voluntary Contributions for such year provided that:

                  (1) all 401(k) Contributions for such year satisfy the
         limitation of Section 4.2, and

                  (2) the 401(k) Contributions for such year, excluding those
         treated as Voluntary and/or 401(k) Matching Contributions under this
         Section for such year, satisfy the limitation of Section 4.2.

         4.4. Special Rules for Nondiscrimination Limits. For purposes of the
nondiscrimination limits set forth in Sections 4.2 and 4.3, the following rules
shall apply:

         (a) Alternative Limitation. The alternative limit set forth in Sections
4.2(b) and 4.3(b) may be utilized only to the extent permitted under section
401(m)(9) of the Code and the Treasury regulations and rulings and notices
issued thereunder.

         (b) Calculations. The Actual Deferral Percentages and the Contribution
Percentages shall be calculated to the nearest one-hundredth of 1%.

         (c) Plan and Contribution Aggregation Requirements. If one or more
plans are aggregated with this Plan for purposes of satisfying section 401(a)(4)
or 410(b) of the Code (other than solely for purposes of satisfying section
410(b)(2)(A)(ii) of the Code) for any Plan Year, then, the nondiscrimination
limits of Section 4.2 and 4.3 shall be applied, in the manner required by the
applicable provisions of the Code and Treasury regulations, by treating such
plan or plans and this Plan as a single plan for such year. If one or more plans
are permissibly aggregated with this Plan for purposes of satisfying the
nondiscrimination limit in Section 4.2 and/or Section 4.3 for any Plan Year,
then, such plan or plans, when aggregated with this Plan, must also satisfy
sections 401(a)(4) and 410(b) of the Code for such year, as though they were a
single plan. In the case of any Highly Compensated Employee who, during any Plan
Year, participates both in this Plan and another qualified retirement plan of
any Affiliated Company, any elective contributions made on his behalf to such
other plan under its 401(k) provisions for such year (or, if applicable, for the
plan year of such other plan which ends in such year) shall be taken into
account in determining his actual deferral percentage under this Plan for such
year; and any voluntary after-tax contributions, or any matching contributions,
made by him, or on his behalf, to such other plan under its 401(m) provisions
for such year (or, if applicable, for the plan year of such other plan which
ends in such year) shall be taken into account in determining his contribution
percentage under this Plan for such year.

                                      -16-
<PAGE>

         (d) Records. The Committee shall maintain or cause to be maintained
records sufficient to demonstrate the satisfaction of the nondiscrimination
limits in Sections 4.2 and 4.3, and to show the amount of 401(k) Contributions,
if any, used to satisfy the nondiscrimination limit in Section 4.3.

         4.5. Deduction Limit. The total amount of contributions made hereunder
by an Employer, considering the amount of such contributions both with and
without aggregating such contributions with the contributions made by the
Employer under each other qualified plan the Employer maintains, for any taxable
year of the Employer may not exceed the maximum amount allowable as a deduction
for the contributions made to this Plan by the Employer for such taxable year.

         4.6. Section 415 Limits.

         (a) General. For any Plan Year, the total amount contributed by or on
behalf of any Member, or allocated to such Member, under the Plan, other than
Catch-up Contributions, when aggregated with all other amounts which are "annual
additions" with respect to such Member, shall not exceed the lesser of (1)
$30,000, increased by the statutory or cost-of-living adjustment, if any, in
effect for such Plan Year under section 415(d)(1)(C) of the Code or (2) 25% of
the Participant's Compensation for such Plan Year occurring before January 1,
2002 and 100% of the Participant's Compensation for such Plan Year occurring
after December 31, 2001. For these purposes, "annual additions" with respect to
a Member shall mean (i) any employer contributions (including 401(k) or matching
contributions), voluntary after-tax employee contributions or forfeitures
allocated to the Member under any qualified defined contribution plan maintained
by any Affiliated Company, and (ii) except as to the limitation in clause (2)
above, amounts allocated on behalf of the Member to any individual medical
account which is part of a pension or annuity plan, or any contributions
attributable to post-retirement medical benefits allocated on behalf of the
Member to a separate account described in Code section 419A(d)(1) under a
welfare benefit fund, maintained by any Affiliated Company.

         (b) 415(e) Limit. In addition to the above, the amounts contributed
under the Plan by or on behalf of, or allocated under the Plan to, any Member
for any Plan Year shall not exceed the amount permissible under the overall
limitation applicable to such Member for such year under section 415(e) of the
Code. In calculating the defined benefit plan fraction and the defined
contribution plan fraction, as defined in section 415(e) of the Code, for the
purpose of determining the aforesaid Code section 415(e) limitation, an amount
shall, to the extent permitted under ss.1106(i)(4) of P.L. 99-514, be subtracted
from the numerator of the defined contribution plan fraction (not exceeding such
numerator) as prescribed by the Secretary of the Treasury so that the sum of the
defined benefit plan fraction and the defined contribution plan fraction does
not exceed 1.0 for the Plan Year. In no event shall the amount to be subtracted
from the numerator of the defined contribution plan fraction be less than the
amount permitted to be so subtracted under ss.235(g)(3) of P.L. 97-248. In
addition, the aforesaid Code section 415(e) limitation shall, to the extent
permitted under ss. 1106(i)(3) of P.L. 99-514, be calculated by using the
Member's Current Accrued Benefit. The "Current Accrued Benefit" is a Member's
accrued benefit under any qualified defined benefit plan which is, or ever was,
maintained by the Employer, determined as if the Member had separated from
service as of the close of the last limitation year of such plan beginning
before August 1, 1987, when expressed as an annual benefit within the meaning of
section 415(b)(2) of the Code. In determining the amount of a Member's Current
Accrued Benefit, the following shall be disregarded: (1) any change in the terms
and conditions of such plan after May 5, 1986, and (2) any cost of living
adjustment occurring after May 5, 1986. In no event shall the amount of the
Current Accrued Benefit be less than the Current Accrued Benefit as defined and
determined under ss.235(g)(4) of P.L. 97-248.

                                      -17-
<PAGE>

         If the limitation applicable to a Member under section 415(e) of the
Code is exceeded, the Member's benefit under a qualified defined benefit plan
maintained by the Employer shall be reduced to the extent necessary to meet such
limitation, before any reduction is made with respect to the Member's annual
additions under this Plan.

         Notwithstanding any provisions of the Plan to the contrary, the Code
section 415(e) limitation described in this Section 4.6(b) shall cease to apply
as of January 1, 2000.

         (c) Reduction of Contributions. In the event that the amount of the
contributions which, without regard to this Section 4.6, would be made by or on
behalf of, or allocated to, a Member under the Plan in respect of any Plan Year
must be reduced by reason of the limitations of this Section 4.6, such
reductions shall be made in the following order of priority, but only to the
extent necessary: (1) the amount of the Member's Voluntary Contributions shall
be reduced, or, if already paid to the Trustee, shall (with the Trust Fund
earnings thereon) be refunded to the Member; then (2) the amount of the Member's
401(k) Contributions shall be reduced, or, if already paid to the Trustee, shall
(with the Trust Fund earnings thereon) be refunded to the Member and 401(k)
Matching Contributions attributable to such 401(k) Contributions shall be
forfeited; then (3) any Employer Contributions that would otherwise be allocated
to such Member in respect of such Plan Year shall, instead, be allocated to each
other Member entitled to share in such contributions (subject to the limitations
of this Section 4.6 as applied to each such Member) in the same proportion that
each such Member's Compensation for such Plan Year bears to the aggregate of the
Compensation for such Plan Year of all such Members.

         (d) Distribution or Other Correction of Allocated Contributions. If the
contributions allocated to the Accounts of any Member for any Plan Year should
exceed the limitations under this Section 4.6 for such year, such excess shall
be deemed to be attributable to the contributions so allocated for such year in
the following order: (i) Voluntary Contributions, (ii) 401(k) Contributions and
401(k) Matching Contributions attributable thereto, (iii) Employer
Contributions, and (iv) any other contributions taken into account for purposes
of this Section 4.6. To the extent permitted by ss.1.415-6(b)(6) of the Treasury
regulations, (x) any Voluntary Contributions or 401(k) Contributions deemed to
be a part of such excess, and the earnings on such contributions, shall be
distributed to the Member in accordance with ss.1.415-6(b)(6)(iv) of the
Treasury regulations, and (y) any other contributions made under this Plan which
are deemed to be a part of such excess shall be treated in the manner described
in ss.1.415-6(b)(6)(ii) of the Treasury regulations.

                                      -18-
<PAGE>

         4.7. Adjustments. Notwithstanding any other provision in the Plan to
the contrary, at any time during the Plan Year, the Committee may make such
adjustments to or impose such restrictions on the amounts of contributions that
otherwise may be made to the Plan by or on behalf of, or allocated to, any
Member or group of Members during the balance of such Plan Year, as the
Committee deems necessary in order for such contributions or allocations not to
exceed any of the limitations set forth in this Article 4, or in order for the
Plan to meet any other requirement for the Plan's continued qualification under
sections 401(a), 401(k) and 401(m) of the Code.

         4.8. Corrective Distributions. If for any Plan Year the 401(k)
Contributions or Voluntary Contributions and 401(k) Matching Contributions made
by or on behalf of a Member for such year exceed the limitation applicable to
such contributions under Section 4.1, 4.2 or 4.3, or if for any Plan Year any
amount of the 401(k) Contributions made on behalf of a Member during such year
is designated as an excess deferral attributable to this Plan under subsection
(b) below, the excess of the contributions over the limitation, or the amount so
designated, shall be distributed to the Member in accordance with the following
rules:

         (a) If the aggregate amount of the 401(k) Contributions made on behalf
of a Member for any Plan Year exceeds the dollar limit for such contributions
under Section 4.1 for such year, the excess amount so contributed, as adjusted
for income or loss allocable thereto, shall be (1) designated by the Committee
as an excess amount of 401(k) Contributions (and earnings), and (2) distributed
to the Member from his 401(k) Contribution Account after the end of such year
but by no later than April 15 next following the close of such year. The 401(k)
Contributions to be distributed under this subsection (a) for any Plan Year
shall be so distributed prior to any distribution of 401(k) Contributions under
subsection (b) for such Plan Year, and shall be reduced by the 401(k)
Contributions previously distributed to the Member under subsection (c) or (d)
for such Plan Year.

         (b) If the aggregate amount of the 401(k) Contributions made on behalf
of a Member under this Plan for any Plan Year, when added to the total amount
deferred by such Member in such year under other plans or arrangements described
in section 401(k), 408(k) or 403(b) of the Code, exceeds the limit under section
402(g) of the Code for such year, the Member may designate a portion of such
excess deferrals as allocable to the 401(k) Contributions made on the Member's
behalf under this Plan for such year. Such designation shall be made by filing
with the Committee a written notice that specifies the amount so designated, and
which contains a certification by the Member that if the amount so designated is
not distributed, such amount, when added to his remaining 401(k) Contributions
and the total amount deferred under other plans or arrangements described in
section 401(k), 408(k) or 403(b) of the Code, will exceed the limit under
section 402(g) of the Code for the Plan Year in question.

                                      -19-
<PAGE>

         Such written notice shall be filed with the Committee no later than by
March 1 next following the close of such Plan Year. The amount so designated, as
adjusted for income or loss allocable thereto, shall be (1) designated by the
Committee as an excess deferral (and earnings), and (2) distributed to the
Member from his 401(k) Contribution Account after the end of such year but by no
later than April 15 next following the close of such year.

         The 401(k) Contributions to be distributed under this subsection (b)
for a Plan Year shall be reduced by any 401(k) Contributions that were
previously distributed to the Member under subsection (a), (c) or (d) for the
same Plan Year. In no event shall a distribution of 401(k) Contributions
pursuant to this subsection (b) for a Plan Year exceed the amount of the
Member's 401(k) Contributions under this Plan for such year.

         (c) If for any Plan Year the aggregate amount of 401(k) Contributions
made on behalf of Members who are Highly Compensated Employees exceeds the limit
for such contributions under Section 4.2 (such excess is referred to herein as
"Excess Contributions"), the Excess Contributions, as adjusted for income or
loss allocable thereto, shall be distributed to such Members. The portion of the
Excess Contributions to be distributed to each such Member shall be determined
under the following paragraph.

         First, the total amount of Excess Contributions shall be determined as
follows. The actual deferral percentage of the Members who are Highly
Compensated Employees shall be reduced in the order of the amount of their
actual deferral percentages, beginning with those Highly Compensated Employees
with the highest such percentages, until the aggregate amount of 401(k)
Contributions for such Members has been reduced to the amount permissible under
Section 4.2. The total amount of Excess Contributions shall be equal to the
aggregate amount of such reductions. Second, a portion of the total amount of
Excess Contributions shall be attributed to each Member who is a Highly
Compensated Employee as follows. The 401(k) Contributions under Section 3.1(a)
of the Members who are Highly Compensated Employees shall be reduced in the
order of the dollar amount of such contributions, beginning with those Highly
Compensated Employees with the highest such dollar amounts, until the aggregate
amount of such 401(k) Contributions for such Members has been reduced by an
amount equal to the total amount of Excess Contributions. The portion of the
total amount of Excess Contributions attributed to each Member who is a Highly
Compensated Employee shall be equal to the amount by which his 401(k)
Contributions are reduced pursuant to the preceding sentence. Third, the portion
of Excess Contributions that shall be distributed to such Highly Compensated
Employee for such year, shall equal the excess of that portion of Excess
Contributions attributed to such Highly Compensated Employee in the second step
of this paragraph, plus the total of all Catch-up Contributions made on behalf
of such Highly Compensated Employee over the dollar limit for Catch-up
Contributions under Section 3.1(b) for such year.

         Distributions of Excess Contributions and the income or loss allocable
thereto shall be (1) designated by the Committee as Excess Contributions (and
earnings) and (2) distributed to the Member from his 401(k) Contribution Account
after the end of the Plan Year but no later than by March 15 next following the
close of such year. Excess Contributions to be distributed to a Member in
accordance with the preceding sentence for any Plan Year shall be so distributed
prior to any distributions of 401(k) Contributions under subsection (a) or (b)
for such Plan Year. In no event shall a distribution of Excess Contributions to
a Member for a Plan Year exceed the amount of 401(k) Contributions made on the
Member's behalf for such year.

                                      -20-
<PAGE>

         (d) If for any Plan Year the aggregate amount of Voluntary
Contributions and 401(k) Matching Contributions, when added to the total amount
of 401(k) Contributions treated as Voluntary Contributions under Section 4.3,
made by or on behalf of Members who are Highly Compensated Employees exceeds the
limit for such contributions under Section 4.3 (such excess is referred to
herein as "Excess Aggregate Contributions"), the Excess Aggregate Contributions,
as adjusted for income or loss allocable thereto, shall be distributed to such
Members. The portion of the Excess Aggregate Contributions to be distributed to
each such Member shall be determined under the following paragraph.

         First, the total amount of Excess Aggregate Contributions to be
distributed shall be determined as follows. The contribution percentages of the
Members who are Highly Compensated Employees shall be reduced in the order of
the amount of their contribution percentages, beginning with those Highly
Compensated Employees with the highest such percentages, until the aggregate
amount of Voluntary Contributions (and 401(k) Contributions treated as Voluntary
Contributions) for such Members has been reduced to the amount permissible under
Section 4.3. The total amount of Excess Aggregate Contributions to be
distributed shall be equal to the aggregate amount of such reductions. Second,
the portion of the total amount of Excess Aggregate Contributions to be
distributed to each Member who is a Highly Compensated Employee shall be
determined as follows. The Voluntary Contributions (and 401(k) Contributions
treated as such) of the Members who are Highly Compensated Employees shall be
reduced in the order of the dollar amount of such contributions, beginning with
those Highly Compensated Employees with the highest such dollar amounts, until
the aggregate amount of Voluntary Contributions (and 401(k) Contributions
treated as such) for such Members has been reduced by an amount equal to the
total amount of Excess Aggregate Contributions to be distributed. The portion of
the total amount of Excess Aggregate Contributions to be distributed to each
Member who is a Highly Compensated Employee shall be equal to the amount by
which his Voluntary Contributions (and 401(k) Contributions treated as such) are
reduced pursuant to the preceding sentence.

         Distributions of Excess Aggregate Contributions and the income or loss
allocable thereto shall be (1) designated by the Committee as Excess Aggregate
Contributions (and earnings) and (2) distributed to the Member, first, from his
Voluntary Contribution Account and, second, to the extent that 401(k)
Contributions were treated as Voluntary Contributions for the Plan Year in
question under Section 4.3, from his 401(k) Contribution Account after the end
of the Plan Year but no later than by March 15 next following the close of such
year. In no event shall a distribution of Excess Aggregate Contributions to a
Member for a Plan Year exceed the amount of Voluntary Contributions (and 401(k)
Contributions so treated as such) for such year.

         (e) The amount of income or loss allocable to 401(k) Contributions or
Voluntary Contributions to be distributed to any Member under subsection (a),
(b), (c) or (d) above shall be determined in accordance with the applicable
provisions of the regulations issued under sections 401(k), 401(m) and 402(g) of
the Code.

                                      -21-
<PAGE>

         (f) Any amounts required to be distributed to a Member pursuant to
subsection (a), (b), (c) or (d) above shall be so distributed, notwithstanding
any other provision in the Plan to the contrary.

         4.9. Other Rules.

         (a) In determining the actual deferral percentages under Section 4.2,
401(k) Contributions which are made on behalf of any Member who is not a Highly
Compensated Employee, and which, without regard to any amounts deferred by such
Member under any other plan or arrangement, are in excess of the limitation in
Section 4.1, shall be disregarded.

         (b) 401(k) Contributions which are made on behalf of any Member shall
be disregarded for purposes of Section 4.6 to the extent that such contributions
are distributed to such Member under Section 4.8(a) or (b).

         (c) 401(k) Contributions and Voluntary Contributions which are made to
the Plan, and which are returned to Members under Section 4.6(d) by reason of
being in excess of the limitations set forth in Section 4.6, shall be
disregarded for purposes of Sections 4.1, 4.2 and 4.3.

             ARTICLE 5 - PLAN ACCOUNTS, ALLOCATIONS AND FORFEITURES

         5.1. Plan Accounts. For each Member, the Committee shall establish and
maintain, or caused to be established and maintained, a separate Plan Account
with respect to the 401(k) Contributions made on behalf of the Member under
Section 3.1, the Voluntary Contributions made by the Member under Section 3.2,
the Employer Contributions allocated to the Member under Section 3.4 and the
amounts rolled over to the Plan by the Member under Section 3.7. Such Accounts
shall be referred to herein, respectively, as the Member's "401(k) Contribution
Account", his "Voluntary Contribution Account", his "Employer Contribution
Account", and his "Rollover Account". The Committee shall also establish and
maintain, or cause to be established and maintained, such other Accounts as may
be necessary or desirable to comply with the requirements of the Code or to
otherwise effect the purposes of the Plan. Each such Account shall be adjusted
from time to time as follows:

         (a) Such Account shall be credited, as hereinafter provided, with the
amounts contributed to the Plan by or on behalf of the Member, allocated to the
Member, or rolled over to the Plan by the Member under Section 3.1, 3.2, 3.4,
3.5 or 3.7, as the case may be, and with any payments of principal and interest
made by the Member pursuant to Section 7.5 on any loan to him. 401(k)
Contributions shall be credited to a Member's 401(k) Contribution Account at the
time such contributions are made to the Plan, but no later than by the final day
of the Plan Year to which such contributions relate. Voluntary Contributions,
Employer Contributions and amounts rolled over to the Plan by the Member shall
be credited to a Member's Voluntary Contribution Account, Employer Contribution
Account and Rollover Account, respectively, at the time such contributions are
made to the Plan or at the time such rolled over amounts are transferred to or
received by the Plan. Any payment on a loan under Section 7.5, which is credited
to a Member's Account as described therein, shall be so credited to such Account
as of the date on which such payment is received by the Plan.

                                      -22-
<PAGE>

         (b) Such Account shall be credited or charged, as the case may be, with
the Earnings attributable to the investment of such Account under Section 6.3.

         (c) Such Account shall be charged with the amount of any distributions,
withdrawals or loans made therefrom, pursuant to Section 4.8 or Article 7. A
distribution, withdrawal or loan shall be so charged as of the date on which the
amount thereof is paid to the Member.

         (d) In addition to (a), (b) and (c) above, such Account shall be
credited or charged as required by other provisions of the Plan, in the manner
and as of the date set forth therein, or, where such manner or date is not
expressly set forth, as the Committee shall determine.

         (e) Such Account shall also reflect the number of shares of any Mutual
Fund, and the number of units of interest in the Pall Stock Fund, in which the
balance of such Account is invested. The number of shares or units of interest
to be so reflected shall include fractions of a share or unit of interest, as
well as whole numbers of shares or units.

         5.2. Forfeitures.

         (a) Incurrence and Application of Forfeitures. The portion of any of
the Member's Accounts other than the Vested Portion of such Account shall be
forfeited, and the amount so forfeited shall be charged to such Account at a
time determined by the Committee. Any forfeiture shall be applied, first, to
restore other forfeitures under subsection (b) below, and, second, to reduce
Employer Contributions made to the Plan after the date such forfeiture arises.
Prior to such application, a forfeiture shall be held in a separate account
established and maintained solely for forfeitures under the Trust Fund; and such
account shall be invested in the Fidelity Retirement Money Market Portfolio
described in Section 6.1(f).

         (b) Restoration of a Forfeiture. If any portion of a Member's Employer
Contribution Account was forfeited upon his Termination of Service, and such
Member thereafter returns to Service, any amount that was forfeited shall be
restored to his Employer Contribution Account, as of his Reemployment
Commencement Date, unless: (1) the Member failed to return to Service prior to
incurring a 5-Year Break in Service after such Termination of Service, or (2)
the Member had previously received from the Plan a distribution described in
subsection (c) below, and, as of his Reemployment Commencement Date, has failed
to repay such distribution in accordance with subsection (c) below. In the event
that the restoration of a forfeiture is prevented by reason of clause (2) in the
preceding sentence, and the Member subsequently repays the distribution referred
to in clause (2) in accordance with subsection (c) below, the amount forfeited
shall be restored to the Member's Employer Contribution Account as of the date
on which such repayment is made to the Plan. Any amount so restored to such
Account shall be invested in accordance with the Member's investment election
with respect to New Money to be credited to such Account then in effect under
Section 6.2.

                                      -23-
<PAGE>

         Funds to restore a forfeiture to a Member's Employer Contribution
Account shall come, first, from other forfeitures as provided in subsection (a)
above, and, second, from contributions made to the Plan by the Company for such
purpose. The Company shall make such additional contributions to the Plan as are
necessary to restore any forfeitures in accordance with the preceding sentence.
If the Company makes any such contributions with respect to a Member who is
employed by an Employer other than the Company, such Employer shall reimburse
the Company for the amount of any such contributions so made. The amount of any
forfeiture to be restored to a Member hereunder shall, to the extent required by
section 411 of the Code, include earnings on the amounts that were forfeited by
the Member under subsection (a) above.

         (c) Repayment of Distributions. A Member who has incurred a Termination
of Service and, in connection therewith, has received from the Plan a
distribution of the entire Vested Portion of the balance of his Plan Accounts,
and thereafter returns to Service, may repay such distribution to the Plan. Any
such repayment shall consist of the full amount of such distribution. Further,
such repayment must be made before the fifth anniversary of the Member's
Reemployment Commencement Date. A repaid distribution shall be credited pro rata
to the Member's Accounts from which such distribution was made, shall be so
credited as of the date received by the Plan, and shall be invested in
accordance with the Member's investment election with respect to New Money to be
credited to such Accounts then in effect under Section 6.2.

                      ARTICLE 6 - INVESTMENTS AND EARNINGS

         6.1. Investment of Accounts. The balance of each Plan Account
maintained for a Member hereunder shall be invested, as the Member shall from
time to time elect in accordance with Section 6.2, in any one or more of the
following investment options (hereinafter referred to as "Investment Options"):

         (a) shares of the Fidelity Retirement Money Market Portfolio;

         (b) shares of the Fidelity U.S. Bond Index Portfolio;

         (c) shares of the Fidelity Puritan Fund;

         (d) shares of the Spartan U.S. Equity Index Fund;

         (e) shares of the Fidelity Equity-Income Fund;

         (f) shares of the Fidelity Blue Chip Growth Fund;

         (g) shares of the Fidelity Magellan Fund;

                                      -24-
<PAGE>

         (h) shares of the Fidelity Asset Manager;

         (i) shares of the Fidelity Freedom Income Fund;

         (j) shares of the Fidelity Freedom 2000 Fund;

         (k) shares of the Fidelity Freedom 2010 Fund;

         (l) shares of the Fidelity Freedom 2020 Fund;

         (m) shares of the Fidelity Freedom 2030 Fund;

         (n) shares of the Fidelity Freedom 2040 Fund;

         (o) shares of the Fidelity Aggressive Growth Fund;

         (p) shares of the Fidelity Diversified International Fund; and

         (q) units of interest in the Pall Stock Fund.

         The Committee may, at any time and in its sole discretion, eliminate or
add any Investment Option to the above list.

         Except to the extent that the Committee otherwise directs, all
dividends and other distributions payable with respect to the shares of any
Mutual Fund in which any Plan Account is invested shall be reinvested in
additional shares of such Mutual Fund; and the number of additional shares
acquired as a result of such reinvestment shall be credited to such Plan
Account. Except as otherwise provided in the Trust Agreement, all dividends and
other distributions payable with respect to the shares of common stock of Pall
Corporation held in the Pall Stock Fund shall be reinvested by the Trustee in
such fund in additional shares of such stock.

         To the fullest extent permissible under section 404(c) of ERISA, the
Trustee, the members of the Committee, and any other fiduciary of the Plan shall
not be liable for any loss, or by reason of any breach of duty, that results
from any election made, or deemed to have been made, by a Member under Section
6.2 with respect to the investment of his Plan Account balances.

         6.2. Investment Elections. Elections with respect to the investment of
a Member's Plan Accounts shall be made in accordance with the following rules:

         (a) Initial Investment Election. Each Member shall make an initial
investment election with respect to each Plan Account that is established for
him hereunder by the close of the last business day immediately preceding the
date on which an amount is first credited to such Account pursuant to Section
5.1. Such election shall be made in the manner set forth in subsection (c)
below.

                                      -25-
<PAGE>

         (b) Investment Election Changes. Subject to the limitations set forth
below, a Member may change his investment election with respect to any of his
Plan Accounts, by making a new investment election with respect to such Account
in accordance with the provisions of subsection (c) below. A Member may so
change his investment election just with respect to the existing balance of any
Plan Account ("Current Balance"); or just with respect to contributions and
repayments of principal and interest on any loan from the Plan ("New Money")
that are to be credited to any Plan Account on or after the effective date of
such change; or with respect to both the Current Balance of, and New Money to be
credited to, any Plan Account.

         (c) Procedure for Making Elections. An investment election under
subsection (a) above shall be made by filing with the Committee a form furnished
by the Committee for this purpose, on which the Member shall indicate, by
percentage (which shall be an integral multiple of 1%) or dollar amount, the
portion of the Member's Plan Account balance to be invested in shares or units
of interest, as applicable, of each Investment Option. The Member shall
designate his investment choices, in the manner described in the preceding
sentence, separately for each of his Plan Accounts. If a Member fails to make
the investment election under subsection (a) with respect to any of his Plan
Accounts by the time required under subsection (a), then, the Member shall be
deemed to have elected, (1) in the case of the Member's Employer Contribution
Account, to have the entire balance of such account invested in shares of the
Fidelity Asset Manager, (2) in the case of the Member's 401(k) Matching Account,
to have the entire balance of such account invested in the same Investment
Options and proportions as his 401(k) Contribution Account is invested, provided
that the Member has designated investment choices for his 401(k) Contribution
Account, and (3) in any other case, the Plan shall not accept any contribution
to any Account, or other amount, that would otherwise be credited to such
account, until the Member makes an investment election hereunder for such
account. Any change in a Member's investment election under subsection (b) above
shall be made in the same manner as herein described in the case of an election
under subsection (a) above. Notwithstanding the foregoing, if the Committee so
permits (and subject to such rules as the Committee may have promulgated) any
Member may use the telephone service or electronic media made available by the
Trustee to communicate directly to the Trustee any initial investment election
made under subsection (a) above, or any change in his investment election made
under subsection (b) above. A Member shall be provided with a written
confirmation of any investment election made under subsection (a), or any change
in investment election made under subsection (b), in the manner provided in the
Trust Agreement or in any administrative services agreement between the
Committee and the Trustee.

         (d) Effect of Election. An investment election made by a Member, or
deemed to have been made by him, with respect to any of his Plan Accounts under
subsection (a) above shall remain in effect until the Member changes his
investment election with respect to such Plan Account in accordance with
subsection (b) above. Any investment election change made by a Member under
subsection (b) above with respect to any Plan Account shall remain in effect
until the Member again changes his investment election with respect to such Plan
Account in accordance with subsection (b) above.

                                      -26-
<PAGE>

         (e) Implementation. All transactions necessary to implement any
investment elections and changes therein that are made by Members pursuant to
this Section 6.2 shall be executed at such times, and in such manner, as
provided in the Trust Agreement or in any administrative services agreement
between the Committee and the Trustee.

         (f) Restrictions. Notwithstanding any provision of the Plan to the
contrary, the following restrictions shall apply to a Member's investment
elections under this Section 6.2:

                  (1) A Member may not invest any Plan Account, other than his
         Employer Contribution Account, in the Pall Stock Fund. Also, no Plan
         Account may be invested in the Pall Stock Fund until May 1, 1997. A
         Member may, on and after May 1, 1997, invest all or any portion of his
         Employer Contribution Account in the Pall Stock Fund.

                  (2) Notwithstanding subsection (c) above, a Member who is a
         Designated Officer may make a change in investment election, which
         would result in any Current Balance being transferred to or from the
         Pall Stock Fund, only by filing such forms with, and providing such
         information to, the Committee as the Committee shall require for this
         purpose. Any such change in investment election by such Member must be
         approved by the Committee, and the Committee shall not approve any such
         change if it would result in (i) liability to such Member under section
         16(b) of the Securities and Exchange Act of 1934, or (ii) the violation
         of any policy which has been adopted by the Company's Board of
         Directors, and which establishes a "blackout period" during which
         Designated Officers may not sell or purchase Company stock.

                  (3) Effective October 15, 2001, a Member may not invest any
         New Money that derives from Employer Contributions or 401(k) Matching
         Contributions in the Fidelity Aggressive Fund, and may not transfer any
         portion of the Current Balance of his Employer Contribution Account or
         401(k) Matching Account to such fund, and any election to the contrary
         in effect on or after such date shall be deemed to be an election by
         such Member to invest such New Money or such Current Balance in shares
         of the Fidelity Asset Manager.

         The Committee may, at any time and in its sole discretion, eliminate or
modify any of the foregoing restrictions, or impose additional restrictions on
Members' investment elections. To the extent that any such restriction ceases to
apply with respect to the Current Balance of, or the New Money to be credited
to, any Plan Account of a Member, the Member may elect to invest all or any
portion of such Current Balance, or of such New Money, of such Account in any
Investment Option offered under Section 6.1, subject to any such restrictions
which remain, by making a change in investment election under subsection (b)
above.

                                      -27-
<PAGE>

         6.3. Determination of Earnings. The Earnings attributable to the
investment of any Plan Account for any period shall mean the amount (positive or
negative) by which (a) the aggregate value, as of the close of the last business
day of such period, of all shares of Mutual Funds, and all units of interest in
the Pall Stock Fund, in which such Account is then invested, plus the unpaid
principal amount of any loan made to the Member from such Account that is
outstanding at the close of such day, and any cash amount standing to the
Member's credit in such Account as of the close of such day, as reduced by (b)
the amount of all contributions, loan repayments and amounts rolled over to the
Plan, that were credited to such Account during the period, and as increased by
(c) the amount of all distributions, withdrawals and loans charged to such
Account during the period, exceeds, or is less than, (d) the aggregate value, as
of the close of the last business day immediately preceding the start of such
period, of all shares of Mutual Funds, and all units of interest in the Pall
Stock Fund, in which such Account was then invested, plus the unpaid principal
amount of any loan made to the Member from such Account that was outstanding at
the close of such day, and any cash amount standing to the Member's credit in
such Account as of the close of such day.

         6.4. Voting Rights. In accordance with the applicable rules set forth
in the Trust Agreement, each Member shall have the right to direct the Trustee
as to how to vote the shares of Pall Corporation stock attributable to the units
of interest in the Pall Stock Fund, and the shares of any Mutual Fund, credited
to his Plan Accounts, and the right to direct the Trustee as to how to exercise
all other rights pertaining to such shares, including the right to direct the
Trustee as to the manner in which to respond to a tender or exchange offer with
respect to any such shares of Pall Corporation stock. A Member shall be treated
as a "named fiduciary", within the meaning of section 402(a)(2) of ERISA, for
the purpose of giving such directions to the Trustee.

                ARTICLE 7 - DISTRIBUTIONS, WITHDRAWALS AND LOANS

         7.1. Distributions. Distributions shall be made in accordance with the
following rules:

         (a) Commencement of Distributions. A Member's Plan Account balances
shall become distributable to him (1) upon his Termination of Service, for any
reason other than death, or (2) if he is affected by an event described in
section 401(k)(10)(A)(ii) or (iii) of the Code. Any distribution to the Member
hereunder shall be made as soon as practicable after the date of the
Participant's Termination of Service, or the date of such event, as applicable.

         (b) Medium, Form, and Amount of Distributions. Any distribution to a
Member under this Section 7.1 shall be made in cash, shall be made in the form
of a single lump sum payment, except as provided in subsection (e) below. Any
lump sum payment made to the Member under this Section 7.1 shall be equal to the
Vested Portion of the balance of his Plan Accounts as of the close of the day on
which such payment is made. For the purposes of making any installment payment
to the Member under subsection (e) below, the balance of his Plan Accounts shall
be determined as of the close of the day on which such installment payment is
made. Without limitation of the foregoing, and as described in Appendix A
hereof, (i) effective October 1, 1996 through December 31, 2001, a Member's
Filtron Transfer Account shall be distributable at such time and in such forms
as were available under the Filtron Technology Corporation 401(k) Savings Plan
as of September 30, 1996, and (ii) effective January 1, 1999 through December
31, 2001, a Member's Gelman Transfer Account shall be distributable at such time
and in such forms as were available under the Gelman Sciences 401(k) Savings
Plan as of December 31, 1998.

                                      -28-
<PAGE>

         (c) Member's Consent. Notwithstanding subsection (a), no distribution
to the Member with respect to his Plan Account balances shall be made prior to
his attaining Normal Retirement Age unless either (1) his Plan Account balances
do not exceed $5,000 or (2) during the 90-day period ending on the date on which
the distribution is made, and after receipt of the explanation described in the
paragraph below, the Member requests and consents to the immediate payment of
such distribution.

         For purposes of clause (2) of the preceding paragraph, the Committee
shall furnish the Member with a written explanation of the Member's right to
defer his distribution until he has attained age 65 and the effect of such
deferral. Such explanation shall be furnished no less than 30 days (or such
shorter period as may be permitted by Treasury regulations) and no more than 90
days before the distribution is made to the Member. After receipt of such
explanation, the Member may request, and consent to, the distribution by
obtaining the applicable form from, and filing such form with, the Committee.
Notwithstanding the foregoing, if the Committee so permits (and subject to such
rules as the Committee may have promulgated), any Member may use the telephone
service or electronic media made available by the Trustee to communicate
directly to the Trustee his request for, and consent to, such distribution.

         If an immediate distribution with respect to the Member's Plan Account
balances cannot be made to the Member by reason of his failure to request and
consent to such distribution, distribution with respect to his Account balances
shall be made as soon as practicable after the earliest to occur of the
following: the date on which the Member attains age 65, the date of the Member's
death, or the date on which the Committee receives written notice, or if
applicable, the Trustee receives a message over the telephone service or
electronic media, from the Member requesting, and consenting to, an immediate
distribution from his Accounts.

         (d) Distributions after Termination of Service. Unless the Member
elects otherwise, distribution to the Member with respect to his Plan Account
balances shall be made no later than 60 days after the close of the Plan Year in
which occurs the latest of the date on which the Member attains age 65, the 10th
anniversary of the date as of which the Member commenced participation in the
Plan, or the date of the Member's Termination of Service.

         (e) Age 70 1/2 Distributions. Notwithstanding any provision of the Plan
to the contrary, the distribution of a Member's Plan Account balances shall be
made or commence not later than:

                  (1) in the case of a Member who is a 5-percent owner, as
         defined under section 416(i) of the Code and the Treasury regulations
         thereunder, the April 1st following the calendar year in which he
         attains age 70 1/2;

                  (2) in the case of a Member who is not a 5-percent owner, as
         so defined in (1), and who attains age 70 1/2 prior to January 1, 2001,
         the April 1st following the calendar year in which he attains age 70
         1/2; or

                                      -29-
<PAGE>

                  (3) in the case of a Member not described in (1) or (2), the
         later of (i) the April 1st following the calendar year in which he
         attains age 70 1/2, or (ii) the Plan Year in which the Member's
         Termination of Service occurs.

         The date by which the distribution of a Member's Account balances must
be made or commence under (1), (2) or (3) above, as applicable, shall be
referred to herein as the Member's "Required Commencement Date".

         A Member who attains age 70 1/2 may elect to have his Account balances
distributed pursuant to one of the following options: (I) the balance of his
Plan Accounts shall be distributed to him annually in a single lump sum payment
or (II) for distributions prior to January 1, 2003, his Account balances shall
be paid to him in 10 annual installments. The election must be made no later
than by the June 30 of the calendar year preceding the calendar year in which
the Member's Required Commencement Date falls, or by such later date permitted
by the Committee. If the Member fails to make an election by such date, the
Member's Account balances shall be distributed under option (I).

         If the Member's Account balances are to be distributed under option
(I), the initial lump sum payment shall be made no earlier than by the November
1 of the calendar year preceding the calendar year in which the Member's
Required Commencement Date falls and no later than by the Member's Required
Commencement Date. Thereafter, pursuant to option (I), a lump sum payment shall
be made once each calendar year, beginning with the calendar year in which the
Member's Required Commencement Date falls, on or after August 1 of the year.

         If the Member's Account balances are to be distributed under option
(II), the initial installment payment shall be made no earlier than by the
November 1 of the calendar year preceding the calendar year in which the
Member's Required Commencement Date falls and no later than by the Member's
Required Commencement Date, and with respect to the remaining installment
payments, one installment payment shall be made each calendar year, beginning
with the calendar year in which the Member's Required Commencement Date falls,
on or after August 1 of the year. The amount of the initial installment payment
shall be equal to the balance of the Member's Plan Accounts, divided by 10, and
the amount of each other installment payment shall be equal to the balance of
the Member's Plan Accounts, divided by the excess of (x) 10 over (y) the number
of installment payments previously made. Any amounts credited to the Member's
Plan Accounts after the date on which the 10th installment payment is made shall
be distributed in one lump sum payment for each calendar year, beginning with
the calendar year following the calendar year in which the 10th installment is
made, on or after the August 1 of such year.

         Notwithstanding any provision in the Plan to the contrary, the amount
of any payment made pursuant to this subsection (e) shall be increased to the
extent necessary to satisfy the requirements of Code section 401(a)(9),
including the incidental death benefit requirements of Code section
401(a)(9)(G), and the regulations, rulings or notices issued thereunder.

                                      -30-
<PAGE>

         (f) The Member's Death. If a Member dies and, immediately following his
death, there is a balance to his credit in the Vested Portion of his Plan
Accounts, such balance shall be distributed to his Beneficiary, in the form of a
single lump sum cash payment. Such payment shall be equal to the Vested Portion
of the Member's Plan Accounts, determined as of the close of the day on which
such payment is made. Such payment shall be made as soon as practicable after
the Member's death, but in all events not later than by the final day of the
Plan Year next following the Plan Year in which his death occurs. Without
limitation of the foregoing, and as described in Appendix A hereof, amounts
payable to a Member's Beneficiary shall be paid, (i) effective October 1, 1996
through December 31, 2001, from the Member's Filtron Transfer Account at the
time and in such forms as were available under the Filtron Technology
Corporation 401(k) Savings Plan as of September 30, 1996, and (ii) effective
January 1, 1999 through December 31, 2001, from the Member's Gelman Transfer
Account at the time and in such forms as were available under the Gelman
Sciences 401(k) Savings Plan as of December 31, 1998.

         7.2. Hardship Withdrawals. A Member who is in Service, and who has not
attained age 59 1/2, may make a hardship withdrawal from his 401(k) Contribution
Account, his Filtron Transfer Account and/or his pre-tax contributions held in
his Gelman Transfer Account, as the case may be, subject to the following
conditions: (a) The withdrawal must be for:

                  (1) expenses for "medical care", as defined in section 213(d)
         of the Code, incurred by the Member, the Member's spouse or any
         "dependent" of the Member, as defined in section 152 of the Code;

                  (2) costs directly related to the purchase of the Member's
         principal residence (excluding mortgage payments);

                  (3) payments necessary to prevent the eviction of the Member
         from, or the foreclosure of the mortgage on, his principal residence;
         or

                  (4) payment of tuition and related educational fees for the
         next 12 months of post-secondary education for the Member, or for the
         Member's spouse, children or dependents (as defined in (1) above).

In addition to the above, the Committee may, in its sole discretion, permit a
Member to make a withdrawal in any circumstance which the Committee determines
to be an "immediate and heavy financial need", within the meaning of ss.
1.401(k)-1(d)(2)(iii) of the Treasury regulations.

         (b) The amount withdrawn may not exceed the lesser of (1) the amount of
the Member's immediate and heavy financial need, determined in accordance with
ss. 1.401(k)-1(d)(2)(iv)(B)(1) of the Treasury regulations, attributable to the
matter for which the hardship withdrawal is requested or (2) the aggregate
amount of 401(k) Contributions that have been contributed to the Plan on the
Member's behalf, amounts credited to his Filtron Transfer Account and his
pre-tax contributions held in his Gelman Transfer Account, as the case may be,
as of the day of the withdrawal, less the aggregate amount of such amounts that
were previously withdrawn by the Member under this Section 7.2.

                                      -31-
<PAGE>

         (c) The Member must have obtained all distributions, other than
hardship distributions, and all nontaxable loans currently available under this
Plan and all other plans maintained by the Employer or any other Affiliated
Company, to the extent obtaining such distributions or loans is required under
section 401(k) of the Code and the regulations, rulings or notices issued
thereunder.

         (d) Notwithstanding any other provision in Article 3 to the contrary,
no 401(k) Contributions or Voluntary Contributions may be made to the Plan, no
elective contributions or employee contributions may be made to any other plan
(qualified or nonqualified) of deferred compensation maintained by the Employer
or any other Affiliated Company, and no contributions may be made to the Pall
Corporation Employee Stock Purchase Plan by or on behalf of the Member for a
period of 12 months following the day of the Member's receipt of a hardship
withdrawal hereunder prior to December 31, 2001 and for a period of six months
following the day of receipt of such a withdrawal occurring on or after January
1, 2002.

         (e) Notwithstanding the provisions of Section 4.1, the maximum amount
of 401(k) Contributions that may be made to the Plan on the Member's behalf for
the Plan Year next following the Plan Year in which the Member receives a
hardship withdrawal shall not exceed the dollar limit applicable to 401(k)
Contributions under section 402(g) of the Code for such next following year,
less the amount of the 401(k) Contributions made on the Member's behalf for the
Plan Year in which such hardship withdrawal is received.

         (f) A Member who wishes to make a withdrawal hereunder shall file a
written request with the Committee setting forth the amount he wishes to
withdraw. The Member's request shall include such information as to the amount
needed by the Member, the reason for the withdrawal and the Member's financial
need for such withdrawal as required to enable the Committee to make a
determination as to whether or not the conditions set forth herein for a
hardship withdrawal will be met in the Member's case. However, if the Committee
so permits, and subject to such rules and guidelines as the Committee may have
promulgated, a Member may use the telephone service or electronic media made
available by the Trustee to request a withdrawal by communicating the request
and the foregoing information directly to the Trustee. A Member requesting a
withdrawal shall complete such forms as are prescribed by the Committee and/or
the Trustee in support of his request.

         A withdrawal cannot be made from the Member's 401(k) Contribution
Account to the extent there is an unpaid amount outstanding on any loan to the
Member from such Account (including any loan required to be taken under
subsection (c) hereof as a condition of taking such withdrawal). Amounts
withdrawn from the Member's 401(k) Contribution Account shall be so withdrawn,
pro rata, from each Investment Option in which such Account is invested at the
time of the withdrawal. Any withdrawal hereunder shall be paid in the form of a
lump sum cash payment.

                                      -32-
<PAGE>

         7.3. In-Service Withdrawals. A Member who is in Service shall be
permitted to make withdrawals from his Plan Accounts as follows:

         (a) Voluntary Contribution and Rollover Account. A Member may, at any
time, make a withdrawal of all or any portion of the balance of his Voluntary
Contribution Account or Rollover Account. A Member for whom a Gelman Transfer
Account is maintained may, at any time, withdraw all or any portion of his
after-tax and/or rollover contributions held in such Account.

         (b) Attainment of Age 59 1/2. A Member who has attained age 59 1/2 may,
at any time and in addition to the withdrawals permitted under subsection (a)
above, make a withdrawal of all or any portion of the balance of his 401(k)
Contribution Account, or, if applicable, after November 5, 1995, his RAI
Transfer Account. Effective January 1, 1999, a Member for whom a Gelman Transfer
Account is maintained may, at any time after age 59 1/2, withdraw all or any
portion of his pre-tax contributions held in such Account.

         (c) Rules of Application. Withdrawals made pursuant to this Section 7.3
shall be made in accordance with the following rules. A Member who wishes to
make a withdrawal hereunder shall file a written request with the Committee,
setting forth the amount he wishes to withdraw and specifying the Account or
Accounts from which such withdrawal is to be made. However, if the Committee so
permits, and subject to such rules and guidelines as the Committee may have
promulgated, a Member may use the telephone service or electronic media made
available by the Trustee to request a withdrawal by communicating the request
and the foregoing information directly to the Trustee. A Member requesting a
withdrawal shall complete such forms as are prescribed by the Committee and/or
the Trustee in support of his request.

         A withdrawal cannot be made from an Account to the extent there is an
unpaid amount outstanding on any loan to the Member from such Account. Amounts
withdrawn from any Account shall be so withdrawn, pro rata, from each Investment
Option in which such Account is invested at the time of the withdrawal. For the
purpose of this Section 7.3, the balance of any Account shall be determined as
of the close of the day on which the withdrawal is made. Any withdrawal
hereunder shall be made in the form of a lump sum cash payment.

         7.4. Direct Rollovers. This Section 7.4 applies to any distribution or
withdrawal made under Section 7.1, 7.2 or 7.3 on or after January 1, 1993, to
the extent that such distribution or withdrawal is an "Eligible Rollover
Distribution". Notwithstanding any provision of the Plan to the contrary, the
"Payee" of any Eligible Rollover Distribution made under Section 7.1, 7.2 or 7.3
may elect, at the time and in the manner prescribed by the Committee, to have
all or any portion of such distribution paid as a "Direct Rollover" to an
"Eligible Retirement Plan" specified by the Payee.

                                      -33-
<PAGE>

         For the purpose of this Section 7.4, the following definitions shall
apply. An "Eligible Rollover Distribution" is defined as under section 402(c)(4)
of the Code and the applicable Treasury regulations. An "Eligible Retirement
Plan" is an individual retirement account described in section 408(a) of the
Code, an individual retirement annuity described in section 408(b) of the Code,
a qualified annuity plan described in section 403(a) of the Code, or a qualified
trust described in section 401(a) of the Code, that will accept a Direct
Rollover of the Payee's distribution or withdrawal. However, if the Payee is the
surviving spouse of a Member, only an individual retirement account or
individual retirement annuity described above may be an Eligible Retirement
Plan. A "Payee" is any person who is entitled to receive a distribution or
withdrawal from the Plan, and who is a Member, the surviving spouse of a Member,
or the spouse or former spouse of a Member who is entitled to receive the
distribution or withdrawal as the alternate payee under a "qualified domestic
relations order", as defined in section 414(p) of the Code. A "Direct Rollover"
is a direct payment of a distribution or withdrawal by the Plan to the Eligible
Retirement Plan specified by the Payee, made in accordance with section
401(a)(31) of the Code and the Treasury regulations, and the rulings and notices
issued by the Internal Revenue Service, thereunder, and made in such manner as
prescribed by the Committee.

         7.5. Loans. The Committee shall establish and administer a loan program
for Members. Loans shall be made to a Member by the Trustee pursuant to said
program in accordance with the following rules:

         (a) Generally, loans under the Plan shall: (1) be available to all
Members on a reasonably equivalent basis, (2) not be made available to Highly
Compensated Employees in an amount greater than the amount made available to
other Employees, (3) be made in accordance with the specific provisions herein,
(4) bear a reasonable rate of interest, and (5) be adequately secured. A loan
may be made to a Member only while such Member is in Service with an Employer. A
loan may not be taken from the Plan while there is an outstanding balance on two
separate loans previously taken from the Plan, or while there is any outstanding
balance on a loan from another qualified retirement plan maintained by the
Employer or any other Affiliated Company. A loan may be made for any purpose.

         (b) A loan may be made from one or more Accounts, but only from the
Vested Portion of the following Accounts and in the following order unless
otherwise required by the Committee: Rollover Account, RAI Transfer Account,
Employer Contribution Account, 401(k) Matching Contribution Account, 401(k)
Contribution Account, Filtron Transfer Account and Gelman Transfer Account
(Tax-Deferred Contributions Sub-Account, Matching Contributions Sub-Account,
Rollover Contributions Sub-Account).

         (c) The proceeds of any loan to a Member which are withdrawn from an
Account shall be so withdrawn, pro-rata, from each Investment Option in which
the balance of such Account is invested at the time of the loan. The Accounts
from which the loan is made shall be charged with such fees with respect to the
loan as the Trustee and the Committee shall agree from time to time.

                                      -34-
<PAGE>

         (d) A Member shall request a loan by filing a written request with the
Committee, in advance of the loan, setting forth the amount and term of the loan
desired. However, if the Committee so permits, and subject to such rules and
guidelines as the Committee may have promulgated, a Member may use the telephone
service or electronic media made available by the Trustee to request a loan by
communicating the request and the foregoing information directly to the Trustee.
A Member requesting a loan shall complete such forms and documents as are
prescribed by the Committee and/or the Trustee to obtain the loan.

         Notwithstanding the foregoing, a Member who is a Designated Officer,
and who desires to take a loan which will be wholly or partly withdrawn from his
Employer Contribution Account while any portion of the balance of such Account
is invested in the Pall Stock Fund, may request such loan only by filing such
forms with, and providing such information to, the Committee as the Committee
shall require for this purpose. The Committee shall not approve the request for
such loan if the granting of such loan would either (i) subject such Member to
liability under section 16(b) of the Securities and Exchange Act of 1934, or
(ii) result in the violation of any policy which has been adopted by the
Company's Board of Directors, and which establishes a "blackout period" during
which a Designated Officer may not sell or purchase Company stock.

         (e) Each loan must be for a minimum amount of at least $1,000. The
amount of any loan, when added to the outstanding balance of any other loan to
the Member from this Plan ("Other Plan Loan"), shall not exceed the lesser of:

                  (1) $50,000, reduced by the excess (if any) of (i) the highest
         outstanding balance of Other Plan Loans to the Member during the one
         year period ending the day before the loan is to be made over (ii) the
         outstanding balance of any Other Plan Loan to the Member on the day the
         loan is made; or

                  (2) one-half of the Vested Portion of the balance of the
         Member's Plan Accounts.

         (f) For the purpose of this Section 7.5, the Vested Portion of the
balance of the Member's Plan Accounts, individually and in the aggregate, shall
be determined as of the day on which the loan is made.

         (g) The loan shall be evidenced by a note and security agreement in
such form and containing such terms and conditions as are herein required and as
the Committee otherwise determines.

         (h) Each loan shall provide for repayment of principal and interest in
level monthly installments over its term. Repayments shall commence with the
month following the month in which the loan is made. The monthly installments of
Members shall be deducted proportionately from each of their paychecks from the
Employer for the month and remitted by the Employer to the Trustee, or shall be
made in such other manner as prescribed by the Committee. Repayments shall be
suspended, for up to one year, for periods during which the Member is taking an
unpaid leave of absence from the Employer due to temporary disability.

                                      -35-
<PAGE>

         (i) The loan shall be for a term to be selected by the Member with the
approval of the Committee. The term for a loan shall not exceed five years, or,
if the proceeds of such loan are to be used to acquire any dwelling unit which,
within a reasonable time, is to be used as the Member's principal residence, the
term of such loan shall not exceed 15 years. Notwithstanding the above, the loan
shall provide that all unpaid amounts of principal and interest shall become
immediately due and payable 90 days after the Member's Termination of Service.

         (j) The interest rate charged on any loan from the Plan shall represent
a prevailing interest rate charged on similar personal loans granted under like
circumstances by persons in the business of lending money, as determined under
rules of uniform application issued by the Committee from time to time.

         (k) The amount of the outstanding balance of any loan shall, itself, be
deemed to be an investment of the Member's Accounts from which the loan was
made. No Earnings shall be credited or charged to such Accounts under Section
6.3 with respect to the amount of the outstanding balance of any Plan loan.
Repayments on the loan shall be credited, pro-rata, to such Accounts, and shall
be invested in accordance with the Member's investment election with respect to
New Money to be credited to each such Account then in effect under Section 6.2.

         (l) The loan shall be secured by the portion of the Member's Accounts
deemed to be invested in the outstanding balance of the loan. As a condition of
any loan to a Member hereunder, the Member shall agree that in the event of a
default by the Member on such loan, to the extent that such Accounts are being
used as a security for the loan, such Accounts shall be reduced as an offset
against the Member's obligation to repay any amount outstanding on such loan;
provided, however, that no such reduction of the Member's 401(k) Contribution
Account, Filtron Transfer Account, Gelman Transfer Account or RAI Transfer
Account may be made until the earliest of the Member's attainment of age 59 1/2,
his becoming Disabled or his Termination of Service.

         (m) If any portion of the loan remains outstanding at the time the
Accounts from which the loan was made are to be distributed under Section 7.1,
to the extent such Accounts are being used as security for the loan, the amount
then distributable under Section 7.1 from such Accounts shall be reduced to
offset the outstanding loan balance.

         (n) The failure to make any payment under the loan when due shall
constitute a default on the loan. However, the Committee may, in its sole
discretion, grant any Member who has failed to make any payment on a loan by its
due date a grace period, not exceeding 90 days after such due date, during which
the Member may make such payment and avoid a default on the loan. In the event
of a default, the balance of the Member's Accounts from which the loan was made,
to the extent such Accounts are being used as security for the loan, shall be
reduced as an offset against the Member's obligations under the loan as provided
in subsection (l). In addition, the Committee shall take any commercially
reasonable action it deems necessary or desirable to satisfy any remaining
obligations under the loan.

                                      -36-
<PAGE>

         (o) Each loan hereunder shall be subject to such other terms and
conditions as the Committee may require under rules of uniform application
issued by the Committee from time to time. The Committee may also impose any
other terms and conditions, including spousal consent requirements, on loans
from a Member's Gelman Transfer Account, Filtron Transfer Account or other
transfer account as may be necessary to comply with the requirements of the
Code.

                        ARTICLE 8 - PLAN ADMINISTRATION

         8.1. Responsibility for Administering the Plan. Authority to control
and manage the operation and administration of the Plan shall rest exclusively
with the Committee, except as to those responsibilities and powers reserved or
granted to the Trustee under Section 8.5, and to the Company's Board of
Directors under Section 8.6.

         8.2. Responsibilities of the Committee. The Committee shall be a "named
fiduciary" of the Plan within the meaning of section 402(a) of ERISA, the
"administrator" of the Plan within the meaning of section 3(16)(A) of ERISA, and
the "plan administrator" within the meaning of section 414(g) of the Code. The
Committee shall have the following responsibilities with respect to the
administration of the Plan:

         (a) to furnish Members (and other individuals entitled to receive same)
with such reports, notifications, documents, statements, information and
explanations with respect to the Plan as may be required under the provisions
hereof and by the Code and ERISA;

         (b) to file with the appropriate governmental agencies all reports with
respect to the Plan required by the Code, ERISA or any other applicable statute;

         (c) to engage an independent certified public accountant to perform
such functions with respect to the Plan as may be required of the Committee by
ERISA;

         (d) to direct the Trustee to pay out of the Trust Fund all amounts
which are payable hereunder to Members or their surviving spouses or other
beneficiaries, any contributions to be returned to an Employer under Section
12.1 and any taxes (including interest and penalties thereon) that may be levied
or assessed on the Trust's assets or the income thereof;

         (e) to interpret the Plan, to decide all questions that may arise as to
the construction or application of any of its provisions and, in accordance with
the claims procedure set forth in Section 8.7, to make all final determinations
as to the rights of Members or their surviving spouses or other beneficiaries to
benefits under the Plan. Any determination made by the Committee as to the
interpretation, construction or application of the Plan, or as to the rights of
any Member or any other person to benefits under the Plan, shall be conclusive
and binding on all parties;

                                      -37-
<PAGE>

         (f) to promulgate such rules and regulations, and prescribe such forms
and manuals, as it shall deem appropriate for the efficient administration of
the Plan, and to maintain all data, records and documents with respect to the
Plan that may be necessary for its operation and administration or that may be
required to be maintained by law;

         (g) to employ suitable agents and legal counsel (who may be the same as
legal counsel for any Employer) to advise or assist the Committee with respect
to any of its duties hereunder;

         (h) to establish and carry out a funding policy and method for the Plan
consistent with the objectives of the Plan and with the requirements of ERISA,
and to communicate such funding policy and method to the Trustee; and

         (i) to perform such other duties and responsibilities as are
specifically assigned to it hereunder or under the Trust Agreement, or as may be
necessary for the Plan to be operated and administered in accordance with the
requirements of the Code and ERISA.

         8.3. Duties and Powers of the Committee. In carrying out its
responsibilities under Section 8.2, the Committee shall comply with the
standards of conduct set forth in subsection (a) and shall have the powers set
forth in subsection (b).

         (a) Standards of Conduct. The Committee shall discharge its duties
under the Plan solely in the interest of the Members and their surviving spouses
or other beneficiaries (subject, however, to the provisions of Section 12.1);
and

                  (1) for the exclusive purpose of providing benefits to Members
         and their surviving spouses or other beneficiaries and defraying the
         reasonable expenses of administering the Plan;

                  (2) with the skill, care, prudence, and diligence under the
         circumstances then prevailing that a prudent man acting in a like
         capacity and familiar with such matters would use in the conduct of an
         enterprise of a like character and with like aims;

                  (3) in accordance with the documents and instruments governing
         the Plan insofar as such documents and instruments are consistent with
         the provisions of ERISA; and

                  (4) in accordance with such other applicable standards as may
         be prescribed by ERISA for Plan fiduciaries.

In addition, the Committee shall maintain a written record of all actions taken
by it and determinations made by it in carrying out its responsibilities under
the Plan, and shall prepare and submit to the Company's Board of Directors such
written reports relating to its responsibilities under the Plan as the Board may
request of it from time to time. Any action to be taken by the Committee
hereunder shall be taken upon the affirmative vote of at least a majority of all
persons serving on the Committee, except as otherwise permitted under subsection
(b)(1). Any direction to be given by the Committee hereunder in effecting any
action may be given by any person serving on the Committee, unless the duty to
give such direction with respect to such action has been allocated to a specific
person or persons serving on the Committee under subsection (b)(1).

                                      -38-
<PAGE>

         (b) Powers. The Committee shall have the following powers:

                  (1) The persons serving on the Committee may allocate specific
         duties and responsibilities among themselves. Any such allocation shall
         be made pursuant to a written instrument, signed by all such persons,
         and setting forth (i) the duties or responsibilities so allocated, (ii)
         the person or persons to whom such duties or responsibilities are
         allocated, and (iii) the period of time for which such allocation is to
         be effective. If any duty or responsibility is so allocated, a person
         to whom such duty or responsibility has not been allocated shall not be
         liable for any act or omission of the person or persons to whom such
         duty or responsibility has been allocated, except as may otherwise be
         provided under section 405(b)(2) of ERISA;

                  (2) The Committee may designate persons other than persons
         serving on the Committee to carry out any fiduciary responsibility,
         other than a "trustee responsibility" within the meaning of section
         405(c)(3) of ERISA. Any such designation shall be made pursuant to a
         written instrument setting forth (i) the duties or responsibilities so
         delegated, (ii) the person or persons to whom such duties or
         responsibilities are delegated, and (iii) the period of time for which
         such delegation is to be effective. If any fiduciary responsibility is
         so delegated, the Committee shall not be liable for any act or omission
         of the person or persons designated by it to carry out such
         responsibility, except as otherwise provided under section 405(c)(2) of
         ERISA. Any person to whom fiduciary responsibilities are so delegated
         shall perform such responsibilities in accordance with the standards of
         conduct set forth in subsection (a) of this Section;

                  (3) The Committee, and any person to whom fiduciary
         responsibilities are delegated by it under subsection (b)(2) above, may
         employ attorneys, accountants, actuaries, and other consultants or
         advisors to render advice to or otherwise to assist them in carrying
         out their responsibilities under the Plan; and

                  (4) The Committee shall have all other powers necessary to
         enable it to carry out its responsibilities under Section 8.2, and to
         carry out such responsibilities as are assigned to it under the Trust
         Agreement.

         8.4. Reimbursement and Indemnification of the Committee. The persons
serving on the Committee, and any persons designated by the Committee to perform
fiduciary responsibilities pursuant to Section 8.3(b)(2), shall not receive any
compensation for their services as such, but shall be reimbursed by the Company
for all reasonable expenses incurred by them in the performance of their duties
hereunder. The persons serving on the Committee, and any other persons
designated by the Committee to perform fiduciary responsibilities pursuant to
Section 8.3(b)(2), shall be indemnified and held harmless by the Company and
each other Employer for any liability or loss (including legal fees or other
expenses of litigation) arising out of or in connection with their services to
the Plan in such capacity, to the extent that such liability or loss (a) is not
insured against under any applicable policy of insurance (whether or not
maintained by the Company or any other Employer) and (b) is not determined to be
due to their gross negligence or willful misconduct.

                                      -39-
<PAGE>

         8.5. Responsibilities of the Trustee. The Trustee shall have the
following responsibilities and powers in connection with the Plan:

         (a) to hold all amounts contributed to the Plan by the Employers, any
income thereon and any other Plan assets, as part of the Trust Fund;

         (b) to make payments out of the Trust Fund in accordance with the
instructions of the Committee;

         (c) to hold and control the Trust Fund, and to invest the Trust Fund in
accordance with any directions received from the Committee and the Members which
are proper, and which are in accordance with the terms of the Plan and the
requirements of ERISA; and

         (d) to perform such other responsibilities and duties in connection
with the Plan and Trust as are set forth in the Trust Agreement.

         8.6. Responsibilities of the Company's Board of Directors. The
following responsibilities and powers in connection with the Plan shall be
reserved to the Board of Directors of the Company:

         (a) to amend or terminate the Plan;

         (b) to establish a committee to control and manage the operation and
administration of the Plan; and to appoint, remove and replace the persons
serving on such committee, and to determine the number of persons who shall
serve on such committee; and

         (c) to appoint, remove and replace the Trustee, and to determine the
number of persons who shall serve as Trustee.

         8.7. Claims Procedure. Any claim for benefits or other payments under
the Plan shall be determined in accordance with the procedure set forth below.

         (a) Initial Determination. Any claim for benefits or other payments
under the Plan shall be made by filing a written statement of such claim with
the person or persons designated by the Committee to process and make initial
determinations as to such claims. In the event such claim is denied in whole or
in part, such person or persons shall notify the claimant of the denial within
90 days after the date on which the claim was filed. Such notification shall be
in writing and shall set forth: the specific reason or reasons for the denial;
specific reference to the provisions of the Plan on which denial was based; a
description of any additional material or information necessary for the claimant
to perfect the claim, and an explanation of why such material or information is
necessary; and an explanation of the review procedure under subsection (b).

                                      -40-
<PAGE>

         (b) Review Procedure. A claimant whose claim is denied in whole or in
part under subsection (a) shall be entitled to have such denial reviewed by the
Committee, by filing a written request for such review with the Committee within
60 days after his receipt of notification of the denial of his claim under
subsection (a). Upon receipt of such request, the Committee shall make a full
and fair review of the claim; and in connection with such review, the claimant
shall be entitled to review pertinent documents and to submit issues and
comments in writing.

         (c) Decision on Review. The Committee shall make a decision with
respect to such claim within 60 days after its receipt of the claimant's written
request for review; provided, however, that if the Committee determines that a
hearing is necessary, the Committee shall hold such hearing within such 60-day
period and shall make its decision within 120 days after its receipt of the
claimant's request for review. The Committee's decision on review shall be in
writing and shall include specific reasons for the decision and specific
references to the provisions of the Plan on which its decision was based.

         8.8. Agent for Service of Process. The agent to accept service of legal
process on behalf of the Plan shall be such person as may be designated by the
Committee, from time to time, to perform such function or, in the absence of
such designation, the Committee itself.

         8.9. Expenses. The Employers shall pay all of the fees and expenses of
the Plan and Trust which are not specifically described in the Trust Agreement.
All other fees and expenses of the Plan and Trust shall be paid by the
Employers, or out of the Trust Fund, as provided in the Trust Agreement.

                 ARTICLE 9 - AMENDMENT, MERGER AND TERMINATION

         9.1. Amendment. The Company may amend this Plan at any time, by a duly
adopted resolution of the Company's Board of Directors. Any such amendment may
be made with retroactive effect to the extent not prohibited by law. However, no
such amendment shall decrease the balance of any Member's Plan Accounts, or
affect the computation of the extent to which a Member is vested in his
Accounts. In addition, no such amendment shall increase the duties or
liabilities of the Committee or the Trustee without their written consent.

         9.2. Merger or Consolidation.

         (a) General. In the event that the Plan is merged or consolidated with
any other plan, or in the event of any transfer of assets or liabilities of the
Plan to any other plan, the benefit which each Member would be entitled to
receive if the Plan terminated immediately after such merger, consolidation or
transfer shall be at least equal to the benefit which he would have been
entitled to receive if the Plan had terminated immediately before the merger,
consolidation or transfer.

                                      -41-
<PAGE>

         (b) Transfer Accounts. In the event that any Employer terminates any
plan and its trust which are qualified and tax-exempt under sections 401(a) and
501(a) of the Code, and such plan was a defined contribution plan (such plan
shall be referred to below as a "Terminated Plan"), then the Committee may, in
its sole discretion, permit such Employer to directly transfer to this Plan any
or all of the account balances under the Terminated Plan which belong to Members
in this Plan. Any such transfer shall be made in accordance with the applicable
provisions of the law, and in accordance with such rules as are prescribed by
the Committee.

         The account balances under the Terminated Plan of any Member which are
so transferred to this Plan shall be held in an account referred to as a
"Transfer Account" established and maintained under the Plan for such Member. A
Member's interest in his Transfer Account shall be fully vested and
nonforfeitable at all times. The Transfer Account shall be invested in
accordance with rules and procedures which are consistent with those set forth
in Article 6, as if such account was a Rollover Account. A Member may borrow
from his Transfer Account (other than after-tax contributions and earnings
thereon in such Transfer Account) under the provisions of Section 7.5 as if such
Account was a Rollover Account, except that, if required by law, a loan may not
be obtained without spousal consent, and except as otherwise determined by the
Committee. Any loan against the Member's account balances under the Terminated
Plan which is outstanding at the time such balances are transferred to this Plan
may, in the discretion of the Committee, be included in such transfer; and the
Member shall repay any such loan in accordance with the terms and conditions
thereof as established under the Terminated Plan.

         A Transfer Account shall be credited with Earnings in the manner
described in Section 5.1(b). However, the balance of any Transfer Account shall
be distributed, or may be withdrawn, under the same terms and conditions which
applied to distributions and withdrawals from participants' accounts under the
Terminated Plan (immediately prior to the termination thereof) in lieu of the
terms and conditions of Article 7, and, upon Plan termination, Section 9.3(b),
except that, for purposes of determining the amount of any distribution or
withdrawal, the Transfer Account shall be valued as of the close of the day on
which such distribution or withdrawal is made. If appropriate, the Transfer
Account shall be divided into sub-accounts to account separately for any
portions of the account balances transferred from the Terminated Plan which,
under the provisions of the Terminated Plan, could be distributed or withdrawn
at different times, or in different forms or manners, than other portions of
such account balances.

         Except as otherwise provided above, the Transfer Account shall be
treated as an Account under the Plan.

         9.3. Termination.

         (a) General. The Company reserves the right to terminate the Plan at
any time, without the consent of any other party, pursuant to a resolution
authorizing such termination duly adopted by the Company's Board of Directors.
Notwithstanding anything herein to the contrary, the Employers, upon termination
of the Plan, shall have no obligation or liability whatsoever to make any
further contributions to the Trust, and neither the Trustee, nor any Member,
Beneficiary, Employee or other person shall have any right to compel any
Employer to make any such further contributions.

                                      -42-
<PAGE>

         (b) Termination or Continuation of the Trust. Upon termination of the
Plan, one of the following actions shall be taken:

                  (1) If the Company so directs, the Trust shall continue in
         existence. In such event, the Trust Fund shall be held, administered
         and distributed as directed by the Committee and as provided in the
         Plan, and all of the provisions of the Plan set forth herein, which are
         applicable in the opinion of the Committee, other than the provisions
         relating to contributions, shall remain in full force and effect.

                  (2) If the Plan is terminated without establishment or
         maintenance of another defined contribution plan within the meaning of
         section 401(k)(10) of the Code, and if the Company so directs, the
         Trust shall be terminated. In such case, notwithstanding any other
         provision of the Plan to the contrary, the Plan Account balances of
         each Member and Beneficiary shall be distributed to such Member or
         Beneficiary, as soon as administratively feasible, in the form of a
         single lump sum payment.

                  (3) If, upon termination of the Plan, another defined
         contribution plan has been, or will be, established or maintained
         within the meaning of section 401(k)(10) of the Code, then,
         notwithstanding any other provision of the Plan to the contrary and if
         the Company so directs (i) an immediate distribution shall be made, in
         accordance with the provisions of (2) above, to all Beneficiaries and
         to all Members who have attained age 59-1/2 or are Disabled, and (ii)
         the Trust shall be continued, in accordance with the provisions of (1)
         above, with respect to all other Members; provided, however, that each
         such other Member's Plan Account balances shall be distributed, in a
         single lump-sum payment, as soon as practicable after such Member has
         attained age 59-1/2, has become Disabled or has incurred a Termination
         of Service for any reason.

         (c) Vesting Upon Termination. Upon the termination or partial
termination of the Plan, or upon the complete discontinuance of contributions to
the Plan, notwithstanding any other provision of the Plan to the contrary, each
Member affected thereby shall become 100% vested, and shall have a
nonforfeitable interest, in his Plan Accounts.

         9.4. Termination of An Employer's Participation in the Plan. An
Employer, other than the Company, may at any time terminate its participation in
the Plan, and the Company may at any time direct that an Employer terminate its
participation in the Plan. Unless the Company specifically directs otherwise, an
Employer other than the Company shall be treated as having terminated its
participation in the Plan (a) upon the sale or other transfer of all or
substantially all of its assets to an Unaffiliated Entity or (b) upon the sale
or other transfer of its stock to an Unaffiliated Entity in a transaction that
results in the termination of such Employer's "parent-subsidiary or
brother-sister controlled group relationship" with the Company, or with the
controlled group of corporations of which the Company is a member, within the
meaning of section 414(b) of the Code. For purposes of the foregoing, the term
"Unaffiliated Entity" shall mean any entity other than an Affiliated Company.
Upon any such termination of participation, the Plan shall terminate with
respect to the terminating Employer and its Employees and shall continue in
effect with respect to the remaining Employers and their Employees. In the event
of such a termination, the provisions of Section 9.3(b) shall apply with respect
to the portion of the Trust Fund attributable to the terminating Employer, and
Section 9.3(c) shall apply to the Employees of such Employer.

                                      -43-
<PAGE>

                       ARTICLE 10 - TOP-HEAVY PROVISIONS

         10.1. General. With respect to each Plan Year in which the Plan is
Top-Heavy, the provisions of Sections 10.2, 10.3, 10.4 and 10.5 shall apply
notwithstanding any other provisions in this Plan to the contrary. With respect
to any Plan Year in which the Plan is not Top-Heavy, except as otherwise
provided herein, the provisions of Sections 10.2, 10.3. 10.4 and 10.5 shall not
apply.

         10.2. Minimum Benefit. For any Plan Year in which the Plan is
Top-Heavy, the Employer shall make a contribution to the Plan under this Section
10.2 on behalf of any Member who is a Non-Key Employee. Such contribution shall
be in the amount by which the contributions made by the Employer on such
Member's behalf, or allocated to such Member, for such year under this Plan, and
under each other defined contribution plan aggregated with this Plan under
Section 10.6(a), is less than the smaller of (a) 3% of such Member's Section 415
Compensation for such year or (b) the percentage of such Member's Section 415
Compensation for such year which is equal to the highest Allocation Percentage
for the year of any Member who is a Key Employee. For this purpose, (1) 401(k)
Contributions made on behalf of Non-Key Employees under this Plan, and any
contributions subject to section 401(k) or 401(m) of the Code made on behalf of
Non-Key Employees under any other defined contribution plan, shall be
disregarded; (2) a Key Employee's "Allocation Percentage" for a Plan Year shall
mean the percentage determined by dividing the sum for such year of (i) total
401(k) Contributions and Employer Contributions made on behalf of the Key
Employee, or allocated to the Key Employee, under this Plan and (ii) the total
contributions made by the Employer on such Key Employee's behalf, or allocated
to such Key Employee, under any other defined contribution plan aggregated with
this Plan under Section 10.6(a) by so much of his Section 415 Compensation for
the year as does not exceed the maximum amount of his Section 415 Compensation
that may be taken into account hereunder; and (3) any person who is not a Member
solely because he has not elected to have any 401(k) Contributions made on his
behalf shall be treated as a Member. Clause (b) in the second preceding sentence
shall not apply in any Plan Year in which this Plan enables a defined benefit
plan, which is aggregated with this Plan under Section 10.6(a), to meet the
requirements of section 401(a)(4) or 410 of the Code for such year.

                                      -44-
<PAGE>

         Notwithstanding the foregoing, the amount to be contributed on behalf
of any Member pursuant to this Section shall not exceed the minimum amount that
must be contributed on such Member's behalf in order to meet the "minimum
benefit" requirements of section 416(c) of the Code and the regulations issued
thereunder; and no amount shall be contributed under this Section on behalf of a
Member for any Plan Year if (A) the Member is not employed by the Employer on
the last day of such Plan Year, or (B) the Member is entitled to receive for
such year, under any defined benefit plan aggregated with this Plan under
Section 10.6(a), a benefit that is at least equal to the defined benefit minimum
described in M-2 of ss.1.416-1 of the Treasury regulations.

         Any amount contributed under this Section 10.2 by the Employer on
behalf of any Member shall be credited to the Member's Employer Contribution
Account, as of the day on which such contribution is made to the Plan, but no
later than by the final day of the Plan Year to which the contribution relates.

         10.3. Minimum Vesting. In the case of a Member who earns at least one
Hour of Service under the Plan during or subsequent to a Plan Year for which the
Plan is Top-Heavy, the Vested Portion of his Plan Accounts shall be determined
as provided in Section 1.37, except that the following schedule shall apply to
all such Members in lieu of the schedule appearing in subsection (a) of Section
1.37:

                   Years of Service                     Vested Percentage
                   ----------------                     -----------------
                           0 - 1                             0%
                           2                                 40%
                           3                                 100%

         10.4. Maximum Compensation. For any Plan Year beginning prior to August
1, 1989 in which the Plan is Top-Heavy, the annual Compensation taken into
account under the Plan, and the annual Section 415 Compensation taken into
account under this Article 10, for any Member shall not exceed $200,000,
adjusted annually by the Secretary of the Treasury under section 416(d) of the
Code and the Treasury regulations issued thereunder.

         10.5. Section 415 Limits. For any Plan Year beginning before January 1,
2000 in which the Plan is Top-Heavy, the overall limit of section 415(e) of the
Code shall be applied by substituting "1.0" for "1.25" wherever "1.25" appears.
However, the preceding sentence shall not apply with respect to a Plan Year if
(a) each Member who is a Non-Key Employee is entitled to receive for such year
(1) under this Plan, when aggregated with any other defined contribution plan
aggregated with this Plan under Section 10.6(a), a benefit that is at least
equal to the defined contribution minimum described in M-14 of ss. 1.416-1 of
the Treasury regulations, or (2) under any defined benefit plan aggregated with
this Plan under Section 10.6(a), a benefit that is at least equal to the defined
benefit minimum described in M-14 of ss. 1.416-1 of the Treasury regulations,
and (b) the Plan is not Super Top-Heavy for such year.

                                      -45-
<PAGE>

         10.6. Definitions. For purposes of this Article 10, the following terms
shall have the following meanings, and the following rules shall apply:

         (a) "Top-Heavy" and "Super Top-Heavy" - the Plan shall be deemed to be
Top-Heavy with respect to any Plan Year if, as of the Determination Date for
that year, the aggregate Benefits of all Key Employees under this Plan, and all
other plans which are aggregated with this Plan, exceed 60% of the aggregate
Benefits of all Key and Non-Key Employees under this Plan and all such other
plans. The Plan shall be deemed to be Super Top-Heavy with respect to any Plan
Year if, as of the Determination Date for that year, the aggregate Benefits of
all Key Employees under this Plan, and all other plans that are aggregated with
this Plan, exceed 90% of the aggregate Benefits of all Key and Non-Key Employees
under this Plan and all such other plans. For purposes of the two preceding
sentences, each qualified plan maintained by the Employer, including this Plan,
(1) in which a Key Employee was a participant, or (2) which enabled any plan
described in clause (1) to meet the requirements of section 401(a)(4) or section
410 of the Code, during the 5-year period ending on the Determination Date for
the Plan Year in question shall be aggregated. A terminated plan shall be
aggregated with this Plan, for these purposes, if such plan was maintained by
the Employer during the aforesaid 5-year period and would, but for its
termination, be so aggregated under the preceding sentence.

         (b) "Determination Date" - The Determination Date for a Plan Year shall
mean the final day of the immediately preceding Plan Year, except, however, the
Determination Date for the first Plan Year shall be the final day of such year.

         (c) "Benefits" - An individual's Benefits shall mean the sum of (1) the
balance of his Plan Accounts under this Plan and his accounts under all other
defined contribution plans aggregated with this Plan under Section 10.6(a); (2)
the present value of his cumulative accrued benefits under all defined benefit
plans aggregated with this Plan under Section 10.6(a); and (3) the aggregate
distributions made with respect to him under the plans described in clauses (1)
and (2) hereof during the 5-year period ending on the Determination Date as of
which such individual's Benefits are being determined.

         For purposes of this Section 10.6(c), the Benefits of any individual
shall be disregarded if such individual (i) has not performed any services for
the Employer during the 5-year period ending on the Determination Date for the
Plan Year or (ii) was a Key Employee for any Plan Year but subsequently became a
Non-Key Employee for any Plan Year. The present value of accrued benefits under
any defined benefit plan shall be determined for each Non-Key Employee under the
uniform method of benefit accrual used by all qualified defined benefit plans of
the Employer, or, if there is no such method, as if benefits accrued not more
rapidly than under the slowest accrual rate permitted under section 411(b)(1)(C)
of the Code.

         (d) "Key Employee" and "Non-Key Employee" - shall be defined as under
section 416(i) of the Code and the Treasury regulations thereunder.

         (e) "Section 415 Compensation" - shall mean, for any Plan Year,
compensation as defined under section 415(c)(3) of the Code, subject to the
Compensation Limit in effect for such year.

                                      -46-
<PAGE>

         (f) The benefits attributable to any plan aggregated with this Plan
under Section 10.6(a) shall be taken into account for purposes of Sections 10.2,
10.5 and 10.6(a) and (c) in a Plan Year in a manner consistent with T-23 of ss.
1.416-1 of the Treasury regulations.

         (g) For purposes of this Article 10, wherever required by Section 416
of the Code and the regulations thereunder, the term "Employer" includes all
entities aggregated with the Employer under section 414(b), (c), (m) or (o) of
the Code and the regulations thereunder.

         10.7. Applicability. In the event that Congress should provide by
statute, or the Treasury Department or the Internal Revenue Service should
provide by regulation, ruling or notice, that the provisions of this Article are
no longer necessary to meet the qualification requirements of section 401(a) of
the Code, this Article shall become void, and shall no longer apply, without the
necessity of any amendment to the Plan.

                ARTICLE 11 - SPECIAL RULES FOR GELMAN EMPLOYEES

         11.1. In General. The rules set forth in this Article 11 shall apply,
notwithstanding any other provisions of the Plan to the contrary, to any
individual who, during any Plan Year, transfers employment either from Gelman
Sciences, Inc. ("Gelman") to an Employer, or from an Employer to Gelman. For
purposes of this Article, any elective contributions made by or on behalf of any
individual to a qualified retirement plan pursuant to the 401(k) provisions of
such plan shall be referred to as "Elective Contributions". Any voluntary,
after-tax contributions or matching contributions made by or on behalf of any
individual to a qualified retirement plan pursuant to the 401(m) provisions of
such plan shall be referred to as "Voluntary Contributions" and "Matching
Contributions", respectively. The Gelman Sciences 401(k) Savings Plan shall be
referred to as the "Gelman Plan".

         11.2. Transfer of Employment to Gelman.

         (a) In the case of any individual whose employment is transferred from
an Employer to Gelman, and whose Elective Contributions, as of the date of such
transfer, are not in excess of the dollar limit under section 402(g) of the Code
for the Plan Year in which such transfer occurs, any distribution of Elective
Contributions (and earnings) that would otherwise be required to be made to such
individual by this Plan for such Plan Year under Section 4.8(a) shall, instead,
be made by the Gelman Plan.

         (b) In the case of any individual whose employment is so transferred,
and whose Elective Contributions, as of the date of such transfer, are in excess
of such dollar limit, the distribution of Elective Contributions (and earnings)
that would otherwise be required to be made to such individual by this Plan for
such Plan Year under Section 4.8(a) shall be limited to the excess of Elective
Contributions over such dollar limit as of the date of such transfer (and the
earnings attributable to such excess contributions). The Elective Contributions
(and earnings) that would be distributed to such individual by this Plan under
Section 4.8(a) but for the preceding sentence shall, instead, be distributed to
such individual by the Gelman Plan.

                                      -47-
<PAGE>

         (c) In the case of any individual whose employment is so transferred,
and whose contributions under the Gelman Plan are required to be taken into
account in computing his actual deferral percentage and contribution percentage
under this Plan for any Plan Year, and who must receive a distribution of any
contributions (and earnings), or forfeit any Matching Contributions (and
earnings), for such Plan Year in order for this Plan and/or the Gelman Plan to
satisfy the requirements of section 401(k) or (m) of the Code:

                  (1) if Elective Contributions must be so distributed for such
         year, the Elective Contributions made under the Gelman Plan during such
         year shall be distributed before any Elective Contributions made under
         this Plan for such year are distributed; and

                  (2) if Voluntary and Matching Contributions must be so
         distributed, or if Matching Contributions must be so forfeited, for
         such year, the Voluntary Contributions made under this Plan for such
         year shall be distributed before any Matching Contributions made under
         the Gelman Plan during such year are distributed or forfeited.

         11.3. Transfer of Employment From Gelman to an Employer.

         (a) In the case of any individual whose employment is transferred from
Gelman to an Employer, and whose Elective Contributions under the Gelman Plan,
as of the date of such transfer, are not in excess of the dollar limit under
Code section 402(g) for the Plan Year in which such transfer occurs, any
distribution of Elective Contributions (and earnings), which is otherwise
required by this Plan and the Gelman Plan because such contributions exceed such
dollar limit for such Plan Year, shall be made entirely from this Plan under
Section 4.8(a).

         (b) In the case of any individual whose employment is so transferred,
and whose Elective Contributions under the Gelman Plan, as of the date of such
transfer, are in excess of the dollar limit under Code section 402(g) for the
Plan Year in which such transfer occurs, any distribution of Elective
Contributions (and earnings) that would otherwise be required to be made to such
individual by the Gelman Plan for such Plan Year shall be limited to the excess
of Elective Contributions over such dollar limit as of the date of such transfer
(and the earnings attributable to such excess contributions). The Elective
Contributions (and earnings) that would be distributed to such individual by the
Gelman Plan but for the preceding sentence shall, instead, be distributed to
such individual by this Plan under Section 4.8(a).

         (c) In the case of any individual whose employment is so transferred,
and whose contributions under the Gelman Plan are required to be taken into
account in computing his actual deferral percentage and contribution percentage
under this Plan for any Plan Year, and who must receive a distribution of any
contributions (and earnings), or forfeit any Matching Contributions (and
earnings), for such Plan Year in order for this Plan and/or the Gelman Plan to
satisfy the requirements of section 401(k) or (m) of the Code:

                  (1) if Elective Contributions must be so distributed for such
         year, the Elective Contributions made under this Plan for such year
         shall be distributed before any Elective Contributions made under the
         Gelman Plan during such year are distributed; and

                                      -48-
<PAGE>

                  (2) if Voluntary and Matching Contributions must be so
         distributed, or Matching Contributions must be so forfeited for such
         year, the Voluntary Contributions made under this Plan for such year
         shall be distributed before any Matching Contributions made under the
         Gelman Plan during such year are distributed or forfeited.

         11.4. Plan Loans. If the employment of any individual is transferred
from an Employer to Gelman, and on the date of such transfer there is an
outstanding principal balance on any loan to such individual from the Plan, the
Committee may, in its discretion and under such terms and conditions as the
Committee shall prescribe, permit such individual to continue making installment
payments on the loan after such transfer, by employer deduction from his
paychecks from Gelman or otherwise, until the loan has been fully repaid. In the
case of any individual who receives such permission, such outstanding principal
balance shall not become immediately due and payable, and such loan shall not
otherwise be treated as being in default, merely as a result of such transfer of
employment, or merely as a result of any change in the time or manner for making
the installment payments on such loan under the preceding sentence.

         11.5. Article Ceases to Apply. Notwithstanding any other provisions of
the Plan to the contrary, this Article shall not apply to, or with respect to,
any individual who transfers employment from an Employer to Gelman, or from
Gelman to an Employer, on or after January 1, 1999.

                           ARTICLE 12 - MISCELLANEOUS

         12.1. Plan Assets to be Held for Exclusive Benefit of Members. The
assets of the Plan shall never inure to the benefit of the Employers and shall
be held for the exclusive purposes of providing benefits to Members of the Plan
and their spouses and other beneficiaries, and defraying the reasonable costs
and expenses of administering the Plan. However, this Section shall not prevent
a contribution made by any Employer under the Plan from being returned to it, or
other Plan assets to be distributed to an Employer, in the following
circumstances:

         (a) If an amount is contributed under the Plan by an Employer pursuant
to a mistake of fact, the amount so contributed shall be returned to such
Employer within one year of the date of such contribution.

         (b) Each contribution which an Employer makes under the Plan is
conditioned upon the deductibility of such contribution under section 404 of the
Code. To the extent a deduction therefor is not allowed, the amount of any such
contribution shall be returned to such Employer within one year after the
contribution is determined to be nondeductible.

                                      -49-
<PAGE>

         12.2. Nonassignability of Rights. Except to the extent provided in
Section 12.3, no interest, right or claim in or to any part of the Trust Fund or
any payment therefrom shall be assignable, transferable or subject to sale,
mortgage, pledge, garnishment, attachment, execution or levy of any kind, and
the Trustee shall not recognize any attempt to assign, transfer, sell, mortgage,
pledge, garnish, attach or execute the same.

         12.3. Qualified Domestic Relations Orders. To the extent so provided in
an order that the Committee determines to constitute a "qualified domestic
relations order" within the meaning of section 414(p)(1)(A) of the Code
("QDRO"), the right to receive all or a portion of the benefits payable under
the Plan with respect to a Member may be assigned or transferred by the Member
to any "alternate payee" within the meaning of section 414(p)(8) of the Code
("Alternate Payee") specified in such QDRO. Notwithstanding any other provision
in this Plan to the contrary, if a QDRO so provides, the portion of a Member's
interest in the Plan which is payable under the QDRO to any Alternate Payee
shall be distributed to such Alternate Payee, in the form of a single lump sum
payment, as soon as practicable after the Committee has determined that such
order constitutes a QDRO. The Committee shall establish written procedures for
qualifying and administering QDROs submitted to the Plan, and shall amend,
modify or restate such procedures at any time, in its sole discretion.

         12.4. Military Leaves of Absence. With respect to any period of absence
from employment taken by a Member for military service, to the extent required
by section 414 (u) of the Code:

         (a) the Member shall be credited with Hours of Service and days of
Service, and shall be deemed to receive Compensation, for such period;

         (b) the Member shall receive an allocation under Section 3.4 of any
Employer contribution made for such period; and

         (c) at the conclusion of such period, the Member shall be permitted to
make any 401(k) Contributions and Voluntary Contributions that he would have
been able to make to the Plan during such period but for the absence.

In addition to the above, the Committee may permit the suspension of repayments
during any such period of absence on any loan that was made by the Plan to the
Member prior to the start of such period, to the extent that such suspension is
permitted under section 414 (u) of the Code.

         12.5. Trust Fund as Sole Source of Benefit Payments. The Trust Fund
shall be the sole source of payment of benefits under the Plan. In no event
shall any Employer or any other Affiliated Company be liable to any Member or to
any other individual for the payment of such benefits.

         12.6. Right to Employment. The Plan shall not confer upon any Employee
any right of employment, nor shall any provision of the Plan interfere with the
right of any Employer to discharge any Employee.

                                      -50-
<PAGE>

         12.7. Gender and Number. Words used in the masculine include the
feminine gender. Words used in the singular or plural shall be construed as if
plural or singular, respectively, where they would so apply.

         12.8. Titles. Titles of Articles, Sections and subsections are inserted
for convenience and shall not affect the meaning or construction of the Plan.

         12.9. Notifications. Except as otherwise provided above, any written
notification required to be given to a Member hereunder may be given by sending
such notification to him by first class mail, addressed to him at the address
most recently listed for him in the records of his Employer.

                                      -51-
<PAGE>

                                   APPENDIX A

The following distribution provisions apply to accounts transferred to the Plan
from the plans identified below for the relevant purposes and periods specified
in Section 7.1(b) and (f) of the Plan:

I. Filtron Technology Corporation 401(k) Savings Plan

         The various forms of distribution under the Filtron Technology 401(k)
Savings Plan were contained in Article VI thereof, as follows in relevant part:

6.01 Automatic Forms of Distribution

         Unless a qualified election of an optional form of benefit has been
made within the election period (see Section 6.03(1)), the automatic form of
benefit payable to or on behalf of a Member is determined as follows:

         (a) automatic form of retirement benefit for a Member who does not die
before his Annuity Starting Date shall be the Qualified Joint and Survivor Form.

         (b) The automatic form of death benefit for a Member who dies before
his Annuity Starting Date shall be:

                  (1) A Qualified Preretirement Survivor Annuity for a Member
who has a spouse to whom he has been continuously married throughout the
one-year period ending on the date of his death. The spouse may elect to start
receiving the death benefit on any first day of the month on or after the Member
dies and by the date the Member would have been age 70 1/2. If the spouse dies
before benefits start, the Member's Vested Account, determined as of the
spouse's death, shall be paid to the spouse's Beneficiary.

                  (2) A single sum payment to the Member's Beneficiary for a
Member who does not have a spouse who is entitled to a Qualified Preretirement
Survivor Annuity.

6.02 Optional Forms of Distribution and Distribution Requirements

         (b) The optional forms of retirement benefit shall be the following: a
straight life annuity; single life annuity with certain periods of five, ten, or
fifteen years; a single life annuity with installment refund; survivorship life
annuities with installment refund and survivorship percentages of 50, 66 2/3, or
100; fixed period annuities for any period of whole months which is not less
than sixty and does not exceed the Life Expectancy of the Member and the named
Beneficiary as provided in (d) below where the Life Expectancy is not
recalculated; and a series of installments chosen by the Member with a minimum
payment each year beginning with the year the Member turns age 70 1/2 . The
payment for the first year in which a minimum payment is required will be made
by April 1 of the following calendar year. The payment for the second year and
each successive year will be made by December 31 of that year. The minimum
payment will be based on a period equal to the Joint and Last Survivor
Expectancy of the Member and the Member's spouse, if any, as provided in (d)
below where the Joint and Last Survivor Expectancy is recalculated. The balance
of the Member's Vested Account, if any, will be payable on the Member's death to
his Beneficiary in a single sum. If not prohibited in item Y of the Adoption
Agreement - Plus, a single sum payment is also available.

--------------------
(1) This and all other cross references in part I are to the Filtron Technology
401(k) Savings Plan.

                                      -52-
<PAGE>

         (c) The optional forms of death benefit are a single sum payment and
any annuity that is an optional form of retirement benefit. However, a series of
installments shall not be available if the Beneficiary is not the spouse of the
deceased Member.

II. Gelman Sciences 401(k) Savings Plan

         The various forms of distribution under the Gelman Sciences 401(k)
Savings Plan were contained in Article XVI thereof, as follows in relevant part:

16.2 Normal Form of Payment

         Except as otherwise provided in Section 16.62, unless a Participant, or
his Beneficiary, if the Participant has died, elects one of the optional forms
of payment provided in Section 16.3, distribution shall be made to the
Participant, or his Beneficiary, as the case may be, in a single sum payment.
Distribution shall be made in cash or in kind, as elected by the Participant,
except that distribution shall not be made in Employer stock.

16.3 Optional Forms of Payment

         A Participant, or his Beneficiary, as the case may be, may elect to
receive distribution in one of the following optional forms of payment:

         (a) Installment Payments - Distribution shall be made in a series of
installments over a period not exceeding the life expectancy of the Participant,
or the Participant's Beneficiary, if the Participant has died, or a period not
exceeding the joint life and last survivor expectancy of the Participant and his
Beneficiary. Each installment shall be equal in amount except as necessary to
adjust for any changes in the value of the Participant's Separate Account. The
determination of life expectancies shall be made on the basis of the expected
return multiples in Tables V and VI of Section 1.72-9 of the Treasury
regulations and shall be calculated either once at the time installment payments
begin or annually for the Participant and/or his Beneficiary, if his Beneficiary
is his spouse, as elected by the Participant at the time installment payments
begin. Distribution shall be made in cash or in kind, as elected by the
Participant, except that distribution shall not be made in Employer stock.

--------------
(2) This and all other cross references in part II are to the Gelman Sciences
401(k) Savings Plan.

                                      -53-
<PAGE>

         (b) Annuity Contract - Distribution shall be made through the purchase
of a single premium, nontransferable annuity contract for such term and in such
form as the Participant, or his Beneficiary, if the Participant has died, shall
select, subject to the provisions of Section 16.5; provided, however, that a
Participant's Beneficiary may not elect to receive distribution of an annuity
payable over the joint lives of the Beneficiary and any other individual. The
terms of any annuity contract purchased hereunder and distributed to a
Participant or his Beneficiary shall comply with the requirements of the Plan.

16.4 Change of Option Election

         Subject to the provisions of Section 16.5, a Participant or Beneficiary
who has elected an optional form of payment under Section 16.3 may revoke or
change his election at any time prior to his annuity starting date [as defined
in Section 16.1(a)] by filing with the Administrator a written election in the
form prescribed by the Administrator.

16.5 Form of Annuity Requirements

         If a Participant elects to receive distribution through the purchase of
an annuity contract, distribution shall be made to such Participant through the
purchase of an annuity contract that provides for payment in one of the
following automatic annuity forms [as defined in Section 16.1(b)], unless the
Participant elects a different type of annuity:

         (a) The automatic annuity form for a Participant who is married on his
annuity starting date is the 50 percent qualified joint and survivor annuity [as
defined in Section 16.1(e)].

         (b) The automatic annuity form for a Participant who is not married on
his annuity starting date is the single life annuity [as defined in Section
16.1(g)].

         A Participant's election of an annuity other than the automatic annuity
form shall not be effective unless it is a qualified election [as defined in
Section 16.1(c)]; provided, however, that spousal consent shall not be required
if the form of annuity elected by the Participant is a qualified joint and
survivor annuity. A Participant who has elected the optional annuity form of
payment can revoke or change his election only pursuant to a qualified election.

16.6 Qualified Preretirement Survivor Annuity Requirements

         If a married Participant elects to receive distribution through the
purchase of an annuity contract and dies before his annuity starting date, his
spouse shall receive distribution of the value of the Participant's vested
interest in his Separate Account through the purchase of an annuity contract
that provides for payment over the life of the Participant's spouse. A
Participant's spouse may elect to receive distribution under any one of the
other forms of payment available under this Article instead of in the qualified
preretirement survivor annuity form [as defined in Section 16.1(f)]. If a
married Participant's Beneficiary designation on file with the Administrator
pursuant to Article XVII designates a non-spouse Beneficiary, the designation
shall become inoperative upon the Participant's election to receive distribution
through the purchase of an annuity contract, unless the Participant files a new
designation of Beneficiary form with the Administrator. A Participant can only
designate a non-spouse Beneficiary to receive distribution of that portion of
his Separate Account otherwise payable as a qualified preretirement survivor
annuity pursuant to a qualified election.

                                      -54-
<PAGE>

16.9 Reemployment

         If a Participant is reemployed by an Employer or a Related Company
prior to receiving distribution of the entire balance of his vested interest in
his Separate Account, his prior election of a form of payment hereunder shall
become ineffective. Notwithstanding the foregoing, if a Participant had elected
to receive distribution through the purchase of an annuity contract, the
requirements of Sections 16.5 and 16.6 of the Plan shall continue in effect with
respect to that portion of his Separate Account attributable to his prior
employment.

16.10 Section 242(b)(2) Elections

         Notwithstanding any other provisions of this Article and subject to the
requirements of Sections 16.5 and 16.6, distribution on, behalf of a
Participant, including a five-percent owner, may be made pursuant to an election
under Section 242(b)(2) of the Tax Equity and Fiscal Responsibility Act of 1982
and in accordance with all of the following requirements:

         (a) The distribution is one which would not have disqualified the Trust
under Section 401(a)(9) of the Code as in effect prior to amendment by the
Deficit Reduction Act of 1984.

         (b) The distribution is in accordance with a method of distribution
elected by the Participant whose interest in the Trust is being distributed or,
if the Participant is deceased, by a Beneficiary of such Participant.

         (c) Such election was in writing, was signed by the Participant or the
Beneficiary, and was made before January 1, 1984.

         (d) The Participant had accrued a benefit under the Plan as of December
31, 1983.

         (e) The method of distribution elected by the Participant or the
Beneficiary specifies the time at which distribution will commence, the period
over which distribution will be made and, in the case of any distribution upon
the Participant's death, the Beneficiaries of the Participant listed in order of
priority.

                                      -55-
<PAGE>

         A distribution upon death shall not be made under this Section unless
the information in the election contains the required information described
above with respect to the distributions to be made upon the death of the
Participant. For any distribution which commences before January 1, 1984, but
continues after December 31, 1983, the Participant or the Beneficiary to whom
such distribution is being made will be presumed to have designated the method
of distribution under which the distribution is being made, if this method of
distribution was specified in writing and the distribution satisfies the
requirements in paragraphs (a) and (e) of this Section. If an election is
revoked, any subsequent distribution will be in accordance with the other
provisions of the Plan. Any changes in the election will be considered to be a
revocation of the election. However, the mere substitution or addition of
another Beneficiary (one not designated as a Beneficiary in the election), under
the election will be not considered to be a revocation of the election, so long
as such substitution or addition does not alter the period over which
distributions are to be made under the election directly, or indirectly (for
example, by altering the relevant measuring life).

                                      -56-<PAGE>

                                PALL CORPORATION

                         MANAGEMENT STOCK PURCHASE PLAN

                                      -----

1. Purpose.

         This document sets forth the Pall Corporation Management Stock Purchase
Plan as adopted effective June 29, 1999 and amended effective October 1, 1999,
January 19, 2000, March 28, 2001, and July 16, 2002.

         The purpose of the Plan is to encourage key employees of the
Corporation and its Affiliated Companies to increase their ownership of shares
of the Corporation's Common Stock by providing such employees with an
opportunity to elect to have portions of their total annual compensation paid in
the form of Restricted Units, and to have additional matching Restricted Units
credited with respect thereto.

         The Plan also provides certain employees with an opportunity to elect
to defer payment with respect to the Restricted Units credited to them that
become vested. With respect to these provisions, the Plan is intended to
constitute an unfunded plan of deferred compensation for "a select group of
management or highly compensated employees" within the meaning of Sections
201(2), 301(a)(3) and 401(a)(1) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA").

2. Definitions.

         As used herein, the following terms shall have the following meanings:

         "Account" and "Subaccount" shall mean, respectively, the account, and
each Subaccount within such Account, that is established for a Participant
pursuant to Section 8.

         "Affiliated Companies" shall mean each direct or indirect subsidiary of
the Corporation.

         "Beneficiary" shall mean the person or persons designated by a
Participant in accordance with Section 12 to receive any payment that is
required to be made under the Plan upon the Participant's death.

         "Board of Directors" shall mean the Board of Directors of the
Corporation.

         "Bonus" shall mean, with respect to any Eligible Employee for any Plan
Year, the Bonus payable to such Eligible Employee during such year under the
Corporation's Executive Incentive Bonus Plan, or, if applicable, under the terms
of the Eligible Employee's employment agreement with the Corporation, or under
any other plan, program or arrangement of annual incentive compensation
maintained by the Corporation or any of its Affiliated Companies.

                                      -1-
<PAGE>

         "Bonus Payment Date" shall mean each date on which Bonus payments are
made under the Corporation's Executive Incentive Bonus Plan.

         "Business Day" shall mean any day on which the Corporation's principal
office in the U.S. is open for business.

         "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 the same may
                           have been amended or extended to the time in question
                           or in any successor agreement (the "Rights
                           Agreement"); or

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

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

                  (d)      the date on which the number of duly elected and
                           qualified directors of the 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.

         "Closing Price" shall mean, as of any date, the closing price of a
share of Common Stock as reported on the New York Stock Exchange Composite Tape
for such date.

         "Committee" shall mean the CEO and such other officers of the
Corporation as the CEO in his discretion may appoint from time to time. The CEO
shall have the power to remove any other member of the Committee at any time.

         "Common Stock" shall mean the shares of common stock ($0.10 par value)
of the Corporation.

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

         "Corporation" shall mean Pall Corporation.

                                      -2-
<PAGE>

         "Crediting Date" shall mean, with respect to any Initial Award
Restricted Unit Subaccount, Purchased Restricted Unit Subaccount or Matching
Restricted Unit Subaccount maintained for a Participant under Section 8, the
date as of which Restricted Units, or Matching Restricted Units, were first
credited to such Subaccount pursuant to Section 5(a), (b), (c), (d), or (e).

         "Deferred Vested Units" shall mean Vested Units with respect to which
the Participant has elected to defer payment in accordance with the provisions
of Section 7(d) hereof.

         "Dividend Equivalent Units" shall mean additional Restricted Units or
additional Deferred Vested Units credited to a Participant's Account pursuant to
Section 5(f) or Section 7(d)(vi).

         "Dividend Payment Date" shall mean each date on which the Corporation
pays a dividend on its Common Stock.

         "Eligible Employee" shall mean, with respect to any Plan Year, any
Employee who has been designated under Section 4 as eligible to be credited with
Restricted Units for such Plan Year.

         "Employee" shall mean any person employed by the Corporation or any of
its Affiliated Companies.

         "Involuntary Termination" shall mean the termination of a Participant's
employment with the Corporation and all of its Affiliated Companies by the
Corporation, or by any of its Affiliated Companies, for any reason other than
for disability or for cause.

         "Matching Restricted Units" shall mean Restricted Units that are
credited to a Participant's Account pursuant to Section 5(e), to match
Restricted Units that are credited to the Participant's Account under Section
5(b), (c) or (d).

         "Participant" shall mean any Employee for whom an Account has been
established, and is being maintained, pursuant to Section 8 hereof.

         "Plan" shall mean the Pall Corporation Management Stock Purchase Plan
as set forth herein and as amended from time to time.

         "Plan Year" shall mean the period beginning on August 1 of each
calendar year and ending on July 31 of the following calendar year.

         "Restricted Unit" shall mean a Unit credited to a Participant pursuant
to Section 5 that has not yet become vested in accordance with the provisions of
Section 6.

         "Retirement" shall mean the termination of a Participant's employment
with the Corporation and all of its Affiliated Companies, if at the time of such
termination of employment the Participant has attained age 62 and is eligible to
receive (i) a Retirement Benefit under Section 3.1, 3.2 or 3.3 of the Pall
Corporation Pension Plan or (ii), in the case of any Participant who is not a
resident of the U.S., a similar type of benefit under any plan or program
maintained by the Corporation or any of its Affiliated Companies (or to which
the Corporation or any of its Affiliated Companies makes contributions) that
provides benefits to Employees upon their retirement.

                                      -3-
<PAGE>

         "Trading Day" shall mean any day on which the New York Stock Exchange
is open for trading.

         "Unit" shall mean a unit of measurement equivalent to one share of
Common Stock, with none of the attendant rights of a shareholder of such share,
including, without limitation, the right to vote such share and the right to
receive dividends thereon, except to the extent otherwise specifically provided
herein.

         "Vested Unit" shall mean a Unit credited to a Participant pursuant to
Section 5 that has become vested in accordance with the provisions of Section 6.

         "Vesting Date" shall mean, with respect to any Restricted Units
credited to a Participant's Account, the date on which such Restricted Units
become vested in accordance with the provisions of Section 6.

3. Maximum Number of Shares of Common Stock Available.

         The number of shares of Common Stock that may be distributed with
respect to Restricted Units and Deferred Vested Units credited to Participants
under the Plan, (including Dividend Equivalent Units credited with respect to
such Units) shall be limited to 1,000,000 shares of Common Stock. If any
Restricted Units initially credited to a Participant shall be forfeited, the
number of shares of Common Stock no longer payable with respect to the
Restricted Units so forfeited shall thereupon be released and shall thereafter
be available for the crediting of new Restricted Units under the Plan. The
limitation provided under this Section 3 shall be subject to adjustment as
provided in Section 9.

         The shares of Common Stock distributed under the Plan may be authorized
and unissued shares, shares held in the treasury of the Corporation, or shares
purchased on the open market by the Corporation at such time or times and in
such manner as it may determine. The Corporation shall be under no obligations
to acquire shares of Common Stock for distribution to Participants before
payment in Common Stock is due.

4. Eligibility.

         An Employee shall be eligible to be credited with Restricted Units
under Section 5 during any Plan Year only if he or she has been designated by
the Compensation Committee as an Eligible Employee with respect to such year.

                                      -4-
<PAGE>

         Upon the recommendation of the CEO, the Compensation Committee may
select as an Eligible Employee for any Plan Year any Employee who is expected to
make significant contributions during the course of such year to the success of
the Corporation and its Affiliated Companies and to the growth of their
businesses.

         Any person who has been selected as an Eligible Employee for any Plan
Year shall continue to be an Eligible Employee in the Plan for each subsequent
Plan Year during the period of his or her employment, subject, however, to the
Compensation Committee's right to terminate such individual's eligibility
effective beginning as of the first base salary payment date or, if earlier, the
first Bonus Payment Date occurring after the date on which the Compensation
Committee makes its determination to terminate such individual's eligibility.

5. Crediting of Restricted Units.

         For each Plan Year, Eligible Employees shall be credited with
Restricted Units in accordance with the following provisions:

         (a) Initial Award Units. Each Employee who is an Eligible Employee for
the Plan Year that begins on August 1, 1999 shall be credited as of such date
with such number of Restricted Units as the Compensation Committee in its sole
discretion may determine for such Employee. To the extent that the Compensation
Committee in its sole discretion so determines, any Employee who is designated
as an Eligible Employee at any time after August 1, 1999 shall be credited, as
of the date specified by the Compensation Committee in such determination, with
such number of Restricted Units as the Compensation Committee may determine for
such Employee.

         (b) Bonus Units. Each Employee who is an Eligible Employee for any Plan
Year beginning on or after August 1, 1999 may elect to have any part or all of
any Bonus that may become payable to the Participant during such year paid in
the form of Restricted Units that will be credited to his or her Account
hereunder and distributed in accordance with the provisions of this Plan,
instead of being paid to the Eligible Employee in cash. If an Eligible Employee
has so elected, the Eligible Employee's Account shall be credited on the first
Bonus Payment Date during such year with a number of Restricted Units determined
by dividing (i) the total amount of the portion of the Eligible Employee's Bonus
payable during such year which the Eligible Employee elected to have paid in the
form of Restricted Units, by (ii) the Closing Price of a share of Common Stock
on such Bonus Payment Date or, if such date is not a Trading Day, on the next
following day that is a Trading Day. In the event that an Eligible Employee's
Bonus is payable in a unit of currency other than U.S. dollars, the portion of
the bonus which the Eligible Employee has elected to have paid in the form of
Restricted Units shall be converted to U.S. dollars on the Crediting Date (the
first Bonus Payment Date during the Plan Year in which such Bonus is payable) at
a rate equal to the exchange rate of such currency and U.S. dollars on such
Crediting Date as reported in The Wall Street Journal in its issue following the
Crediting Date.

                                      -5-
<PAGE>

         (c) Base Salary Units. Each Employee who is an Eligible Employee for
any Plan Year beginning on or after August 1, 1999 may elect to have up to 50%
of the amount of the base salary otherwise payable to the Eligible Employee on
each payday during such year paid in the form of Restricted Units that will be
credited to his or her Account hereunder and distributed in accordance with the
provisions of this Plan, instead of being paid to the Eligible Employee in cash.
If an Eligible Employee has so elected, the amount specified in such election
shall be withheld from the payment of base salary otherwise required to be made
to the Eligible Employee on each payday during such year, and the Eligible
Employee's Account shall be credited on January 31 and on July 31 of such year,
with a number of Restricted Units determined by dividing (i) the aggregate
amount so withheld from the start of such year, in the case of the Restricted
Units to be credited on January 31, or from January 31, in the case of the
Restricted Units to be credited on July 31, by (ii) the Closing Price of a share
of Common Stock on the applicable crediting date or, if such date is not a
Trading Day, on the next following day that is a Trading Day. In the event that
an Eligible Employee's base salary is payable in a unit of currency other than
U.S. dollars, the aggregate amount withheld shall be converted to U.S. dollars
on the January 31 or July 31 Crediting Date, as the case may be, at a rate equal
to the exchange rate of such currency and U.S. dollars on such Crediting Date as
reported in The Wall Street Journal in its issue following the Crediting Date.

         (d) Cash Payment Units. Each Employee who is an Eligible Employee for
any Plan Year beginning on or after August 1, 1999 may make a direct cash
payment to the Corporation at least seven days prior to (i) the first Bonus
Payment Date during such Plan Year and/or (ii) January 31 of such Plan Year. The
Crediting Dates with respect to such direct cash payments shall be (i) the first
Bonus Payment Date of the Plan Year with respect to cash payments made at least
seven days prior to such Bonus Payment Date and (ii) January 31 with respect to
cash payments made at least seven days prior to that date. In consideration of
any such cash payment, the Eligible Employee shall have his or her Account
credited, on the relevant Crediting Date, with a number of Restricted Units
determined by dividing (i) the amount of such cash payment by (ii) the Closing
Price of a share of Common Stock on such Crediting Date or, if such date is not
a Trading Day, on the next following day that is a Trading Day. In the event
that an Eligible Employee's direct cash payment is made in a unit of currency
other than U.S. dollars, the amount of such payment shall be converted to U.S.
dollars on the relevant Crediting Date, at a rate equal to the exchange rate of
such currency and U.S. dollars on such Crediting Date as reported in The Wall
Street Journal in its issue following the Crediting Date.

         The aggregate amount of the direct cash payments that an Eligible
Employee may make under this Section 5(d) during any Plan Year shall not exceed
the sum of (x) the amount by which 50% of the Eligible Employee's base salary
for such year exceeds the portion thereof which the Eligible Employee has
elected under Section 5(c) to have paid in the form of Restricted Units, plus
(y) the amount by which the Bonus payable to the Eligible Employee during such
Plan Year exceeds the portion thereof which the Eligible Employee elected under
Section 5(b) to have paid in the form of Restricted Units.

                                      -6-
<PAGE>

         (e) Matching Units. On each date on which any Restricted Units are
credited to an Eligible Employee's Account pursuant to the provisions of
paragraphs (b), (c) or (d) of this Section 5, there shall also be credited to
the Eligible Employee's Account on that date a number of Matching Restricted
Units equal to (i) 50% of the number of Restricted Units credited on such date,
in the case of Restricted Units credited during the Plan Year beginning on
August 1, 1999, (ii) 33 1/3% of the number of Restricted Units credited on such
date, in the case of Restricted Units credited during each Plan Year beginning
on or after August 1, 2000, through and including the Plan Year beginning on
August 1, 2002, and (iii) 50% of the number of Restricted Units credited on such
date, in the case of Restricted Units credited during each Plan Year beginning
on or after August 1, 2003.

         (f) Dividend Equivalents. Until the Vesting Date for the Restricted
Units that have been credited to a Participant's Account pursuant to paragraphs
(a), (b), (c), (d) and (e) of this Section 5, additional Restricted Units shall
be credited to the Participant's Account, with respect to the Restricted Units
so credited, as of each Dividend Payment Date. The number of additional
Restricted Units to be so credited shall be determined separately for each
Initial Award Restricted Unit Subaccount, for each Purchased Restricted Unit
Subaccount, and for each Matching Restricted Unit Subaccount, maintained for a
Participant pursuant to Section 8. The number of additional Restricted Units to
be credited to each such Subaccount shall be determined by first multiplying (A)
the total number of Restricted Units standing to the Participant's credit in
such Subaccount on the day immediately preceding such Dividend Payment Date
(including all Dividend Equivalent Units credited to such Subaccount on all
previous Dividend Payment Dates), by (B) the per-share dollar amount of the
dividend paid on such Dividend Payment Date and then, dividing the resulting
amount by the Closing Price of one share of Common Stock on such Dividend
Payment Date.

         (g) Election Procedures. Any election made by an Eligible Employee
under paragraph (b) or (c) of this Section 5 shall be made in accordance with,
and shall be subject to, the provisions set forth below.

                  (i) any such election shall be made in writing, on a form
         furnished to the Eligible Employee for such purpose by the Committee
         and filed by the Eligible Employee with the Committee.

                  (ii) An election under Section 5(b) with respect to the Bonus
         payable to an Eligible Employee during the Plan Year beginning on
         August 1, 1999 shall be made by no later than July 23, 1999. An
         election under Section 5(b) with respect to the Bonus payable to an
         Eligible Employee during any Plan Year beginning on or after August 1,
         2000 shall be made by no later than April 30 of the immediately
         preceding Plan Year. An election under Section 5(c) with respect to the
         base salary payable to an Eligible Employee during any Plan Year shall
         be made on or prior to the last Business Day preceding the start of
         such Plan Year. Notwithstanding the foregoing, any Employee who is
         hired after the start of a Plan Year but who is designated under
         Section 4 as an Eligible Employee for such year may make election under
         Section 5(c) with respect to his or her base salary for such year at
         any time during the 30-day period commencing on his or her date of
         hire; provided, however, that any election so made shall be effective
         only with respect to base salary payable to the Eligible Employee for
         periods of service beginning after the date on which he or she files
         such election with the Committee.

                                      -7-
<PAGE>

                  (iii) In his or her election form, the Eligible Employee shall
         specify, by dollar amount (which shall be an even multiple of $100) or
         by percentage (which shall be an even multiple of 1%), the portion of
         his or her Bonus and/or base salary that the Eligible Employee wishes
         to have paid in the form of Restricted Units credited to his or her
         Account, instead of in cash. The dollar amount or percentage so
         specified shall be at least equal to any minimum amount or percentage
         which the Committee in its discretion may have determined to be
         applicable to elections under Section 5(b) and/or Section 5(c) for the
         Plan Year.

                  (iv) Any election made under Section 5(b) or (c) for any Plan
         Year shall be irrevocable.

         (h) Other Election Rules. Elections made under Section 5(b) or (c)
shall be subject to the following rules:

                  (i) If an Eligible Employee who has made an election under
         Section 5(b) with respect to the Bonus payable to the Eligible Employee
         during any Plan Year terminates employment with the Company and all of
         its Affiliated Companies for any reason prior to any Bonus Payment Date
         for such Bonus but is nevertheless entitled to receive a Bonus payment
         on such date, the portion of such payment that is otherwise required to
         be paid by means of the crediting of Restricted Units to the Eligible
         Employee's Account pursuant to his or her election under Section 5(b)
         shall not be paid in such form, but shall be paid instead in the form
         of a single lump sum cash payment. Such payment shall be made as soon
         as practicable after such Bonus Payment Date.

                  (ii) If an Eligible Employee who has made an election under
         Section 5(c) with respect to the base salary payable to the Eligible
         Employee during any Plan Year terminates employment with the Company
         and all of its Affiliated Companies for any reason prior to any date on
         which Restricted Units are to be credited to his or her Account with
         respect to amounts withheld from his or her base salary pursuant to
         such election, no Restricted Units shall be so credited on such date
         but instead, the aggregate amount so withheld as of the date of the
         Eligible Employee's termination of employment shall be paid to the
         Eligible Employee, without interest thereon, in a single lump sum cash
         payment. Payment shall be made on such termination date, or as soon
         thereafter as is practicable.

                  (iii) Any election made by an Eligible Employee under Section
         5(b) or (c) shall not be given effect if, at any time during the
         12-month period ending on the date as of which any Restricted Units are
         otherwise required to be credited to his or her Account pursuant to
         such election, the Eligible Employee received a hardship withdrawal
         under Section 7.2 of the Pall Corporation Profit-Sharing Plan.

                                      -8-
<PAGE>

6. Vesting of Units.

         Restricted Units credited to a Participant's Account, and Dividend
Equivalent Units credited with respect thereto, shall become vested in
accordance with the provisions set forth below.

         (a) All Restricted Units standing to a Participant's credit in any
Initial Award Restricted Unit Subaccount, Purchased Restricted Unit Subaccount
or Matching Restricted Unit Subaccount maintained for the Participant under
Section 8 (including, in each case, all such Units that are Dividend Equivalent
Units) shall become vested on the earliest to occur of the following dates:

                  (i) the third anniversary of the Crediting Date for any such
         Subaccount with a Crediting Date on or before July 31, 2003,

                  (ii) the fourth anniversary of the Crediting Date for any such
         Subaccount with a Crediting Date after July 31, 2003,

                  (iii) the date of the Participant's death,

                  (iv) the date as of which the Participant first incurs a
         disability that entitles the Participant to a Social Security
         certificate of disability award under the Federal Social Security Act,
         or

                  (v) the date on which a Change in Control occurs.

         (b) If a Participant's employment with the Corporation and all of its
Affiliated Companies terminates as a result of Retirement or Involuntary
Termination prior to the third anniversary of a Crediting Date occurring on or
before July 31, 2003, or prior to the fourth anniversary of a Crediting Date
occurring after July 31, 2003, for any Initial Reward Restricted Unit
Subaccount, Purchased Restricted Unit Subaccount or Matching Restricted Unit
Subaccount maintained for the Participant under Section 8 and prior to the
occurrence of a Change in Control, as of the date of such termination of the
Participant's employment

                  (i) all Units in any such Purchased Restricted Unit Subaccount
         (including all such Units that are Dividend Equivalent Units), shall
         become vested;

                  (ii) the Earned Portion (as defined below) of all Units in any
         such Initial Award Restricted Unit Subaccount and in any such Matching
         Restricted Unit Subaccount (including all such Units that are Dividend
         Equivalent Units), shall become vested; and

                                      -9-
<PAGE>

                  (iii) the Unearned Portion (as defined below) of all Units in
         any such Initial Award Restricted Unit Subaccount and in any such
         Matching Restricted Unit Subaccount (including all such Units that are
         Dividend Equivalent Units) shall be forfeited, and the Participant
         shall have no further rights with respect thereto.

         For purposes of the foregoing, the "Earned Portion" of the Units in any
Initial Award Restricted Unit Subaccount and in any Matching Restricted Unit
Subaccount maintained for a Participant shall mean the percentage of such Units
determined (A) by dividing by 36 the number of months in the period beginning on
the Crediting Date for such Subaccount (if such Crediting Date is on or before
July 31, 2003) and ending on the date of the Participant's termination of
employment, or (B) by dividing by 48 the number of months in the period
beginning on the Crediting Date for such Subaccount (if such Crediting Date is
after July 31, 2003) and ending on the date of the Participant's termination of
employment, in either case (A) or (B) with any fraction of a month included in
such period treated as a full month; and the "Unearned Portion" of the Units in
any such Subaccount shall mean the percentage of such Units determined by
subtracting from 100% the Earned Portion of such Units, as determined under the
preceding clause.

         (c) If a Participant's employment with the Corporation and all of its
Affiliated Companies terminates for any reason other than death, disability,
Retirement or Involuntary Termination prior to the third anniversary of a
Crediting Date occurring on or before July 31, 2003, or prior to the fourth
anniversary of a Crediting Date occurring after July 31, 2003, for any Initial
Award Restricted Unit Subaccount, Purchased Restricted Unit Subaccount or
Matching Restricted Unit Subaccount maintained for the Participant under Section
8 and prior to the occurrence of a Change in Control, upon such termination of
the Participant's employment

                  (i) all Units in any such Initial Award Restricted Unit
         Subaccount and in any such Matching Restricted Unit Subaccount
         (including all such Units that are Dividend Equivalent Units), shall be
         forfeited, and the Participant shall have no further rights with
         respect thereto; and

                  (ii) all Units in any such Purchased Restricted Unit
Subaccount shall become vested.

7. Payment for Vested Units.

         Payment with respect to a Participant's Vested Units shall be made in
accordance with the provisions set forth below.

         (a) Time for Payment. Payment with respect to a Participant's Vested
Units shall be made to the Participant or, in the event of the Participant's
death, to his or her Beneficiary, as soon as practicable after the Vesting Date
for such Units, except as otherwise provided in paragraph (d) below.

                                      -10-
<PAGE>

         (b) Form of Payment. Except as provided in paragraph (c) below, payment
to be made in accordance with paragraph (a) above with respect to all Restricted
Units that have become vested on any Vesting Date shall be made in the form of a
single lump sum payment consisting of (i) a number of shares of Common Stock
equal to the total number of whole Restricted Units that have become vested on
such Vesting Date, and (ii) a cash payment for any fractional part of a
Restricted Unit that has become vested on such Vesting Date. The amount of such
cash payment shall be determined by multiplying such fractional part by the
Closing Price of a share of Common Stock on the first Trading Day preceding the
date of payment.

         (c) Payment on Termination. Payment to be made in accordance with
paragraph (a) above with respect to all Restricted Units that have become vested
pursuant to Section 6(c)(ii) on any Vesting Date shall be made by the issuance
of a number of shares of Common Stock determined by dividing the lesser of (x)
the aggregate value of such Units determined by multiplying the number of such
Units by the Closing Price of a share of Common Stock on the date or dates as of
which such Units were credited to the Participant's Account, or (y) the
aggregate value of such Units determined by multiplying the number of such Units
by the Closing Price of a share of Common Stock on such Vesting Date, by (z) the
Closing Price of a share of Common Stock on such Vesting Date. If such Vesting
Date was not a Trading Day, the Closing Price of a share of Common Stock on the
first Trading Day following such Vesting Date shall be used for purposes of the
preceding sentence. If the number of shares of Common Stock determined in
accordance with the provisions of the second preceding sentence includes a
fractional part of a share, payment with respect to such fractional part shall
be made in cash, in an amount determined by multiplying such fractional part by
the Closing Price of a share of Common Stock on the first Trading Day preceding
the date of payment.

         (d) Deferred Payment. Subject to the provisions of paragraph (e) below,
payment with respect to part or all of a Participant's Restricted Units that
become vested on any Vesting Date pursuant to Section 6(a)(i) shall be deferred,
and shall be made at the time and in the manner hereinafter set forth, if the
Participant so elects in accordance with the following provisions:

                  (i) An election by the Participant hereunder with respect to
         any Restricted Units that become vested on any Vesting Date shall be
         made in writing, on a form furnished to the Participant for such
         purpose by the Committee. The form shall be filed with the Committee at
         least one year prior to such Vesting Date.

                  (ii) In the Participant's election form, the Participant shall
         specify the number of such Restricted Units with respect to which the
         Participant wishes to defer payment, and the date on which payment with
         respect to such Units shall be made (the "Payment Date").

                  (iii) The Participant may select, as the Payment Date for such
         Units, the first Business Day of any of the following: (A) the third
         calendar year following the calendar year in which the Vesting Date for
         such Units occurs, or any later calendar month; (B) the calendar year
         following the date on which the Participant's employment with the
         Corporation or any of its Affiliated Companies terminates for any
         reason; or (C) the earlier of (x) any calendar year or month selected
         by the Participant which is a year or month permitted to be selected
         under clause (A) of this sentence, or (y) the calendar year referred to
         in clause (B).

                                      -11-
<PAGE>

                  (iv) Any election made hereunder by the Participant shall be
         irrevocable.

                  (v) As of the Vesting Date for any Restricted Units covered by
         a deferral election made by a Participant hereunder, the number of such
         Units shall be transferred from the Restricted Unit Subaccount or
         Matching Restricted Unit Subaccount in which such Units were recorded
         to the appropriate Deferred Vested Unit Subaccount established for the
         Participant under Section 8.

                  (vi) Until payment has been made with respect to all of the
         Units in any Deferred Vested Unit Subaccount maintained for the
         Participant under Section 8, there shall be credited to each such
         Subaccount, as of each Dividend Payment Date, a number of additional
         Deferred Vested Units determined by first multiplying (A) the total
         number of Deferred Vested Units standing to the Participant's credit in
         such Subaccount on the day immediately preceding such Dividend Payment
         Date (including all Dividend Equivalent Units credited to such
         Subaccount on all previous Dividend Payment Dates), by (B) the
         per-share dollar amount of the dividend paid on such Dividend Payment
         Date and then, dividing the resulting amount by the Closing Price of
         one share of Common Stock on such Dividend Payment Date.

                  (vii) Except as provided in subparagraph (viii) below, payment
         with respect to the Deferred Vested Units in any Deferred Vested Unit
         Subaccount maintained for the Participant shall be made on the Payment
         Date specified by the Participant in his or her deferral election with
         respect to such Units. Payment with respect to the Deferred Vested
         Units payable on any Payment Date shall be made (A) by the issuance of
         one share of Common Stock for each whole Deferred Vested Unit payable
         on such Payment Date, and (B) by a cash payment for any fractional part
         of a Deferred Vested Unit payable on such Payment Date. The amount of
         such cash payment shall be determined by multiplying such fractional
         part by the Closing Price of a share of Common Stock on the first
         Trading Day preceding the date of payment.

                  (viii) Notwithstanding any other provision in this Section 7
         to the contrary, payment with respect to any part or all of any
         Deferred Vested Unit Subaccount maintained for a Participant may be
         made to the Participant on any date earlier than the Payment Date
         specified by the Participant in his deferral election for such Units if
         (A) the Participant requests such early payment and (B) the Committee,
         in its sole discretion, determines that such early payment is necessary
         to help the Participant meet an "unforeseeable emergency" within the
         meaning of Section 1.457-2(h)(4) of the federal income tax regulations.
         The amount that may be so paid may not exceed the amount necessary to
         meet such emergency.

                                      -12-
<PAGE>

         (e) Limitations on Deferrals. A deferral election otherwise permitted
to be made under paragraph (d) above shall be subject to the following
limitations:

                  (i) The Committee may deny any Participant the right to make
         such election if it determines, in its sole discretion, that such
         deferral election by the Participant might cause the Plan to fail to be
         treated as a plan of deferred compensation "for a select group of
         management or highly compensated employees" for purposes of ERISA.

                  (ii) If a Change in Control should occur after the date on
         which the Participant's election form is filed with the Committee but
         before the date that otherwise would have been the Vesting Date under
         Section 6(a)(i) for the Units designated in such form, the
         Participant's deferral election shall not be given effect, and payment
         with respect to such Units shall be made in accordance with the other
         applicable provisions of this Section 7.

                  (iii) No deferral election shall be effective hereunder if, at
         any time during the 12-month period ending on the Vesting Date, the
         Participant received a hardship withdrawal under Section 7.2 of the
         Pall Corporation Profit-Sharing Plan.

                  (iv) No amount may be deferred with respect to the
         Participant's Vested Units pursuant to a Participant's deferral
         election hereunder to the extent that any tax is required to be
         withheld with respect to such amount pursuant to applicable federal,
         state or local law.

8. Accounts.

         There shall be established on the books and records of the Corporation,
for bookkeeping purposes only, a separate Account for each Participant, to
reflect the Participant's interest under the Plan.

         Within each Account so established for each Participant there shall be
established and maintained the following Subaccounts: an "Initial Award
Restricted Unit Subaccount" to reflect all Restricted Units to be credited to
the Participant's Account on any Crediting Date pursuant to Section 5(a); a
"Purchased Restricted Unit Subaccount" to reflect all Restricted Units to be
credited to the Participant's account on any Crediting Date pursuant to Section
5(b), (c) or (d); a "Matching Restricted Unit Subaccount" to reflect all
Matching Restricted Units to be credited to the Participant's Account on any
Crediting Date pursuant to Section 5(e); and a "Deferred Vested Unit Subaccount"
to reflect all Vested Units with respect to which a Participant has elected to
defer payment, and for which the Participant has selected the same Payment Date,
pursuant to Section 7(d).

                                      -13-
<PAGE>

         A Participant's Account and Subaccounts shall be adjusted from time to
time to reflect all Dividend Equivalent Units to be credited thereto pursuant to
Section 5(f) and Section 7(d)(vi), all payments made with respect to the Units
reflected therein pursuant to Section 7, and, in the case of any Initial Award
Restricted Unit Subaccount, Purchased Restricted Unit Subaccount or Matching
Restricted Unit Subaccount maintained for a Participant, any forfeitures of
Units reflected therein pursuant to Section 6.

         A Participant's interest in any Deferred Vested Unit Subaccount
maintained for the Participant shall be fully vested and nonforfeitable at all
times.

9. Certain Adjustments to Plan Shares.

         In the event of any change in the shares of Common Stock by reason of
any stock dividend, stock split, recapitalization, reorganization, merger,
consolidation, split-up, combination or exchange of shares, or any rights
offering to purchase shares of Common Stock at a price substantially below fair
market value, or any similar change affecting the shares of Common Stock, the
number and kind of shares represented by Units credited to Participants'
Accounts shall be appropriately adjusted consistent with such change in such
manner as the Compensation Committee, in its sole discretion, may deem equitable
to prevent substantial dilution or enlargement of the rights granted to, or
available for, the Participants hereunder. The Committee shall give notice to
each Participant of any adjustment made pursuant to this Section and, upon such
notice, such adjustment shall be effective and binding for all purposes.

10. Listing and Qualification of Common Stock.

         The Corporation, in its discretion, may postpone the issuance,
delivery, or distribution of shares of Common Stock with respect to any Vested
Units until completion of such stock exchange listing or other qualification of
such shares under any state or federal law, rule or regulation as the
Corporation may consider appropriate, and may require any Participant or
Beneficiary to make such representations and furnish such information as it may
consider appropriate in connection with the issuance or delivery of the shares
in compliance with applicable laws, rules and regulations.

11. Taxes.

         The Corporation or any of its Affiliated Companies may make such
provisions and take such steps as it may deem necessary or appropriate for the
withholding of all federal, state and local taxes required by law to be withheld
with respect to any payments to be made under the Plan including, but not
limited to (i) deducting the amount so required to be withheld from any other
amount then or thereafter payable to a Participant or Beneficiary, and/or (ii)
requiring a Participant or Beneficiary to pay to the Corporation or any of its
Affiliated Companies the amount so required to be withheld as a condition of the
issuance, delivery, or distribution of any shares of Common Stock. With the
approval of the Compensation Committee, the Committee may permit such amount to
be paid in shares of Common Stock previously owned by the Participant, or a
portion of the shares of Common Stock that otherwise would be distributed to
such Participant in respect to his or her Vested Units, or a combination of cash
and shares of Common Shares.

                                      -14-
<PAGE>

12. Designation and Change of Beneficiary.

         Each Participant shall file with the Committee a written designation of
one or more persons as the Beneficiary who shall be entitled to receive any
amount, or any shares of Common Stock, payable under the Plan upon his or her
death. A Participant may, from time to time, revoke or change his or her
Beneficiary designation without the consent of any previously designated
Beneficiary by filing a new designation with the Committee. The last such
designation received by the Committee shall be controlling; provided, however,
that no designation, or change or revocation thereof, shall be effective unless
received by the Committee prior to the Participant's death, and in no event
shall it be effective as of a date prior to such receipt. If at the date of a
Participant's death, there is no designation of a Beneficiary in effect for the
Participant pursuant to the provisions of this Section 12, or if no Beneficiary
designated by the Participant in accordance with the provisions hereof survives
to receive any amount, or any shares of Common Stock, payable under the Plan by
reason of the Participant's death, the Participant's estate shall be treated as
the Participant's Beneficiary for purposes of the Plan.

13. Rights of Participants.

         A Participant's rights and interests under the Plan shall be subject to
the following provisions:

         (a) A Participant shall have the status of a general unsecured creditor
of the Corporation with respect to his or her right to receive any payment under
the Plan. The Plan shall constitute a mere promise by the Corporation or the
applicable Affiliated Company to make payments in the future of the benefits
provided for herein. It is intended that the arrangements reflected in the Plan
be treated as unfunded for tax purposes, as well as for purposes of any
applicable provisions of Title I of ERISA.

         (b) A Participant'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 Participant
or his or her Beneficiary.

         (c) Neither the Plan nor any action taken hereunder shall be construed
as giving any Participant any right to be retained in the employment of the
Corporation or any of its Affiliated Companies.

         (d) No Participant shall have the right, by virtue of having been
selected as an Eligible Employee with respect to any Plan Year, to be
automatically treated as an Eligible Employee with respect to any subsequent
Plan Year.

                                      -15-
<PAGE>

         (e) No Restricted Units credited to a Participant's Account, and no
payments made with respect to such Units upon or after they become vested, shall
be considered as compensation under any employee benefit plan of the Corporation
or any of its Affiliated Companies, except as specifically provided in any such
plan or as otherwise determined by the Board of Directors.

14. 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; provided, however, that any questions as to the
rights under the Plan of any person who is an Elected Officer under Section
4.01(a), of the By-Laws of the Corporation, as amended on June 29, 1999 or
thereafter, shall be determined by the Compensation Committee instead of by the
Committee.

         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.

         All decisions, actions or interpretations of the Committee or the
Compensation Committee under the Plan shall be final, conclusive and binding
upon all parties. Notwithstanding the foregoing, any determination made by the
Committee or the Compensation 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.

15. 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 no amendment, suspension or termination of the Plan
shall adversely affect the rights of any Participant with respect to any Units
previously credited to the Participant's Account, without his or her written
consent.

16. 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 Participants' 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.

                                      -16-
<PAGE>

17. Governing Law.

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

18. Effective Date.

         The Plan was adopted effective as of June 29, 1999 by the Board of
Directors, acting by the Compensation 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 1999 annual meeting of the Corporation's shareholders.
Restricted Units may be credited to the Accounts of Eligible Employees as
provided herein prior to such shareholder approval, subject to such approval
being obtained at such meeting.

As adopted by the Compensation Committee of the
Board of Directors on June 29, 1999, amended by
that Committee by Consent dated October 1, 1999,
approved by shareholders at the annual meeting on
November 17, 1999 and further amended by the
Compensation Committee by Consents dated
January 19, 2000 and March 28, 2001, and at a
meeting held July 16, 2002.

                                      -17-

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