Document:

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                                  EXHIBIT 10.10

                                                          [Senior Vice President
                                                             Split Bonus, 08/01]

         EMPLOYMENT AGREEMENT dated November 15, 2001 between PALL CORPORATION,
a New York corporation (the "Company") and Reed Sarver ("Executive").

         WHEREAS, the parties hereto are parties to an employment agreement
dated August 1, 2001 (the "Existing Agreement"), and

         WHEREAS, in light of the approval by the shareholders of the Company on
November 14, 2001 of the Pall Corporation Executive Incentive Bonus Plan, the
parties desire to terminate the Existing Agreement and simultaneously replace it
with this Agreement, effective August 1, 2001,

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

Section 1.        Employment and Term

         The Company hereby employs Executive, and Executive hereby agrees to
serve, as an executive employee of the Company with the duties set forth inss.2,
for a term (hereinafter called the "Term of Employment") which began August 1,
2001 (the "Term Commencement Date") and ending, unless sooner terminated
underss.4, on the effective date specified in a notice of termination given by
either party to the other except that such effective date shall not be earlier
than the second anniversary of the date on which such notice is given.

Section 2.        Duties

         (a)      Executive agrees that during the Term of Employment he will
                  hold such offices or positions with the Company, and perform
                  such duties and assignments relating to the business of the
                  Company, as the Chief Executive Officer of the Company shall
                  direct except that Executive shall not be required to hold any
                  office or position or to perform any duties or assignment
                  inconsistent with his experience and qualifications.

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

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

Section  3.      Compensation During Term of Employment

         (a)      Base Salary. With respect to the period beginning on the Term
                  Commencement Date and ending on July 31, 2002, the Company
                  shall pay Executive a Base Salary (in addition to the
                  compensation provided for elsewhere in this Agreement) at the
                  rate of $150,020 per annum (hereinafter called the "Original
                  Base Salary"). With respect to each Contract Year beginning
                  with the Contract Year which starts August 1, 2002, the
                  Company shall pay Executive a Base Salary at such rate as the
                  Board of Directors may determine but not less than the
                  Original Base Salary adjusted as follows: The term "Contract
                  Year" as used herein means the period from August 1 of each
                  year through July 31 of the following year. For each Contract
                  Year during the Term of Employment beginning with the Contract
                  Year which starts August 1, 2002, the minimum compensation
                  payable to Executive under thisss.3(a) (hereinafter called the
                  "Minimum Base Salary") shall be determined by increasing (or
                  decreasing) the Original Base Salary by the percentage
                  increase (or decrease) of the Consumer Price Index (as
                  hereinafter defined) for the month of June immediately
                  preceding the start of the Contract Year in question over (or
                  below) the Consumer Price Index for June 2001. The term
                  "Consumer Price Index" as herein used means the "Consumer
                  Price Index for all Urban Consumers" compiled and published by
                  the Bureau of Labor Statistics of the United States Department
                  of Labor for "New York - Northern N. J. - Long Island,
                  NY-NJ-CT-PA". To illustrate the operation of the foregoing
                  provisions of thisss.3(a): Executive's Base Salary for the
                  Contract Year August 1, 2002 through July 31, 2003 shall be
                  not less than the Original Base Salary adjusted by the
                  percentage increase (or decrease) of the Consumer Price Index
                  for June 2002 over (or below) said Index for June 2001.
                  Further adjustment in the Minimum Base Salary shall be made
                  for each ensuing Contract Year, in each case (i) using the
                  Consumer Price Index for June 2001 as the base except as
                  provided in the immediately following paragraph hereof and
                  (ii) applying the percentage increase (or decrease) in the
                  Consumer Price Index since said base month to the Original
                  Base Salary to determine the Minimum Base Salary. The Base
                  Salary shall be paid in such periodic installments as the
                  Company may determine but not less often than monthly.

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                           If with respect to any Contract Year (including the
                  Contract Year beginning August 1, 2002) the Board of Directors
                  fixes the Base Salary at an amount higher than the Minimum
                  Base Salary, then (unless the order fixing such higher Base
                  Salary provides otherwise), for the purpose of determining the
                  Minimum Base Salary for subsequent Contract Years: (1) the
                  amount of the higher Base Salary so fixed shall be deemed
                  substituted for the Original Base Salary wherever the Original
                  Base Salary is referred to in the immediately preceding
                  paragraph hereof, and (ii) the base month for determining the
                  Consumer Price Index adjustment shall be June of the calendar
                  year in which the Contract Year to which such higher Base
                  Salary is applicable begins (e.g., if the Board of Directors
                  fixes a Base Salary for the Contract Year beginning August 1,
                  2002 which is higher than the Minimum Base Salary, then June
                  2002 would become the base month for the purposes of making
                  the CPI adjustment to determine the Minimum Base Salary for
                  subsequent Contract Years).

         (b)      Bonus Compensation.

                           (i) Plan Bonus. As used herein, the term "Bonus Plan"
                  means the Pall Corporation Executive Incentive Bonus Plan
                  adopted by the Compensation Committee of the Board of
                  Directors of the Company on July 17, 2001 and approved by
                  shareholders at the annual meeting of shareholders on November
                  14, 2001, a copy of which is annexed hereto and incorporated
                  herein by reference. Words and terms used herein with initial
                  capital letters and not defined herein are used herein as
                  defined in the Bonus Plan. With respect to each Fiscal Year of
                  the Company falling in whole or in part within the Term of
                  Employment beginning with the Fiscal Year ending August 3,
                  2002:

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

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

                  For purposes of determining the amount of the Bonus payable to
                  Executive for any Fiscal Year as provided in this ss.3(b)(i)
                  (the "Plan Bonus"), Executive's Target Bonus Percentage shall
                  be 28% of his Base Salary for such Fiscal Year.

                           (ii) Business Segment Bonus. Inasmuch as Executive's
                  services for the Company relate primarily to the operations of
                  a subsidiary, a division or other segment of the overall
                  operations of the Company and its subsidiaries (a "Business
                  Segment"), Executive shall be considered for additional bonus
                  compensation for each Fiscal Year based on the results of
                  operations of such Business Segment for such Fiscal Year. The
                  amount of such additional bonus compensation, if any, shall be
                  determined by the Chief Executive Officer in his sole
                  discretion but in no event shall such additional bonus
                  compensation exceed 42% of Executive's Base Salary.

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

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

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

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

         (a)      Disability or Death. If, during the Term of Employment,
                  Executive, by reason of physical or mental disability, is
                  incapable of performing his principal duties hereunder for an
                  aggregate of 130 working days out of any period of twelve
                  consecutive months, the Company at its option may terminate
                  the Term of Employment effective immediately by notice to
                  Executive given within 90 days after the end of such
                  twelve-month period. If Executive shall die during the Term of
                  Employment or if the Company terminates the Term of Employment
                  pursuant to the immediately preceding sentence by reason of
                  Executive's disability, the Company shall pay to Executive, or
                  to Executive's legal representatives, or in accordance with a
                  direction given by Executive to the Company in writing, the
                  following: (i) Executive's Base Salary to the end of the month
                  in which such death or termination for disability occurs and
                  Executive's Bonus Compensation prorated to said last day of
                  the month and (ii) for each month in the period from the end
                  of the month in which such death or termination for disability
                  occurs until the earlier of (x) the first anniversary of the
                  date of death or termination and (y) the date on which the
                  Term of Employment would have ended but for such death or
                  termination for disability, monthly payments of an amount
                  equal to 1/12th of 64% of the annual rate of Base Salary in
                  effect for Executive immediately prior to the date on which
                  Executive's death or termination for disability occurs (such
                  64% being comprised of one-half of such Base Salary and
                  one-half of Executive's Target Bonus Percentage set forth
                  inss.3 (b) hereof).

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         (b)      Retirement. (i) The Term of Employment shall end
                  automatically, without action by either party, on Executive's
                  65th birthday unless, prior to such birthday, Executive and
                  the Company have agreed in writing that the Term of Employment
                  shall continue past such 65th birthday. In the latter event,
                  unless the parties have agreed otherwise, the Term of
                  Employment shall be automatically renewed and extended each
                  year, as of Executive's birthday, for an additional one-year
                  term, unless either party has given a Non-Renewal Notice. A
                  Non-Renewal Notice shall be effective as of Executive's
                  ensuing birthday only if given not less than 60 days before
                  such birthday, and shall state that the party giving such
                  notice elects that this Agreement shall not automatically
                  renew itself further, with the result that the Term of
                  Employment shall end on Executive's ensuing birthday. (ii) If
                  the Term of Employment ends pursuant to thisss.4(b) by reason
                  of a notice given by either party as herein permitted or
                  automatically at age 65 or any subsequent birthday, the
                  Company shall pay to Executive, or to another payee specified
                  by Executive to the Company in writing, Executive's Base
                  Salary and Bonus Compensation prorated to the date on which
                  the Term of Employment ends. (iii) Anything hereinabove to the
                  contrary notwithstanding, if any provision of thisss.4(b)
                  violates federal or applicable state law relating to
                  discrimination on account of age, such provision shall be
                  deemed modified or suspended to the extent necessary to
                  eliminate such violation of law. If at a later date, by reason
                  of changed circumstances or otherwise, the enforcement of such
                  provision as set forth herein would no longer constitute a
                  violation of law, then it shall be enforced in accordance with
                  its terms as set forth herein.

         (c)      Change in Control. In event of a Change in Control (as defined
                  in the Bonus Plan), Executive shall have the right to
                  terminate the Term of Employment, by notice to the Company
                  given at any time after such Change in Control, effective on
                  the date specified in such notice, which date shall not be
                  more than (but can be less than) one year after the giving of
                  such notice.

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Section 5.        Covenant Not to Compete

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

Section 6.        Company's Right to Injunctive Relief

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

Section 7.        Inventions and Patents

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

Section 8.        Trade Secrets and Confidential Information

         Executive shall not, either directly or indirectly, except as required
in the course of his employment by the Company, disclose or use at any time,
whether during or subsequent to the Term of Employment, any information of a
proprietary nature owned by the Company, including but not limited to, records,
data, formulae, documents, specifications, inventions, processes, methods and
intangible rights which are acquired by him in the performance of his duties for
the Company and which are of a confidential information or trade-secret nature.
All records, files, drawings, documents, equipment and the like, relating to the
Company's business, which Executive shall prepare, use, construct or observe,
shall be and remain the Company's sole property. Upon the termination of his
employment or at any time prior thereto upon request by the Company, Executive
shall return to the possession of the Company any materials or copies thereof
involving any confidential information or trade secrets and shall not take any
material or copies thereof from the possession of the Company.
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Section 9.        Mergers and Consolidations; Assignability

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

Section 10.       Captions

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

Section 11.       Choice of Law

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

Section 12.       Entire Contract

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

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Section 13.       Notices

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

Section 14.       Termination of Existing Agreement

         The Existing Agreement is hereby terminated and replaced and superseded
by this Agreement, effective August 1, 2001. All payments, of Base Salary or
otherwise, made by the Company under the Existing Agreement with respect to any
period commencing on or after August 1, 2001 shall be credited against the
corresponding payment obligations of the Company under this Agreement.

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

                                              PALL CORPORATION

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

                                              EXECUTIVE

                                                  /s/ Reed Sarver
                                                  ------------------------------
                                                      Reed Sarver

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                                PALL CORPORATION

                         EXECUTIVE INCENTIVE BONUS PLAN

                                      -----

1.       Purpose

         This document sets forth the Pall Corporation Executive Incentive Bonus
Plan as adopted effective July 17, 2001.

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

2.       Certain Definitions

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

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

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

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

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

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

         "Change in Control" means the occurrence of any of the following:

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

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

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

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

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

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

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

         "Corporation" shall mean Pall Corporation.

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

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

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

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

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

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

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

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

         "Return on Equity" shall mean, for any Fiscal Year, the percentage
determined by dividing the Net Earnings for the year by the Average Equity for
the year.

         "Target Bonus Percentage" shall mean, with respect to any Executive,
the target bonus percentage specified for such Executive in his or her
Employment Agreement.

3.       Determination of Bonus Amounts

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

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

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

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

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

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

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

4.       Adjustment of and Limitation on Bonus Amounts

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

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

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

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

5.       Payment of Bonuses

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

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

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

                                       4
<PAGE>

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

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

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

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

6.        Change in Control

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

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

                                       5
<PAGE>

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

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

7.       Rights of Executives

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

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

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

8.       Administration

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

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

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

                                       6
<PAGE>

9.       Amendment or Termination

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

10.      Successor Corporation

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

11.      Governing Law

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

12.      Effective Date

         The Plan was adopted effective as of July 17, 2001 by the Board of
Directors, acting by the Committee, subject, however, to approval by the
shareholders of the Corporation by a majority of the votes cast in person or by
proxy at the 2001 annual meeting of the Corporation's shareholders, including
any adjournment thereof.

[The Plan was approved
by shareholders at the
annual meeting on
November 14, 2001.]

                                       7<PAGE>

                                                                   EXHIBIT 10.11

                                PALL CORPORATION

                          EMPLOYEE STOCK PURCHASE PLAN

1. Purpose. The purpose of the Pall Corporation Employee Stock Purchase Plan
(the "Plan") is to offer certain Employees of Pall Corporation (the "Company")
and Affiliated Companies an incentive to invest in common shares, par value $.10
per share (each, a "Share") of the Company, by permitting eligible Employees to
purchase Shares at below-market prices. The Plan is intended to qualify as an
"employee stock purchase plan" within the meaning of Section 423 of the Internal
Revenue Code of 1986, as amended (the "Code"). The stock purchase plan of the
same name maintained by the Company prior to November 1, 1999 (the "Prior Plan")
is hereby amended and superseded by this Plan. In the event that the Plan is
adopted by any non-U.S. Affiliated Company and is subject to the laws of another
country, a separate document may be prepared for such company reflecting the
specific requirements of applicable law, and such document, and not this
document, shall determine all rights of all Employees of such company.

2. Definitions. Capitalized terms used in this Plan shall have the following
meanings unless defined elsewhere herein.

"Affiliated Company" means, at the time of the granting of an option under the
Plan, any corporation of which not less than 80% of the voting shares are held
by the Company or a subsidiary within the meaning of Section 424 of the Code
(except that 80% stock ownership shall be substituted for 50% stock ownership in
such definition), whether or not such corporation now exists or is hereafter
organized or acquired by the Company or a subsidiary.

"Board of Directors" means the Board of Directors of Pall 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 Company
                  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 Company 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 Company as fixed by its by-laws;

                                      -1-
<PAGE>

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 16(c)
shall exist, to the extent that the Board of Directors so determines by
resolution adopted prior to the Change in Control. Any such resolution may be
rescinded or countermanded by the Board of Directors at any time with or without
retroactive effect.

"Committee" means the group of individuals appointed by the Board of Directors
of the Company to administer the Plan.

"Compensation" means, for any pay period, the gross base salary payable for such
period. Compensation shall not include overtime, incentive compensation,
incentive payments or bonuses, shift differentials, expense reimbursements,
long-term disability and workers' compensation payments, lump-sum payments due
to death, termination of employment or layoff, non-taxable fringe benefits,
payments or discounts under any stock purchase or option plan, or any other
extraordinary compensation or other payments to an Employee.

"Employee" means a common law employee of an Employer whose customary employment
is at least twenty (20) hours per week. Any person who is not initially
recognized by an Employer as a common law employee, but who is subsequently
determined to be an Employee by the proper authority, shall be an Employee for
purposes of participation in the Plan after such determination.

"Employer" means the Company and any Affiliated Company that adopts the Plan
with the prior written approval of the Committee.

"Exercise Date" means the last Trading Day of each Offering Period.

"Fair Market Value" means the value of a Share on a given date, determined based
on the mean of the highest and lowest sale prices for a Share on such date, as
reported on the New York Stock Exchange or, if the Shares are not traded on the
New York Stock Exchange on such date, the exchange on which the Shares are
listed ("Exchange"), or if the Exchange is not open for trading on such date, on
the nearest preceding date on which the Exchange is open for trading.

"Participant" means any individual who is eligible to participate in the Plan as
provided in Section 4 and enrolls in the Plan in the manner set forth in Section
5.

"Offering Period" means each six consecutive calendar month period during
which an option to purchase Shares is granted and may be exercised.

"Purchase Price" means an amount equal to 85% of the lower of the Fair Market
Value of a Share on the first Trading Day of an Offering Period or on the
Exercise Date, but in no event less than the par value of a Share.

"Stock Account" means the account established pursuant to Section 8 for a
Participant with such investment service provider as the Committee shall select
in its discretion.

                                      -2-
<PAGE>

 "Trading Day" means any day on which the Exchange is open for trading.

3. Offering Periods. The Plan shall be implemented by consecutive Offering
Periods, with the first Offering Period commencing on November 1, 1999 and
ending on April 30, 2000, and each subsequent Offering Period thereafter,
continuing until the Plan is terminated in accordance with Sections 17 or 20
hereof.

4.       Eligibility.

         (a) Eligible Employees. Each Employee of an Employer shall be eligible
to participate in the Plan on the earlier of the November 1st or May 1st
coincident with or next following his or her completion of two (2) consecutive
years of employment with an Employer; provided, however, that each Employee who,
as of August 1, 1999 has completed six (6) consecutive months of employment with
an Employer and each Employee who immediately prior to November 1, 1999 was a
participant in the Prior Plan shall be eligible to participate in the Plan
effective November 1, 1999. Notwithstanding the preceding sentence, no Employee
of any Employer shall be eligible to participate in the Plan if that Employee
(i) is a "highly compensated employee", as defined in Section 414(q) of the
Code, who is eligible to participate in the Management Stock Purchase Plan, or
(ii) has received a hardship distribution from the Pall Corporation
Profit-Sharing Plan within the preceding twelve (12) months.

         (b) Leave of Absence. Each Participant who is on medical leave, family
leave, military leave or any other leave of absence approved by an Employer
shall be permitted to participate in the Plan as provided in this paragraph (b).

         A Participant who is on an unpaid leave of absence shall have payroll
deductions suspended at the commencement of such unpaid leave, but shall
participate in the exercise of options under Section 7 to the extent of amounts
credited to his or her account as of the next following Exercise Date. Upon such
Participant's return from unpaid leave of absence during the same Offering
Period in which such leave began, his or her payroll deductions shall
automatically recommence at the same rate as in effect prior to such leave.

         A Participant who is on a paid leave of absence may elect, by notifying
the Committee in the manner prescribed by the Committee, to suspend his or her
payroll deductions at any time during such paid leave, but shall participate in
the exercise of options under Section 7 to the extent of the amount credited to
his or her account as of the next following Exercise Date. Upon such
Participant's return from paid leave of absence, he or she may elect to
recommence payroll deductions as provided in Section 5(d).

         (c) Termination of Eligibility. If a Participant ceases to be eligible
to participate in the Plan for any reason on or before an Exercise Date, the
Participant's payroll deductions shall cease as of the effective date of such
termination of eligibility, as determined by the Committee. All payroll
deductions credited to the Participant's account as of the effective date of his
or her termination of eligibility, shall be distributed to the Participant as
soon as practicable thereafter.

                                      -3-
<PAGE>

5.       Enrollment and Payroll Deductions.

         (a) Enrollment. Any Employee who satisfies the eligibility requirements
of Section 4(a) shall participate by enrolling in the Plan and authorizing
payroll deductions in the manner prescribed by the Committee not later than
fifteen (15) days prior to the commencement of any Offering Period. An eligible
Employee who has elected to enroll in the Plan for an Offering Period and whose
payroll deductions have not ceased during the Offering Period as provided in
Section 5(d) shall automatically continue to participate in the Plan in each
successive Offering Period with the same terms applicable.

         (b) Amount. At the time a Participant enrolls in the Plan, the
Participant shall elect to have payroll deductions made on each pay day during
each Offering Period equal to an amount not to exceed the Compensation which the
Participant received on each such pay day; provided, however, that in the case
of the Offering Period beginning on November 1, 1999, no Participant shall be
permitted to make payroll deductions during the first two months thereof that,
in the aggregate, exceed Four Thousand, Two Hundred Dollars ($4,200). All
payroll deductions shall be withheld in whole units of currency only. All
payroll deductions shall be credited to a bookkeeping account maintained by the
Company for each Participant under the Plan. No interest will be paid on any
amounts credited to any account. A Participant may not make any additional
payments into such account.

         (c) Payroll Deductions. Payroll deductions shall commence with the
first practicable payroll period of the Offering Period following the
Participant's enrollment in the Plan and shall end in the last practicable
payroll period of the Offering Period during which the Participant is enrolled
in the Plan, or, if earlier (i) after the Participant notifies the Committee of
his or her suspension of payroll deductions pursuant to Section 5(d), (ii) when
the Participant ceases to participate in the Plan for any of the reasons stated
in Sections 4(b), 4(c) or Section 11, or (iii) the first practicable payroll
period after the Participant receives a hardship distribution from the Pall
Corporation Profit-Sharing Plan.

         (d) Adjustments to Payroll Deductions. A Participant may decrease the
amount of payroll deductions or suspend all future payroll deductions during an
Offering Period by notifying the Committee in the manner prescribed by the
Committee. In the event a Participant suspends all payroll deductions, the
Participant shall not be entitled to begin payroll deductions until the
commencement of a subsequent Offering Period, except as provided below in the
case of certain leaves of absence. The Committee may, in its discretion, limit
the number of payroll deduction rate changes and prescribe the effective dates
thereof during any Offering Period.

                                      -4-
<PAGE>

         In the event that a Participant reduces or suspends payroll deductions
during a paid leave of absence, such Participant, upon his or her return from
such leave during the same Offering Period in which such leave began, may elect
to recommence or increase payroll deductions by notifying the Committee in the
manner prescribed by the Committee.

         Notwithstanding other provisions of the Plan, to the extent necessary
to comply with Section 6(b), the Company may decrease a Participant's payroll
deductions or suspend same at any time during an Offering Period.

6.       Options.

         (a) Grant of Option. On the first day of each Offering Period, each
Participant shall be granted an option to purchase, exercisable on each Exercise
Date, that number of Shares determined by dividing the aggregate amount credited
to the Participant's account as of such Exercise Date, by the Purchase Price;
provided however, that such purchase shall be subject to the limitations set
forth in Sections 6(b) and 14.

         (b) Limitation on Option Grant. Notwithstanding any other provisions of
the Plan, no Participant shall be granted an option under the Plan if
immediately after the grant, (i) such Participant (or any other person whose
stock would be attributed to such Participant pursuant to Section 424(d) of the
Code) would own capital stock of the Company and/or hold outstanding options to
purchase any class of capital stock possessing five percent (5%) or more of the
total combined voting power or value of all classes of the capital stock of the
Company or any Affiliated Company thereof, or (ii) such Participant's rights to
purchase capital stock under all Section 423 employee stock purchase plans of
the Company and Affiliated Companies would accrue at a rate which exceeds
Twenty-Five Thousand Dollars ($25,000) of Fair Market Value of such capital
stock (determined at the time such option is granted) for each calendar year in
which such option is outstanding at any time. In the event that a Participant's
account is maintained in a unit of currency other than U.S. dollars, for
purposes of determining whether the limitation in the preceding sentence is
exceeded, the unit of currency in which such Participant's account is maintained
shall be notionally exchanged for U.S. dollars at a rate equal to the exchange
rate of such currency and U.S. dollars at the close of the first day of the
Offering Period.

7. Exercise of Option. As soon as administratively practicable after each
Exercise Date, each Participant's option to purchase Shares under the Plan shall
be exercised automatically, and the maximum number of whole or fractional Shares
subject to such option shall be purchased for the Participant at the Purchase
Price, with the aggregate amount credited to the Participant's account, unless
the Participant has terminated participation as provided in Section 4(c) or
employment as provided in Section 11. In the event that a Participant's account
is maintained in a unit of currency other than U.S. dollars, prior to the
exercise of any option, such currency will be exchanged for U.S. dollars at a
rate equal to the exchange rate of such currency and U.S. dollars at the close
of the Exercise Date as of which such options are exercised.

8.       Participant Stock Accounts.

                                      -5-
<PAGE>

         (a) Establishment of Stock Account. A Stock Account shall be maintained
for each Participant. Shares purchased for the Stock Account of each Participant
shall be credited thereto as of the close of business on the Exercise Date. All
brokerage commissions attributable to the exercise of options under the Plan
shall be paid by the Company or an Affiliated Company.

         (b) Statement. As soon as practicable following each Offering Period, a
statement of Stock Account shall be sent to each Participant, setting forth the
amount of payroll deductions accumulated during the Offering Period, the
Purchase Price, the number of Shares purchased and the amount of any cash
remaining credited to the Participant's Stock Account.

         (c) Participant Shares. Shares purchased for each Participant shall be
held in the Participant's Stock Account. A Participant may request that a
certificate be issued in the Participant's name or the name of the Participant
and his or her spouse for all or a portion of the whole Shares credited to the
Participant's Stock Account. A Participant may sell such Shares at any time
thereafter, subject to compliance with any applicable federal or state
securities laws. Each Participant agrees, by enrolling in the Plan, to notify
the Committee of any sale or other disposition of Shares held by the Participant
under the Plan which occurs within eighteen (18) months from the Exercise Date,
indicating the number of such Shares disposed of. The Committee shall be
entitled to presume that a Participant has disposed of any Shares for which the
Participant has requested a certificate. All certificates for Shares delivered
under the Plan shall be subject to such stock transfer orders and other
restrictions as the Company may deem advisable under all applicable laws, rules,
and regulations, and the Company may cause a legend or legends to be put on any
such certificates to make appropriate references to such restrictions. In the
event that a Participant requests a withdrawal of all amounts credited to his
Stock Account, any fractional Shares then held in the Participant's Stock
Account will be converted to an equivalent unit of currency and such amount
shall be distributed to the Participant in cash along with the requested Shares.

         (d) Voting Rights; Dividends. A Participant shall have all ownership
rights with respect to the Shares credited to the Participant's Stock Account,
including the right to direct the vote of such Shares. Any dividends or
distributions which may be declared thereon by the Board of Directors will be
reinvested in additional Shares for the Participant, unless otherwise provided
under the terms of the participant's Stock Account. Such additional shares shall
be purchased on the open market as soon as practicable after the dividend
payment is received.

9. Taxes. The Company or Affiliated Company may, but shall not be obligated to,
withhold from the Participant's compensation the amount necessary for the
Company or Affiliated Company to meet applicable withholding obligations,
including any withholding required to make available to the Affiliated Company
any tax deductions or benefits attributable to any sale or early disposition of
Shares by the Participant.

10. Hardship Distributions. In the event that during an Offering Period a
Participant experiences a "hardship" as defined in the Pall Corporation
Profit-Sharing Plan, the Participant may file a written request with the
Committee for a refund of all amounts then credited to his account. If the
Committee determines in its discretion that the Participant meets the
requirements of a "hardship," it shall cause the Participant's account to be
paid to the Participant as soon as practicable after such determination, without
regard to whether a distribution is made on account of such hardship from the
Pall Corporation Profit-Sharing Plan.

                                      -6-
<PAGE>

11. Termination of Plan Participation.

         (a) Termination of Participation. A Participant may terminate
participation in the Plan by notifying the Committee thereof in the manner
prescribed by the Committee. Following the effective date of such notice, the
Participant's payroll deductions shall cease with the next practicable payroll
period. The Participant shall participate in the exercise of options under
Section 7 to the extent of amounts credited to his or her account as of the
cessation of his or her payroll deductions.

         (b) Renewal of Participation. If a Participant terminates participation
in the Plan, the Participant must re-enroll in the Plan as provided in Section
5(a) to renew participation.

         (c) Termination of Employment. As soon as practicable following a
Participant's termination of employment for any reason, including retirement, a
Participant or the Participant's beneficiary shall receive cash equal to the
amount credited to the Participant's account during the Offering Period in which
occurs the Participant's termination and all options granted under Section 6(a)
in connection with such Offering Period shall be canceled.

12. Transfer. A Participant may not assign, transfer, pledge or otherwise
dispose of (other than by will, the laws of descent and distribution) any
payroll deductions credited to the account of the Participant or any right to
exercise an option or receive Shares under the Plan. Any such assignment,
transfer, pledge or other disposition shall be without effect. Each option is
exercisable during the lifetime of the Participant only by such Participant.

13. Participant Beneficiaries.

         (a) Designation. A Participant may file with the Committee, a written
designation of a beneficiary who is entitled to receive any accumulated payroll
deductions, if any, held for the Participant under the Plan, in the event of the
Participant's death; provided, however, that the disposition of a Participant's
Stock Account upon his or her death shall be provided under the terms of such
Stock Account.

         (b) Failure of Designation. If a Participant dies without a valid
beneficiary designation on file with the Committee, or if no designated
beneficiary survives the Participant, the following automatic beneficiaries
surviving the Participant shall be entitled to receive any accumulated payroll
deductions, if any, held for the Participant under the Plan: (i) Participant's
surviving spouse, or (ii) if the Participant is not married, the Participant's
estate.

                                      -7-
<PAGE>

14. Shares. The maximum number of Shares that may be acquired by any Participant
in any Offering Period is 1,500. The maximum number of Shares that may be
purchased by all Participants under the Plan is 1,000,000, subject to adjustment
upon changes in the capitalization of the Company as set forth in Section 16.
Shares credited to for Participants' Stock Accounts may, at the Committee's
discretion, be purchased in the open market (on an exchange or in negotiated
transactions), or may be previously acquired treasury Shares, authorized and
unissued Shares, or any combination of Shares purchased in the open market,
previously acquired treasury Shares or authorized and unissued Shares. If, on a
given Exercise Date, the number of Shares with respect to which options are to
be exercised exceeds the number of Shares then available under the Plan, the
Committee shall make a pro rata allocation of the Shares remaining available for
purchase in as uniform a manner as shall be practicable and as it shall
determine to be equitable.

15. Administration. The Plan shall be administered by the Committee, which shall
have full and exclusive discretionary authority to construe, interpret and apply
the terms of the Plan, to determine eligibility and to adjudicate all disputed
claims filed under the Plan. The Committee may change the frequency of payroll
deductions, limit the frequency or number of changes in the amount of payroll
deductions to be made during an Offering Period, permit payroll withholding in
excess of the amount designated by a Participant in order to adjust for delays
or mistakes in the Company's processing of properly completed withholding
elections, establish reasonable waiting and adjustment periods and/or accounting
and crediting procedures to ensure that amounts applied toward the purchase of
Shares for each Participant properly correspond with the Participant's payroll
deductions, and establish such other limitations or procedures as the Committee
determines in its sole discretion are advisable and consistent with the Plan.

         The Plan is intended to qualify as an "employee stock purchase plan"
within the meaning of Section 423 of the Code. Each Participant shall have the
same rights and privileges as afforded by Section 423 of the Code. Accordingly,
the provisions of the Plan shall be construed so as to extend and limit
participation in a manner consistent with the requirements of that section of
the Code. Every finding, decision and determination made by the Committee shall,
to the fullest extent permitted by law, be final and binding upon all parties.

16. Adjustments Upon Changes in Capitalization, Dissolution, Liquidation, Change
in Control.

         (a) Changes in Capitalization. Subject to any required action by the
shareholders of the Company, the number of Shares covered by each option under
the Plan which has not yet been exercised and the number of Shares which have
been authorized for issuance under the Plan but not yet placed under option, the
maximum number of Shares each Participant may purchase per Offering Period
(pursuant to Section 6) as well as the Purchase Price, shall be proportionately
adjusted for any increase or decrease in the number of issued Shares resulting
form a stock split, reverse stock split, stock dividend, combination or
reclassification of the Shares, or any other increase or decrease in the number
of Shares effected without receipt of consideration by the Company. Such
adjustment shall be made by the Committee, whose determination in that respect
shall be final, binding and conclusive.

                                      -8-
<PAGE>

         (b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, any Offering Period then in progress
shall be shortened by setting a new Exercise Date (the "New Exercise Date"), and
any Offering Period then in progress shall end on the New Exercise Date. The New
Exercise Date shall be established by the Committee, and shall be before the
date of the Company's proposed dissolution or liquidation. The Committee shall
notify each Participant in writing, at least ten (10) business days prior to the
New Exercise Date, that the Exercise Date for the Participant's option has been
changed to the New Exercise Date and that the Participant's option shall be
exercised automatically on the New Exercise Date in accordance with Section 7.

         (c) Change in Control. In the event of a Change in Control of the
Company, any Offering Period then in progress shall be shortened by setting a
new Exercise Date (the "Change of Control Exercise Date") and any Offering
Period then in progress shall end on the Change of Control Exercise Date. The
Change of Control Exercise Date shall be established by the Committee and shall
be before the date of the Company's proposed sale or merger. The Committee shall
notify each Participant in writing, at least ten (10) business days prior to the
Change of Control Exercise Date, that the Exercise Date for the Participant's
option has been changed to the Change of Control Exercise Date and that the
Participant's option shall be exercised automatically on the Change of Control
Exercise Date in accordance with Section 7.

17. Amendment or Termination. The Board of Directors may at any time and for any
reason terminate or amend the Plan, and/or delegate authority for any amendments
to the Committee. Except as provided in Section 16, no such termination or
amendment shall affect options previously granted or adversely affect the rights
of any Participant with respect thereto. Without shareholder consent and without
regard to whether any Participant rights may have been considered to have been
"adversely affected," the Plan may be amended to change the Offering Periods,
increase the Purchase Price or change the maximum amount of payroll deductions
permitted. To the extent necessary to comply with Section 423 of the Code (or
any successor rule or provision or any other applicable law, regulation or stock
exchange rule), the Company shall obtain shareholder approval of any amendment
to the Plan in such a manner and to such a degree as required.

18. Notices. All notices or other communications by a Participant to the Company
under or in connection with the Plan shall be deemed to have been duly given
when received in the form specified by the Committee at the location, or by the
person, designated by the Committee for the receipt thereof.

19. Conditions Upon Issuance of Shares. Shares shall not be issued with respect
to an option unless the exercise of such option and the issuance and delivery of
Shares pursuant thereto shall comply with all applicable provisions of law,
domestic or foreign, including, without limitation, the Securities Act of 1933,
as amended, the Securities Exchange Act of 1934, as amended, the rules and
regulations promulgated thereunder, and the requirements of any stock exchange
upon which the Shares may then be listed.

                                      -9-
<PAGE>

         As a condition to the exercise of an option, the Company may require a
Participant to represent and warrant at the time of any such exercise that the
Shares are being purchased only for investment and without any present intention
to sell or distribute such Shares if, in the opinion of counsel for the Company,
such a representation is required by any of the aforementioned applicable
provisions of law.

20. Term. The Plan shall be effective upon its adoption by the Board of
Directors subject to the approval by the shareholders of the Company which
approval must occur within the 12-month period after the Plan is adopted by the
Board of Directors. It shall continue in effect indefinitely thereafter until
the maximum number of Shares available for sale under the Plan (as provided in
Section 14 hereof) has been purchased, unless terminated pursuant to Section 17
hereof. In the event that the shareholders of the Company do not approve the
Plan, all payroll deductions that have accumulated in Participants' accounts
shall be refunded to Participants as soon as possible following the
shareholder's action.

21. Use of Funds. Payroll deductions credited to a Participant's account shall
remain the general assets of the Company or an Affiliated Company and shall not
be held in trust or required to be segregated in any manner.

22. No Right to Continued Employment. Nothing in the Plan or in any option shall
confer on any Participant any right to continue in the employ of the Company or
any Affiliated Company.

                                      -10-

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