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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Fiscal Year Ended July 31, 1999
Commission File Number 1- 4311
PALL CORPORATION
2200 Northern Boulevard, East Hills, N.Y. 11548
(516) 484-5400
Incorporated in New York State I.R.S. Employer Identification
Number 11-1541330
Securities registered pursuant to Section 12(b) of the Act:
Name of Exchange
Title of Class on Which Registered
------------------------- ---------------------------
Common Stock $.10 par value New York Stock Exchange
Common Share Purchase Rights New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: NONE
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that registrant was required
to file such reports), and (2) has been subject to such filing requirement for
the past 90 days.
Yes X No
------- ------
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained to the best
of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
The aggregate market value of the voting stock held by non-affiliates of the
registrant was $2,715,000,000, based on the closing price on October 4, 1999.
The number of common shares, $.10 par value outstanding of the registrant was
124,167,433 shares on October 4, 1999.
Total number of pages - 103 Exhibit index located on page 18
DOCUMENTS INCORPORATED BY REFERENCE:
Portions of the registrant's Proxy Statement for the 1999 annual meeting of
shareholders, previously filed, (hereinafter referred to as the "Proxy
Statement") are incorporated by reference into Part III.
Portions of the registrant's Annual Report to Shareholders for the fiscal year
ended July 31, 1999, filed as Exhibit 13 hereto, (hereinafter referred to as the
"Annual Report to Shareholders") are incorporated by reference into Parts I, II
and IV of this report.
2
PART I
------
ITEM 1. BUSINESS.
- ------------------
(a) General development of business.
Pall Corporation, incorporated in July 1946, and its subsidiaries (hereinafter
collectively called "the Company" unless the context requires otherwise) is a
leading supplier of fine filters, principally made by the Company using its
proprietary filter media, and other fluid clarification and separations
equipment for the removal of solid, liquid and gaseous contaminants from a wide
variety of liquids and gases.
The Company's business is best analyzed by the following four principal markets,
or industry segments, in which it sells its products:
(1) BioPharmaceuticals.
(2) Medical.
(3) Aeropower.
(4) Fluid processing.
During the past five years, the Company has continued its development and sale
of fluid clarification and separations products in a wide variety of markets.
(b) Financial information about market segment information.
Reference is made to page 43 of the Annual Report to Shareholders.
(c) Narrative description of business.
1) The Company is a specialty materials and engineering company with the
broadest-based filtration, separations and purification capabilities in the
world. Its proprietary products are used to discover, develop and produce
pharmaceuticals, to protect hospital patients, to enhance the quality and
efficiency of manufacturing processes, to keep equipment running efficiently and
to protect the environment. Reference is made to the section titled "Pall
creates 100's of commercially successful products every year...." on pages 20-23
of the Annual Report to Shareholders. The products sold are principally filters
made with proprietary Pall filter media produced by chemical film casting,
melt-blowing of polymer fibers, papermaking and metallurgical processes. Metal
and plastic housings and a wide variety of appurtenant devices, are also made.
(A) BioPharmaceuticals Segment:
The BioPharmaceuticals segment includes the following markets:
BioPharmaceuticals, Specialty Materials and Food & Beverage. For information
about the BioPharmaceuticals segment, reference is made to the section titled
"Health Care: BioPharmaceuticals" on page 6 and pages 8 and 9 of the Annual
Report to Shareholders.
(B) Medical Segment:
The Medical segment includes the following markets: Blood and Critical Care. For
information about the Medical segment, reference is made to the section titled
"Health Care: Medical" on page 6 and pages 10 and 11 of the Annual Report to
Shareholders.
Sales in the BioPharmaceuticals and the Medical markets are made through the
Company's own personnel and through distributors. Backlog information is
omitted, as it is not considered meaningful to an understanding of these
segments of the Company's business. The Company feels that safety, efficacy,
ease of use, technical support, as well as price, are the principal competitive
factors in this market, although economy of use is important. A principal list
of competitors is included on page 6 of the Annual Report to Shareholders.
3
(C) Aeropower Segment:
The Aeropower segment includes the following markets: Aerospace and Industrial
Hydraulics. For information about the Aeropower segment, reference is made to
the section titled "Aeropower" on page 7 and pages 12 and 13 of the Annual
Report to Shareholders. Backlog at July 31, 1999 was approximately $73,746,000
and is equal to about three months of sales. The Company's sales to aerospace
and military customers are made principally through its own personnel and
manufacturers' representatives; sales to Industrial Hydraulics customers are
made through Company personnel and through distributors. The Company believes
that product performance and quality, and service to the customer, as well as
price, are the principal competitive factors in this market segment. A principal
list of competitors is included on page 7 of the Annual Report to Shareholders.
(D) Fluid Processing Segment:
The Fluid Processing Segment encompasses the following markets: Microelectronics
and Industrial Process. For information about the Fluid Processing segment,
reference is made to the section titled "Fluid Processing" on page 7 and pages
14-19 of the Annual Report to Shareholders. The Company's products are sold to
customers in these markets through its own personnel, and through distributors
and manufacturers' representatives. Backlog information is omitted, as it is not
considered material for an understanding of this segment of the Company's
business. The Company believes that performance and quality of product and
service, as well as price, are determinative in most sales. A principal list of
competitors is included on page 7 of the Annual Report to Shareholders.
(E) The following comments relate to the four segments discussed above:
(i) Raw materials:
Most raw materials used by the Company are available from multiple sources of
supply. A limited number of materials are proprietary products of major chemical
companies. The Company believes that it could find satisfactory substitutes for
these materials if they should become unavailable, and has in fact done so
several times in the past.
(ii) Patents:
The Company owns a broad range of patents covering its filter media, filter
designs and other products, but it considers these to be mainly defensive, and
relies on its proprietary manufacturing methods and engineering skills. However,
it does act against infringers when it believes such action is economically
justified.
2) The following comments relate to the Company's business in general:
(a) With limited exceptions, research activities conducted by the Company are
company-sponsored. Such expenditures totaled $56,490,000 in 1999,
$58,540,000 in 1998 and $53,747,000 in 1997.
(b) There was no one customer to whom sales were made totaling 10% or
more of consolidated sales in fiscal 1999, 1998 or 1997.
(c) The Company is in substantial compliance with federal, state and local
laws regulating the discharge of materials into the environment or
otherwise relating to the protection of the environment. To date,
compliance with environmental matters has not had a material effect upon
the Company's capital expenditures or competitive position.
4
The Company continues the clean up of contaminated water at its Ann
Arbor, Michigan facility that began in fiscal 1998. Costs incurred
during this year indicate that the anticipated future costs for
remediation will exceed the estimate originally established. As a
result, the reserve for future environmental remediation costs has been
increased by $6,000. In the opinion of management, the Company is in
substantial compliance with applicable environmental laws. Because
regulatory standards under environmental laws are becoming increasingly
stringent, there can be no assurance that future developments will not
cause the Company to incur material environmental liabilities or costs.
For a further description of the environmental issues see Item 3, Legal
Proceedings.
(d) At July 31, 1999, the Company employed approximately 8,600 persons.
(d) Financial information about geographic areas.
Reference is made to page 44 of the Annual Report to Shareholders.
5
ITEM 2. PROPERTIES.
- --------------------
Location Type Industry Segment Size (square feet)
- -------- ---- ---------------- ------------------
OWNED:
East Hills, NY Office, plant & Executive Office &
warehouse All Segments 326,000
Pt. Washington, NY Office, laboratory All 215,000
& training center
Hauppauge, NY Plant, office Medical & Fluid
& laboratory Processing 75,000
Cortland, NY Plants, office BioPharmaceuticals & Fluid
Processing 338,000
Putnam, CT Plant All 62,000
Ft. Myers, FL Plant, warehouse Aeropower 111,000
New Port Richey, FL Plant, office Aeropower 165,000
Pensacola, FL Plant Medical, BioPharmaceuticals 58,000
Covina, CA Plant, office &
laboratory Medical 176,000
Ann Arbor, MI Plant & office Medical, BioPharmaceuticals 180,000
Fajardo, Puerto Rico Plants Medical, BioPharmaceuticals
& Fluid Processing 259,000
Portsmouth, U.K. Plant, office, warehouse All 331,000
Ilfracombe, U.K. Plant & office BioPharmaceuticals & Fluid
Processing 112,000
Redruth, U.K. Plant, warehouse Aeropower 123,000
Newquay, U.K. Plant & office Medical & Fluid
Processing 106,000
Tipperary, Ireland Plant Medical, Aeropower 178,000
Frankfurt, Germany Office & warehouse All 72,000
Paris, France Office & warehouse All 65,000
Limay, France Warehouse All 23,000
Tsukuba, Japan Plant, laboratory &
warehouse All 119,000
Johannesburg, South Africa Office & warehouse All 7,000
LEASED:
Clearwater, FL Office Aeropower 23,000
Houston, TX Plant & office Fluid Processing 40,000
Northborough, MA Plant & office BioPharmaceuticals 38,000
Exton, PA Office BioPharmaceuticals &
Fluid Processing 13,000
Toronto, Montreal, Canada Office & warehouse BioPharmaceuticals, Medical
& Fluid Processing 18,000
Frankfurt, Hamburg, Germany Office & warehouse All 104,000
Oud Beijerland, Netherlands Plant, office, warehouse Fluid Processing 12,000
Milan, Italy Office & warehouses All 54,000
Vienna, Austria Office & warehouse All 13,000
Basel, Switzerland Office & warehouse All 13,000
Madrid, Spain Office & warehouse All 28,000
Brussels, Belgium Office & warehouse All 12,000
Oslo, Norway Office & warehouse All 6,000
Warsaw, Poland Office All 4,000
Buenos Aires, Argentina Office All 3,000
Tokyo, Osaka, Nagoya, Japan Offices All 39,000
Singapore Office & warehouse All 17,000
Seoul, South Korea Office All 7,000
Beijing, China Plant, office, warehouse All 46,000
Melbourne, Sydney
& Perth, Australia Office & warehouse All 21,000
Auckland, New Zealand Office & warehouse All 6,000
In the opinion of management, these premises are suitable and adequate to meet
the Company's requirements.
6
ITEM 3. LEGAL PROCEEDINGS.
- --------------------------
In February 1988, an action was filed in the Circuit Court for Washtenaw
County, Michigan ("Court") by the State of Michigan ("State") against Gelman
Sciences Inc. ("Gelman")(a subsidiary acquired by the Company in February 1997)
requesting reimbursement of costs the State had expended in investigating
contamination near Gelman's Ann Arbor facility, which the State alleged was
caused by Gelman's disposal of waste water from its manufacturing process.
Pursuant to a consent judgment entered into by Gelman and the State in October
1992 (amended September 1996 and October 1999), which resolved that litigation,
Gelman is remediating the contamination without admitting wrongdoing. In July
1997 and in October 1997 the State notified Gelman that it believes that Gelman
is not in full compliance with the consent judgment and that Gelman is
potentially liable for stipulated penalties of more than $100,000, which
penalties may continue to accrue. Gelman disputes these assertions and has been
vigorously contesting them.
Reference is also made to Contingencies and Commitments on page 42 of the Annual
Report to Shareholders.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
- ------------------------------------------------------------
There were no matters submitted to a vote of shareholders during the fourth
quarter of fiscal year 1999.
7
PART II
-------
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED
STOCKHOLDER MATTERS.
- ------------------------------------------------------------
Reference is made to the section titled "Common Stock Prices and Cash Dividends"
on page 46 of the Annual Report to Shareholders.
ITEM 6. SELECTED FINANCIAL DATA.
- --------------------------------
Reference is made to page 47 of the Annual Report to Shareholders.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
- -------------------------------------------------------------------
Reference is made to pages 25-28 of the Annual Report to Shareholders.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
- -----------------------------------------------------
Reference is made to pages 29-45 of the Annual Report to Shareholders.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURES.
- -------------------------------------------------------------------
None.
8
PART III
--------
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
- ------------------------------------------------------------
(a) Identification of directors:
Reference is made to "Election of Directors" on page 3 of the Proxy
Statement.
None of the persons listed in the section of the Proxy Statement referred to
in the preceding paragraph has been involved in those legal proceedings
required to be disclosed by Item 401(f) of Regulation S-K during the past
five years.
(b) Identification of executive officers:
Year in which
Service as
Age at Officer of
Oct. 15 Pall Corp.
Name 1999 Position Held Began
- ---- ---- ------------- -----
Eric Krasnoff* 47 Chairman and Chief
Executive Officer 1986
Jeremy Hayward-Surry* 56 President 1989
John Adamovich, Jr. 46 Group Vice President and Treasurer,
Chief Financial Officer 1998
Peter S. Cope 45 Group Vice President 1994
Clifton Hutchings 61 Group Vice President 1993
Paul Kohn 53 Group Vice President 1996
Donald B. Stevens 54 Group Vice President 1996
Gerhard Weich 63 Group Vice President 1993
Marcus Wilson 44 Group Vice President 1998
Samuel T. Wortham 52 Group Vice President 1990
Steven Chisolm 41 Senior Vice President 1998
Charles Grimm 59 Senior Vice President 1998
Erwin Kirnbauer 64 Senior Vice President 1999
Akio Satake 62 Senior Vice President 1995
* Member of the Executive Committee of the Board of Directors.
None of the persons listed above is related.
Messrs. Krasnoff and Hayward-Surry are directors of Pall Corporation.
For more than the past five years, the principal occupation of each person
listed above has been their employ by the registrant, except for Mr. Adamovich,
who joined the Company in January 1998. Previously, Mr. Adamovich was
partner-in-charge of Professional Practice in the Long Island office of KPMG LLP
and while at that firm, he served as engagement partner for its audits of the
Company's financial statements for each of the years in the seven year period
ending July 29, 1995.
Mr. Kirnbauer also served as executive officer from 1982 until 1992.
Executive officers are elected by the Board of Directors annually, to serve
until the next annual organizational meeting of the Board.
None of the above persons has been involved in those legal proceedings required
to be disclosed by Item 401(f) of Regulation S-K, during the past five years.
9
ITEM 11. EXECUTIVE COMPENSATION.
- ---------------------------------
Reference is made to "Compensation and Other Benefits of Senior Management"
beginning on page 6 of the Proxy Statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
- -------------------------------------------------------------------------
Reference is made to "Beneficial Ownership of Common Stock" beginning on page 26
of the Proxy Statement.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
- ---------------------------------------------------------
None.
Disclosure of information relating to delinquent filers required by Item 405 of
Regulation S-K is set forth on page 28 of the Proxy Statement.
10
PART IV
-------
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
- ---------------------------------------------------------------------------
a. Documents filed as part of the Form 10-K:
(1) The following financial statements are incorporated by reference to
the indicated pages of the 1999 Annual Report to Shareholders, filed
as Exhibit 13 hereto.
Page Number in
Annual Report
--------------
Independent Auditors' Report 29
Consolidated Statements of Earnings - years ended
July 31, 1999, August 1, 1998 and August 2, 1997 29
Consolidated Balance Sheets - July 31, 1999
and August 1, 1998 30
Consolidated Statements of Stockholders' Equity -
years ended July 31, 1999, August 1, 1998 and
August 2, 1997 31
Consolidated Statements of Cash Flows - years ended
July 31, 1999, August 1, 1998 and August 2, 1997 32
Notes to Consolidated Financial Statements 33-45
(2) Financial Statement Schedule
The following schedules are filed herewith:
Page Number in
Form 10-K
--------------
Report of Independent Auditors on Financial Statement
Schedule 15
Schedule II - Valuation and Qualifying Accounts 16
All other schedules are omitted because they are not applicable or the required
information is shown in the financial statements or in the notes thereto.
11
(3) Exhibits filed herewith:
Exhibit
Number Description of Exhibit
- --------------------------------------------------------------------------------
3(i)* Restated Certificate of Incorporation of the Registrant as amended
through November 23, 1993, filed as Exhibit 3(i) to the Registrant's
Annual Report on Form 10-K for the fiscal year ended July 30, 1994
(the "1994 10-K").
3(ii) By-Laws of the Registrant as amended on October 5, 1999.
4 Note: The exhibits filed herewith do not include the instruments with
respect to long-term debt of the Registrant and its subsidiaries,
inasmuch as the total amount of debt authorized under any such
instrument does not exceed 10% of the total assets of the Registrant
and its subsidiaries on a consolidated basis. The Registrant agrees,
pursuant to Item 601(b) (4) (iii) of Regulation S-K, that it will
furnish a copy of any such instrument to the Securities and Exchange
Commission upon request.
10.1*(a) Amended And Restated Employment Agreement dated October 6, 1997
between the Registrant and Eric Krasnoff, filed as Exhibit 10.3 to the
Registrant's Annual Report on Form 10-K for the fiscal year ended
August 2, 1997 (the "1997 10-K").
10.2*(a) Letter agreement dated July 17, 1997 between the Registrant and Eric
Krasnoff, filed as Exhibit 10.4 to the 1997 10-K.
10.3*(a) Amended And Restated Employment Agreement dated October 6, 1997
between the Registrant and Jeremy Hayward-Surry, filed as Exhibit 10.5
to the 1997 10-K.
10.4*(a) Service Agreement dated November 28, 1995 between Pall Europe Limited
and Clifton Stanley Hutchings, filed as Exhibit 10.9 to the
Registrant's Annual Report on Form 10-K for the fiscal year ended
August 3, 1996 (the "1996 10-K").
10.5*(a) Service Agreement dated November 28, 1995 between Pall Deutschland
GmbH Holding and Gerhard Friedrich Weich, filed as Exhibit 10.10 to
the 1996 10-K.
10.6*(a) Employment Agreement dated February 1, 1992 between the Registrant and
Samuel Wortham, filed as Exhibit 10.15 to the Registrant's Annual
Report on Form 10-K for the fiscal year ended August 1, 1992 (the
"1992 10-K").
10.7*(a) Amendment dated July 19, 1993 to Employment Agreement dated February
1, 1992 between the Registrant and Samuel Wortham, filed as Exhibit
10.4 to the Registrant's Annual Report on Form 10-K for the fiscal
year ended July 31, 1993 (the "1993 10-K").
10.8*(a) Second Amendment dated August 1, 1995 to Employment Agreement dated
February 1, 1992 between the Registrant and Samuel Wortham, filed as
Exhibit 10.16 to the 1996 10-K.
* Incorporated herein by reference.
(a) Management contract or compensatory plan or arrangement required to be
filed as an exhibit pursuant to Item 14(c) of Form 10-K.
12
Exhibit
Number Description of Exhibit
- --------------------------------------------------------------------------------
10.9*(a) Third Amendment dated August 1, 1998 to Employment Agreement dated
February 1, 1992 between the Registrant and Samuel Wortham, filed as
Exhibit 10.15 to the Registrant's Annual Report on Form 10-K for the
fiscal year ended August 1, 1998 (the "1998 10-K").
10.10*(a) Employment Agreement dated August 1, 1994 between the Registrant and
Peter Cope, filed as Exhibit 10.13 to the 1994 10-K.
10.11*(a) Amendment dated August 1, 1995 to Employment Agreement dated August 1,
1994 between the Registrant and Peter Cope, filed as Exhibit 10.18 to
the 1996 10-K.
10.12*(a) Second Amendment dated August 1, 1998 to Employment Agreement dated
August 1, 1994 between the Registrant and Peter Cope, filed as Exhibit
10.18 to the 1998 10-K.
10.13*(a) Employment Agreement dated September 26, 1994 between the Registrant
and Donald B. Stevens, filed as Exhibit 10.17 to the 1994 10-K.
10.14*(a) Amendment dated August 1, 1995 to Employment Agreement dated September
26, 1994 between the Registrant and Donald B. Stevens, filed as
Exhibit 10.24 to the 1996 10-K.
10.15*(a) Second Amendment dated August 1, 1998 to Employment Agreement dated
September 26, 1994 between the Registrant and Donald B. Stevens, filed
as Exhibit 10.24 to the 1998 10-K.
10.16*(a) Employment Agreement dated August 5, 1996 between the Registrant and
Paul Kohn, filed as Exhibit 10.25 to the 1996 10-K.
10.17*(a) First Amendment dated August 1, 1998 to Employment Agreement dated
August 5, 1996 between the Registrant and Paul Kohn, filed as Exhibit
10.26 to the 1998 10-K.
10.18*(a) Employment Agreement made as of January 5, 1998 between the Registrant
and John Adamovich, filed as Exhibit 10 to the Registrant's Quarterly
Report on Form 10-Q for the quarterly period ended November 1, 1997.
10.19*(a) Employment Agreement made as of January 12, 1998 between the
Registrant and Steven Chisolm, filed as Exhibit 10 to the Registrant's
Quarterly Report on Form 10-Q for the quarterly period ended January
31, 1998.
10.20*(a) First Amendment dated August 1, 1998 to Employment Agreement dated
January 12, 1998 between the Registrant and Steven Chisolm, filed as
Exhibit 10.29 to the 1998 10-K.
* Incorporated herein by reference.
(a) Management contract or compensatory plan or arrangement required to be
filed as an exhibit pursuant to Item 14(c) of Form 10-K.
13
Exhibit
Number Description of Exhibit
- --------------------------------------------------------------------------------
10.21*(a) Employment Agreement made as of August 1, 1998 between the Registrant
and Charles R. Grimm, filed as Exhibit 10.30 to the 1998 10-K.
10.22*(a) Service Agreement dated August 1, 1998 between Pall Europe Limited and
Marcus Albert Wilson, filed as Exhibit 10.31 to the 1998 10-K.
10.23*(a) Employment Agreement made as of February 1, 1992 between the
Registrant and Erwin A. Kirnbauer, filed as Exhibit 10.26 to the 1992
10-K.
10.24(a) Amendment dated July 19, 1993 to Employment Agreement dated
February 1, 1992 between the Registrant and Erwin A. Kirnbauer.
10.25*(a) Pall Corporation Supplementary Profit Sharing Plan as amended and
restated February 15, 1995, filed as Exhibit 10.26 to the 1996 10-K.
10.26*(a) Pall Corporation Supplementary Pension Plan (As amended effective
October 6, 1997), filed as Exhibit 10.25 to the 1997 10-K.
10.27*(a) Pall Corporation Profit Sharing Plan, as amended and restated as of
January 1, 1997, filed as Exhibit 10.26 to the 1997 10-K.
10.28*(a) Pall Corporation 1988 Stock Option Plan, as amended through October 8,
1991, filed as Exhibit 10.32 to the Registrant's Annual Report on Form
10-K for the fiscal year ended August 3, 1991 (the "1991 10-K").
10.29*(a) Pall Corporation 1991 Stock Option Plan, as amended effective November
19, 1998, filed as Exhibit 10.1 to the Registrant's Quarterly Report
on Form 10-Q for the quarterly period ended October 31, 1998.
10.30*(a) Pall Corporation 1993 Stock Option Plan, as amended effective November
19, 1998, filed as Exhibit 10.2 to the Registrant's Quarterly Report
on Form 10-Q for the quarterly period ended October 31, 1998.
10.31*(a) Pall Corporation 1995 Employee Stock Option Plan, as amended effective
November 19, 1998, filed as Exhibit 10.3 to the Registrant's Quarterly
Report on Form 10-Q for the quarterly period ended October 31, 1998.
10.32*(a) Pall Corporation 1998 Employee Stock Option Plan, filed as Exhibit 99
to the Registrant's Registration Statement on Form S-8 (Registration
No. 333-68371).
10.33*(a) Pall Corporation Stock Option Plan for Non-Employee Directors, as
amended effective November 19, 1998, filed as Exhibit 10.5 to the
Registrant's Quarterly Report on Form 10-Q for the quarterly period
ended October 31, 1998.
* Incorporated herein by reference.
(a) Management contract or compensatory plan or arrangement required to be
filed as an exhibit pursuant to Item 14(c) of Form 10-K.
14
Exhibit
Number Description of Exhibit
- --------------------------------------------------------------------------------
10.34*(a) Pall Corporation Management Stock Purchase Plan, filed as Exhibit 99
to the Registrant's Registration Statement on Form S-8 (Registration
No. 333-82469).
10.35*(a) Principal Rules of the Pall Supplementary Pension Scheme, filed as
Exhibit 10.25 to the Registrant's Annual Report on Form 10-K for the
fiscal year ended July 29, 1995.
10.36*(a) Pall Deutschland GmbH Holding, Concept Of An Additional Pension
Plan For Senior Executives, filed as Exhibit 10.35 to the 1996 10-K.
13 Annual Report to Shareholders for the year ended July 31, 1999.
21 Subsidiaries of Pall Corporation.
23 Consent of Independent Auditors.
27 Financial Data Schedule (only filed electronically).
* Incorporated herein by reference.
(a) Management contract or compensatory plan or arrangement required to be
filed as an exhibit pursuant to Item 14(c) of Form 10-K.
b. Reports on Form 8-K:
The Registrant filed no reports on Form 8-K during its fourth fiscal quarter
ended July 31, 1999.
15
[KPMG LLP LETTERHEAD]
Independent Auditors' Report on Schedule
The Board of Directors
Pall Corporation:
Under date of September 1, 1999, we reported on the consolidated balance sheets
of Pall Corporation and subsidiaries as of July 31, 1999 and August 1, 1998, and
the related consolidated statements of earnings, stockholders' equity and cash
flows for each of the years in the three-year period ended July 31, 1999, as
contained in the Company's fiscal 1999 annual report to stockholders. These
consolidated financial statements and our report thereon are incorporated by
reference in the Company's annual report on Form 10-K for fiscal year 1999. In
connection with our audits of the aforementioned consolidated financial
statements, we also have audited the related financial statement schedule as
listed in the accompanying index. This financial statement schedule is the
responsibility of the Company's management. Our responsibility is to express an
opinion on this financial statement schedule based on our audits.
In our opinion, such financial statement schedule, when considered in relation
to the basic consolidated financial statements taken as a whole, presents
fairly, in all material respects, the information set forth therein.
/s/ KPMG LLP
-------------------
KPMG LLP
Melville, New York
September 1, 1999
16
SCHEDULE II
PALL CORPORATION AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED JULY 31, 1999,
AUGUST 1, 1998 AND AUGUST 2, 1997
Balance at Charged to Write-off of Balance
Beginning Costs and Uncollectible at End
Description of Year Expenses Accounts of Year
----------- ---------- ---------- ------------- ----------
Year ended July 31, 1999:
Allowance for doubtful
accounts $5,879,000 $1,891,000 $1,147,000 $6,623,000
Year ended August 1, 1998:
Allowance for doubtful
accounts $6,602,000 $1,915,000 $2,638,000 $5,879,000
Year ended August 2, 1997:
Allowance for doubtful
accounts $5,998,000 $1,417,000 $ 813,000 $6,602,000
17
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
Pall Corporation
October 27, 1999 By: /s/ Jeremy Hayward-Surry
------------------------------
Jeremy Hayward-Surry
President
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.
/s/ Eric Krasnoff
- --------------------------- Chairman of the Board and October 27, 1999
Eric Krasnoff Chief Executive Officer
/s/ Jeremy Hayward-Surry
- --------------------------- President and Director October 27, 1999
Jeremy Hayward-Surry
/s/ John Adamovich, Jr.
- --------------------------- Chief Financial Officer October 27, 1999
John Adamovich, Jr. and Treasurer
/s/ Viraj J. Patel
- --------------------------- Chief Accountant October 27, 1999
Viraj J. Patel (Chief Accounting Officer)
/s/ Abraham Appel
- --------------------------- Director October 27, 1999
Abraham Appel
/s/ Daniel J. Carroll, Jr.
- --------------------------- Director October 27, 1999
Daniel J. Carroll, Jr.
/s/ John H. F. Haskell, Jr.
- --------------------------- Director October 27, 1999
John H. F. Haskell, Jr.
/s/ Ulric S. Haynes, Jr.
- --------------------------- Director October 27, 1999
Ulric S. Haynes, Jr.
/s/ Edwin W. Martin
- --------------------------- Director October 27, 1999
Edwin W. Martin
/s/ Katharine L. Plourde
- --------------------------- Director October 27, 1999
Katharine L. Plourde
/s/ Chesterfield F. Seibert
- --------------------------- Director October 27, 1999
Chesterfield F. Seibert
/s/ Heywood Shelley
- --------------------------- Director October 27, 1999
Heywood Shelley
/s/ Alan B. Slifka
- --------------------------- Director October 27, 1999
Alan B. Slifka
/s/ James D. Watson
- --------------------------- Director October 27, 1999
James D. Watson
18
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
- --------------------------------------------------------------------------------
3(i)* Restated Certificate of Incorporation of the Registrant as amended
through November 23, 1993, filed as Exhibit 3(i) to the Registrant's
Annual Report on Form 10-K for the fiscal year ended July 30, 1994
(the "1994 10-K").
3(ii) By-Laws of the Registrant as amended on October 5, 1999.
4 Note: The exhibits filed herewith do not include the instruments with
respect to long-term debt of the Registrant and its subsidiaries,
inasmuch as the total amount of debt authorized under any such
instrument does not exceed 10% of the total assets of the Registrant
and its subsidiaries on a consolidated basis. The Registrant agrees,
pursuant to Item 601(b) (4) (iii) of Regulation S-K, that it will
furnish a copy of any such instrument to the Securities and Exchange
Commission upon request.
10.1*(a) Amended And Restated Employment Agreement dated October 6, 1997
between the Registrant and Eric Krasnoff, filed as Exhibit 10.3 to the
Registrant's Annual Report on Form 10-K for the fiscal year ended
August 2, 1997 (the "1997 10-K").
10.2*(a) Letter agreement dated July 17, 1997 between the Registrant and Eric
Krasnoff, filed as Exhibit 10.4 to the 1997 10-K.
10.3*(a) Amended And Restated Employment Agreement dated October 6, 1997
between the Registrant and Jeremy Hayward-Surry, filed as Exhibit 10.5
to the 1997 10-K.
10.4*(a) Service Agreement dated November 28, 1995 between Pall Europe Limited
and Clifton Stanley Hutchings, filed as Exhibit 10.9 to the
Registrant's Annual Report on Form 10-K for the fiscal year ended
August 3, 1996 (the "1996 10-K").
10.5*(a) Service Agreement dated November 28, 1995 between Pall Deutschland
GmbH Holding and Gerhard Friedrich Weich, filed as Exhibit 10.10 to
the 1996 10-K.
10.6*(a) Employment Agreement dated February 1, 1992 between the Registrant and
Samuel Wortham, filed as Exhibit 10.15 to the Registrant's Annual
Report on Form 10-K for the fiscal year ended August 1, 1992 (the
"1992 10-K").
10.7*(a) Amendment dated July 19, 1993 to Employment Agreement dated February
1, 1992 between the Registrant and Samuel Wortham, filed as Exhibit
10.4 to the Registrant's Annual Report on Form 10-K for the fiscal
year ended July 31, 1993 (the "1993 10-K").
10.8*(a) Second Amendment dated August 1, 1995 to Employment Agreement dated
February 1, 1992 between the Registrant and Samuel Wortham, filed as
Exhibit 10.16 to the 1996 10-K.
* Incorporated herein by reference.
(b) Management contract or compensatory plan or arrangement required to be
filed as an exhibit pursuant to Item 14(c) of Form 10-K.
19
Exhibit
Number Description of Exhibit
- --------------------------------------------------------------------------------
10.9*(a) Third Amendment dated August 1, 1998 to Employment Agreement dated
February 1, 1992 between the Registrant and Samuel Wortham, filed as
Exhibit 10.15 to the Registrant's Annual Report on Form 10-K for the
fiscal year ended August 1, 1998 (the "1998 10-K").
10.10*(a) Employment Agreement dated August 1, 1994 between the Registrant and
Peter Cope, filed as Exhibit 10.13 to the 1994 10-K.
10.11*(a) Amendment dated August 1, 1995 to Employment Agreement dated August 1
1994 between the Registrant and Peter Cope, filed as Exhibit 10.18 to
the 1996 10-K.
10.12*(a) Second Amendment dated August 1, 1998 to Employment Agreement dated
August 1, 1994 between the Registrant and Peter Cope, filed as
Exhibit 10.18 to the 1998 10-K.
10.13*(a) Employment Agreement dated September 26, 1994 between the Registrant
and Donald B. Stevens, filed as Exhibit 10.17 to the 1994 10-K.
10.14*(a) Amendment dated August 1, 1995 to Employment Agreement dated
September 26, 1994 between the Registrant and Donald B. Stevens,
filed as Exhibit 10.24 to the 1996 10-K.
10.15*(a) Second Amendment dated August 1, 1998 to Employment Agreement dated
September 26, 1994 between the Registrant and Donald B. Stevens,
filed as Exhibit 10.24 to the 1998 10-K.
10.16*(a) Employment Agreement dated August 5, 1996 between the Registrant and
Paul Kohn, filed as Exhibit 10.25 to the 1996 10-K.
10.17*(a) First Amendment dated August 1, 1998 to Employment Agreement dated
August 5, 1996 between the Registrant and Paul Kohn, filed as Exhibit
10.26 to the 1998 10-K.
10.18*(a) Employment Agreement made as of January 5, 1998 between the
Registrant and John Adamovich, filed as Exhibit 10 to the
Registrant's Quarterly Report on Form 10-Q for the quarterly period
ended November 1, 1997.
10.19*(a) Employment Agreement made as of January 12, 1998 between the
Registrant and Steven Chisolm, filed as Exhibit 10 to the
Registrant's Quarterly Report on Form 10-Q for the quarterly period
ended January 31, 1998.
10.20*(a) First Amendment dated August 1, 1998 to Employment Agreement dated
January 12, 1998 between the Registrant and Steven Chisolm, filed as
Exhibit 10.29 to the 1998 10-K.
* Incorporated herein by reference.
(b) Management contract or compensatory plan or arrangement required to be
filed as an exhibit pursuant to Item 14(c) of Form 10-K.
20
Exhibit
Number Description of Exhibit
- --------------------------------------------------------------------------------
10.21*(a) Employment Agreement made as of August 1, 1998 between the Registrant
and Charles R. Grimm, filed as Exhibit 10.30 to the 1998 10-K.
10.22*(a) Service Agreement dated August 1, 1998 between Pall Europe Limited and
Marcus Albert Wilson, filed as Exhibit 10.31 to the 1998 10-K.
10.23*(a) Employment Agreement made as of February 1, 1992 between the
Registrant and Erwin A. Kirnbauer, filed as Exhibit 10.26 to the 1992
10-K.
10.24(a) Amendment dated July 19, 1993 to Employment Agreement dated
February 1, 1992 between the Registrant and Erwin A. Kirnbauer.
10.25*(a) Pall Corporation Supplementary Profit Sharing Plan as amended and
restated February 15, 1995, filed as Exhibit 10.26 to the 1996 10-K.
10.26*(a) Pall Corporation Supplementary Pension Plan (As amended effective
October 6, 1997), filed as Exhibit 10.25 to the 1997 10-K.
10.27*(a) Pall Corporation Profit Sharing Plan, as amended and restated as of
January 1, 1997, filed as Exhibit 10.26 to the 1997 10-K.
10.28*(a) Pall Corporation 1988 Stock Option Plan, as amended through October 8,
1991, filed as Exhibit 10.32 to the Registrant's Annual Report on
Form 10-K for the fiscal year ended August 3, 1991 (the "1991 10-K").
10.29*(a) Pall Corporation 1991 Stock Option Plan, as amended effective
November 19, 1998, filed as Exhibit 10.1 to the Registrant's
Quarterly Report on Form 10-Q for the quarterly period ended October
31, 1998.
10.30*(a) Pall Corporation 1993 Stock Option Plan, as amended effective
November 19, 1998, filed as Exhibit 10.2 to the Registrant's
Quarterly Report on Form 10-Q for the quarterly period ended October
31, 1998.
10.31*(a) Pall Corporation 1995 Employee Stock Option Plan, as amended
effective November 19, 1998, filed as Exhibit 10.3 to the
Registrant's Quarterly Report on Form 10-Q for the quarterly period
ended October 31, 1998.
10.32*(a) Pall Corporation 1998 Employee Stock Option Plan, filed as Exhibit
99 to the Registrant's Registration Statement on Form S-8
(Registration No. 333-68371).
10.33*(a) Pall Corporation Stock Option Plan for Non-Employee Directors, as
amended effective November 19, 1998, filed as Exhibit 10.5 to the
Registrant's Quarterly Report on Form 10-Q for the quarterly period
ended October 31, 1998.
* Incorporated herein by reference.
(b) Management contract or compensatory plan or arrangement required to be
filed as an exhibit pursuant to Item 14(c) of Form 10-K.
21
Exhibit
Number Description of Exhibit
- --------------------------------------------------------------------------------
10.34*(a) Pall Corporation Management Stock Purchase Plan, filed as Exhibit 99
to the Registrant's Registration Statement on Form S-8 (Registration
No. 333-82469).
10.35*(a) Principal Rules of the Pall Supplementary Pension Scheme, filed as
Exhibit 10.25 to the Registrant's Annual Report on Form 10-K for the
fiscal year ended July 29, 1995.
10.36*(a) Pall Deutschland GmbH Holding, Concept Of An Additional Pension
Plan For Senior Executives, filed as Exhibit 10.35 to the 1996 10-K.
13 Annual Report to Shareholders for the year ended July 31, 1999.
21 Subsidiaries of Pall Corporation.
23 Consent of Independent Auditors.
27 Financial Data Schedule (only filed electronically).
* Incorporated herein by reference.
(b) Management contract or compensatory plan or arrangement required to be
filed as an exhibit pursuant to Item 14(c) of Form 10-K.