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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 August 2, 1997
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 $2,698,000,000, based on the closing price on October 7, 1997.
The number of common shares, $.10 par value outstanding of the registrant was
127,420,359 shares on October 7, 1997.
Total number of pages - 205 Exhibit index located on page 19
DOCUMENTS INCORPORATED BY REFERENCE:
Portions of the Proxy Statement for the 1997 annual meeting of shareholders are
incorporated by reference into Items 10, 11 and 12.
Portions of the Annual Report to Shareholders for the year ended August 2, 1997
are incorporated by reference into items 1, 5, 7 and 8.
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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 mainly 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. On February 3, 1997 the Company
acquired Gelman Sciences Inc. ("Gelman"). The acquisition was effected through
the exchange of 1.3047 shares of Company common stock for each share of Gelman
common stock. The Company issued 10,607,000 shares of its common stock for the
acquisition. The transaction was accounted for as a pooling-of-interests and,
accordingly, all financial data for periods presented have been restated.
The Company's business is best analyzed by the following three principal
markets, or industry segments, in which it sells its products:
(1) Health care.
(2) Aeropower.
(3) Fluid processing.
During the past five years, the Company has continued its development of fluid
clarification and separations products and of their sale in a wide variety of
markets.
(b) Financial information about industry segments.
Reference is made to page 30 of the registrant's 1997 Annual Report to
Shareholders.
(c) Narrative description of business.
1) The Company sells its products in three principal markets. The products
sold are mainly 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) Health Care Segment:
The Health Care Segment includes the following markets: Laboratory,
Diagnostic, Pharmaceutical, Food & Beverage and Patient Protection. For a
description of these markets refer to pages 6, 7, 10 - 15 of the registrant's
1997 Annual Report which is incorporated herein by reference. Sales of Health
Care products in fiscal 1997 were $555,378,000 or 52% of total sales. Sales in
this market 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 this segment 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 7 of the 1997
Annual Report to Shareholders.
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(B) Aeropower Segment:
The Aeropower segment includes the following markets: Airborne, Military Land
and Marine and Industrial and Mobile Fluid Power. For a description of these
markets refer to pages 6, 7 and 16-17 of the registrant's 1997 Annual Report
which is incorporated herein by reference. Sales in fiscal 1997 were
$243,207,000 or 23% of total sales. Backlog at August 2, 1997 was $65,350,000.
The backlog at August 2, 1997 is equal to about three months of sales. The
Company's sales to aerospace and military customers are made principally through
its own personnel; sales to industrial customers are made through Company
personnel and through distributors and manufacturers' representatives. 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 1997
Annual Report to Shareholders.
(C) Fluid Processing Segment:
The Fluid Processing Segment encompasses the following markets:
Microelectronics, Data Storage and Photographic Film, Oil/Gas,
Chemical/Petrochemical and Power Generation. For a description of these markets
refer to pages 6, 7, 10, 11 and 18-21 of the registrant's 1997 Annual Report
which is incorporated herein by reference. Sales in this market in fiscal 1997
were $263,423,000 or 25% of total sales. 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 1997 Annual Report to Shareholders.
(D) The following comments relate to the three 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 $53,747,000 in 1997,
$53,772,000 in 1996 and $50,640,000 in 1995.
(b) There was no one customer to whom sales were made totaling 10% or more
of consolidated sales in fiscal 1997, 1996 or 1995.
(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 there
has not been a material effect upon the Company's capital expenditures
or competitive position.
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In May 1997, the Company's newly acquired subsidiary, Gelman Sciences
received a permit from the State of Michigan which requires that all
processed water discharged meet the standards set by the State. Based
on the permit obtained from the State and upon review of environmental
issues at its other facilities, the Company decided to record a pre-tax
charge of $10,000,000 in the third quarter. 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 August 2, 1997, the Company employed approximately 8,500 persons.
(d) Financial information about foreign and domestic operations and export
sales.
Reference is made to page 31 of the registrant's 1997 Annual Report to
Shareholders.
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ITEM 2. PROPERTIES.
Location Type Industry Segment Size (square feet)
- -------- ---- ---------------- ------------------
OWNED:
Glen Cove, NY Office & laboratory Research Center 65,000
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 Health Care & Fluid
& laboratory Processing 75,000
Cortland, NY Plants, office Health Care & Fluid
Processing 338,000
Putnam, CT Plant All 62,000
Pinellas Park, FL Plant, office Aeropower 152,000
Ft. Myers, FL Plant, warehouse Aeropower 114,000
New Port Richey, FL Plant Aeropower 160,000
Pensacola, FL Plant Health Care & Fluid
Processing 58,000
Covina, CA Plant, office &
laboratory Health Care 176,000
Ann Arbor, MI Plant & office Health Care & Fluid
Processing 180,000
Fajardo, Puerto Rico Plants Health Care & Fluid
Processing 259,000
Portsmouth, U.K. Plant, office, warehouse All 331,000
Ilfracombe, U.K. Plant & office Health Care & Fluid
Processing 112,000
Redruth, U.K. Plant, warehouse Aeropower 111,000
Newquay, U.K . Plant & office Health Care & Fluid
Processing 106,000
Tipperary, Ireland Plant Health Care 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 109,000
LEASED:
New Iberia, LA Plant Fluid Processing 60,000
Northborough, MA Plant & office Health Care 38,000
Ann Arbor, MI Plant & office Health Care 32,000
Exton, PA Office Fluid Processing 13,000
Pleasanton, CA Plant & office Health Care 24,000
Toronto, Canada Office & warehouse Health Care & Fluid
Processing 12,000
Frankfurt, Germany Office & warehouse All 46,000
Milan, Italy Office & warehouses All 62,000
Vienna, Austria Office & warehouse All 13,000
Basel, Switzerland Office & warehouse All 13,000
Madrid, Spain Office & warehouse All 28,000
Warsaw, Poland Office All 4,000
Tokyo, Japan Offices All 33,000
Singapore Office & warehouse All 17,000
Seoul, South Korea Office All 7,000
Beijing, China Office & warehouse All 9,000
Melbourne, Sydney Office & warehouse
& Brisbane, Australia All 24,000
Hong Kong Office All 2,000
In the opinion of management, these premises are suitable and adequate to meet
the Company's requirements.
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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 judgement entered into by Gelman and the State in October
1992 and amended in September 1996, 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 judgement 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 will vigorously
contest them.
Reference is also made to Commitments and Contingencies on page 39 of the
registrant's 1997 Annual Report to Shareholders incorporated herein by
reference.
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 1997.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED
STOCKHOLDER MATTERS.
Reference is made to page 40 of the registrant's 1997 Annual Report to
Shareholders.
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ITEM 6. SELECTED FINANCIAL DATA
(in thousands, except per share data)
For the Years Ended
Aug. 2, Aug. 3, July 29, July 30, July 31,
1997(a) 1996(b) 1995(c) 1994(d) 1993(e)
------------------------------------------------------------------
Results of operations:
Net sales $1,062,008 $1,072,433 $ 926,326 $ 795,811 $ 773,431
Net earnings 67,318 142,834 125,058 103,859 81,014
Earnings per share 0.53 1.14 1.00 0.84 0.66
Cash dividends per share 0.54 0.47 0.41 0.36 0.31
Financial position:
Total assets 1,265,624 1,291,186 1,156,703 1,031,266 965,768
Long-term debt 62,126 54,416 74,307 75,917 47,030
(a) Fiscal 1997 includes a pre-tax charge of $95,930 related to the Gelman
merger, restructuring and other charges.
(b) Fiscal 1996 includes a pre-tax charge of $2,800 related to Gelman's
environmental remediation costs.
(c) Fiscal 1995 includes a charge of $780 after income taxes ($1,200 pre-tax)
reflecting the initial effect of the adoption of Financial Standards Board
Statement No. 112 (Employers' Accounting for Postemployment Benefits).
(d) Fiscal 1994 includes a pre-tax charge of $3,696 due principally to the
restructuring of the German operations and to the write-off of a bad debt in
the Aerospace operations.
(e) Fiscal 1993 includes a pre-tax charge of $26,710 representing the cost of
downsizing and further integrating the military portion of the Aeropower
business with the Industrial Fluid Power business, and also writing off
certain excess corporate leasehold improvements.
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
Reference is made to pages 23-25 of the registrant's 1997 Annual Report to
Shareholders.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Reference is made to pages 26-29 and 32-40 of the registrant's 1997 Annual
Report to Shareholders.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURES.
None.
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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 registrant's
Proxy Statement for the 1997 annual meeting of shareholders, previously
filed.
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 1997 Position Held Began
- ---- ---- ------------- -----
Eric Krasnoff* 45 Chairman and Chief
Executive Officer 1986
Jeremy Hayward-Surry* 54 President and Treasurer -
Chief Financial Officer 1989
Derek T.D. Williams 65 Executive Vice President
and Chief Operating Officer 1985
Peter S. Cope 43 Group Vice President 1994
Clifton Hutchings 59 Group Vice President 1993
Donald B. Stevens 52 Group Vice President 1994
Gerhard Weich 61 Group Vice President 1993
Arnold Weiner 60 Group Vice President 1986
Samuel T. Wortham 50 Group Vice President 1990
Kim A. Davis 46 Senior Vice President 1997
Paul Kohn 51 Senior Vice President 1996
Akio Satake 60 Senior Vice President 1995
Robert Simkins 53 Senior Vice President 1994
* Member of the Executive Committee of the Board of Directors.
None of the persons listed above is related.
Messrs. Krasnoff, Hayward-Surry and Williams are directors of Pall Corporation.
For more than the past five years, the principal occupation of each person
listed above has been in the employ of the registrant with the exception of Mr.
Davis. Before joining the Company in February 1997, Mr. Davis served as
President and Chief Operating Officer of Gelman Sciences Inc., Ann Arbor,
Michigan since 1993 and as a director since 1995. From 1991 until 1993, Mr.
Davis was Chief Operating Officer of Promega Corporation, a Wisconsin based
biotechnology company.
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.
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ITEM 11. EXECUTIVE COMPENSATION.
Reference is made to "Compensation and Other Benefits of Senior Management"
on page 6 of the registrant's Proxy Statement for the 1997 annual meeting of
shareholders, previously filed.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Reference is made to "Beneficial Ownership of Common Stock" on page 17 of the
registrant's Proxy Statement for the 1997 annual meeting of shareholders,
previously filed.
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 the last page of the registrant's Proxy
Statement for the 1997 annual meeting of shareholders, previously filed, and is
incorporated herein by reference.
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PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
a. Certain documents filed as part of the Form 10-K:
(l) The following documents are incorporated by reference to the indicated
pages of the 1997 Annual Report to Shareholders, filed as Exhibit 13
hereto.
Item
Consolidated Statements of Earnings - years
ended August 2, 1997, August 3, 1996 and July 29, 1995 26
Independent Auditors' Report 26
Consolidated Balance Sheets - as at August 2, 1997,
and August 3, 1996 27
Consolidated Statements of Stockholders' Equity -
years ended August 2, 1997, August 3, 1996 and July 29, 1995 28
Consolidated Statements of Cash Flows - years ended
August 2, 1997, August 3, 1996 and July 29, 1995 29
Notes to Consolidated Financial Statements 32-39
(2) The following schedules are filed herewith:
Name of Schedule
II Valuation and qualifying accounts 16
Independent auditors' report on schedules 17
Schedules not listed above have been omitted either because they are not
applicable or the required information is shown in the financial
statements or in the notes thereto.
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(3) Exhibits filed herewith: 12
Page
Exhibit of 1997
Number Description of Exhibit Form 10-K
2* Agreement and Plan of Reorganization and Merger made on October 27,
1996, by and among the Registrant, Pall Acquisition Corporation and
Gelman Sciences Inc., filed as Exhibit A to The Proxy Statement
Prospectus constituting Part I of the Registrant's Registration
Statement on Form S-4 (Registration No. 333-17417).
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 November 21, 1995 filed as
Exhibit 3(ii) to the Registrant's Quarterly Report on Form 10-Q for
the quarterly period ended October 28, 1995.
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) Agreement made as of July 31, 1992 with David B. Pall, filed as
Exhibit 10.3 to the Registrant's Annual Report on Form 10-K for the
fiscal year ended August 1, 1992 (the "1992 10-K").
10.2*(a) Agreement made as of March 17, 1995 with David B. Pall, filed as
Exhibit 10.2 to the Registrant's Annual Report on Form 10-K for the
fiscal year ended July 29, 1995 (the "1995 10-K").
10.3(a) Amended And Restated Employment Agreement dated October 6, 1997 with
Eric Krasnoff. 23-45
10.4(a) Letter agreement dated July 17, 1997 with Eric Krasnoff. 46-47
10.5(a) Amended And Restated Employment Agreement dated October 6, 1997 with
Jeremy Hayward-Surry. 48-69
10.6*(a) Service Agreement dated November 28, 1995 with Derek Thomas Donald
Williams, filed as Exhibit 10.7 to the 1996 10-K.
10.7*(a) Service Agreement dated November 28, 1995 with Clifton Stanley
Hutchings, filed as Exhibit 10.9 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.
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Page
Exhibit of 1997
Number Description of Exhibit Form 10-K
10.8*(a) Service Agreement dated November 28, 1995 with Gerhard Friedrich
Weich, filed as Exhibit 10.10 to the 1996 10-K.
10.9*(a) Employment Agreement dated February 1, 1992 with Arnold Weiner,
filed as Exhibit 10.32 to the 1992 10-K.
10.10*(a) Amendment dated July 19, 1993 to Employment Agreement dated February
1, 1992 with Arnold Weiner, filed as Exhibit 10.14 to the
Registrant's Annual Report on Form 10-K for the fiscal year ended
July 31, 1993 (the "1993 10-K").
10.11*(a) Second Amendment dated August 1, 1995 to Employment Agreement dated
February 1, 1992 with Arnold Weiner, filed as Exhibit 10.13 to the
1996 10-K.
10.12(a) Third Amendment dated October 6, 1997 to Employment Agreement dated
February 1, 1992 with Arnold Weiner. 70
10.13*(a) Employment Agreement dated February 1, 1992 with Samuel Wortham,
filed as Exhibit 10.15 to the 1992 10-K.
10.14*(a) Amendment dated July 19, 1993 to Employment Agreement dated February
1, 1992 with Samuel Wortham, filed as Exhibit 10.4 to the 1993 10-K.
10.15*(a) Second Amendment dated August 1, 1995 to Employment Agreement dated
February 1, 1992 with Samuel Wortham, filed as Exhibit 10.16 to the
1996 10-K.
10.16*(a) Employment Agreement dated August 1, 1994 with Peter Cope, filed as
Exhibit 10.13 to the 1994 10-K.
10.17*(a) Amendment dated August 1, 1995 to Employment Agreement dated August
1, 1994 with Peter Cope, filed as Exhibit 10.18 to the 1996 10-K.
10.18*(a) Employment Agreement dated August 1, 1994 with Robert Simkins, filed
as Exhibit 10.14 to the 1994 10-K.
10.19*(a) Amendment dated August 1, 1995 to Employment Agreement dated August
1, 1994 with Robert Simkins, filed as Exhibit 10.20 to the 1996
10-K.
10.20*(a) Employment Agreement dated September 26, 1994 with Donald B.
Stevens, filed as Exhibit 10.17 to the 1994 10-K.
10.21*(a) Amendment dated August 1, 1995 to Employment Agreement dated
September 26, 1994 with Donald B. Stevens, filed as Exhibit 10.24 to
the 1996 10-K.
10.22*(a) Employment Agreement dated August 5, 1996 with Paul Kohn, filed as
Exhibit 10.25 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.
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Page
Exhibit of 1997
Number Description of Exhibit Form 10-K
10.23*(a) Employment Agreement dated October 27, 1996 among the Registrant,
Gelman Sciences Inc. and Kim A. Davis, filed as Exhibit 10 to the
Registrant's Quarterly Report on Form 10-Q for the quarterly period
ended February 1, 1997.
10.24*(a) Pall Corporation Supplementary Profit Sharing Plan as amended and
restated February 15, 1995, filed as Exhibit 10.26 to the 1996 10-K.
10.25(a) Pall Corporation Supplementary Pension Plan (As Amended Effective
October 6, 1997). 71-99
10.26(a) Pall Corporation Profit Sharing Plan, as amended and restated as of
January 1, 1997. 100-157
10.27*(a) Pall Corporation 1993 Stock Option Plan, filed as Exhibit 10.22 to
the 1993 10-K.
10.28*(a) Pall Corporation 1991 Stock Option Plan, filed as Exhibit 10.42 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 1988 Stock Option Plan, as amended through October
8, 1991, filed as Exhibit 10.32 to the 1991 10-K.
10.30*(a) Pall Corporation Stock Option Plan for Non-Employee Directors filed
as Exhibit 10.26 to the Registrant's Form 10-Q for the quarterly
period ended October 28, 1995.
10.31*(a) Pall Corporation 1995 Employee Stock Option Plan filed as Exhibit
10.27 to the Registrant's Form 10-Q for the quarterly period ended
October 28, 1995.
10.32*(a) Principal Rules of the Pall Supplementary Pension Scheme, filed as
Exhibit 10.25 to the 1995 10-K.
10.33*(a) Pall Deutschland GMBH, Dreieich, Concept Of An Additional Pension
Plan For Senior Executives, filed as Exhibit 10.35 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.
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Page
Exhibit of 1997
Number Description of Exhibit Form 10-K
13 Annual Report to Shareholders for the year ended August 2, 1997 158-203
21 Subsidiaries of Pall Corporation. 204
23 Consent of Independent Auditors. 205
27 Financial Data Schedule (only filed electronically).
b. Reports on Form 8-K:
The registrant filed no reports on Form 8-K during the three months ended
August 2, 1997.
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PALL CORPORATION AND SUBSIDIARIES SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED AUGUST 2, 1997, AUGUST
3, 1996 AND JULY 29, 1995
Balance at Charged to Write-off of Balance
Beginning Costs and Uncollectible at End
Description of Year Expenses Accounts of Year
----------- ------- -------- -------- -------
Year ended August 2, 1997:
Allowance for doubtful
accounts $5,998,000 $1,417,000 $ 813,000 $6,602,000
Year ended August 3, 1996:
Allowance for doubtful
accounts $6,318,000 $1,851,000 $2,171,000 $5,998,000
Year ended July 29, 1995:
Allowance for doubtful
accounts $5,566,000 $1,549,000 $ 797,000 $6,318,000
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[KPMG Peat Marwick LLP Letterhead]
Independent Auditors' Report on Schedule
----------------------------------------
The Board of Directors
Pall Corporation:
Under date of September 2, 1997, we reported on the consolidated balance sheets
of Pall Corporation and subsidiaries as of August 2, 1997 and August 3, 1996,
and the related consolidated statements of earnings, stockholders' equity and
cash flows for each of the years in the three-year period ended August 2, 1997,
as contained in the Company's fiscal 1997 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 1997. 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.
As discussed in the Accounting Policies note to the consolidated financial
statements, the Company adopted Statement of Financial Accounting Standards
No. 112. "Employers' Accounting for Postemployment Benefits" in fiscal year
1995.
/s/ KPMG PEAT MARWICK LLP
--------------------------
KPMG PEAT MARWICK LLP
Jericho, New York
September 2, 1997
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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.
/s/ Jeremy Hayward-Surry
-----------------------------------------
PALL CORPORATION
October 24, 1997 By: Jeremy Hayward-Surry
President and Treasurer -
Chief Financial Officer
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 24, 1997
- ------------------------------- Chief Executive Officer
Eric Krasnoff
/s/ Jeremy Hayward-Surry President and Treasurer - Chief October 24, 1997
- ------------------------------- Financial Officer and Director
Jeremy Hayward-Surry
/s/ Viraj J. Patel Chief Accountant (Chief October 24, 1997
- ------------------------------- Accounting Officer)
Viraj J. Patel
/s/ Abraham Appel Director October 24, 1997
- -------------------------------
Abraham Appel
/s/ Ulric S. Haynes, Jr. Director October 24, 1997
- -------------------------------
Ulric S. Haynes, Jr.
/s/ Edwin W. Martin Director October 24, 1997
- -------------------------------
Edwin W. Martin
/s/ David B. Pall Director October 24, 1997
- -------------------------------
David B. Pall
/s/ Katharine Plourde Director October 24, 1997
- -------------------------------
Katharine L. Plourde
/s/ Chesterfield F. Seibert Director October 24, 1997
- -------------------------------
Chesterfield F. Seibert
/s/ Heywood Shelley Director October 24, 1997
- -------------------------------
Heywood Shelley
/s/ Alan B. Slifka Director October 24, 1997
- -------------------------------
Alan B. Slifka
/s/ James D. Watson Director October 24, 1997
- -------------------------------
James D. Watson
/s/ Derek T.D. Williams Director October 24, 1997
- -------------------------------
Derek T.D. Williams
19
19
EXHIBIT INDEX
Page
Exhibit of 1997
Number Description of Exhibit Form 10-K
2* Agreement and Plan of Reorganization and Merger made on October 27,
1996, by and among the Registrant, Pall Acquisition Corporation and
Gelman Sciences Inc., filed as Exhibit A to The Proxy Statement-
Prospectus constituting Part I of the Registrant's Registration
Statement on Form S-4 (Registration No. 333-17417).
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 November 21, 1995 filed as
Exhibit 3(ii) to the Registrant's Quarterly Report on Form 10-Q for
the quarterly period ended October 28, 1995.
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) Agreement made as of July 31, 1992 with David B. Pall, filed as
Exhibit 10.3 to the Registrant's Annual Report on Form 10-K for the
fiscal year ended August 1, 1992 (the "1992 10-K").
10.2*(a) Agreement made as of March 17, 1995 with David B. Pall, filed as
Exhibit 10.2 to the Registrant's Annual Report on Form 10-K for the
fiscal year ended July 29, 1995 (the "1995 10-K").
10.3(a) Amended And Restated Employment Agreement dated October 6, 1997 with
Eric Krasnoff. 23-45
10.4(a) Letter agreement dated July 17, 1997 with Eric Krasnoff. 46-47
10.5(a) Amended And Restated Employment Agreement dated October 6, 1997 with
Jeremy Hayward-Surry. 48-69
10.6*(a) Service Agreement dated November 28, 1995 with Derek Thomas Donald
Williams, filed as Exhibit 10.7 to the 1996 10-K.
10.7*(a) Service Agreement dated November 28, 1995 with Clifton Stanley
Hutchings, filed as Exhibit 10.9 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.
20
20
Page
Exhibit of 1997
Number Description of Exhibit Form 10-K
10.8*(a) Service Agreement dated November 28, 1995 with Gerhard Friedrich
Weich, filed as Exhibit 10.10 to the 1996 10-K.
10.9*(a) Employment Agreement dated February 1, 1992 with Arnold Weiner,
filed as Exhibit 10.32 to the 1992 10-K.
10.10*(a) Amendment dated July 19, 1993 to Employment Agreement dated February
1, 1992 with Arnold Weiner, filed as Exhibit 10.14 to the
Registrant's Annual Report on Form 10-K for the fiscal year ended
July 31, 1993 (the "1993 10-K").
10.11*(a) Second Amendment dated August 1, 1995 to Employment Agreement dated
February 1, 1992 with Arnold Weiner, filed as Exhibit 10.13 to the
1996 10-K.
10.12(a) Third Amendment dated October 6, 1997 to Employment Agreement dated
February 1, 1992 with Arnold Weiner. 70
10.13*(a) Employment Agreement dated February 1, 1992 with Samuel Wortham,
filed as Exhibit 10.15 to the 1992 10-K.
10.14*(a) Amendment dated July 19, 1993 to Employment Agreement dated February
1, 1992 with Samuel Wortham, filed as Exhibit 10.4 to the 1993 10-K.
10.15*(a) Second Amendment dated August 1, 1995 to Employment Agreement dated
February 1, 1992 with Samuel Wortham, filed as Exhibit 10.16 to the
1996 10-K.
10.16*(a) Employment Agreement dated August 1, 1994 with Peter Cope, filed as
Exhibit 10.13 to the 1994 10-K.
10.17*(a) Amendment dated August 1, 1995 to Employment Agreement dated August
1, 1994 with Peter Cope, filed as Exhibit 10.18 to the 1996 10-K.
10.18*(a) Employment Agreement dated August 1, 1994 with Robert Simkins, filed
as Exhibit 10.14 to the 1994 10-K.
10.19*(a) Amendment dated August 1, 1995 to Employment Agreement dated August
1, 1994 with Robert Simkins, filed as Exhibit 10.20 to the 1996
10-K.
10.20*(a) Employment Agreement dated September 26, 1994 with Donald B.
Stevens, filed as Exhibit 10.17 to the 1994 10-K.
10.21*(a) Amendment dated August 1, 1995 to Employment Agreement dated
September 26, 1994 with Donald B. Stevens, filed as Exhibit 10.24 to
the 1996 10-K.
10.22*(a) Employment Agreement dated August 5, 1996 with Paul Kohn, filed as
Exhibit 10.25 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.
21
21
Page
Exhibit of 1997
Number Description of Exhibit Form 10-K
10.23*(a) Employment Agreement dated October 27, 1996 among the Registrant,
Gelman Sciences Inc. and Kim A. Davis, filed as Exhibit 10 to the
Registrant's Quarterly Report on Form 10-Q for the quarterly period
ended February 1, 1997.
10.24*(a) Pall Corporation Supplementary Profit Sharing Plan as amended and
restated February 15, 1995, filed as Exhibit 10.26 to the 1996 10-K.
10.25(a) Pall Corporation Supplementary Pension Plan (As Amended Effective
October 6, 1997). 71-99
10.26(a) Pall Corporation Profit Sharing Plan, as amended and restated as of
January 1, 1997. 100-157
10.27*(a) Pall Corporation 1993 Stock Option Plan, filed as Exhibit 10.22 to
the 1993 10-K.
10.28*(a) Pall Corporation 1991 Stock Option Plan, filed as Exhibit 10.42 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 1988 Stock Option Plan, as amended through October
8, 1991, filed as Exhibit 10.32 to the 1991 10-K.
10.30*(a) Pall Corporation Stock Option Plan for Non-Employee Directors filed
as Exhibit 10.26 to the Registrant's Form 10-Q for the quarterly
period ended October 28, 1995.
10.31*(a) Pall Corporation 1995 Employee Stock Option Plan filed as Exhibit
10.27 to the Registrant's Form 10-Q for the quarterly period ended
October 28, 1995.
10.32*(a) Principal Rules of the Pall Supplementary Pension Scheme, filed as
Exhibit 10.25 to the 1995 10-K.
10.33*(a) Pall Deutschland GMBH, Dreieich, Concept Of An Additional Pension
Plan For Senior Executives, filed as Exhibit 10.35 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.
22
22
Page
Exhibit of 1997
Number Description of Exhibit Form 10-K
13 Annual Report to Shareholders for the year ended August 2, 1997 158-203
21 Subsidiaries of Pall Corporation. 204
23 Consent of Independent Auditors. 205
27 Financial Data Schedule (only filed electronically).