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SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12.
</TABLE>
PARKER-HANNIFIN CORPORATION
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
XXXXXXXXXXXXXXXX
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies: .......
(2) Aggregate number of securities to which transaction applies: ..........
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined): ............
(4) Proposed maximum aggregate value of transaction: ......................
(5) Total fee paid: .......................................................
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: ...............................................
(2) Form, Schedule or Registration Statement No.: .........................
(3) Filing Party: .........................................................
(4) Date Filed: ...........................................................
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<PAGE> 2
[PARKER-HANNIFIN LOGO]
PARKER-HANNIFIN CORPORATION
6035 PARKLAND BOULEVARD - MAYFIELD HEIGHTS, OHIO 44124-4141
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
OCTOBER 27, 1999
The annual meeting of shareholders of Parker-Hannifin Corporation will
be held at the Corporation's headquarters at 6035 Parkland Boulevard, Mayfield
Heights, Ohio 44124, on Wednesday, October 27, 1999, at 9:00 a.m., Eastern
Standard Time, for the following purposes:
1. Electing four Directors in the class whose three-year term of office
will expire in 2002;
2. Appointing PricewaterhouseCoopers LLP as independent public
accountants for the fiscal year ending June 30, 2000; and
3. Transacting such other business as may properly come before the
meeting.
Shareholders of record at the close of business on August 31, 1999, are
entitled to vote at the meeting. Please sign and return the enclosed Proxy
promptly. A return envelope is enclosed for your convenience.
By Order of the Board of Directors
/s/ Thomas A. Piraino, Jr.
Thomas A. Piraino, Jr.
Secretary
September 27, 1999
<PAGE> 3
PARKER-HANNIFIN CORPORATION
6035 PARKLAND BOULEVARD - MAYFIELD HEIGHTS, OHIO 44124-4141
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of the Corporation of proxies to be voted at the
annual meeting of shareholders scheduled to be held on October 27, 1999, and at
all adjournments thereof. Only shareholders of record at the close of business
on August 31, 1999 will be entitled to vote. On that date, 111,904,364 Common
Shares were outstanding and entitled to vote at the meeting, each share being
entitled to one vote. This Proxy Statement and the form of Proxy are being
mailed to shareholders on September 27, 1999.
Shareholders of the Corporation have cumulative voting rights in the
election of Directors, provided any shareholder gives notice in writing to the
President or a Vice President or the Secretary of the Corporation not less than
48 hours before the time fixed for holding the meeting that cumulative voting at
such election is desired and an announcement of the giving of such notice is
made upon the convening of the meeting by the Chairman or the Secretary or by or
on behalf of the shareholder giving such notice. In such event, each shareholder
has the right to cumulate votes and give one nominee the number of votes equal
to the number of Directors to be elected multiplied by the number of votes to
which the shareholder is entitled, or to distribute votes on the same principle
among two or more nominees, as the shareholder sees fit. In the event that
voting at the election is cumulative, the persons named in the Proxy will vote
Common Shares represented by valid Board of Directors' Proxies on a cumulative
basis for the election of the nominees named below, allocating the votes of such
Common Shares in accordance with their judgment.
ELECTION OF DIRECTORS
The Directors of the class elected at each annual election hold office
for terms of three years. The Board of Directors of the Corporation presently
consists of 12 members divided into three classes. Each class consists of four
members. Since the last annual meeting of shareholders, pursuant to authority
granted in the Corporation's Code of Regulations, Giulio Mazzalupi was elected
to the Board of Directors in January 1999 to a term expiring in 2000. In
addition, in October 1998, Allen H. Ford and Paul G. Schloemer, formerly members
of the class whose terms expire in 2000, retired from the Board of Directors and
Michael A. Treschow, formerly a member of the class whose term expires in 2000,
resigned from the Board of Directors. In August 1999, Stephanie A. Streeter,
formerly a member of the class whose term expires in 1999, resigned from the
Board of Directors.
Shareholder approval is sought to elect Paul C. Ely, Jr., Peter W.
Likins, Wolfgang R. Schmitt and Debra L. Starnes, Directors whose terms of
office expire in 1999, to the class whose term will expire in 2002. A plurality
of the Common Shares voted in person or by proxy is required to elect a
Director.
Should any nominee become unable to accept nomination or election, the
proxies will be voted for the election of such other person as a Director as the
Board of Directors may recommend. However, the Board of Directors has no reason
to believe that this contingency will occur.
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<PAGE> 4
NOMINEES FOR ELECTION AS DIRECTORS FOR TERM EXPIRING IN 2002
PAUL C. ELY, JR., 67, has served as a Director of the Corporation since 1984.
He is Chairman of the Retirement Planning Committee and a member of the Audit
and Nominating Committees. Now retired, Mr. Ely was a General Partner of
Alpha Partners (venture capital seed financing) from July 1989 to May 1998.
Mr. Ely is also a Director of Tektronix, Inc. and The Sabre Group.
PETER W. LIKINS, 63, has served as a Director of the Corporation since 1989. He
is a member of the Audit, Compensation and Management Development and
Nominating Committees. Dr. Likins is President of the University of Arizona.
He was previously the President of Lehigh University from July 1982 to
October 1997. Dr. Likins is also a Director of Consolidated Edison, Inc. and
Comsat Corporation.
WOLFGANG R. SCHMITT, 55, has served as a Director of the Corporation since
1992. He is a member of the Compensation and Management Development and
Nominating Committees. Mr. Schmitt is the Vice Chairman of Newell-Rubbermaid
Inc. (consumer products). He was previously the Chairman of the Board and
Chief Executive Officer of Rubbermaid Incorporated (manufacturer of rubber
and plastic products) from 1992 to April 1999. Mr. Schmitt is also a Director
of Value America Inc.
DEBRA L. STARNES, 46, has served as a Director of the Corporation since 1997.
She is a member of the Compensation and Management Development, Nominating
and Retirement Planning Committees. Ms. Starnes is the Senior Vice President,
Intermediate Chemicals of Lyondell Petrochemical Company (petrochemical
production). She was previously Senior Vice President, Polymers-Equistar
Chemical (a joint venture majority owned by Lyondell) from December 1997 to
July 1998; Senior Vice President, Polymers at Lyondell from May 1995 to
December 1997; and Senior Vice President, Petrochemical Business Management
and Marketing at Lyondell from May 1992 to May 1995.
PRESENT DIRECTORS WHOSE TERMS EXPIRE IN 2001
JOHN G. BREEN, 65, has served as a Director of the Corporation since 1980. He
is Chairman of the Compensation and Management Development Committee and a
member of the Nominating and Retirement Planning Committees. Mr. Breen is the
Chairman of the Board and Chief Executive Officer of The Sherwin Williams
Company (paints and coatings). Mr. Breen is also a Director of National City
Corporation, Mead Corporation and Goodyear Tire and Rubber Company.
HECTOR R. ORTINO, 57, has served as a Director of the Corporation since 1997.
He is Chairman of the Audit Committee and a member of the Nominating
Committee. Mr. Ortino has been the President of Ferro Corporation (specialty
materials) since February 1996 and has been Chief Executive Officer and
Chairman of the Board of Ferro Corporation since April 1999. He was
previously Chief Operating Officer of Ferro Corporation from February 1996 to
April 1999 and was Executive Vice President and Chief Financial
Administrative Officer of Ferro Corporation from May 1993 to February 1996.
Mr. Ortino is also a Director of Bunge International.
PATRICK S. PARKER, 69, has served as a Director of the Corporation since
1960. Mr. Parker is the Chairman of the Board of Directors of the
Corporation.
DENNIS W. SULLIVAN, 60, has served as a Director of the Corporation since
1983. Mr. Sullivan is Executive Vice President and, since April 1996, a
member of the Office of the President of the Corporation. Mr. Sullivan is
also a Director of Ferro Corporation and KeyCorp.
PRESENT DIRECTORS WHOSE TERMS EXPIRE IN 2000
DUANE E. COLLINS, 63, has served as a Director of the Corporation since 1992.
Mr. Collins is President and Chief Executive Officer of the Corporation. Mr.
Collins is also a Director of National City Corporation, The Sherwin Williams
Company and Mead Corporation.
KLAUS-PETER MULLER, 55, was elected to the Board of Directors in October
1998. He is a member of the Nominating and Retirement Planning Committees.
Mr. Muller is a member of the Board of Managing Directors of Commerzbank AG
in Frankfurt, Germany.
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<PAGE> 5
GIULIO MAZZALUPI, 59, was elected to the Board of Directors in January 1999.
He is a member of the Nominating Committee. Mr. Mazzalupi has been the
President, Chief Executive Officer and a Director of Atlas Copco AB
(industrial manufacturing) in Sweden since April 1997. He was previously
President of Atlas Copco Airpower n.v. in Belgium from September 1987 to
April 1997 and Senior Executive Vice President of Atlas Copco AB and Business
Area Executive of Compressor Technique (a business unit of Atlas Copco AB)
from April 1990 to April 1997.
ALLAN L. RAYFIELD, 64, has served as a Director of the Corporation since
1984. He is Chairman of the Nominating Committee and a member of the Audit
and Compensation and Management Development Committees. Now retired, Mr.
Rayfield previously served as President, Chief Executive Officer and Director
of M/A-COM, Inc. (microwave manufacturing) from November 1993 to December
1994. Mr. Rayfield is also a Director of Acme Metal Inc. and Arch
Communication Group, Inc.
No Director of the Corporation is related to any other Director. During
the fiscal year ended June 30, 1999, there were six meetings of the
Corporation's Board of Directors. Each Director attended at least 75% of the
meetings held by the Board of Directors and the Committees of the Board on which
he or she served, except for Dr. Likins.
THE AUDIT COMMITTEE, which met twice during the fiscal year ended June
30, 1999, is responsible for reviewing with the Corporation's financial
management and its independent auditors the proposed auditing program (including
both the independent and the internal audits) for each fiscal year, the results
of the audits and the adequacy of the Corporation's internal control structure.
This Committee recommends to the Board of Directors the appointment of the
independent auditors for the fiscal year.
THE RETIREMENT PLANNING COMMITTEE, which met once during the fiscal
year ended June 30, 1999, is responsible for reviewing with the Corporation's
management the funding and investment policies for defined benefit plans and
defined contribution plans sponsored by the Corporation.
THE COMPENSATION AND MANAGEMENT DEVELOPMENT COMMITTEE, which met five
times during the fiscal year ended June 30, 1999, is responsible for annually
reviewing and fixing the salaries and other compensation of the officers of the
Corporation, deciding upon the grant of stock options to the officers and other
employees of the Corporation and reviewing corporate policies and programs for
the development of management personnel.
THE NOMINATING COMMITTEE, which met once during the fiscal year ended
June 30, 1999, is responsible for evaluating and recommending to the Board
qualified nominees for election as Directors of the Corporation and considering
other matters pertaining to the size and composition of the Board. The
Nominating Committee will give appropriate consideration to qualified persons
recommended by shareholders for nomination as Directors of the Corporation,
provided that such recommendations are accompanied by information sufficient to
enable the Committee to evaluate the qualifications of the nominee. Nominations
should be sent to the attention of the Secretary of the Corporation.
COMPENSATION OF DIRECTORS. The Corporation compensates Directors, other
than officers who are Directors, for their services. Effective July 1, 1999, the
annual retainer for such Directors was increased from $26,000 to $30,000 and the
fee for attending each Board and Committee meeting was increased from $1,000 to
$1,500 for all such Directors other than Committee Chairmen, whose fee was
increased from $1,500 to $2,000 for chairing committee meetings. Patrick S.
Parker, Chairman of the Board of Directors, receives an annual retainer of
$135,000, plus meeting fees, club memberships and the use of a leased
automobile. Directors may elect to defer all or a portion of their fees under
the Corporation's Deferred Compensation Plan for Directors or to elect to
receive all or a portion of their fees in Common Shares of the Corporation
pursuant to the Corporation's Non-Employee Directors' Stock Plan.
The Board of Directors adopted the Non-Employee Directors Stock Option
Plan in August 1996. Each Director who is not a current or retired employee of
the Corporation ("Non-Employee Director") was granted 1,000 stock options under
the Plan in August 1998 at an option price equal to the then current fair market
value of the Corporation's Common Shares. Such options have a ten-year term and
vest following one year of continued service as a Director. In August 1999, each
Non-Employee Director was granted an additional 850 stock options. Such options
have a ten-year term and vest 50% following one year of continued service as a
Director and 100% following the second year of continued service as a Director.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION. The
following Directors serve as members of the Corporation's Compensation and
Management Development Committee: Messrs. Breen, Likins, Rayfield and Schmitt
and Ms. Starnes. Mr. Collins, the President and Chief Executive Officer of the
Corporation, serves on the
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<PAGE> 6
Compensation Committee of The Sherwin Williams Company. Mr. Breen is the
Chairman and Chief Executive Officer of The Sherwin Williams Company.
COMPENSATION AND MANAGEMENT DEVELOPMENT
COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation and Management Development Committee of the Board of
Directors (the "Committee") has furnished the following report on executive
compensation.
The Committee, which consists entirely of five outside non-employee
Directors, has overall responsibility to:
- review the performance and long-term management potential of the executive
officers of the Corporation; and
- review and fix the salaries and other compensation of the executive
officers of the Corporation.
Following review and approval by the Committee, all issues pertaining
to executive compensation are submitted to the full Board of Directors in
conjunction with its approval and review of the Corporation's strategies and
operating plans, thereby assuring that the Corporation's system of executive
compensation is reasonable and appropriate, meets its stated purpose and
effectively serves the interests of the shareholders and the Corporation.
The Corporation's executive compensation programs are designed to
attract and retain key executives critical to the long-term success of the
Corporation by remaining competitive with other multinational diversified
manufacturing companies of similar size. Comparative compensation information is
used by the Committee to establish competitive salary grade ranges at the market
median for base pay, annual bonus and long-term compensation. The group of
companies used for compensation comparison purposes is not the same as the S&P
Manufacturing (Diversified Industrials) Index, which is the peer group of
companies included in the performance graph on page 11. Comparative compensation
information is obtained by the Committee from independent surveys of numerous
diversified manufacturers, which the Committee believes is important in order to
establish competitive compensation ranges at the appropriate levels. On the
other hand, the S&P Manufacturing (Diversified Industrials) Index utilized in
the performance graph contains data only with respect to a limited number of
companies that are in businesses similar to the Corporation, which data is
theoretically reflective of the stock performance of all diversified
manufacturers as a whole.
The Corporation's executive compensation programs also are intended to
reward executives commensurate with performance and attainment of pre-determined
financial objectives. Accordingly, compensation of executive officers is
directly and materially linked to both operating and stock price performance,
thus aligning the financial interests of the Corporation's executives with those
of its shareholders.
Compensation for the Corporation's executives consists of three primary
elements:
1. A BASE SALARY within a competitively established range. The
specific base salary within the range is determined by length
of service and individual contributions and performance as
measured against pre-established goals and objectives. Goals
and objectives for each executive vary in accordance with each
executive's responsibilities and are established by each
executive's supervisor.
2. An ANNUAL CASH INCENTIVE BONUS that is comprised of two
components:
a. An amount that is determined by the Corporation's
pre-tax return on average assets as compared to the
Corporation's annual plan established at the
beginning of the fiscal year (the "Target Incentive
Bonus"); and
b. An amount that is determined based on the return on
division net assets for the divisions in each
executive's individual operating unit (or the average
return for all divisions for corporate staff
executive officers) (the "RONA Bonus").
The target amounts of the annual cash incentive bonuses are
established in such a manner that base salary plus the target
bonuses will be within the competitively determined total
annual compensation range mentioned above. Target annual cash
incentive bonuses represent approximately 35-45% of total
targeted annual compensation for the executive officers with
operational profit and loss responsibility (including the
Chief Executive Officer) and 30-35% of total targeted annual
compensation for the other executive officers.
The Chief Executive Officer, with the approval of the
Committee, also has the authority to establish addi-
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<PAGE> 7
tional annual incentive programs for operating executives. In
fiscal year 1999, under a Volume Incentive Plan, operating
group presidents had the opportunity to earn an additional
bonus of 1% of base salary for each 1% of sales by which their
group exceeded their previous year's sales by between 7.5% and
12.5%, and an additional bonus of 2% of base salary for each
1% of sales by which their group exceeded their previous
year's sales by more than 12.5%; subject, however, to an
overall maximum of 15% of the participant's base salary.
Acquisitions may only account for up to 5% of the increase in
sales. Also, sales growth above 12.5% resulted in additional
payments under the Plan only if the group exceeded corporate
goals with respect to its return on sales and its assets/sales
ratio. An identical Volume Incentive Plan has been adopted for
fiscal year 2000.
3. LONG-TERM INCENTIVE COMPENSATION that is comprised of two
components:
a. A long-term incentive plan ("LTIP") award that is
based upon the Corporation's actual average return on
equity for a three fiscal year period, payable in
restricted stock (unless the participant elects to
receive cash under the Corporation's Executive
Deferral Plan ("EDP")). The amount of the LTIP award
in shares is calculated by dividing a target LTIP
dollar value (adjusted for risk of forfeiture) by the
market price of the Corporation's Common Shares at
the beginning of the three-year performance period.
The target LTIP value is established by the Committee
at the market median of comparative LTIP
compensation.
b. A stock option grant determined by utilizing the
Black-Scholes valuation model to convert a target
stock option dollar value (adjusted for risk of
non-vesting) into the number of stock options to be
granted. The target stock option value is established
by the Committee at the market median of comparative
stock option compensation. Stock options are granted
with an exercise price equal to the fair market value
of the Corporation's Common Shares on the day of
grant, and grants have historically had a ten-year
term with one year vesting. Effective August 1999,
grants now have a ten-year term and vest 50%
following one year of continued service and 100%
following the second year of continued service from
the date granted. In July 1998, the Committee
approved a Stock Option Deferral Plan which permits
executives to defer the recognition of gain upon the
exercise of stock options under the Plan.
Incentive compensation for the Corporation's executives is
significantly "at risk", based upon the financial performance of the
Corporation. Indeed, more than one-half of each executive's targeted total
compensation (including base salary, annual bonus, LTIP payouts and stock
options) may fluctuate significantly from year to year because it is directly
tied to business and individual performance.
Long-term incentive programs are designed to link the interests of the
executives with those of the shareholders. LTIP awards focus on long-term return
on equity and provide an incentive to increase the stock price during the three
year performance period. Restricted stock awards build stock ownership and
encourage a long-term focus on shareholder value, since the stock is restricted
from being sold, transferred or assigned for a specified period. Stock option
grants provide an incentive that aligns the executive's interests with those of
the shareholders, since stock options will provide value to the executive only
when the price of the Corporation's stock increases above the option grant
price.
In August 1996, the Board of Directors, at the recommendation of the
Committee, adopted stock ownership guidelines that are designed to encourage the
accumulation and retention of the Corporation's Common Shares by its Directors,
executive officers and other key executives. These guidelines, stated as a
multiple of executives' base salaries and of Directors' annual retainer, are as
follows: Chief Executive Officer: three times; Vice Presidents: two times; other
executive officers and group presidents: one time; and non-officer Directors:
four times. The recommended time period for reaching the above guidelines is
five years. The Chief Executive Officer reviews compliance with this policy with
the Committee on an annual basis.
The Corporation's executive compensation philosophy is specifically
evident in the compensation paid during the most recent fiscal year to the
Corporation's President and Chief Executive Officer, Duane E. Collins. Mr.
Collins' increase in base salary from fiscal 1998 to fiscal 1999 of 7.9% is
reflective of his "outstanding" performance rating for fiscal 1998. In addition,
based on the Corporation's fiscal 1999 operating plan, Mr. Collins was entitled
to receive 100% of his Target Incentive Bonus of $315,000 if the Corporation's
actual pre-tax return on average assets, adjusted primarily for acquisitions and
currency transactions, was 15.4%. A minimum payout of 15% of the Target
Incentive Bonus was established at a 3.2% pre-tax return on average assets and a
maximum payout of 150% of the Target Incentive Bonus was established at a 18.7%
pre-tax return on average assets. During the fiscal year ended June 30, 1999,
the Corporation's adjusted pre-tax return on average assets was 13.8% and each
executive officer, including Mr. Collins, received an amount equal to 90% of his
Target Incentive Bonus, which is included in the "Bonus" column of the Summary
Compensation Table on page 7.
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Mr. Collins' RONA Bonus was targeted at $485,408 based upon an
approximate 34.5% average return on division net assets. The average return on
division net assets was 29.8%, resulting in a RONA Bonus payment to Mr. Collins
of $419,214, which is included in the "Bonus" column of the Summary Compensation
Table on page 7. The other executive officers also received RONA Bonuses based
upon the return on division net assets by their respective operating units (or
the average return for all divisions for corporate staff executive officers).
Based on the Corporation's average return on equity of 18.68% for the
three fiscal years ended June 30, 1999, Mr. Collins and the other executive
officers received a payment under the 1997-98-99 LTIP in the form of either
restricted shares or contributions to their EDP accounts in an amount equal to
the value of the restricted shares earned, as reported in the "LTIP Payouts"
column of the Summary Compensation Table on page 7. Such payment represents
178.22% of the target payment that would have been achieved had the Corporation
merely achieved its return on equity goal of 14% during such period.
During fiscal year 1999, Mr. Collins and the other executive officers
also received a long-term incentive award as described in the LTIP Table on page
9 and a stock option grant as reported in the Option Grants Table on page 8.
During 1993, the Omnibus Budget Reconciliation Act of 1993 (the "Act")
was enacted by Congress. The Act includes potential limitations on the
deductibility of compensation in excess of $1 million paid to the Corporation's
Chief Executive Officer and four other highest paid executive officers. The
Committee has taken the necessary actions to ensure the deductibility of
compensation paid by the Corporation to such individuals.
/s/ John G. Breen /s/ Peter Likins
John G. Breen, Chairman Dr. Peter W. Likins
/s/ Allan L. Rayfield /s/ Wolfgang R. Schmitt
Allan L. Rayfield Wolfgang R. Schmitt
/s/ Debra L. Starnes
Debra L. Starnes
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EXECUTIVE COMPENSATION
The following table summarizes compensation paid by the Corporation for each of
the last three fiscal years to its Chief Executive Officer and each of the other
four most highly compensated executive officers:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
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ANNUAL COMPENSATION LONG-TERM COMPENSATION
--------------------------------------- --------------------------------
AWARDS PAYOUTS
SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
FISCAL COMPENSATION OPTIONS LTIP COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) ($) (#) PAYOUTS ($) (a) ($)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Duane E. Collins, 1999 984,996 702,714 20,663 84,070 1,907,821 437,108 (b)
President, Chief Executive 1998 913,000 800,808 83,677 55,740 1,532,701 12,831
Officer,and Member of the Office 1997 830,880 718,184 14,222 88,500 2,898,556 11,531
of the President
Dennis W. Sullivan, 1999 624,996 351,599 15,900 31,220 842,807 115,938 (c)
Executive Vice President and 1998 590,000 397,153 11,080 26,700 711,222 13,818
Member of the Office of the 1997 551,256 358,129 7,137 39,000 1,270,554 12,814
President
Lawrence M. Zeno 1999 399,996 240,179 9,132 32,174 481,976 63,808 (c)
Vice President and Member of 1998 350,000 245,735 8,436 17,610 429,631 12,256
the Office of the President 1997 279,000 153,872 7,258 18,000 678,972 12,478
Michael J. Hiemstra, 1999 425,004 216,661 5,040 18,300 481,976 55,559 (c)
Vice President - 1998 400,000 236,565 3,985 12,735 429,631 13,618
Finance and Administration 1997 376,392 215,491 2,939 18,000 678,972 12,637
Stephen L. Hayes, 1999 369,792 254,578 13,206 18,300 481,976 61,006 (c)
Vice President, and President, 1998 345,600 274,674 31,385 12,735 429,631 13,116
Parker Aerospace Group 1997 314,196 235,623 9,727 18,000 678,972 11,448
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Represents contributions to the executives' Executive Deferral Plan
("EDP") accounts based upon performance achieved under the 1997-98-99,
1996-97-98 and 1995-96-97 Long Term Incentive Plans ("LTIP"),
respectively. The EDP contributions are subject to a three-year vesting
period, with accelerated vesting in the event of the death, disability
or normal retirement of the Plan participant. The number and value of
the aggregate restricted stock holdings resulting from LTIP payouts
prior to fiscal year 1997 for each of the above-named executive
officers as of June 30, 1999 was as follows: Mr. Collins, 8,628 shares
with a value of $394,731; Mr. Sullivan, 17,044 shares with a value of
$779,763; Mr. Zeno, 7,575 shares with a value of $346,556; Mr.
Hiemstra, 9,090 shares with a value of $415,868; and Mr. Hayes, 9,090
shares with a value of $415,868.
(b) Represents: (i) $14,348 of matching contributions by the Corporation to
the Parker Retirement Savings Plan ("Savings Plan") and the
Parker-Hannifin Corporation Savings Restoration Plan ("Restoration
Plan"); (ii) $139,669 of compensatory split-dollar life insurance
benefits under the Corporation's Executive Life Insurance Plan
established in fiscal 1999; and (iii) $283,091 of additional
compensatory split-dollar life insurance benefits under a policy
purchased by the Corporation in fiscal 1999 pursuant to an Executive
Estate Protection Agreement entered into between Mr. Collins and the
Corporation in exchange for the surrender by Mr. Collins of 38,633
restricted shares issued to him under the Corporation's 1994-95-96
LTIP.
(c) Represents: (i) $14,158, $14,698, $13,838 and $13,912 of matching
contributions by the Corporation to the Savings Plan and the
Restoration Plan for Messrs. Sullivan, Zeno, Hiemstra and Hayes,
respectively; and (ii) $101,780, $49,110, $41,721 and $47,094 of
compensatory split-dollar life insurance benefits for Messrs. Sullivan,
Zeno, Hiemstra and Hayes, respectively, under the Corporation's
Executive Life Insurance Plan.
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<PAGE> 10
The following table summarizes stock option grants by the Corporation during
the fiscal year ended June 30, 1999 to each of the executive officers
identified in the Summary Compensation Table on page 7:
OPTION GRANTS IN FISCAL 1999
<TABLE>
<CAPTION>
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INDIVIDUAL GRANTS
-------------------------------------------------------------------------------
% OF TOTAL
NUMBER OF OPTIONS
SECURITIES GRANTED TO EXERCISE POTENTIAL REALIZABLE VALUE AT
UNDERLYING EMPLOYEES OR BASE ASSUMED ANNUAL RATES OF STOCK
OPTIONS IN FISCAL PRICE EXPIRATION PRICE APPRECIATION FOR OPTION TERM (b)
NAME GRANTED (#) (a) 1999 ($/SH) DATE 5% ($) 10% ($) 14.32%($)(c)
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Duane E. Collins 84,070 7.0% $31.375 8/11/08 1,658,869 4,203,836 7,418,841
Dennis W. Sullivan 31,220 2.6% $31.375 8/11/08 616,033 1,561,125 2,755,040
Lawrence M. Zeno 22,900 1.9% $31.375 8/11/08 451,863 1,145,092 2,020,833
9,274 (d) 0.8% $48.563 8/14/06 183,347 427,281 698,907
Michael J. Hiemstra 18,300 1.5% $31.375 8/11/08 361,096 915,073 1,614,902
Stephen L. Hayes 18,300 1.5% $31.375 8/11/08 361,096 915,073 1,614,902
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Options are exercisable on the date following completion of one year of
continuous employment after the date of grant with accelerated vesting
in the event of a Change in Control (as defined on page 10). Restorative
or "reload" option rights are attached to each option and up to two
reload options will be granted upon exercise, subject to certain
provisions, if the exercise price is paid using shares of the
Corporation's common stock owned by the optionee.
(b) The potential realizable value illustrates the value that might be
realized upon the exercise of the options immediately prior to the
expiration of their term, assuming the specified compounded rates of
appreciation over the entire term of the option. Shareholders of the
Corporation, as a group, would realize $2,162,630,969 and $5,480,447,951
at assumed annual rates of appreciation of 5% and 10%, respectively,
over the ten-year life of the options. There can be no assurance that
the amounts reflected in this table will be achieved.
(c) Represents the Corporation's actual rate of stock price appreciation
over the 10-year period ending June 30, 1999.
(d) Represents reload option grant.
The following table summarizes exercises of stock options during the
fiscal year ended June 30, 1999 by each of the executive officers identified in
the Summary Compensation Table on page 7 and the fiscal year-end value of
unexercised options for such executive officers:
AGGREGATED OPTION EXERCISES IN FISCAL 1999 AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
SHARES VALUE UNEXERCISED OPTIONS IN-THE-MONEY
ACQUIRED ON REALIZED AT FY-END (#) OPTIONS AT FY-END ($)
----------------------------------------------------------------
NAME EXERCISE (#) ($) EXERCISABLE / UNEXERCISABLE EXERCISABLE / UNEXERCISABLE
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Duane E. Collins - - 463,740 / 84,070 10,882,953 / 1,208,506
Dennis W. Sullivan 104,625 3,304,558 211,450 / 31,220 4,907,860 / 448,788
Lawrence M. Zeno 18,000 430,119 62,610 / 32,174 1,105,865 / 354,301
Michael J. Hiemstra - - 75,735 / 18,300 1,472,157 / 263,063
Stephen L. Hayes - - 75,735 / 18,300 1,472,157 / 263,063
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
8
<PAGE> 11
The following table summarizes awards by the Corporation during the
fiscal year ended June 30, 1999 to each of the executive officers identified in
the Summary Compensation Table on page 7 under the Corporation's Long Term
Incentive Plan ("LTIP"):
LONG TERM INCENTIVE PLAN - AWARDS IN FISCAL 1999
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
Number of Performance or Estimated Future Payouts under
Shares Other Period Until Non-Stock Price-Based Plans
-----------------------------------------------
Name (#) Maturation or Payout Threshold (#) Target (#) Maximum (#)
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Duane E. Collins 21,080 3 Years 5,270 21,080 42,160
Dennis W. Sullivan 7,830 3 Years 1,958 7,830 15,660
Lawrence M. Zeno 7,050 3 Years 1,763 7,050 14,100
Michael J. Hiemstra 5,630 3 Years 1,408 5,630 11,260
Stephen L. Hayes 5,630 3 Years 1,408 5,630 11,260
- ----------------------------------------------------------------------------------------------------------
</TABLE>
Target awards under the Corporation's LTIP during the last fiscal year
were made in the form of restricted shares of the Corporation's Common Stock and
entitle each executive officer to receive a pro rata share of his award based
upon the Corporation's actual average return on equity (threshold of 8%; target
of 14%; maximum of 20%) for the three fiscal years ending June 30, 2001. Awards
are payable in August 2001. Executive officers will receive cash in lieu of
restricted shares under the LTIP if they are retired at the time of payment or
if they elect, prior to May 31, 2000, to defer the amount earned under the LTIP
pursuant to the Corporation's Executive Deferral Plan.
PENSION PLAN TABLE
The following table summarizes the estimated annual benefits payable upon
retirement to the executive officers identified in the Summary Compensation
Table on page 7:
<TABLE>
<CAPTION>
YEARS OF SERVICE
----------------
REMUNERATION 15 OR MORE
------------ ----------
<S> <C> <C>
$ 300,000 $ 165,000
500,000 275,000
700,000 385,000
900,000 495,000
1,100,000 605,000
1,300,000 715,000
1,500,000 825,000
1,700,000 935,000
1,900,000 1,045,000
2,100,000 1,155,000
</TABLE>
The foregoing table sets forth the straight-life annuity payable under
the Corporation's Supplemental Executive Retirement Benefits Program (the
"Program") at the normal retirement age of 65. The years of service under the
Program for each of the executive officers identified in the Summary
Compensation Table on page 7, at their respective retirement dates, will be as
follows: Mr. Collins, 40 years; Mr. Sullivan, 44 years; Mr. Zeno, 41 years; Mr.
Hiemstra, 25 years and Mr. Hayes, 34 years. The Program provides an annual
benefit based upon the average of the participant's three highest years of cash
compensation (Salary, RONA Bonus and Target Incentive Bonus) with the
Corporation. Benefits payable under the Program are based on calendar year
compensation. Since the amounts set forth in the "Salary" and "Bonus" columns in
the Summary Compensation Table on page 7 are determined on a fiscal year basis
and since the amounts set forth in the "Bonus" column for Mr. Zeno in fiscal
1997 and Mr. Hayes in fiscal 1999, 1998 and 1997 include payments received under
the Volume Incentive Plan (which are not included in determining benefits
9
<PAGE> 12
under the Program), such amounts do not reflect the benefits payable under the
Program. If the benefits were to be payable to each named participant based on
retirement as of June 30, 1999, the average of the three highest calendar years
of cash compensation included in determining benefits under the Program for each
of the named participants would be as follows: Mr. Collins, $1,590,519; Mr.
Sullivan, $933,794; Mr. Zeno, $505,200; Mr. Hiemstra, $607,890; and Mr. Hayes,
$534,485. Benefits are subject to reduction for payments received under the
Corporation's Retirement Plan plus 50% of primary social security benefits.
"CHANGE IN CONTROL" SEVERANCE AGREEMENTS WITH OFFICERS. The Corporation
has entered into separate agreements (collectively the "Agreements") with
Messrs. Collins, Sullivan, Zeno, Hiemstra and Hayes. The Agreements are designed
to retain the executives and provide for continuity of management in the event
of any actual or threatened change in the control of the Corporation. Each
Agreement only becomes operative upon a "Change in Control" of the Corporation,
as that term is defined in the Agreements, and the subsequent termination of the
employment of the executive pursuant to the terms of the Agreement. A Change in
Control of the Corporation shall be deemed to have occurred if and when: (i)
subject to certain exceptions, any "person" (as such term is used in Sections
13(d)(3) and 14(d)(2) of the Exchange Act) is or becomes a beneficial owner,
directly or indirectly, of securities of the Corporation representing 20% or
more of the combined voting power of the Corporation's then outstanding
securities eligible to vote for the election of the Board; (ii) during any
period of twenty-four consecutive months, individuals who at the beginning of
such twenty-four month period were Directors of the Corporation (the "Incumbent
Board") cease to constitute at least a majority of the Board of Directors of the
Corporation, unless the election, or nomination for election, of any person
becoming a Director subsequent to the beginning of such twenty-four month period
was approved by a vote of at least two-thirds of the Incumbent Board; (iii) the
Corporation enters into a merger, consolidation or other reorganization, or
sells all its assets, unless (a) immediately following the business combination:
(1) more than 50% of the total voting power eligible to elect directors of the
resulting corporation is represented by shares that were Common Shares
immediately prior to the business combination, (2) subject to certain
exceptions, no person becomes the beneficial owner, directly or indirectly, of
20% or more of the voting power of the corporation resulting from the business
combination, and (3) at least a majority of the members of the board of
directors of the resulting corporation were members of the Incumbent Board at
the time of the Board of Directors of the Corporation's approval of the
execution of the initial agreement providing for such business combination, or
(b) the business combination is effected by means of the acquisition of Common
Shares from the Corporation, and the Board of Directors of the Corporation
approves a resolution providing expressly that such business combination does
not constitute a "Change in Control"; or (iv) the shareholders of the
Corporation approve a plan of complete liquidation or dissolution of the
Corporation.
Each Agreement provides that, if the employment of the executive is
terminated during the three years following a Change in Control of the
Corporation, either by the Corporation without "Cause" (as defined in the
Agreements) or by the executive for "Good Reason" (as defined in the Agreements
and described below), the executive shall be entitled to receive (a) pro rata
salary and bonus for the year of termination of employment; (b) severance pay
equal to three times the executive's annual salary and bonus; (c) continuation
of welfare benefits (e.g., medical, life insurance, disability coverage) for a
period of three years; (d) to the extent not previously received, all amounts
previously deferred under the Corporation's non-qualified income deferral plans
together with a "make whole" amount designed to compensate the executive for the
lost opportunity to continue to defer receipt of such income (and the earnings
thereon) pursuant to elections made under such deferral plans; and (e) a
"gross-up" payment to offset the effect, if any, of the excise tax imposed by
Section 4999 of the Internal Revenue Code. "Good Reason" for termination of
employment by the executive includes, without limitation, diminution in duties,
reduction in compensation or benefits or relocation. In addition, termination of
employment by the executive for any or no reason during the 180-day period
beginning on the 91st day after the Change in Control shall constitute Good
Reason.
A Change in Control of the Corporation also has an effect under other
executive compensation plans of the Corporation, as follows: (1) any outstanding
unvested stock option held by an executive vests immediately upon a Change in
Control; (2) any outstanding unvested restricted stock issued or unvested
Executive Deferral Plan ("EDP") amounts credited to an executive pursuant to the
Corporation's Long Term Incentive Plans ("LTIP") vests immediately in the event
of a Change in Control; (3) any outstanding LTIP award to an executive will be
paid in full in cash upon a Change in Control, at the target amount or on the
basis of corporate financial performance to the date of the Change in Control,
whichever is greater; (4) if previously elected by the executive, upon a Change
in Control, all amounts previously deferred by the executive under the EDP,
together with the "make whole" amount(described in subsection (d) of the
preceding paragraph), will be paid to the executive; (5) upon a Change in
Control, all shares the
10
<PAGE> 13
receipt of which were previously deferred by the executive under the Stock
Option Deferral Plan will be issued to the executive; and (6) upon a Change in
Control, each participant under the Corporation's Supplemental Executive
Retirement Benefits Program (the "Program") will receive three additional years
of age and service credit under the Program and will receive a lump-sum payment
equal to the present value of the participant's vested benefit under the
Program.
COMMON SHARE PRICE PERFORMANCE GRAPH
The following graph sets forth a comparison of the cumulative
shareholder return on the Corporation's Common Shares with the S&P 500 Index and
the S&P Manufacturing (Diversified Industrials) Index during the period June 30,
1994 through June 30, 1999, assuming the investment of $100 on June 30, 1994,
and the reinvestment of dividends.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN AMONG PARKER-HANNIFIN
CORPORATION, THE S&P 500 INDEX AND THE S&P MANUFACTURING (DIVERSIFIED
INDUSTRIALS) INDEX
S&P MANUFACTURING PARKER-
S&P 500 (DIVERSIFIED HANNIFIN
PERIOD INDEX INDUSTRIALS) INDEX CORPORATION
6/30/94 100 100 100
6/30/95 126 132 130
6/30/96 159 169 155
6/30/97 214 251 226
6/30/98 279 270 216
6/30/99 342 358 264
APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Audit Committee and the Board of Directors recommend the
appointment of PricewaterhouseCoopers LLP ("PWC") as certified public
accountants to examine the financial statements of the Corporation as of and for
the fiscal year ending June 30, 2000. PWC and its predecessor Coopers & Lybrand
L.L.P. have conducted the annual audit of the Corporation's accounts since its
organization in 1938. A representative of PWC is expected to be present at the
meeting with an opportunity to make a statement if he desires to do so and to
respond to appropriate questions. Ratification of the appointment of PWC as
certified public accountants requires the affirmative vote of the holders of at
least a majority of the votes present or represented and entitled to vote on the
proposal at the Annual Meeting.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE PROPOSAL.
11
<PAGE> 14
PRINCIPAL SHAREHOLDERS OF THE CORPORATION
The following table sets forth, as of August 31, 1999, the name and
address of each person believed to be a beneficial owner of more than 5% of the
Common Shares of the Corporation, the number of shares and the percentage so
owned, as well as the beneficial ownership of Common Shares of the Corporation
by the Directors, the executive officers of the Corporation named in the Summary
Compensation Table on page 7, and all Directors and executive officers as a
group:
<TABLE>
<CAPTION>
AMOUNT AND NATURE PERCENTAGE
NAME OF OF OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP(a) CLASS(b)
<S> <C> <C>
Scudder Kemper Investments, Inc. 10,292,377(c) 9.5%
345 Park Avenue
New York, NY 10154-0010
Trimark Financial Corporation 7,022,900(d) 6.5%
One First Canadian Place
Suite 5600
P.O. Box 487
Toronto, ON M5X1E5
J. G. Breen 14,950(e)
P. C. Ely 7,424(f)
P. W. Likins 8,311(f)
G. Mazzalupi 1,000
K. P. Muller 1,467
H. R. Ortino 5,954(g)
P. S. Parker 697,486(h)
A. L. Rayfield 6,282(f)
W. R. Schmitt 7,201(f)
D. L. Starnes 3,492(e)
D. E. Collins 661,000(h)
D. W. Sullivan 439,489(h)
L. M. Zeno 118,618(h)
M. J. Hiemstra 136,412(h)
S. L. Hayes 109,169(h)
All Directors and executive 2,712,150(h) 2.4%
officers as a group
(26 PERSONS)
</TABLE>
(a) Unless otherwise indicated, the beneficial owner has sole voting and
investment power.
(b) No Director or executive officer beneficially owned more than 1% of the
Corporation's Common Stock as of August 31, 1999.
(c) Pursuant to a statement filed by Scudder Kemper Investments, Inc. with
the SEC in accordance with Rule 13d-1 of the Securities and Exchange
Act of 1934 (the "Exchange Act"), Scudder Kemper Investments, Inc. has
reported that, as of December 31, 1998, it had sole voting power over
2,794,302 Common Shares, shared voting power over 5,318,864 Common
Shares, sole investment power over 10,226,563 Common Shares and shared
investment power over 65,814 Common Shares.
(d) Pursuant to a statement filed by Trimark Financial Corporation with the
SEC in accordance with Rule 13d-1 of the Exchange Act, Trimark
Financial Corporation has reported that, as of December 31, 1998, it
had sole investment power over 7,022,900 Common Shares.
(e) These amounts include 1,750 Common Shares subject to options
exercisable on or prior to October 30, 1999 granted under the
Corporation's Non-Employee Directors Stock Option Plan. Such Common
Shares are deemed to be outstanding only for the purpose of computing
the percentage of Common Shares owned by each of the individuals and
the officers and Directors as a group.
(f) These amounts include 3,250 Common Shares subject to options
exercisable on or prior to October 30, 1999 granted under the
Corporation's Non-Employee Directors Stock Option Plan. Such Common
Shares are deemed to be outstanding only for the purpose of computing
the percentage of Common Shares owned by each of the individuals and
the officers and Directors as a group.
(g) This amount includes 2,500 Common Shares subject to options exercisable
on or prior to October 30, 1999 granted under the Corporation's
Non-Employee Directors Stock Option Plan. Such Common Shares are deemed
to be outstanding only for the purpose of computing the percentage of
Common Shares owned by the individual and the officers and Directors as
a group.
12
<PAGE> 15
(h) These amounts include 547,810, 242,670, 85,510, 94,035, 94,035 and
1,424,352 Common Shares subject to options exercisable on or prior to
October 30, 1999 granted under the Corporation's stock option plans
held by Messrs. Collins, Sullivan, Zeno, Hiemstra and Hayes and all
Directors and executive officers as a group, respectively. Such Common
Shares are deemed to be outstanding only for the purpose of computing
the percentage of shares owned by each of the individuals and the
officers and Directors as a group. These amounts also include 39,769,
22,494, 7,806, 4,228, 4,103, 6,425 and 139,105 Common Shares as to
which Messrs. Parker, Collins, Sullivan, Zeno, Hiemstra and Hayes and
all Directors and executive officers as a group, respectively, hold
voting power pursuant to the Corporation's Retirement Savings Plan as
of June 30, 1999.
SHAREHOLDERS' PROPOSALS
The Corporation must receive by May 30, 2000 any proposal of a
shareholder intended to be presented at the 2000 Annual Meeting of Shareholders
of the Corporation (the "2000 Meeting") and to be included in the Corporation's
proxy, notice of meeting and proxy statement related to the 2000 Meeting
pursuant to Rule 14a-8 under the Securities and Exchange Act of 1934 (the
"Exchange Act"). Such proposals should be submitted by certified mail, return
receipt requested. Proposals of shareholders submitted outside the processes of
Rule 14a-8 under the Exchange Act ("Non-Rule 14a-8 Proposals") in connection
with the 2000 Meeting must be received by the Corporation by August 13, 2000 or
such proposals will be considered untimely under Rule 14a-4(c) of the Exchange
Act. The Corporation's proxy related to the 2000 Meeting will give discretionary
authority to the proxy holders to vote with respect to all Non-Rule 14a-8
Proposals received by the Corporation after August 13, 2000. The Corporation's
proxy related to the 1999 Annual Meeting of Shareholders will give discretionary
authority to the proxy holders to vote with respect to all Non-Rule 14a-8
Proposals received by the Corporation after August 14, 1999.
GENERAL
The Board of Directors knows of no other matters which will be
presented at the meeting. However, if any other matters properly come before the
meeting or any adjournment, the person or persons voting the proxies will vote
in accordance with their best judgment on such matters.
The Corporation will bear the expense of preparing, printing and
mailing this Proxy Statement. In addition to solicitation by mail, officers and
other employees of the Corporation may solicit the return of proxies. The
Corporation will request banks, brokers and other custodians, nominees and
fiduciaries to send proxy material to beneficial owners of Common Shares. The
Corporation will, upon request, reimburse them for their expenses in so doing.
The Corporation has retained Kissel-Blake Inc., 88 Pine Street, Wall Street
Plaza, 30th Floor, New York, New York, to assist in the solicitation of proxies
at an anticipated cost of $14,000, plus disbursements.
You are urged to sign and return your Proxy promptly in order to make
certain your shares will be voted at the meeting. Common Shares represented by
properly executed proxies will be voted in accordance with any specification
made thereon and, if no specification is made, will be voted in favor of the
election of the four nominees for Directors in the class whose three-year term
of office will expire in 2002; and in favor of the appointment of
PricewaterhouseCoopers LLP as independent public accountants for the fiscal year
ending June 30, 2000. Abstentions and broker non-votes are counted in
determining the votes present at a meeting. Consequently, an abstention or a
broker non-vote has the same effect as a vote against a proposal, as each
abstention or broker non-vote would be one less vote in favor of a proposal. You
may revoke your Proxy by giving notice to the Corporation in writing or in open
meeting, without affecting any vote previously taken. However, your mere
presence at the meeting will not operate to revoke your Proxy.
The Annual Report of the Corporation, including financial statements
for the fiscal year ended June 30, 1999, is being mailed to shareholders with
this Proxy Statement.
By Order of the Board of Directors
/s/ Thomas A. Piraino, Jr.
Thomas A. Piraino, Jr.
Secretary
September 27, 1999
13
<PAGE> 16
DETACH CARD
- --------------------------------------------------------------------------------
PARKER-HANNIFIN CORPORATION
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS ON OCTOBER 27, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints PATRICK S. PARKER, DUANE E.
COLLINS and THOMAS A. PIRAINO, JR., and any of them, as proxies
to represent and to vote all shares of stock of Parker-Hannifin
Corporation which the undersigned is entitled to vote at the
Annual Meeting of Shareholders of the Corporation to be held on
October 27, 1999, and at any adjournments thereof, on the
proposals more fully described in the Proxy Statement for the
Meeting in the manner specified herein and on any other business
that may properly come before the Meeting.
1. ELECTION OF DIRECTORS IN THE CLASS WHOSE THREE-YEAR TERM OF
OFFICE WILL EXPIRE IN 2002.
<TABLE>
<CAPTION>
<S> <C>
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY to vote for all nominees listed below
(except as otherwise marked below)
</TABLE>
PAUL C. ELY, JR., PETER W. LIKINS, WOLFGANG R. SCHMITT AND DEBRA
L. STARNES
(INSTRUCTIONS: To withhold authority to vote for any individual
nominee, strike a line through that nominee's
name.)
2. APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS AUDITORS FOR
FY00. [ ] FOR [ ] AGAINST [ ] ABSTAIN
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1 AND 2.
---
(Continued and TO BE SIGNED, on the reverse side)
<PAGE> 17
DETACH CARD
- --------------------------------------------------------------------------------
Proxy No. (Continued from reverse side) Common Shares
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICE BY MARKING THE
APPROPRIATE BOXES (SEE REVERSE SIDE) BUT YOU NEED NOT MARK
ANY BOXES IF YOU WISH TO VOTE IN ACCORDANCE WITH THE BOARD
OF DIRECTOR'S RECOMMENDATIONS. THE PROXIES CANNOT VOTE YOUR
SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
Date: ____________, 1999
------------------------
Signature
------------------------
Signature if held
jointly
NOTE: Please sign
exactly as name appears
hereon. Joint owners
should each sign.
Attorneys, executors,
administrators, trustees
or guardians, officers
of corporations and
others signing in a
fiduciary capacity
should state their full
titles as such.
