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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 LOGO]
PARKER-HANNIFIN CORPORATION
6035 PARKLAND BOULEVARD - MAYFIELD HEIGHTS, OHIO 44124-4141
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
OCTOBER 25, 2000
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 25, 2000, at 9:00 a.m., Eastern
Daylight Time, for the following purposes:
1. Electing four Directors in the class whose three-year term of
office will expire in 2003;
2. Appointing PricewaterhouseCoopers LLP as independent certified
public accountants for the fiscal year ending June 30, 2001;
and
3. Transacting such other business as may properly come before
the meeting.
Shareholders of record at the close of business on August 31, 2000 are
entitled to vote at the meeting. If you do not expect to attend the Annual
Meeting, or if you do plan to attend but wish to vote by proxy, please mark,
date, sign and return the enclosed proxy card promptly in the envelope provided
or vote electronically via the internet or by telephone in accordance with the
instructions on the proxy card.
By Order of the Board of Directors
/s/ Thomas A. Piraino, Jr.
Thomas A. Piraino, Jr.
Secretary
September 25, 2000
<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 25, 2000, and at
all adjournments thereof. Only shareholders of record at the close of business
on August 31, 2000 will be entitled to vote. On that date, 116,337,804 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 25, 2000.
Shareholders of the Corporation have cumulative voting rights in the
election of Directors, if 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. In October 1999, Patrick S. Parker, formerly a member of the class
whose term expires in 2001, retired from the Board of Directors and was named
Chairman Emeritus, an advisory position. As permitted under the Corporation's
Code of Regulations, Donald E. Washkewicz was elected to the Board of Directors
in February 2000 to a term expiring in 2001 to fill the vacancy on the Board of
Directors.
Shareholder approval is sought to elect Duane E. Collins, Klaus-Peter
Mueller, Giulio Mazzalupi and Allan L. Rayfield, Directors whose terms of office
expire in 2000, to the class whose term will expire in 2003. 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 2003
DUANE E. COLLINS, 64, has served as a Director of the Corporation since 1992.
Mr. Collins is the Chief Executive Officer of the Corporation and in
October 1999 was named Chairman of the Board of Directors. Mr. Collins was
President of the Corporation from July 1993 until February 2000. Mr.
Collins is also a Director of National City Corporation, The Sherwin
Williams Company and Mead Corporation.
KLAUS-PETER MUELLER, 56, has served as a Director of the Corporation since 1998.
He is a member of the Nominating and Retirement Planning Committees. Mr.
Mueller is a member of the Board of Managing Directors of Commerzbank AG
(international banking institution) in Frankfurt, Germany.
GIULIO MAZZALUPI, 59, has served as a Director of the Corporation since 1999. He
is a member of the Nominating and Retirement Planning Committees. 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, 65, 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.
PRESENT DIRECTORS WHOSE TERMS EXPIRE IN 2002
PAUL C. ELY, JR., 68, 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, 64, 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 Consolidated Edison Co. of New York Inc.
WOLFGANG R. SCHMITT, 56, has served as a Director of the Corporation since 1992.
He is a member of the Audit, Compensation and Management Development and
Nominating Committees. Mr. Schmitt is the Chief Executive Officer of Trends
2 Innovation (strategic growth consultants). He retired as the Chairman of
the Board and Chief Executive Officer of Rubbermaid Incorporated
(manufacturer of rubber and plastic products) in April 1999. Mr. Schmitt is
also a Director of Kimberly-Clark Corporation.
DEBRA L. STARNES, 47, 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, Organizational and Process Change, of Lyondell Chemical Company
(petrochemical production). She was the Senior Vice President, Intermediate
Chemicals, of Lyondell from July 1998 to April 2000; the Senior Vice
President, Polymers-Equistar Chemical (a joint venture majority owned by
Lyondell) from December 1997 to July 1998; and Senior Vice President,
Polymers, at Lyondell from May 1995 to December 1997.
PRESENT DIRECTORS WHOSE TERMS EXPIRE IN 2001
JOHN G. BREEN, 66, 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. Now retired,
Mr. Breen was the Chairman of the Board of The Sherwin Williams Company
(paints and coatings) until April 2000 and Chief Executive Officer until
October 1999. Mr. Breen is also a Director of National City Corporation,
Mead Corporation, Goodyear Tire and Rubber Company, The Sherwin Williams
Company and The Stanley Works.
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<PAGE> 5
HECTOR R. ORTINO, 58, 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.
DENNIS W. SULLIVAN, 61, has served as a Director of the Corporation since 1983.
Mr. Sullivan is Executive Vice President of the Corporation. Mr. Sullivan
is also a Director of Ferro Corporation and KeyCorp.
DONALD E. WASHKEWICZ, 50, was elected to the Board of Directors in February
2000. Mr. Washkewicz is the President and Chief Operating Officer of the
Corporation. He was previously a Vice President of the Corporation and
President of the Hydraulics Group of the Corporation from October 1997 to
February 2000 and Vice President-Operations of the Fluid Connectors Group
of the Corporation from October 1994 to October 1997.
No Director of the Corporation is related to any other Director. During
the fiscal year ended June 30, 2000, there were ten 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 and Messrs. Mazzalupi and Mueller.
THE AUDIT COMMITTEE, which met twice during the fiscal year ended June
30, 2000, is responsible for reviewing with the Corporation's financial
management and its independent certified public accountants 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 certified public accountants for
the fiscal year.
THE RETIREMENT PLANNING COMMITTEE, which met once during the fiscal
year ended June 30, 2000, 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 three
times during the fiscal year ended June 30, 2000, 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
succession management and the development of management personnel.
THE NOMINATING COMMITTEE, which did not meet during the fiscal year
ended June 30, 2000, 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. The annual retainer for
such Directors is $30,000. The fee for attending each Board and Committee
meeting is $1,500 for all such Directors other than Committee Chairmen, whose
fee is $2,000 for chairing committee meetings. Patrick S. Parker, who was
Chairman of the Board of Directors until October 1999, received 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.
Each Director who is not a current employee of the Corporation
("Non-Employee Director") was granted 850 stock options under the Non-Employee
Directors Stock Option Plan in August 1999 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 50% following one year of continued service as a
Director and the remaining 50% following the second year of continued service as
a Director. In August 2000, each Non-Employee Director was granted an additional
1,100 stock options upon identical terms.
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 Chairman and Chief Executive Officer of the
Corporation, serves on the Compensation Committee of The Sherwin Williams
Company. Mr. Breen was the Chairman of The Sherwin Williams Company until April
2000 and Chief Executive Officer until October 1999.
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<PAGE> 6
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 30-45% of total targeted annual
compensation for the executive officers with operational profit
and loss responsibility (including the Chief Executive Officer)
and 25-35% 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 additional annual incentive
programs for operating executives. In fiscal year 2000, 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
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Plan only if the group exceeded corporate goals with respect to
its return on sales and its assets/sales ratio. For fiscal year
2001, the Chief Executive Officer, with the approval of the
Committee, amended the Volume Incentive Plan to raise the
threshold for the increase in previous year's sales from 7.5% and
12.5% to 10% and 15%, respectively.
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 either restricted stock
or as an account entry under the Corporation's Executive
Deferral Plan ("EDP") in an amount equal to the value of
such restricted stock. 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 historically had a ten-year term with
one year vesting. Beginning in August 1999, grants have a
ten-year term and vest 50% following one year of continued
service and the remaining 50% 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 and President: 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 Chairman and Chief Executive Officer, Duane E. Collins. Mr.
Collins' increase in base salary from fiscal 1999 to fiscal 2000 of 5.08% is
reflective of his performance rating for fiscal 1999 and the Corporation's
accomplishments toward its financial and operational goals. In addition, based
on the Corporation's fiscal 2000 operating plan, Mr. Collins was entitled to
receive 100% of his Target Incentive Bonus of $350,000 if the Corporation's
actual pre-tax return on average assets, adjusted primarily for acquisitions and
currency transactions, was 13.7%. A minimum payout of 15% of the Target
Incentive Bonus was established at a 3.4% pre-tax return on average assets and a
maximum payout of 150% of the Target Incentive Bonus was established at a 16.7%
pre-tax return on average assets. During the fiscal year ended June 30, 2000,
the Corporation's adjusted pre-tax return on average assets was 14.3% and each
executive officer, including Mr. Collins, received an amount equal to 111.1% of
his Target Incentive Bonus, which is included in the "Bonus" column of the
Summary Compensation Table on page 7.
Mr. Collins' RONA Bonus was targeted at $418,968 based upon an
approximate 28.35% average return on division net assets. The average return on
division net assets was 31.49%, resulting in a RONA Bonus payment to Mr. Collins
of $465,336, 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).
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Based on the Corporation's average return on equity of 18.34% for the
three fiscal years ended June 30, 2000, Mr. Collins and the other executive
officers received a payment under the 1998-99-00 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
172.61% 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 2000, 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.
The Omnibus Budget Reconciliation Act of 1993 includes potential
limitations on the deductibility of compensation in excess of $1 million paid to
the Corporation's Chief Executive Officer and four other highest paid executive
officers. The Committee has taken the necessary actions to ensure the
deductibility of compensation paid by the Corporation to such individuals.
/S/ John G. Breen /S/ Peter Likins
John G. Breen, Chairman Dr. Peter W. Likins
/S/ Allan L. Rayfield /S/ Wolfgang R. Schmitt
Allan L. Rayfield Wolfgang R. Schmitt
/S/ Debra L. Starnes
Debra L. Starnes
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EXECUTIVE COMPENSATION
The following table summarizes compensation paid by the Corporation for each of
the last three fiscal years to its Chief Executive Officer and each of the other
four most highly compensated executive officers:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
------------------------------------------ -------------------------------
AWARDS PAYOUTS
-------------------------------
SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
FISCAL COMPENSATION OPTIONS LTIP COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) ($) (#) PAYOUTS ($) (a) ($)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Duane E. Collins, 2000 1,035,000 854,186 16,763 126,809 925,812 493,127 (b)
Chief Executive Officer and 1999 984,996 702,714 20,663 84,070 1,907,821 437,108
Chairman of the Board 1998 913,000 800,808 83,677 55,740 1,532,701 12,831
Dennis W. Sullivan, 2000 656,256 415,715 14,534 29,590 443,400 93,454 (c)
Executive Vice President 1999 624,996 351,599 15,900 31,220 842,807 115,938
1998 590,000 397,153 11,080 26,700 711,222 13,818
Lawrence M. Zeno, 2000 420,000 286,054 4,069 21,560 359,145 70,952 (c)
Vice President 1999 399,996 240,179 9,132 32,174 481,976 63,808
1998 350,000 245,735 8,436 17,610 429,631 12,256
Michael J. Hiemstra, 2000 412,923 261,578 4,674 16,390 258,930 140,399 (d)
Vice President - Finance 1999 425,004 216,661 5,040 18,300 481,976 55,559
and Administration and Chief 1998 400,000 236,565 3,985 12,735 429,631 13,618
Financial Officer
Stephen L. Hayes, 2000 388,284 252,592 20,507 16,390 258,930 71,302 (c)
Vice President, and President, 1999 369,792 254,578 13,206 18,300 481,976 61,006
Parker Aerospace Group 1998 345,600 274,674 31,385 12,735 429,631 13,116
</TABLE>
(a) Represents contributions to the executives' Executive Deferral Plan
("EDP") accounts based upon performance achieved under the 1998-99-00,
1997-98-99 and 1996-97-98 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 for each of the above-named executive
officers owning restricted stock as of June 30, 2000 was as follows: Mr.
Collins, 8,628 shares with a value of $295,509, and Mr. Sullivan, 17,044
shares with a value of $583,757.
(b) Represents: (i) $14,266 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) $167,000 of compensatory split-dollar life insurance benefits under
the Corporation's Executive Life Insurance Plan ("Executive Life Insurance
Plan"); and (iii) $311,861 of additional compensatory split-dollar life
insurance benefits under a policy purchased by the Corporation pursuant to
an Executive Estate Protection Agreement entered into between Mr. Collins
and the Corporation.
(c) Represents: (i) $13,865, $14,967 and $13,747 of matching contributions by
the Corporation to the Savings Plan and the Restoration Plan for Messrs.
Sullivan, Zeno and Hayes, respectively; and (ii) $79,589, $55,985, and
$57,555 of compensatory split-dollar life insurance benefits for Messrs.
Sullivan, Zeno and Hayes, respectively, under the Executive Life Insurance
Plan.
(d) Represents: (i) $14,144 of matching contributions by the Corporation to
the Savings Plan and the Restoration Plan; (ii) $47,538 of compensatory
split-dollar life insurance benefits under the Executive Life Insurance
Plan; and (iii) $78,717 of additional compensatory split-dollar life
insurance benefits under a policy purchased by the the Corporation in
fiscal 2000 pursuant to an Executive Estate Protection Agreement entered
into between Mr. Hiemstra and the Corporation in exchange for the
surrender by Mr. Hiemstra of $50,000 per year in base salary until October
2006.
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The following table summarizes stock option grants by the Corporation during
the fiscal year ended June 30, 2000 to each of the executive officers
identified in the Summary Compensation Table on page 7:
OPTION GRANTS IN FISCAL 2000
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
--------------------------------------------------------------------------------------------
NUMBER OF % OF TOTAL POTENTIAL REALIZABLE VALUE AT
SECURITIES OPTIONS EXERCISE ASSUMED ANNUAL RATES OF STOCK
UNDERLYING GRANTED TO OR BASE PRICE APPRECIATION FOR OPTION TERM (b)
OPTIONS EMPLOYEES PRICE EXPIRATION -------------------------------------
NAME GRANTED (#) (a) IN FISCAL 2000 ($/SH) DATE 5% ($) 10% ($)
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Duane E. Collins 68,400 6.3% $45.000 8/10/09 1,935,720 4,905,511
58,409 (c) 5.4% $37.500 8/14/06 744,948 1,690,006
Dennis W. Sullivan 29,590 2.7% $45.000 8/10/09 837,397 2,122,136
Lawrence M. Zeno 21,560 2.0% $45.000 8/10/09 610,148 1,546,240
Michael J. Hiemstra 16,390 1.5% $45.000 8/10/09 463,837 1,175,458
Stephen L. Hayes 16,390 1.5% $45.000 8/10/09 463,837 1,175,458
</TABLE>
(a) Options are 50% exercisable on the date following completion of one year
of continuous employment after the date of grant and the remaining 50%
is exercisable on the date following completion of two years 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 $3,167,109,826 and $8,026,105,390
at assumed annual rates of appreciation of 5% and 10%, respectively,
over the ten-year life of the options. There can be no assurance that
the amounts reflected in this table will be achieved. The Corporation's
actual rate of stock price appreciation over the 10-year period ending
June 30, 2000 was 10.08%.
(c) Represents reload option grant.
The following table summarizes exercises of stock options during the
fiscal year ended June 30, 2000 by each of the executive officers identified in
the Summary Compensation Table on page 7 and the fiscal year-end value of
unexercised options for such executive officers:
AGGREGATED OPTION EXERCISES IN FISCAL 2000 AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY
SHARES VALUE AT FY-END (#) OPTIONS AT FY-END ($)
ACQUIRED ON REALIZED ----------------------------------------------------------------------------
NAME EXERCISE (#) ($) EXERCISABLE / UNEXERCISABLE EXERCISABLE / UNEXERCISABLE
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Duane E. Collins 129,000 5,113,406 418,810 / 126,809 4,541,481 / 0
Dennis W. Sullivan 56,250 2,501,499 186,420 / 29,590 1,530,141 / 0
Lawrence M. Zeno 67,900 2,930,313 26,884 / 21,560 0 / 0
Michael J. Hiemstra - - 94,035 / 16,390 765,783 / 0
Stephen L. Hayes - - 94,035 / 16,390 765,783 / 0
</TABLE>
8
<PAGE> 11
The following table summarizes awards by the Corporation during the fiscal year
ended June 30, 2000 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 2000
<TABLE>
<CAPTION>
ESTIMATED FUTURE PAYOUTS UNDER
NUMBER OF PERFORMANCE OR NON-STOCK PRICE-BASED PLANS
SHARES OTHER PERIOD UNTIL -------------------------------------------
NAME (#) MATURATION OR PAYOUT THRESHOLD (#) TARGET (#) MAXIMUM (#)
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Duane E. Collins 19,500 3 Years 4,875 19,500 39,000
Dennis W. Sullivan 8,440 3 Years 2,110 8,440 16,880
Lawrence M. Zeno 7,540 3 Years 1,885 7,540 15,080
Michael J. Hiemstra 5,730 3 Years 1,433 5,730 11,460
Stephen L. Hayes 5,730 3 Years 1,433 5,730 11,460
</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, 2002. Awards
are payable in August 2002. 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, 2001, 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>
$ 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
2,300,000 1,265,000
</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. Hayes in fiscal
1999 and 1998 include payments received under the Volume Incentive Plan (which
are not included in determining benefits under the Program), such amounts do not
reflect the benefits payable under the
9
<PAGE> 12
Program. If the benefits were to be payable to each named participant based on
retirement as of June 30, 2000, 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, $1,689,524; Mr.
Sullivan, $977,275; Mr. Zeno, $580,821; Mr. Hiemstra, $633,612; and Mr. Hayes,
$572,056. 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 that 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 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.
10
<PAGE> 13
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, 1995
through June 30, 2000, assuming the investment of $100 on June 30, 1995, and the
reinvestment of dividends.
<TABLE>
<CAPTION>
S&P MANUFACTURING PARKER-HANNIFIN
PERIOD S&P (DIVERSIFIED INDUSTRIALS) CORPORATION
<S> <C> <C> <C>
6/30/95 $100 $100 $100
6/30/96 126 128 119
6/30/97 170 189 174
6/30/98 221 204 166
6/30/99 271 271 203
6/30/00 291 244 154
</TABLE>
APPOINTMENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Audit Committee and the Board of Directors recommend the
appointment of PricewaterhouseCoopers LLP ("PwC") as independent certified
public accountants to examine the financial statements of the Corporation as of
and for the fiscal year ending June 30, 2001. 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 independent 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, 2000, 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>
FMR Corp. 8,492,645(c) 7.6%
82 Devonshire Street
Boston, MA 02109
J. G. Breen 17,375(d)
P. C. Ely 9,853(e)
P. W. Likins 10,740(e)
G. Mazzalupi 1,425(f)
K. P. Mueller 1,892(f)
H. R. Ortino 6,379(g)
A. L. Rayfield 6,707(e)
W. R. Schmitt 9,630(e)
D. L. Starnes 3,930(d)
D. E. Collins 586,274(h)
D. E. Washkewicz 61,244(h)
D. W. Sullivan 312,585(h)
L. M. Zeno 68,761(h)
M. J. Hiemstra 149,377(h)
S. L. Hayes 117,494(h)
All Directors and executive 1,914,908(h) 1.6%
officers as a group
(28 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, 2000.
(c) FMR Corp. has reported on behalf of itself, Fidelity Management & Research
Company, Fidelity Management Trust Company and Fidelity International
Limited that, as of August 31, 2000, it had sole voting power over
7,795,948 Common Shares and sole investment power over 8,492,645 Common
Shares.
(d) These amounts include 2,175 Common Shares subject to options exercisable on
or prior to October 30, 2000 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.
(e) These amounts include 3,675 Common Shares subject to options exercisable on
or prior to October 30, 2000 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 425 Common Shares subject to options exercisable on
or prior to October 30, 2000 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 2,925 Common Shares subject to options exercisable on
or prior to October 30, 2000 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 453,010; 41,035; 201,215; 37,664; 102,230; 102,230
and 1,339,721 Common Shares subject to options exercisable on or prior to
October 30, 2000 granted under the Corporation's stock option plans held by
Messrs. Collins, Washkewicz, 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 22,739; 10,334; 60; 2,625;
4,233; 6,555 and 117,837 Common Shares as to which Messrs. Collins,
Washkewicz, 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, 2000.
SHAREHOLDERS' PROPOSALS
The Corporation must receive by May 28, 2001 any proposal of a
shareholder intended to be presented at the 2001 Annual Meeting of Shareholders
of the Corporation (the "2001 Meeting") and to be included in the Corporation's
proxy, notice of meeting and proxy statement related to the 2001 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 2001 Meeting must be received by the Corporation by August 11, 2001 or
such proposals will be considered untimely under Rule 14a-4(c) of the Exchange
Act. The Corporation's proxy related to the 2001 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 11, 2001. The Corporation's
proxy related to the 2000 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 13, 2000.
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 Georgeson Shareholder Communications 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 vote your proxy promptly by internet, telephone or
mail by following the instructions on the enclosed proxy card 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 2003; and in favor of the appointment of
PricewaterhouseCoopers LLP as independent certified public accountants for the
fiscal year ending June 30, 2001. 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 at any time prior to the close of voting at the Annual
Meeting by internet or telephone or 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, 2000, 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 25, 2000
13
<PAGE> 16
VOTE BY TELEPHONE
Have this proxy card available when
you call the Toll-Free number
1-800-250-9081 using a Touch-Tone
phone. You will be prompted to
enter your control number and then
you can follow the simple prompts
that will be presented to you to
record your vote.
VOTE BY INTERNET
Have this proxy card available when
you access the website
http://www.votefast.com. You will
be prompted to enter your control
number and then you can follow the
simple prompts that will be
presented to you to record your
vote.
VOTE BY MAIL
Please mark, sign and date this
proxy card and return it in the
postage paid envelope provided or
return it to: Stock Transfer Dept.
(PH), National City Bank, P.O. Box
92301, Cleveland, OH 44197-1200.
IF VOTING BY TELEPHONE OR INTERNET, PLEASE DO NOT SEND THIS PROXY CARD BY MAIL.
<TABLE>
<CAPTION>
<S> <C> <C>
VOTE BY TELEPHONE VOTE BY INTERNET VOTE BY MAIL
Call Toll-Free using a Access the Website and Return this proxy card
Touch-Tone phone cast your vote in the postage-paid
1-800-250-9081 http://www.votefast.com envelope provided
</TABLE>
VOTE 24 HOURS A DAY, 7 DAYS A WEEK!
Your telephone or internet vote must be received by 11:59 p.m. Eastern Daylight
Time on October 24, 2000 to be counted in the final tabulation.
YOUR CONTROL NUMBER IS:
Proxy card must be signed and dated below.
Please fold and detach card at perforation before mailing
PARKER-HANNIFIN CORPORATION PROXY
--------------------------------------------------------------------------------
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 DIRECTORS' RECOMMENDATIONS. THE PROXIES CANNOT VOTE YOUR
SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
Please sign exactly as name appears
hereon. When shares are held by
joint tenants, both should sign.
When signing on behalf of a
corporation or as a fiduciary,
attorney, executor, administrator,
trustee or guardian, please give
full title as such.
----------------------------------
Signature
----------------------------------
Signature
Date: , 2000
-----------------------
<PAGE> 17
PROXY CARD MUST BE SIGNED AND DATED ON THE REVERSE SIDE.
PLEASE FOLD AND DETACH CARD AT PERFORATION BEFORE MAILING
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE ANNUAL
MEETING OF SHAREHOLDERS ON OCTOBER 25, 2000.
The undersigned hereby appoints DUANE E. COLLINS, DONALD E. WASHKEWICZ
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 25, 2000, and at any adjournment(s) 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 2003.
|_| FOR all nominees listed below |_| WITHHOLD AUTHORITY
(except as otherwise marked below) to vote for all nominees
listed below
DUANE E. COLLINS, KLAUS-PETER MUELLER, GIULIO MAZZALUPI AND
ALLAN L. RAYFIELD
(Instructions: to withhold authority to vote for any individual
nominee, strike a line through that nominee's name.)
2. APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT ACCOUNTANTS FOR
FY01.
|_| FOR |_| AGAINST |_| ABSTAIN
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1 AND 2.
