Exhibit (10)(p)* to Report
on Form 10-K for Fiscal
Year Ended June 30, 1996
by Parker-Hannifin Corporation
Parker-Hannifin Corporation Pension Restoration Plan,
as amended as of August 17, 1995
and August 15, 1996
*Numbered in accordance with Item 601 of Regulation S-K.
Parker-Hannifin Corporation
PENSION RESTORATION PLAN
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Parker-Hannifin Corporation
PENSION RESTORATION PLAN
Parker-Hannifin Corporation, an Ohio corporation (the "Company"),
hereby establishes this Pension Restoration Plan (the "Plan"), effective
January 1, 1995, for the purpose of attracting high quality executives
and promoting in its executives increased efficiency and an interest in
the successful operation of the Company by restoring benefits that are
lost due to legislative limits on the Company's qualified retirement
plan(s). The benefits provided under the Plan shall be provided in
consideration for services to be performed after the effective date of
the Plan, but prior to the executive's retirement.
ARTICLE 1
Definitions
1.1 Actuarial Value shall mean the actuarial present value of
the benefits calculated by an actuary selected by the Administrator and
using the actuarial assumptions employed under the Qualified Plan (other
than the Pension Benefit Guaranty Corporation rates used to determine a
lump sum benefit).
1.2 Administrator shall mean the Company or, if applicable, the
committee appointed by the Board of Directors of the Company to
administer the Plan pursuant to Article 6 of the Plan.
1.3 Beneficiary shall mean the person or persons or entity
designated as such under the Qualified Plan.
1.4 Change in Control means the occurrence of one of the following
events:
(i) any "person" (as such term is defined in Section 3(a)(9) of
the Securities Exchange Act of 1934 (the "Exchange Act") and as
used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act) is or
becomes a "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of
the Company representing 20% or more of the combined voting power
of the Company's then outstanding securities eligible to vote for
the election of the Board of Directors of the Company (the "Board")
(the "Company's Voting Securities"); provided, however, that the
event described in this paragraph shall not be deemed to be a
Change in Control by virtue of any of the following situations:
(A) an acquisition by the Company or any corporation or entity
in which the Company has a direct or indirect ownership interest
of 50% or more of the total combined voting power of the then
outstanding securities of such corporation or other entity (a
"Subsidiary"); (B) an acquisition by any employee benefit plan
sponsored or maintained by the Company or any Subsidiary; (C) an
acquisition by any underwriter temporarily holding securities
pursuant to an offering of such securities; (D) a Non-Control
Transaction (as defined in paragraph (iii)); (E) as pertains to
a Participant, any acquisition by the Participant or any group
of persons (within the meaning of Sections 13(d)(3) and 14(d)(2)
of the Exchange Act) including
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the Participant (or any entity in which the Participant or a group
of persons including the Participant, directly or indirectly,
holds a majority of the voting power of such entity's outstanding
voting interests); or (F) the acquisition of Company Voting
Securities from the Company, if a majority of the Board approves
a resolution providing expressly that the acquisition pursuant
to this clause (F) does not constitute a Change in Control
under this paragraph (i);
(ii) individuals who, at the beginning of any period of
twenty-four (24) consecutive months, constitute the Board
(the "Incumbent Board") cease for any reason to constitute
at least a majority thereof; provided, that (A) any person
becoming a director subsequent to the beginning of such
twenty-four (24) month period, whose election, or nomination
for election, by the Company's shareholders was approved by
a vote of at least two-thirds of the directors comprising the
Incumbent Board who are then on the Board (either by a specific
vote or by approval of the proxy statement of the Company in
which such person is named as a nominee for director, without
objection to such nomination) shall be, for purposes of this
paragraph (ii), considered as though such person were a member
of the Incumbent Board; provided, however, that no individual
initially elected or nominated as a director of the Company as
a result of an actual or threatened election contest with respect
to directors or any other actual or threatened solicitation of
proxies or consents by or on behalf of any person other than
the Board shall be deemed to be a member of the Incumbent Board;
(iii) the consummation of a merger, consolidation, share
exchange or similar form of corporate reorganization of the
Company or any Subsidiary that requires the approval of the
Company's stockholders, whether for such transaction or the
issuance of securities in connection with the transaction
or otherwise (a "Business Combination"), unless (A) immediately
following such Business Combination: (1) more than 50% of the
total voting power of the corporation resulting from such Business
Combination (the "Surviving Corporation") or, if applicable, the
ultimate parent corporation which directly or indirectly has
beneficial ownership of 100% of the voting securities eligible
to elect directors of the Surviving Corporation (the
"Parent Corporation"), is represented by Company Voting
Securities that were outstanding immediately prior to the
Business Combination (or, if applicable, shares into which
such Company Voting Securities were converted pursuant to
such Business Combination), and such voting power among the
holders thereof is in substantially the same proportion as the
voting power of such Company Voting Securities among the holders
thereof immediately prior to the Business Combination, (2) no
person (other than any employee benefit plan sponsored or
maintained by the Surviving Corporation or the Parent
Corporation) is or becomes the beneficial owner, directly or
indirectly, of 20% or more of the total voting power of the
outstanding voting securities eligible to elect
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directors of the Parent Corporation (or, if there is no Parent
Corporation, the Surviving Corporation), and (3) at least a
majority of the members of the board of directors of the
Parent Corporation (or, if there is no Parent Corporation,
the Surviving Corporation), following the Business Combination,
were members of the Incumbent Board at the time of the Board's
approval of the execution of the initial agreement providing for
such Business Combination (a "Non-Control Transaction") or
(B) the Business Combination is effected by means of the
acquisition of Company Voting Securities from the Company, and
a majority of the Board approves a resolution providing expressly
that such Business Combination does not constitute a Change in
Control under this paragraph (iii); or
(iv) the stockholders of the Company approve a plan of
complete liquidation or dissolution of the Company or the sale
or other disposition of all or substantially all of the assets
of the Company and its Subsidiaries.
Notwithstanding the foregoing, a Change in Control shall not be deemed to
occur solely because any person acquires beneficial ownership of more than 20%
of the Company Voting Securities as a result of the acquisition of Company
Voting Securities by the Company which, by reducing the number of Company
Voting Securities outstanding, increases the percentage of shares beneficially
owned by such person; provided, that if a Change in Control would occur as a
result of such an acquisition by the Company (if not for the operation of this
sentence), and after the Company's acquisition such person becomes the
beneficial owner of additional Company Voting Securities that increases the
percentage of outstanding Company Voting Securities beneficially owned by such
person, a Change in Control shall then occur.
Notwithstanding anything in this Plan to the contrary, if the
Participant's employment is terminated prior to a Change in Control, and the
Participant reasonably demonstrates that such termination was at the request
of a third party who has indicated an intention or taken steps reasonably
calculated to effect a Change in Control, (a "Third Party"), then for all
purposes of this Plan, the date immediately prior to the date of such
termination of employment shall be deemed to be the date of a Change in
Control for such Participant.
1.5 Code shall mean the Internal Revenue Code of 1986, as
amended, including any successor provisions.
1.6 Early Retirement Date shall mean the "Early Retirement Date"
as defined in the Qualified Plan.
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1.7 Eligible Executive shall mean an employee of the Company or
any of its subsidiaries who (i) participates in the Qualified Plan, (ii)
is designated by the Administrator as eligible to participate in the
Plan, and (iii) qualifies as a member of the "select group of management
or highly compensated employees" under ERISA.
1.8 ERISA shall mean the Employee Retirement Income Security Act
of 1974, as amended.
1.9 Normal Retirement Date shall mean the "Normal Retirement
Date" as defined in the Qualified Plan.
1.10 Participant shall mean an Eligible Executive who has become
a participant hereunder pursuant to Article 2.
1.11 Qualified Plan shall mean the Parker-Hannifin Corporation
Retirement Plan as it currently exists and as it may subsequently be
amended, or any other qualified defined benefit plan maintained by the
Company and in which an Eligible Executive participates.
1.12 Statutory Limit shall mean any limit on compensation taken
into account in calculating benefits under qualified retirement plans
under Section 401(a)(17) of the Code or that directly or indirectly
affects the amount of benefits payable from a Qualified Plan.
1.13 Termination of Employment shall mean the date of the
cessation of the Participant's employment with the Company for any
reason whatsoever, whether voluntary or involuntary, other than as a
result of the Participant's death.
ARTICLE 2
Participation
Eligible Executives shall become Participants in the Plan on the
first day of the month following their appointment as Eligible
Executives.
ARTICLE 3
Restoration Benefits
3.1 Amount. Upon Termination of Employment on or after Normal
or Early Retirement Date, or after the Participant has a nonforfeitable
right to a deferred benefit
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under the Qualified Plan, the Participant shall be entitled to a
retirement benefit as provided in paragraph 3.2 of this Plan. The
retirement benefit shall equal the benefits that would be payable to the
Participant under the Qualified Plan calculated as if the Statutory
Limit did not apply to such benefits, less the benefits that are payable
under the Qualified Plan taking the Statutory Limit into account.
3.2 Form of Retirement Benefits. (a) Subject to (b) and (c)
below, the retirement benefit shall be paid in the same form and at the
same time as the Participant's benefits under the Qualified Plan.
(b) Notwithstanding (a) above, the Administrator may, in its
sole discretion, elect to pay the Actuarial Value of the benefit under
this Plan in a single lump sum if the monthly benefit otherwise due
hereunder is less than $50.00.
(c) Notwithstanding (a) above, a Participant who has retired at
or after Normal or Early Retirement Date, or who reaches Normal or Early
Retirement Date after a Termination of Employment may elect at any time
thereafter to receive the remaining Actuarial Value of his benefit in a
single lump sum, provided that his lump sum payment shall be reduced by
10%.
ARTICLE 4
Survivor Benefits
4.1 Survivor Benefit. If benefits are payable to the
Participant's Beneficiary under the Qualified Plan following the
Participant's death (whether the Participant's death occurs before or
after Termination of Employment), the Company shall pay to the
Participant's Beneficiary a survivor benefit equal to the benefits that
would be payable to the Beneficiary under the Qualified Plan calculated
as if the Statutory Limit did not apply to such benefits, less the
survivor benefits that are payable under the Qualified Plan taking the
Statutory Limit into account.
4.2 Form of Survivor Benefit. The survivor benefit shall be paid
in the same form and at the same time as the survivor benefits under the
Qualified Plan; provided, however that the Administrator may, in its
sole discretion, elect to pay the Actuarial Value of the survivor
benefit under this Plan in a single lump sum, if the monthly benefit
otherwise payable hereunder is less than $50.00.
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ARTICLE 5
Conditions Related to Benefits
5.1 Nonassignability. The benefits provided under the Plan may
not be alienated, assigned, transferred, pledged or hypothecated by or
to any person or entity, at any time or any manner whatsoever. These
benefits shall be exempt from the claims of creditors of any Participant
or other claimants and from all orders, decrees, levies, garnishment or
executions against any Participant to the fullest extent allowed by law.
5.2 No Right to Company Assets. The benefits paid under the
Plan shall be paid from the general funds of the Company, and the
Participant and any Beneficiary shall be no more than unsecured general
creditors of the Company with no special or prior right to any assets of
the Company for payment of any obligations hereunder.
5.3 Protective Provisions. The Participant shall cooperate with
the Company by furnishing any and all information requested by the
Administrator, in order to facilitate the payment of benefits hereunder,
taking such physical examinations as the Administrator may deem
necessary and taking such other actions as may be requested by the
Administrator. If the Participant refuses to cooperate, the Company
shall have no further obligation to the Participant under the Plan. In
the event of a Participant's suicide during the first two (2) years of
participation in the Plan, or if the Participant makes any material
misstatement of information or nondisclosure of medical history, then no
benefits shall be payable to the Participant or the Participant's
Beneficiary or estate under the Plan.
5.4 Withholding. The Participant or the Beneficiary shall make
appropriate arrangements with the Company for satisfaction of any
federal, state or local income tax withholding requirements and Social
Security or other employee tax requirements applicable to the payment of
benefits under the Plan. If no other arrangements are made, the Company
may provide, at its discretion, for such withholding and tax payments as
may be required.
ARTICLE 6
Administration of Plan
The Company shall administer the Plan, provided, however, that the
Company may elect by action of its Board of Directors to appoint a
committee of three (3) or more individuals to administer the Plan. All
references to the Administrator herein shall refer to the Company or, if
such committee has been appointed, the committee.
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The Administrator shall administer the Plan and interpret,
construe and apply its provisions in accordance with its terms. The
Administrator shall further establish, adopt or revise such rules and
regulations as it may deem necessary or advisable for the administration
of the Plan. All decisions of the Administrator shall be final and
binding. The individuals serving on the committee shall, except as
prohibited by law, be indemnified and held harmless by the Company from
any and all liabilities, costs, and expenses (including legal fees), to
the extent not covered by liability insurance arising out of any action
taken by any member of the committee with respect to the Plan, unless
such liability arises from the individual's own gross negligence or
willful misconduct.
ARTICLE 7
Change in Control
In the event there is a Change in Control, each Participant shall
receive the Actuarial Value of his benefit earned hereunder to the date
of the Change in Control. Such benefit shall be paid in monthly
installments over thirty-six (36) months commencing within 3 months of
the Change in Control; provided, however, that the Administrator may
elect, in its sole discretion, to make payment in a single lump sum.
ARTICLE 8
Amendment and Termination of Plan
8.1 Amendment of Plan. The Company may at any time amend the
Plan in whole or in part, provided, however, that such amendment shall
not decrease the value of benefits accrued under the Plan prior to the
time of such amendment.
8.2 Termination of Plan. The Company may at any time terminate
the Plan. If the Company terminates the Plan, the date of such
termination shall be treated as the date of Termination of Employment
for the purpose of calculating Plan benefits. The Company shall pay to
the Participant the benefits the Participant is entitled to receive
under the Plan in monthly installments over a thirty-six (36) month
period; provided, however, that the Administrator may elect, in its sole
discretion, to make payment in a single lump sum.
8.3 Amendment or Termination After Change in Control.
Notwithstanding the foregoing, the Company shall not amend or terminate
the Plan without the prior written consent of affected Participants for
a period of two calendar years following a Change in Control and shall
not thereafter amend or terminate the Plan in any manner which affects
any Participant (or Beneficiary of a deceased Participant) who
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commences receiving payment of benefits under the Plan prior to the end
of such two year period following a Change in Control.
8.4 Company Action. Except as provided in paragraph 8.5, the
Company's power to amend or terminate the Plan shall be exercisable by
the Company's Board of Directors or by the committee or individual
authorized by the Company's Board of Directors to exercise such powers.
8.5 Constructive Receipt Termination. In the event the
Administrator determines that benefits under the Plan have been
constructively received by Participants and must be recognized as income
for federal income tax purposes, the Plan shall terminate and
distributions shall be made to Participants in accordance with the
provisions of paragraph 8.2 or as may be determined by the
Administrator. The determination of the Administrator under this
paragraph 8.5 shall be binding and conclusive.
ARTICLE 9
Miscellaneous
9.1 Successors of the Company. The rights and obligations of
the Company under the Plan shall inure to the benefit of, and shall be
binding upon, the successors and assigns of the Company.
9.2 ERISA Plan. The Plan is intended to be an unfunded plan
maintained primarily to provide deferred compensation benefits for "a
select group of management or highly compensated employees" within the
meaning of Sections 201, 301 and 401 of ERISA and therefore to be exempt
from Parts 2, 3 and 4 of Title I of ERISA.
9.3 Trust. The Company shall be responsible for the payment of
all benefits under the Plan. At its discretion, the Company may
establish one or more grantor trusts for the purposes of providing for
payment of benefits under the Plan. Such trust or trusts may be
irrevocable, but the assets thereof shall be subject to the claims of
the Company's creditors. Benefits paid to the Participant from any such
trust shall be considered paid by the Company for purposes of meeting
the obligations of the Company under the Plan.
9.4 Employment Not Guaranteed. Nothing contained in the Plan
nor any action taken hereunder shall be construed as a contract of
employment or as giving any Participant any right to continued
employment with the Company.
9.5 Gender, Singular and Plural. All pronouns and variations
thereof shall be deemed to refer to the masculine, feminine, or neuter,
as the identity of the person or
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persons may require. As the context may require, the singular may be
read as the plural and the plural as the singular.
9.6 Captions. The captions of the articles and paragraphs of
the Plan are for convenience only and shall not control or affect the
meaning or construction of any of its provisions.
9.7 Validity. If any provision of the Plan is held invalid,
void or unenforceable, the same shall not affect, in any respect
whatsoever, the validity of any other provisions of the Plan.
9.8 Waiver of Breach. The waiver by the Company of any breach
of any provision of the Plan by the Participant shall not operate or be
construed as a waiver of any subsequent breach by the Participant.
9.9 Applicable Law. The Plan shall be governed and construed in
accordance with the laws of the Ohio except where the laws of the Ohio
are preempted by ERISA.
9.10 Notice. Any notice or filing required or permitted to be
given to the Company under the Plan shall be sufficient if in writing
and hand-delivered, or sent by first class mail to the principal office
of the Company, directed to the attention of the Administrator. Such
notice shall be deemed given as of the date of delivery, or, if delivery
is made by mail, as of the date shown on the postmark.
ARTICLE 10
Claims and Review Procedures
10.1 Claims Procedure. The Company shall notify a Participant in
writing, within ninety (90) days after his or her written application
for benefits, of his or her eligibility or noneligibility for benefits
under the Plan. If the Company determines that a Participant is not
eligible for benefits or full benefits, the notice shall set forth (1)
the specific reasons for such denial, (2) a specific reference to the
provisions of the Plan on which the denial is based, (3) a description
of any additional information or material necessary for the claimant to
perfect his or her claim, and a description of why it is needed, and (4)
an explanation of the Plan's claims review procedure and other
appropriate information as to the steps to be taken if the Participant
wishes to have the claim reviewed. If the Company determines that there
are special circumstances requiring additional time to make a decision,
the Company shall notify the Participant of the special circumstances
and the date by which a decision is expected to be made, and may extend
the time for up to an additional ninety-day period.
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10.2 Review Procedure. If a Participant is determined by the
Company not to be eligible for benefits, or if the Participant believes
that he or she is entitled to greater or different benefits, the
Participant shall have the opportunity to have such claim reviewed by
the Company by filing a petition for review with the Company within
sixty (60) days after receipt of the notice issued by the Company. Said
petition shall state the specific reasons which the Participant believes
entitle him or her to benefits or to greater or different benefits.
Within sixty (60) days after receipt by the Company of the petition, the
Company shall afford the Participant (and counsel, if any) an
opportunity to present his or her position to the Company orally or in
writing, and the Participant (or counsel) shall have the right to review
the pertinent documents. The Company shall notify the Participant of
its decision in writing within the sixty-day period, stating
specifically the basis of its decision, written in a manner calculated
to be understood by the Participant and the specific provisions of the
Plan on which the decision is based. If, because of the need for a
hearing, the sixty-day period is not sufficient, the decision may be
deferred for up to another sixty-day period at the election of the
Company, but notice of this deferral shall be given to the Participant.
In the event of the death of the Participant, the same procedures shall
apply to the Participant's beneficiaries.
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