Exhibit (10)(t)* to Report
on Form 10-K for Fiscal
Year Ended June 30, 1996
by Parker-Hannifin Corporation
Parker-Hannifin Corporation Non-Employee Directors
Stock Option Plan
*Numbered in accordance with Item 601 of Regulation S-K.
PARKER-HANNIFIN CORPORATION
NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN
ADOPTED: AUGUST 15, 1996
1. Purpose. The purpose of the Parker-Hannifin Corporation
Non-Employee Directors Stock Option Plan (the "Plan") is to attract, retain
and compensate highly qualified individuals who are not current employees of
Parker-Hannifin Corporation (the "Company") as members of the Board of
Directors and to enable them to increase their ownership of shares of common
stock, $.50 par value, of the Company ("Common Stock"). The Plan will be
beneficial to the Company and its shareholders since it will allow these
directors to have a greater personal financial stake in the Company through
the ownership of Common Stock, in addition to underscoring their common
interest and identification with stockholders in increasing the value of
Common Stock.
2. Shares Subject to Plan. The total number of shares of
Common Stock with respect to which options may be granted under the Plan
shall not exceed 250,000 (as adjusted pursuant to Section 7 hereof). Shares
issued upon exercise of options granted under the Plan may be either
authorized and unissued shares, treasury shares, or any combination thereof.
In the event that any option granted under the Plan shall terminate, expire
or, with the consent of the optionee, be cancelled as to any shares of Common
Stock, without having been exercised in full, new options may be granted with
respect to such shares without again being charged against the maximum share
limitations set forth above in this Section 2.
3. Administration. The Plan shall be administered by the
Compensation and Management Development Committee of the Board of Directors,
or any successor Committee (the "Committee"), which shall be appointed by the
Board of Directors of the Company and shall consist of such number of
directors, not less than two, as shall be determined by the Board of
Directors, who shall serve at the pleasure of the Board of Directors, and
each of whom shall be "non-employee directors" within the meaning of Rule
16b-3 of the Securities Exchange Act of 1934, or any successor provision at
the time in effect. Vacancies occurring in the membership of the Committee
shall be filled by appointment by the Board of Directors. If for any reason
the Committee is unable to perform its functions and duties under the Plan,
the Board of Directors may perform any such functions and duties.
The Committee, from time to time, may adopt rules and regulations
for carrying out the provisions and purposes of the Plan. The interpretation
and construction by the Committee of any provisions of, and the determination
of any questions arising under, the Plan, any such rule or regulation, or any
agreement evidencing options under the Plan, shall be final, binding and
conclusive on all persons interested in the Plan. The Secretary of the Company
shall be authorized to implement the Plan in accordance with its terms and to
take such actions of a ministerial nature as shall be necessary to effectuate
the intent and purposes hereof. The validity, construction and effect of the
Plan and any rules and regulations relating to the Plan shall be determined in
accordance with the laws of the State of Ohio without regard to its conflicts
of law principles.
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4. Eligibility. All members of the Company's Board who are
not current or retired employees of the Company or any of its subsidiaries at
the time of option award ("Non-Employee Directors") are eligible to
participate in the Plan.
5. Types of Options. All options granted under the Plan shall
be non-statutory options not intended to qualify under Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"). Each option granted
under the Plan shall provide that such option will not be treated as an
"incentive stock option," as that term is defined in Section 422 of the Code.
The Committee, in its sole discretion, shall determine the terms of the
options granted hereunder, including, without limitation, the time or times
when options shall be granted, the number of shares to be covered by each
option so granted, the time or times when such options shall become
exercisable, the transferability of such options and the expiration date of
such options.
6. Terms and Conditions of Options. All options approved by
the Committee under the Plan shall be evidenced by stock option agreements in
writing (hereinafter referenced to as "Option Agreements"), in such form as
the Committee may from time to time approve, executed on behalf of the
Company by the Chairman of the Board or President of the Company. Each
Option Agreement shall be subject to the Plan, and, in addition to such other
terms and conditions as the Committee may deem desirable, shall provide in
substance as follows:
(a) Purchase Price. The purchase price per share of Common
Stock for which each option is exercisable shall be equal to 100% of
the fair market value of a share of Common Stock ("Fair Market Value")
as of the date such option is granted. Such Fair Market Value shall be
the last sale price of Common Stock on the date next preceding such
date as reported on the New York Stock Exchange Composite Tape or, in
the event that no sale shall have taken place on the New York Stock
Exchange on such next preceding day, the last sale price of Common
Stock on the next preceding day on which there was a sale as reported
on the New York Stock Exchange Composite Tape, or if the Common Stock
is no longer traded on the New York Stock Exchange, the fair market
value on such date as determined by the Committee in accordance with
applicable law and regulations. The option price shall be subject to
adjustment as provided in Section 7 hereof.
(b) Manner of Exercise. Each Option Agreement shall provide
that any option therein granted shall be exercisable only by giving in
each case written notice of exercise, accompanied by full payment of
the purchase price either (i) in cash (including check, bank draft or
money order, or wire or other transfer of funds, or advice of credit to
the Company); (ii) in shares of Common Stock with a Fair Market Value
equal to the purchase price of a combination of cash and shares of
Common Stock which in the aggregate are equal in value to such purchase
price; or (iii) from the proceeds of a sale through a broker on the
date of exercise of some or all of the shares of Common Stock to which
the exercise relates.
7. Adjustment upon Changes in Stock. The Committee shall make
or provide for such adjustments in the option price and in the number or kind
of shares or other securities covered by outstanding options as the Committee
in its sole discretion, exercised in good faith, shall determine is equitably
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required to prevent dilution or enlargement of rights of optionees that would
otherwise result from (a) any stock dividend, stock split, combination of
shares, issuance of rights or warrants to purchase stock, recapitalization or
other changes in the capital structure of the Company, (b) any merger,
consolidation, reorganization or partial or complete liquidation, or (c) any
other corporate transaction or event having an effect similar to any of the
foregoing. The Committee also shall make or provide for such adjustments in
the number or kind of shares of the Company's Common Stock or other
securities which may be acquired pursuant to options granted under this Plan
and the number of such securities to be awarded to each optionee as the
Committee in its sole discretion, exercised in good faith, shall determine is
appropriate to reflect any transaction or event described in the preceding
sentence. The determination of the Committee as to what adjustments shall be
made, and the extent thereof, shall be final, binding and conclusive.
8. Fractional Shares. No fractional shares shall be issued
pursuant to options granted hereunder, the any fractional share resulting
from an adjustment pursuant to Section 7 hereof shall be eliminated.
9. Government Regulations. The Plan, the grant and exercise
of options hereunder, and the Company's obligation to sell and deliver shares
of Common Stock pursuant to any such exercise, shall be subject to all
applicable federal and state laws, rules and regulations and to such
approvals by any regulatory or government agency as shall be required. The
Company shall not be required to issue or deliver any certificate or
certificates for shares of its Common Stock prior to (a) the admission of
such shares to listing on any stock exchange or national market system on
which the stock shall then be listed or quoted and (b) the completion of any
registration or other qualification of such shares under any state or federal
law or rulings or regulations of any government body, which the Company shall,
in its sole discretion, determine to be necessary or advisable.
10. Term of the Plan. The period during which option grants
shall be made under the Plan shall terminate within 10 years from the
effective date. Termination of the Plan, however, shall not affect
outstanding options which have been granted prior to such termination, and
all unexpired options shall continue in full force and operation after
termination of the Plan, except as they shall lapse or terminate by their own
terms and conditions, and the terms of the Plan shall continue to apply to
such options.
11. Amendment, Suspension or Termination of the Plan. The
Committee at any time and from time to time may suspend or terminate the Plan
or revise or amend the Plan in any respect whatsoever. No action may,
without the consent of a participant, reduce the participant's rights under
any previously granted and outstanding option.
12. No Right to Continue as Director. Neither the Plan, nor
the granting of an option nor any other action taken pursuant to the Plan,
shall constitute or be evidence of any agreement or understanding, express or
implied, that a director has a right to continue as a director for any period
of time, or at any particular rate of compensation.
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