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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ____________________ to ________________________
Commission file number 1-4982
A. Full title of the plan and the address of the plan, if different
from that of the issuer named below:
NON-QUALIFIED STOCK PURCHASE PLAN OF COMMERCIAL INTERTECH CORP.
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
PARKER-HANNIFIN CORPORATION
6035 PARKLAND BOULEVARD
CLEVELAND, OHIO 44124-4141
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Non-Qualified Stock Purchase Plan of Commercial Intertech Corp.
Audited Financial Statements
Years Ended December 31, 2000, 1999 and 1998
CONTENTS
REQUIRED INFORMATION
Independent Auditors' Reports ................................................... 1
Statements of Net Assets Available for Benefits--December 31, 2000 and 1999 ..... 3
Statements of Changes in Net Assets Available for Benefits--Years Ended
December 31, 2000, 1999 and 1998 ............................................ 4
Notes to Financial Statements ................................................... 5
EXHIBIT 23
Consent of Independent Auditors ................................................. 11
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INDEPENDENT AUDITORS' REPORT
To the Participants and Board of Directors
Parker-Hannifin Corporation
Non-Qualified Stock Purchase Plan of Commercial Intertech Corp.
We have audited the statement of net assets available for benefits of the
Non-Qualified Stock Purchase Plan of Commercial Intertech Corp. (the "Plan") as
of December 31, 2000, and the related statement of changes in net assets
available for benefits for the year then ended. These financial statements are
the responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audit. The statement of net
assets available for benefits of the Plan as of December 31, 1999 and the
statements of changes in net assets available for benefits for the periods ended
December 31, 1999 and 1998 were audited by other auditors whose report dated
March 23, 2000, expressed an unqualified opinion on those statements.
We conducted our audit in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
As described in Note A to the financial statements, the Board of Directors of
Commercial Intertech Corp., the Plan's sponsor, voted on March 22, 2000 to
terminate the Plan, which became effective upon approval of the merger with
Parker-Hannifin Corporation on April 11, 2000. In accordance with generally
accepted accounting principles, the Plan has changed its basis of accounting
used to determine the amounts at which investments are stated, from the
going-concern basis to the liquidation basis for periods after April 11, 2000.
Because the assets and liabilities of the plan were stated at fair market value
prior to April 11, 2000, there is no adjustment to the financial statements in
adopting the liquidation method of accounting. Therefore, the 2000 statement of
changes in net assets is not segregated for the period prior to and after
adoption of the liquidation basis of accounting. As of December 31, 2000, the
Plan was completely liquidated.
In our opinion, the financial statements referred to above present fairly, in
all material respects the net assets available for benefits of the Non-Qualified
Stock Purchase Plan of Commercial Intertech Corp. as of December 31, 2000, and
the changes in its net assets available for benefits for the year then ended, in
conformity with accounting principles generally accepted in the United States.
Hausser + Taylor LLP
Beachwood, Ohio
March 21, 2001
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Report of Independent Auditors
Administrative Committee
Non-Qualified Stock Purchase Plan
of Commercial Intertech Corp.
We have audited the accompanying statement of net assets of the Non-Qualified
Stock Purchase Plan of Commercial Intertech Corp. as of December 31, 1999, and
the related statements of changes in net assets for each of the two years in the
period ended December 31, 1999. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets of the Non-Qualified Stock Purchase Plan
of Commercial Intertech Corp. at December 31, 1999, and the changes in its net
assets for each of the two years in the period ended December 31, 1999, in
conformity with accounting principles generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The Fund Information in the statements of net
assets and the statements of changes in net assets is presented for purposes of
additional analysis rather than to present the net assets and changes in net
assets of each fund. The Fund Information has been subjected to the auditing
procedures applied in our audits of the financial statements and, in our
opinion, is fairly presented in all material respects in relation to the
financial statements taken as a whole.
Ernst & Young LLP
Cleveland, Ohio
March 23, 2000
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Non-Qualified Stock Purchase Plan of Commercial Intertech Corp.
Statements of Net Assets Available for Benefits
DECEMBER 31, 2000 DECEMBER 31, 1999
----------------------------------- -------------------------------------------
COMMERCIAL
INTERTECH
CORP.
MONEY COMMON MONEY COMMON
MARKET STOCK MARKET STOCK
FUND FUND TOTAL FUND FUND TOTAL
--------------------------------------------------------------------------------
ASSETS
Accrued interest receivable $ 0 $ 0 $ 0 $ 221 $ 16 $ 237
Investment in Money Market Fund 0 0 0 55,540 6,417 61,957
Investment in Commercial
Intertech Corp. common stock 0 0 0 0 72,382 72,382
--------------------------------------------------------------------------------
0 0 0 55,540 78,799 134,339
--------------------------------------------------------------------------------
Total assets 0 0 0 55,761 78,815 134,576
LIABILITIES
Distributions payable to participants 0 0 0 55,761 78,616 134,377
Payable to the Company 0 0 0 199 199
--------------------------------------------------------------------------------
Total liabilities 0 0 0 55,761 78,815 134,576
--------------------------------------------------------------------------------
NET ASSETS AVAILABLE FOR
BENEFITS $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
================================================================================
See notes to financial statements.
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Non-Qualified Stock Purchase Plan of Commercial Intertech Corp.
Statements of Changes in Net Assets Available for Benefits
FOR THE YEAR ENDED
-------------------------------------------------------------------------------------
DECEMBER 31, 2000 DECEMBER 31, 1999
----------------------------------------- ------------------------------------------
COMMERCIAL
INTERTECH
CORP.
MONEY COMMON MONEY COMMON
MARKET STOCK MARKET STOCK
FUND FUND TOTAL FUND FUND TOTAL
-------------------------------------------------------------------------------------
Contributions:
Company $ 4,306 $ 8,281 $ 12,587 $ 18,125 $ 26,991 $ 45,116
Employee 8,613 16,562 25,175 36,250 54,171 90,421
-------------------------------------------------------------------------------------
12,919 24,843 37,762 54,375 81,162 135,537
Net investment income:
Interest and dividends 357 321 678 1,386 1,756 3,142
Other expenses (4) (41) (45) (292) (292)
-------------------------------------------------------------------------------------
353 280 633 1,386 1,464 2,850
Realized gain (loss) on distribution 33,321 33,321 (19,290) (19,290)
Realized gain (loss) on sales of assets 824 824 (20) (20)
Unrealized appreciation (depreciation) in
aggregate current value of investments 18,366 18,366
Decrease (increase) in Company payable 199 199 620 620
Transfers to (from) plan
-------------------------------------------------------------------------------------
Net assets available for distribution 13,272 59,467 72,739 55,761 82,302 138,063
Distributions paid/payable to participants 13,272 59,467 72,739 55,761 82,302 138,063
-------------------------------------------------------------------------------------
Net change 0 0 0 0 0 0
Net Assets Available for Benefits:
Beginning of year 0 0 0 0 0 0
-------------------------------------------------------------------------------------
END OF YEAR $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
=====================================================================================
-----------------------------------------
DECEMBER 31, 1998
-----------------------------------------
COMMERCIAL
INTERTECH
CORP.
MONEY COMMON
MARKET STOCK
FUND FUND TOTAL
-----------------------------------------
Contributions:
Company $ 19,708 $ 24,128 $ 43,836
Employee 39,662 48,795 88,457
-----------------------------------------
59,370 72,923 132,293
Net investment income:
Interest and dividends 1,397 1,019 2,416
Other expenses (168) (168)
-----------------------------------------
1,397 851 2,248
Realized gain (loss) on distribution 15,233 15,233
Realized gain (loss) on sales of assets 40 40
Unrealized appreciation (depreciation) in
aggregate current value of investments (44,068) (44,068)
Decrease (increase) in Company payable (639) (639)
Transfers to (from) plan (177) (177)
-----------------------------------------
Net assets available for distribution 60,767 44,163 104,930
Distributions paid/payable to participants 60,767 44,163 104,930
-----------------------------------------
Net change 0 0 0
Net Assets Available for Benefits:
Beginning of year 0 0 0
-----------------------------------------
END OF YEAR $ 0 $ 0 $ 0
=========================================
See notes to financial statements.
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NON-QUALIFIED STOCK PURCHASE PLAN OF COMMERCIAL INTERTECH CORP.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
A. SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING AND PLAN TERMINATION
The Board of Directors of Commercial Intertech Corp., the Plan's sponsor, voted
on March 22, 2000 to terminate the Plan, which became effective upon approval of
the merger with Parker-Hannifin Corporation ("Parker") on April 11, 2000. In
accordance with accounting principles generally accepted in the United States,
the Plan has changed its basis of accounting used to determine the amounts at
which investments are stated, from the going-concern basis to the liquidation
basis for periods after April 11, 2000. Because the assets and liabilities of
the plan were stated at fair market value prior to April 11, 2000, there is no
adjustment to the financial statements in adopting the liquidation method of
accounting. Therefore, the 2000 statement of changes in net assets is not
segregated for the period prior to and after adoption of the liquidation basis
of accounting.
All participants were 100% vested in their account balances as of April 11,
2000. Any unallocated assets were allocated to participant accounts, and
accounts were distributed to participants as soon as practical after the
effective termination date. As of December 31, 2000 the Plan was completely
liquidated.
VALUATION OF INVESTMENTS
Investments are stated at the closing sale price on the last business day of the
Plan's year. Investments consisted of common shares of Commercial Intertech
Corp. ("CIC") and Money Market Fund shares. Generally, purchases of CIC Shares
were made on the open market; however, purchases could also have been made
directly from the CIC's treasury. Historical cost is computed based on average
cost for purposes of computing unrealized appreciation (depreciation) in the
aggregate current value of investments, realized gain (loss) on distribution,
and realized gain (loss) on sales of common stock.
PLAN DISTRIBUTIONS
Distributions payable to participants represent the value of participants'
accounts in the Money Market Fund and the number of shares of stock allocated to
participants' accounts times the year end market price per share for the Common
Stock Fund ("Stock Fund"), previously known as the CIC Common Stock Fund prior
to the plan sponsor's merger with Parker. Realized gains/losses on distributions
are calculated based on historical costs.
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NON-QUALIFIED STOCK PURCHASE PLAN OF COMMERCIAL INTERTECH CORP.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires the administrator to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates.
B. DESCRIPTION OF THE PLAN
The Plan was terminated effective April 11, 2000, the date of the merger between
CIC and Parker (see Note E). The Plan provided investment opportunities for
eligible employees, including the opportunity to acquire stock of CIC. Eligible
employees included all employees of CIC and its domestic subsidiaries with a
base salary in excess of $160,000, as adjusted in accordance with Section
401(a)(17) of the Internal Revenue Code (Match Participants). Eligible employees
also included employees, as designated by the senior administrative officer of
the company, of foreign subsidiaries of CIC (Overseas Participants), and
effective January 1, 1999, highly compensated participants in the Commercial
Intertech Retirement Plan (Retirement Plan Participants).
Match Participants and Overseas Participants could elect to contribute up to 15%
of their eligible compensation. Eligible compensation, for employees of CIC and
its domestic subsidiaries, is defined as base wage or salary in excess of
$160,000, as adjusted in accordance with Section 401(a)(17) of the Internal
Revenue Code. For employees of foreign subsidiaries of CIC, eligible
compensation consists of base wage or salary. CIC made a contribution to each
such participant's account equal to 50% of the participant's contributions, up
to a maximum of 3% of the participant's eligible compensation.
For eligible Retirement Plan Participants, CIC agreed to contribute an amount
equal to 150% of the difference between (1) the actual amount of the employer
pay based contribution allocation to the account of the employee in the
retirement plan for the year just ended, and (2) the amount of the employer pay
based contribution allocation that such employee would have received for the
year just ended had such contribution allocation not been limited by Treasury
regulations under Code Section 401(a)(4) concerning non-discrimination in the
amount of contributions.
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NON-QUALIFIED STOCK PURCHASE PLAN OF COMMERCIAL INTERTECH CORP.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
B. DESCRIPTION OF THE PLAN--CONTINUED
Match Participants and Retirement Plan Participants could elect to contribute to
either the Stock Fund or the Money Market Fund. Overseas participants could
contribute to the Stock Fund only. Employee and employer contributions were
allocated directly to each participant's account and vested immediately. For the
Stock Fund, the monthly allocation of shares to a participant's account was
based on the proportion that the participant's contributions and employer
contributions for that participant bore to such contributions of all
participants who participated in the Stock Fund. Investment income was allocated
proportionally to each participant's account.
At the beginning of each Plan year, participants could change deduction
percentages or investment funds, suspend contributions, or withdraw from the
Plan.
Distributions were made after the end of each Plan year. Money Market Fund
participants received the full value of their accounts as of the Plan year end.
Stock Fund distributions were made in whole shares of stock, while fractional
shares less than one-half were forfeited and used as a credit toward future CIC
contributions. Distribution of a participant's account was required as soon as
practical after the end of the month in which the participant terminated
employment for any reason, including death, disability, retirement, discharge or
otherwise. Distributions for the 2000 Plan year were made as soon as practical
after the Plan was terminated.
In 2000, 4 employees participated in the Money Market Fund and 12 employees
participated in the Stock Fund. In 1999, 5 employees participated in the Money
Market Fund and 11 employees participated in the Stock Fund. In 1998, 7
employees participated in the Money Market Fund and 10 employees participated in
the Stock Fund.
The Plan was administered by a committee appointed by the Compensation Committee
of the Board of Directors of CIC. CIC had the sole right to appoint the Trustee,
and to terminate the Plan at any time, subject to Plan provisions.
Administrative expenses that were not paid by CIC, in its sole discretion, were
paid by the Plan.
The foregoing description of the Plan provides only general information.
Additional information may be obtained from the Plan administrative
representative.
C. INCOME TAX STATUS
The Plan maintained its assets in a trust which was not a qualified trust under
Section 401(a) of the Internal Revenue Code. As such, the trust was a taxable
trust under Subchapter J of the Internal Revenue Code and was taxable on
undistributed earnings.
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NON-QUALIFIED STOCK PURCHASE PLAN OF COMMERCIAL INTERTECH CORP.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
Participants were taxed on matching CIC contributions and earnings distributed
by the trust.
Since the trust distributed all earnings for 2000, 1999 and 1998, it has no
federal income tax liability for such years.
D. TRANSACTIONS WITH PARTIES-IN-INTEREST
The Plan purchased shares of common stock of Commercial Intertech Corp. during
the years ended December 31, 2000, 1999 and 1998. The Plan received dividends of
$68, $1,693 and $959 on this stock during 2000, 1999 and 1998, respectively.
On April 11, 2000, CIC merged with Parker in a cash and stock transaction
whereby CIC shareholders received Parker common stock based on an exchange ratio
of .4611 determined by the twenty-day average of Parker's closing price as
determined five days immediately preceding the closing date of the merger.
Alternatively, shareholders could elect to receive $20.00 per share in cash,
subject to a maximum of 49 percent of the value of the total shares acquired by
Parker. As of April 11, 2000, the Plan held 903 shares of CIC common stock, of
which 384 shares were exchanged for $20.00 per share and 519 shares were
exchanged for 239 shares of Parker stock based on the exchange ratio.
During 2000, the Plan received dividends of $41 on the Parker shares.
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NON-QUALIFIED STOCK PURCHASE PLAN OF COMMERCIAL INTERTECH CORP.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
E. INVESTMENTS
Identity of Issue Borrower, Description of Current
Lessor or Similar Party Investment Cost Value
- ---------------------------------------------------------------------------------------------------------------
DECEMBER 31, 2000
Common Stock Fund:
*Commercial Intertech Corp. zero common shares $ 0 $ 0
*Parker-Hannifin Corporation zero common shares 0 0
Federated Investors Inc.
Treasury Obligations Fund zero shares 0 0
Money Market Fund:
Federated Investors Inc.:
Treasury Obligations Fund zero shares 0 0
-----------------------
$ 0 $ 0
=======================
DECEMBER 31, 1999
Commercial Intertech Corp. Common Stock Fund:
*Commercial Intertech Corp. ** 5,677 common shares
$12.750 per share $ 76,449 $ 72,382
Federated Investors Inc.
Treasury Obligations Fund ** 6,417 shares 6,417 6,417
Money Market Fund:
Federated Investors Inc.:
Treasury Obligations Fund ** 55,540 shares 55,540 55,540
-----------------------
$138,406 $134,339
=======================
Sales and Distributions of Investments
During the Year Ended
--------------------------------------------------
Identity of Issue Borrower, Aggregate Market Realized
Lessor or Similar Party Cost Value Gain (Loss)
- --------------------------------------------------------------------------- ---------------------------------
DECEMBER 31, 2000
Common Stock Fund:
*Commercial Intertech Corp. $ 85,504 $ 120,980 $ 35,476
*Parker-Hannifin Corporation 9,873 8,542 (1,331)
Federated Investors Inc.
Treasury Obligations Fund 55,470 55,470 0
Money Market Fund:
Federated Investors Inc.:
Treasury Obligations Fund 138,006 138,006 0
DECEMBER 31, 1999
Commercial Intertech Corp. Common Stock Fund:
*Commercial Intertech Corp.
$ 73,822 $ 54,512 $ (19,310)
Federated Investors Inc.
Treasury Obligations Fund 83,057 83,057 0
Money Market Fund:
Federated Investors Inc.:
Treasury Obligations Fund 60,767 60,767 0
* Party-in-interest.
** Individual investment that comprises five percent or more of the Plan's
assets. The fair value of the Plan's investment in Commercial Intertech
Corp. common stock (including shares bought and distributed, as well as
held during the year), appreciated $35,476 in 2000 and $18,366 in 1999, and
depreciated $44,068 in 1998. The fair value of the Plan's investment in
Parker-Hannifin Corporation common stock (including shares bought or
received, held, and distributed during the year) depreciated $1,331 in
2000.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the plan) have duly caused this annual
report to be signed by the undersigned thereunto duly authorized.
Date: March 28, 2001 Non-Qualified Stock Purchase Plan
of Commercial Intertech Corp.
By: /s/ Michael J. Hiemstra
-------------------------------------------
Michael J. Hiemstra
Vice President - Finance & Administration &
Chief Financial Officer
Parker-Hannifin Corporation
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