Exhibit 10.4

LOGO [g70541img-001.jpg]

TO: [Name]

August 15, 2007

2008-09-10

LONG TERM INCENTIVE (LTI) AWARD

UNDER PERFORMANCE BONUS PLAN

Dear                                         :

On August 15, 2007, the Human Resources and Compensation Committee of the Board
of Directors (“Committee”) of Parker-Hannifin Corporation (“Company”) authorized
a Long-Term Incentive (“LTI”) award (“Award”) to you under the Company’s
Performance Bonus Plan (“Plan”). Payments made pursuant to the Plan qualify as
“performance-based compensation” for purposes of Section 162(m) of the Internal
Revenue Code of 1986 and Section 1.162-27 of the Treasury Regulations. Your
Award is in the target amount of                      (“Target Amount”)
restricted shares of common stock of the Company (“Restricted Shares”), subject
to the following terms and conditions:

1. Your payout under the Award (“Payout”) will be based on the Company’s
performance in comparison to other companies in its peer group as listed on
attached Exhibit A (“Peers”) for the performance measurements indicated below
(“Performance Measures”) during fiscal years 2008, 2009 and 2010 (“Performance
Period”). The Target Amount will be weighted (“Weighted Target”) for each
Performance Measure as follows:

 

Performance Measure

   Weight

Revenue Growth

   20%

Earnings Per Share (EPS) Growth

   40%

Return on Capital (ROC)

   40%

Revenue Growth, EPS Growth and ROC of the Company and the Peers is calculated by
reference to sales and income from continuing operations.

You will receive a payout of 100% of the Weighted Target for each Performance
Measure if the Company ranks in the 50th percentile among the Peers in the
applicable Performance Measure. Percentile rankings above or below the 50th
percentile for the Performance Period among the Peers for any Performance
Measure will result in a lesser or greater payout for each Weighted Target in
accordance with the following table:

 

Percentile Ranking:

   £35    42.5    50    62.5    ³75

Payout %:

   0    50    100    150    200

For each Performance Measure, the Company’s ranking must be above the 35th
percentile among the Peers for the Performance Period in order to receive any
payout for the applicable Weighted Target. The total Payout will be equal to the
sum of the payouts earned under each of the Performance Measures.

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Peers which do not publish stand-alone financial results for the entire
Performance Period as a result of going private, acquisition, or any similar
transaction will be removed from the list of Peers. Peers which merge during the
Performance Period will remain as Peers only if they are the surviving entity of
the merger. Any Peer which has publicly announced the need to restate its
financial statements for any portion of the Performance Period, but has not yet
published such restatement, will be excluded from the Peer comparisons for any
Performance Metric in which its result is better than the Company’s result. Any
Peer which has not published financial statements for the entire Performance
Period due to the publicly announced need to restate its financial statements
will be removed from the list of Peers.

2. The Payout earned under the Award will be paid after the end of the
Performance Period.

3. If you retire (at or after age 60, or earlier with the consent of the
Committee), die or become disabled during the Performance Period, you will be
entitled to receive a portion of the Payout in proportion to the number of full
calendar quarters worked in an eligible position during the Performance Period.
Termination of employment for any other reason during the Performance Period
will result in full forfeiture of your Award.

4. Except as provided below, if you are actively employed by the Company at the
time of the Payout, you will receive the Payout in the form of Restricted
Shares. The Restricted Shares will be subject to the terms and conditions
imposed by the Committee at the time of issuance.

5. You may elect, in accordance with rules established by the Company, to
receive your Payout in the form of a credit to your Executive Deferral Plan
(“EDP”) account. If such an election is timely made, you will receive your
Payout in the form of a credit to your EDP account as of July 1, 2010 in a
dollar amount equal to the number of Restricted Shares earned under the Award
multiplied by the closing price of the Company’s common stock on the New York
Stock Exchange on June 30, 2010 (“Cash Equivalent”).

6. If you are not an active employee of the Company at the time of the Payout,
it will be made in the form of cash equal to the Cash Equivalent, except where
you have made a timely EDP election as provided in Section 5.

7. In the event of a “Change in Control of the Company” (as defined in the
Company’s Change in Control Severance Agreements, and subject to good faith
application of the requirements of Section 409A of the Internal Revenue Code),
you will receive a cash payout under the Award within fifteen (15) days
following the date of the Change in Control equal to the greater of (a) amount
equal to (i) the Target Amount of Restricted Shares multiplied by (ii) the Stock
Price (as defined below); or (b) the amount equal to (i) what your Payout in
Restricted Shares would have been had the Company’s percentile ranking among the
Peers for each of the Performance Measures during the Performance Period through
the end of the fiscal quarter immediately preceding the date of the Change in
Control continued throughout the Performance Period at the same level,
multiplied by (ii) the Stock Price. “Stock Price” means the closing price of the
Company’s common stock on the New York Stock Exchange on July 1, 2007, or on the
date of the Change in Control, whichever is higher.

8. You will receive the Payout in the form described above following
certification of the calculation of the Performance Measures and the Payout by
the Committee after the end of the Performance Period. The Committee may in its
sole discretion reduce the Payout. The amount of your Payout is also subject to
the payout limitations set forth in Section 5(c) of the Plan.

9. Your Award is subject to all terms, conditions and provisions of the Plan and
this award notification. In the event of any conflict between the terms of the
Plan and the Award, the Plan controls.

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Please acknowledge receipt of this Award and indicate your agreement with its
terms and the terms of the Plan by signing below and returning a copy to me as
soon as possible.

 

Thomas A. Piraino, Jr.

Vice President, General Counsel And Secretary

Receipt Acknowledged and Agreed:

 

 

    Date:  

 

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Exhibit A

to

2008-09-10 LONG TERM INCENTIVE (LTI) AWARD

UNDER PERFORMANCE BONUS PLAN

Peers

 

   Caterpillar Inc.       Cooper Industries, Ltd.       Cummins Inc.      
Danaher Corporation       Deere & Company       Dover Corporation       Eaton
Corporation       Emerson Electric Co.       Flowserve Corporation      
Goodrich Corporation       Honeywell International Inc.       Illinois Tool
Works Inc.       Ingersoll-Rand Company Limited       ITT Industries, Inc.      
Johnson Controls, Inc.       Pall Corporation       Rockwell Automation, Inc.   
   SPX Corporation       Textron Inc.