Document:

Form of Grant Letter for Restricted Stock for Non-Employee Directors

 Exhibit 10.2 
 

 
  

	Name:	[Name] 

 PID:
                                 
 October 1, 2006 
 NOTICE OF ISSUANCE OF RESTRICTED STOCK 
 On August 16, 2006, pursuant to the 2004 Non-Employee Directors’ Stock Incentive Plan
(the “Plan”), the Human Resources and Compensation Committee of the Board of Directors (the “Committee”) of Parker-Hannifin Corporation (the “Corporation”) granted to you
             restricted shares of Parker-Hannifin Corporation Common Stock (“Shares”), to be issued to you subject to the following terms and conditions: 
  

	1.	Shares will be issued as of October 1, 2006. 

  

	2.	Ownership of the Shares will become vested (i.e., unrestricted) on September 30, 2009. 

  

	3.	During the vesting period, the Shares cannot be sold or otherwise transferred or assigned. 

  

	4.	Except as otherwise provided herein, in the event you cease to be Director of the Corporation for any reason prior to September 30, 2009, including, without limitation, your
retirement, death, disability, voluntary or involuntary removal from the Board of Directors or a “change in control” of the Corporation, a pro rata portion of the unvested Shares shall become vested immediately, based upon the ratio of the
number of months actually served as a Director to the total number of months in the vesting period, and all remaining unvested Shares shall be forfeited. 

  

	5.	Certificates representing the Shares will not be issued during the vesting period. Rather, the Shares will be issued in an uncertificated book entry format at the transfer agent.

  

	6.	Shares will earn non-refundable dividends during the vesting period, payable directly to you. 

  

	7.	Upon vesting, the value of the Shares will become taxable income to you. In the event the Corporation is liable to remit withholding taxes on your behalf, you will be obligated to
immediately reimburse the Corporation for all withholding taxes payable by the Corporation at such time. At your election, you may surrender a portion of the Shares to satisfy such withholding taxes. 

	8.	If you engage in any Detrimental Activity (as hereinafter defined), the Committee has the right to revoke this award by either cancelling the shares issued under this award (whether
unvested or vested) or, if vested shares issued under the award have been disposed of, by requiring repayment to the Corporation in cash of the fair market value (as defined in the Plan) of the liquidated shares as of the date the Committee
authorizes revocation of the award. The Corporation may set off any repayment in cancelled shares or in cash against any amounts that may be owed by the Corporation to you, whether as director fees, deferred compensation, or in the form of any other
benefit for any other reason. Detrimental Activity, as defined in the Plan, means activity that is determined in individual cases, by the Committee or its express delegate, to be detrimental to the interests of the Corporation or a Subsidiary,
including without limitation (i) the rendering of services to an organization, or engaging in a business, that is, in the judgment of the Committee or its express delegate, in competition with the Corporation; (ii) the disclosure to anyone
outside of the Corporation, or the use for any purpose other than the Corporation’s business, of confidential information or material related to the Corporation, whether acquired by you during or after your service as a Director of the
Corporation; (iii) fraud, embezzlement, theft-in-office or other illegal activity; or (iv) a violation of the Corporation’s Code of Ethics. 

  

	9.	By acknowledging of the terms of this award, you hereby consent to the cross-border collection, use and disclosure by the Corporation of certain personal data required solely for
the purpose of administering the grant and exercise of this award. Such personal data shall be limited to your name, gender, address, telephone number, date of birth, date of hire, position, grade, supervisor, country of residence and country of
employment. Such data shall be treated as highly confidential and shall not be used for any purpose other than Plan administration. 

  

	10.	To the extent not otherwise specified above, the issuance of the Shares is subject to the terms and conditions of the Plan. 

 Please confirm your receipt of this Notice and indicate your acknowledgment and agreement to the terms specified herein by signing and returning a copy of this Notice to
Tom Piraino. 
 Sincerely yours, 
  
 Donald E. Washkewicz 
 Chairman and Chief Executive Officer 
  
  

			
	ACKNOWLEDGED AND AGREED:	 	
		
	                                       
                                        
                         
	 	 Date:                                     
                                

	 [Name]Form of Grant Letter for Stock Options with Tandem Stock Appreciation Rights

 Exhibit 10.3 
 

 
 Name: XXX 
 PID: XXX 
 NOTICE OF GRANT OF STOCK OPTIONS WITH 
 TANDEM STOCK APPRECIATION RIGHTS 
 The Human Resources and Compensation Committee of the Board of Directors (the “Committee”) of
Parker-Hannifin Corporation (the “Company”) has granted to you, under the Company’s 2003 Stock Incentive Plan (the “Plan”), stock options (“Options”) with tandem stock appreciation rights (“SARs”) with
respect to the number of common shares of the Company (“Common Shares”) set forth below. Your Options/SARs under this grant have a grant price (“Grant Price”) that is 100% of the fair market value (the “Fair Market
Value”) of the Common Shares, which is taken as the reported closing price of the Common Shares on the New York Stock Exchange-Composite Transactions on the date of the grant. This grant will expire at the time indicated below unless an earlier
lapse date (“Lapse Date”) applies due to one of the status changes described in this notice. 
  

			
	 Grant Date:
	 	XX/XX/XXXX
	 No. of Shares to Which Options/SARs Apply:
	 	XXX
	 Grant Price:
	 	$XX.XX
	 Expiration Date:
	 	XX/XX/XXXX, at 4:00 PM ET

 Each Option granted hereunder entitles you to purchase the Common Shares covered by the option at the Grant Price.
Each SAR granted hereunder entitles you to receive the increase in value (the “Appreciation”) of one Common Share from the grant date to the date the SAR is exercised with respect to all or any portion of the Common Shares. 
 You may exercise all or any portion of this grant as either Options or SARs but not both. The exercise of any portion of the grant as Options automatically cancels the
corresponding SARs, and the exercise of any portion of the grant as SARs automatically cancels the corresponding Options. 
 SAR Calculation.
Upon the exercise of an SAR, the Appreciation shall be paid to you in Common Shares having a value equivalent to the Appreciation determined in the manner described below. The Company reserves the right to settle the Appreciation in cash in lieu of
Common Shares, at its sole election. Appreciation shall be calculated by subtracting the Grant Price from the last determinable Fair Market Value of the Common Shares (which shall be the Fair Market Value on the day prior to exercise, referred to
hereafter as the “Prior Day’s Close”) and multiplying the result by the number of SARs exercised. To determine the number of Common Shares to be issued upon settlement, the Appreciation shall be divided by the Prior Day’s Close,
and fractional shares shall be rounded down to the nearest whole share with no cash consideration being paid for the fractional remainder. 

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 Vesting Period. While you are an active employee, this grant shall vest in one-third increments as follows: 
 [Vesting Schedule] 
 provided, however, in the event of a Change in Control of the Company (as defined in the Plan), all of
the Options/SARs granted hereunder shall immediately vest and become exercisable. 
 If your continuous full-time employment is terminated at any time prior
to a vesting date as a result of retirement, permanent disability or death, any unvested Options/SARs shall continue to vest according to the schedule set forth above. 
 Following vesting, your Options/SARs are exercisable in accordance with the terms hereof only while you are a full-time employee of the Company or one of its Subsidiaries at any time until the Expiration Date or Lapse
Date as to all or any portion of the Common Shares subject to the vested Options/SARs. Vested Options/SARs may also be exercised upon termination of full-time employment in accordance with the specific status change rules set forth below.

 Effect of Status Changes. If your continuous full-time employment is terminated at any time prior to a vesting date for any reason other
than death, permanent disability or retirement under the applicable retirement plan or policy of the Company, any unvested Options/SARs at such date of termination shall lapse immediately upon termination. 
 Vested Options/SARs may be exercised in whole or in part after termination of full-time employment before the Lapse Date shown in the right-hand column corresponding to
the described status change: 
  

			
	 Status Change
	  	 Lapse Date

	(A) Permanent Disability or Retirement. If the termination of full-time employment is due to permanent disability or to retirement under the applicable retirement plan or policy of
the Company or a Subsidiary.	  	Expiration Date
		
	(B) Death. In the event of your death, if exercised by the executor or administrator of your estate (or if your estate has already been probated, the beneficiary who has inherited
the Options/SARs).	  	The earlier of: Two (2) years after the date of death or the Expiration Date.
		
	(C) Termination. If the termination of full-time employment is due to any other reason except your permanent disability or retirement as specified in (A) above, or your death
as specified in (B) above.	  	The earlier of: Three (3) months from the date of termination or the Expiration Date

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 Exercise and
Settlement Procedures. To exercise any portion of this grant, you shall be required to complete and deliver a notice of exercise in the prescribed format to the Company for processing on the Exercise Date. The Exercise Date shall be deemed
to be the first business day on which the Company receives, prior to the established cut-off time, (i) the notice of exercise and (ii) if the grant is being exercised as Options, the exercise price which may be paid in cash or with other
Common Shares of the Company. If you tender Common Shares of the Company to satisfy the exercise price, such shares will be valued at the Prior Day’s Close. 
 To settle the exercise of the Options/SARs, the Company will instruct its stock transfer agent to issue to you the net number of Common Shares you are entitled to receive. If any portion of the grant is exercised as SARs, the Company may,
in its sole discretion, alternatively elect to settle in cash, in which case the Company will pay you the appropriate dollar amount in settlement thereof. 
 Automatic Self-Exercise Prior to Expiration. If any vested portion of this grant has a positive value but remains unexercised on the business day preceding the Expiration Date or a Lapse Date, such grant remainder shall
automatically self-exercise as SARs on the Expiration Date to prevent forfeiture. 
 Compensation and Payment of Income Withholding Taxes. If
you are a U.S. citizen, you do not realize income upon the grant of these Options/SARs. In certain foreign countries, however, you may be taxed upon grant. In any year in which you exercise a part or all of such Options/SARs, the excess of the fair
market value of the Common Shares on the Exercise Date over the Grant Price will be taxed as compensation at ordinary income rates and you will be subject to U.S. or foreign income tax withholding, as applicable. For U.S. citizens, such withholding
shall include federal, state, local, FICA, Medicare, or other statutorily-required taxes (“Taxes”). Such Taxes must be paid to the Company at the time of exercise by surrendering to the Company a portion of the Common Shares
received in settlement upon exercise. If, however, the Company elects to settle the exercise of SARs in cash instead of stock, the Taxes due upon exercise shall be deducted from the cash settlement prior to payment. 
 Tax Withholding Calculation. The Company will withhold for Taxes the number of shares having an aggregate value based on the Prior Day’s Close at
least equal to the amount required to be withheld by law. If the value of the withheld shares exceeds the withholding tax amount due, such excess (which will be less than the value of one Common Share) shall be credited to federal income tax
withholding. 
 Reloadability. If you (or a permitted transferee as provided below) tender Common Shares of the Company to satisfy the exercise
price on an Option, you will receive one (1) restorative or “reload” grant of SARs effective on the Exercise Date equivalent to the number of Common Shares surrendered to satisfy the exercise price (the “Reload SARs”). The
Reload SARs will have a Grant Price equal to the Fair Market Value of the Common Shares on the Exercise Date. Except as otherwise specified herein, no Reload SARs may be exercised (a) prior to the completion of one (1) year of continuous
full-time employment following the Exercise Date; and (b) unless you have retained ownership of the Common Shares resulting from the Option exercise on the Exercise Date (less a sufficient number of Common Shares to satisfy withholding tax
obligations) for a period of one (1) year from the Exercise Date. No more than one (1) grant of Reload SARs shall be made 

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 hereunder. All
other terms and conditions of the Reload SARs will be identical to those contained herein, including without limitation the expiration and termination of the Reload SARs. 
 Transferability. Your Options/SARs are not transferable (other than by will or the laws of descent and distribution) except to (a) your spouse, children or grandchildren, (b) one or more trusts
for the benefit of such family members; or (c) partnerships in which such family members are the only partners; provided, however, that you do not receive any consideration for the transfer. Any transferred Options/SARs
shall continue to be subject to the same terms and conditions that were applicable immediately prior to its transfer (except that such transferred Options/SARs shall not be further transferable by the transferee inter vivos). 
 Detrimental Activity. If you engage in any Detrimental Activity (as hereinafter defined), the Committee has the right to cancel this grant if unexercised
or require repayment to the Company of any compensation received (in the form of cash or Common Shares) as a result of the exercise of any portion of this grant. Detrimental Activity, as defined in the Plan, means activity that is determined in
individual cases, by the Committee or its express delegate, to be detrimental to the interests of the Corporation or a Subsidiary, including without limitation (i) the rendering of services to an organization, or engaging in a business, that
is, in the judgment of the Committee or its express delegate, in competition with the Corporation; (ii) the disclosure to anyone outside of the Corporation, or the use for any purpose other than the Corporation’s business, of confidential
information or material related to the Corporation, whether acquired by the Grantee during or after employment with the Corporation; (iii) fraud, embezzlement, theft-in-office or other illegal activity; or (iv) a violation of the
Corporation’s Code of Ethics. 
 Consent to Use Data. By acknowledging of the terms of this award, you hereby consent to the cross-border
collection, use and disclosure by the Corporation of certain personal data required solely for the purpose of administering the grant and exercise of this award. Such personal data shall be limited to your name, gender, address, telephone number,
date of birth, date of hire, position, grade, supervisor, country of residence and country of employment. Such data shall be treated as highly confidential and shall not be used for any purpose other than Stock Incentive Program administration.

 Prospectus Notification. A Memorandum dated July 29, 2004 (the “Prospectus”) describing the terms of the 2003 Stock
Incentive Program which governs this grant and the most recent Annual Report and Proxy Statement issued by Parker-Hannifin Corporation are available for your review on your Stock Incentives Web page. You have the right to receive a
printed copy of the Prospectus upon request by either calling the Stock Plan Administrator at 216-896-2950 or by sending your written request to Parker’s Legal Department. 
 All Terms Herein Subject to the Plan. The grant of your Options/SARs hereunder is at all times subject to all other terms, conditions and provisions of the Plan (and any rules or procedures adopted
thereunder by the Committee) to the extent not specifically addressed herein. All initially capitalized terms, to the extent not otherwise defined herein, shall have the meaning ascribed to such terms in the Plan. In the event of a conflict between
the terms of the Plan and this grant letter, the Plan shall prevail. 

 Page 5 
 By acknowledging
the terms of this award, you acknowledge that: (i) any award of equity compensation is purely discretionary and is not compensation/salary for termination indemnity purposes; (ii) future awards of equity incentives may be discontinued at
any time; and (iii) an award granted in one year does not guarantee a grant of awards in future years. 
 Please acknowledge your receipt of this
letter and your agreement to the terms stated herein by clicking on the “Accept” button below. Failure to acknowledge receipt of this letter and the terms stated herein will jeopardize your ability to exercise the Options/SARs granted
herein. 
 Sincerely yours, 
 Thomas A. Piraino, Jr. 
 Vice President, General Counsel and Secretary

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