Exhibit 10(m)
AMENDED AND RESTATED
DEFERRED COMPENSATION PLAN
FOR DIRECTORS OF PARKER-HANNIFIN
CORPORATION
Adopted: 07/21/2008
Effective: 07/21/2008
Parker-Hannifin Corporation, an Ohio
corporation, established this Deferred Compensation Plan for
Directors of Parker-Hannifin Corporation (the “Plan”),
originally effective
,
, to provide Directors with the opportunity to defer payment of
their directors’ fees in accordance with the provisions of
this Plan. The Plan has been amended from time to time, including
an amendment effective as of January 1, 2005 to provide for
certain transitional rules and is hereby amended and restated as of
July 21, 2008 and such other dates as specified herein to
reflect the requirements of the American Jobs Creation Act
(“the Act”) with respect to the terms and conditions
applicable to amounts that are deferred under the Plan after
December 31, 2004 and subject to Section 409A of the
Code. Except as otherwise specifically provided in
Section 2(b) of Article III and Section 1(c) of Article
IV, all benefits deferred under the Plan prior to January 1,
2005 and any additional amounts that are not subject to
Section 409A of the Code (the “Grandfathered
Amounts”) shall continue to be subject solely to the terms of
the separate Plan as in effect on December 31, 2004. The Plan
will be administered in a manner consistent with the Act and
Section 409A of the Code and any regulations or other guidance
thereunder and any provision in the Plan that is inconsistent with
Section 409A of the Code shall be void and without effect.
Notwithstanding anything else in the Plan to the contrary, nothing
herein shall be read to preclude the Plan from using any transition
rules permitted under the Act, provided that no action will be
permitted with respect to the Grandfathered Amounts that will
subject such amounts to Section 409A of the Code.
ARTICLE I
DEFINITIONS
For the purposes hereof, the
following words and phrases shall have the meaning
indicated.
1. “ Account
” shall mean the aggregate of a Participant’s Deferral
Account and his or her Parker Stock Account, if any.
2. “ Beneficiary
” shall mean the person designated by a Participant in
accordance with the Plan to receive payment of the remaining
balance of a Participant’s Account in the event of the death
of the Participant prior to receipt of the entire amount credited
to the Participant’s Account.
3. “ Change in
Control ” shall mean the occurrence of one of the
following events
(i) A change in ownership of the
Corporation, which occurs on the date that any one person or more
than one person acting as a group (within the meaning of the
Regulations under Section 409A of the Code) acquires ownership
of stock of the Corporation that, together with stock held by such
person or group, constitutes more than 50% of the total voting
power of
the stock of the Corporation.
Notwithstanding the foregoing, if any one person or group is
considered to own more than 50% of the total voting power of the
stock of the Corporation, the acquisition of additional stock by
the same person or group is not considered to cause a change in the
ownership of the Corporation or a change in the effective control
of the Corporation (within the meaning of Section 3(ii) of
this Article). Notwithstanding the foregoing, a Change in Control
shall not be deemed to occur solely because any person acquires
ownership of more than 50% of the total voting power of the stock
of the Corporation as a result of the acquisition by the
Corporation of stock of the Corporation which, by reducing the
number of shares 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
Corporation (if not for the operation of this sentence), and after
the Corporation’s acquisition such person becomes the
beneficial owner of additional stock of the Corporation that
increases the percentage of outstanding shares of stock of the
Corporation owned by such person, a Change in Control shall then
occur.
(ii) A change in effective control
of the Corporation, which occurs on either of the following
dates:
(a) The date that any one person or
more than one person acting as a group (within the meaning of the
Regulations under Section 409A of the Code) acquires (or has
acquired during the 12-month period ending on the date of the most
recent acquisition by such person or group) ownership of stock of
the Corporation possessing 30% or more of the total voting power of
the Corporation. Notwithstanding the foregoing, if any one person
or group is considered to own 30% or more of the total voting power
of the stock of the Corporation, the acquisition of additional
stock by the same person or group is not considered to cause a
change in the effective control of the Corporation or a change in
ownership of the Corporation (within the meaning of
Section 3(i) of this Article). Notwithstanding the foregoing,
a Change in Control shall not be deemed to occur solely because any
person acquires ownership of more than 30% of the total voting
power of the stock of the Corporation as a result of the
acquisition by the Corporation of stock of the Corporation which,
by reducing the number of shares 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 Corporation (if not for the operation of this
sentence), and after the Corporation’s acquisition such
person becomes the beneficial owner of additional stock of the
Corporation that increases the percentage of outstanding shares of
stock of the Corporation owned by such person, a Change in Control
shall then occur.
(b) The date that a majority of the
Corporation’s board of directors is replaced during any
12-month period by directors whose appointment or election was not
endorsed by a majority of the members of the board prior to the
date of such appointment or election.
(iii) A change in the ownership of a
substantial portion of the Corporation’s assets, which occurs
on the date that any one person or more than one person acting as a
group (within the meaning of the Regulations under
Section 409A of the Code) acquires (or has acquired during the
12-month period ending on the date of the most recent acquisition
by such
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person or group) assets that have a
total gross fair market value equal to or more than 65% of the
total gross fair market value of all the assets of the Corporation
immediately before such acquisition or acquisitions. The gross fair
market value of assets shall be determined without regard to
liabilities associated with such assets. Notwithstanding the
foregoing, a transfer of assets shall not result in a change in
ownership of a substantial portion of the Corporation’s
assets if such transfer is to (a) a shareholder of the
Corporation (immediately before the asset transfer) in exchange for
or with respect to its stock, (b) an entity 50% or more of the
total value or voting power of which is owned, directly or
indirectly, by the Corporation, (c) a person or group (within
the meaning of the Regulations under Section 409A of the Code)
that owns, directly or indirectly, 50% or more of the total value
or voting power of the stock of the Corporation, or (d) an
entity, at least 50% of the total value or voting power of which is
owned, directly or indirectly by a person or group described in
Section 3(iii)(c) of this Article.
Notwithstanding Sections 3(i),
3(ii)(a) and 3(iii) of this Article, the consummation of a merger,
consolidation, share exchange or similar form of corporate
reorganization of the Corporation or any Subsidiary that requires
the approval of the Corporation’s stockholders, whether for
such transaction or the issuance of securities in connection with
the transaction or otherwise (a “Business
Combination”), shall not be deemed a Change in Control if,
immediately following such Business Combination: (a) 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
securities of the Corporation eligible to vote for the election of
the Board (the “Corporation Voting Securities”) that
were outstanding immediately prior to the Business Combination (or,
if applicable, shares into which such Corporation 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 Corporation Voting
Securities among the holders thereof immediately prior to the
Business Combination, (b) 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 directors of
the Parent Corporation (or, if there is no Parent Corporation, the
Surviving Corporation), and (c) 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
Corporation’s Board at the time of the Board’s approval
of the execution of the initial agreement providing for such
Business Combination.
Notwithstanding the foregoing, an
acquisition of stock of the Corporation described in
Section 3(i) or 3(ii)(a) of this Article shall not be deemed
to be a Change in Control by virtue of any of the following
situations: (a) an acquisition by the Corporation or any
Subsidiary; (b) an acquisition by any employee benefit plan
sponsored or maintained by the Corporation or any Subsidiary;
(c) an acquisition by any underwriter temporarily holding
securities pursuant to an offering of such securities; or
(d) the acquisition of stock of the Corporation from the
Corporation.
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4. “ Code ” shall
mean the Internal Revenue Code of 1986, as amended, or any
successor statute, and regulations or other guidance issued
thereunder.
5. “ Corporation
” shall mean Parker-Hannifin Corporation, an Ohio
corporation, its corporate successors, and the surviving
corporation resulting from any merger of Parker-Hannifin
Corporation with any other corporation or corporations.
6. “ Deferral
Account ” shall mean the bookkeeping account to which is
credited Fees deferred by a Director under Article II and any
earnings or losses credited thereto in accordance with the
Plan.
7. “ Director ”
shall mean any member of the Board of Directors of the Corporation
who is not an officer or common-law employee of the
Corporation.
8. “ Fees ”
shall mean the retainer and cash meeting fees earned by the
Director for his or her services as such.
9. “ Participant
” shall mean any Director who has at any time elected to
defer the receipt of Fees in accordance with Article II or with
respect to whom there has been established a Parker Stock Account
under Article III.
10. “ Parker Stock
Account ” shall mean the bookkeeping account to which is
credited notional stock with respect to certain Participants under
Article III, and any earnings and losses credited thereto in
accordance with the Plan.
11. “ Plan ”
shall mean the deferred compensation plan as set forth herein,
together with all amendments hereto, which Plan shall be called the
Amended and Restated Deferred Compensation Plan for Directors of
Parker-Hannifin Corporation.
12. “ Regulations
” shall mean regulations issued under Section 409A of
the Code. Reference to any section of the Regulations shall be read
to include any amendment or revision of such Regulation.
13. “ Unforeseeable
Emergency ” shall mean a severe financial hardship
arising from (i) the illness or accident of the Participant,
the Participant’s spouse, or the Participant’s
dependent (as defined in Section 152(a) of the Code),
(ii) loss of the Participant’s property due to casualty,
or (iii) other similar extraordinary and unforeseeable
circumstances
