THIS AGREEMENT is made and entered into as of December 29, 2003 by and among Parker-Hannifin Corporation (the
“Company”), Duane E. Collins (the “Executive”) and The Duane E. Collins Irrevocable Trust dated 5/10/99 (the “Trust”).
A. The Company and the Executive are parties to an Exchange Agreement dated as of May 11, 1999 (the “Exchange
Agreement”) whereby the Executive agreed to the surrender of 38,633 shares of Company common stock issued to the
Executive under the Company’s 1991-92-93 Long Term Incentive Plan (the “Shares”) in exchange for the Company’s agreement
to be bound by the terms of an Executive Estate Protection Plan Document (as defined in the Exchange Agreement).
B. The Company, the Executive and the Trust are parties to an Executive Estate Protection Agreement dated as of May 11,
1999 (the “EEP Agreement”) whereby the Company has agreed to provide life insurance for the benefit of the Executive and his
wife by funding the premiums on a Policy (as defined in the EEP Agreement) to be owned by the Trust.
C. In September 2003, the Internal Revenue Service issued final regulations (the “Tax Regulations”) which have a
significant negative affect on the Executive from a financial standpoint relative to the tax treatment of the Executive’s benefits
under the EEP Agreement; and
D. As a result of the Tax Regulations, the Executive has requested that the Company and the Trust agree to the
cancellation of their respective obligations under the Exchange Agreement and EEP Agreement.
E. The Company and the Trust are willing to accommodate the Executive’s request to cancel their respective obligations
under the Exchange Agreement and the EEP Agreement pursuant to the terms and conditions stated herein, which are
specifically designed to assure repayment to the Company of all premiums paid by the Company for the Policy and to have the
same cash flow impact to the Company on a present value basis as would the c