THIS AGREEMENT is made and entered into as of December 19, 2003 by and among Parker-Hannifin Corporation (the
“Company”), Thomas A. Piraino, Jr. (the “Executive”) and the Thomas A. Piraino, Jr. and Barbara C. McWilliams Irrevocable
Trust dated September 1, 2000 (the “Trust”).
A. The Company and the Executive are parties to an Exchange Agreement dated as of October 12, 2000 (the “Exchange
Agreement”) whereby the Executive agreed to the surrender of a portion of his future bonuses in the amount of $40,000 per year
for seven (7) years 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). To date, the Executive has surrendered $123,350 in bonuses (the “Current
B. The Company, the Executive and the Trust are parties to an Executive Estate Protection Agreement dated as of October
12, 2000 (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. To date, the
Company has paid $608,173 in premiums for the Policy (the “Premiums Paid”).
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 specific