Cooperation Agreement, dated August 2, 2021, by and between Parker-Hannifin Corporation and Meggitt plc

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Schedule 1 Form of Announcement

Schedule 2 Meggitt Share Schemes and Employee Related Matters

PARKER-HANNIFIN CORPORATION, a corporation registered in the state of Ohio, whose registered office is at 6035 Parkland Boulevard, Cleveland, Ohio ###-###-#### (Parker); and

MEGGITT PLC, a public limited company registered in England and Wales with registered number 00432989, whose registered office is at Pilot Way, Ansty Business Park, Coventry CV7 9JU, United Kingdom (Meggitt),

Parker proposes to announce immediately following execution of this Agreement a firm intention to make a recommended offer for the entire issued and to be issued share capital of Meggitt pursuant to Rule 2.7 of the Code on the terms and subject to the conditions set out in the Announcement and this Agreement (the Acquisition).

The parties intend that the Acquisition will be implemented by way of the Scheme, although Parker reserves the right, if the Panel consents and subject to the terms of this Agreement and the Announcement, to implement the Acquisition by way of the Takeover Offer.

The parties have agreed to take certain steps to effect completion of the Acquisition (whether by way of the Scheme or the Takeover Offer) and are entering into this Agreement to set out their respective rights, obligations and commitments in relation to such matters.

Definitions and interpretation

In this Agreement (including the recitals but excluding Schedule 1), the terms and expressions listed in this clause 1.1 shall have the meanings set out in this clause 1.1. Terms and expressions used in Schedule 1 shall have the meanings given to them in Schedule 1.

an offer (including a partial, exchange or tender offer), merger, acquisition, dual listed structure, scheme of arrangement, reverse takeover, whitewash transaction and/or business combination (or the announcement of a firm intention to do the same), the purpose of which is to acquire, directly or indirectly, 30 per cent. or more of the entire issued and to be issued ordinary share capital of Meggitt (when aggregated with the shares already held by the acquirer and any person acting or deemed to be acting in concert with the acquirer) or any arrangement or series of arrangements which results in any party acquiring, consolidating or increasing ‘control’ (as defined in the Code) of Meggitt;

the acquisition or disposal, directly or indirectly, of all or a significant proportion (being 30 per cent. or more) of the business, assets and/or undertakings of the Meggitt Group calculated by reference to any of its revenue, profits or value taken as a whole;

a demerger, any material reorganisation and/or liquidation involving all or a significant portion (being 30 per cent. or more) of the Meggitt Group calculated by reference to any of its revenue, profits or value taken as a whole; or

any other transaction which would be alternative to, or inconsistent with, or would be reasonably likely materially to preclude, impede or delay or otherwise prejudice the implementation of the Acquisition (including, for the avoidance of doubt, any transaction or arrangement which would constitute a Class 1 transaction for the purposes of the Listing Rules undertaken by a member of the Meggitt Group),

for so long as the Acquisition is being implemented by means of the Scheme, the conditions to the implementation of the Acquisition (including the Scheme) as set out in Appendix 1 to the Announcement and to be set out in the Scheme Document, as may be amended by Parker with the consent of the Panel (and, for so long as the Scheme is subject to a unanimous and unqualified recommendation from the Meggitt Directors, with the consent of Meggitt); and

if Parker elects to implement the Acquisition by way of the Takeover Offer in accordance with clause 7.1, the conditions referred to in (a) above, as amended by replacing the Scheme Conditions with the Acceptance Condition and as may be further amended by Parker with the consent of the Panel (and, in the case of an Agreed Switch, for so long as the Acquisition is subject to a unanimous and unqualified recommendation from the Meggitt Directors, with the consent of Meggitt),

the date on which the Scheme becomes effective in accordance with its terms; or

if Parker elects to implement the Acquisition by means of the Takeover Offer in accordance with the terms of this Agreement, the date on which the Takeover Offer becomes or is declared unconditional in all respects;

In this Agreement, unless the context otherwise requires:

the expressions subsidiary and subsidiary undertaking have the meanings given in the Companies Act;

the expressions acting in concert and concert parties shall be construed in accordance with the Code;

a reference to an enactment or statutory provision shall include a reference to any subordinate legislation made under the relevant enactment or statutory provision and is a reference to that enactment, statutory provision or subordinate legislation as from time to time amended, consolidated, modified, re-enacted or replaced;

references to a person include any individual, an individual’s executors or administrators, a partnership, a firm, a body corporate (wherever incorporated), an unincorporated association, government, state or agency of a state, local or municipal authority or government body, a joint venture, association, works council or employee representative body (in any case, whether or not having separate legal personality);

references to a recital, paragraph, clause or Schedule (other than a schedule to a statutory provision) shall refer to those of this Agreement unless stated otherwise;

headings do not affect the interpretation of this Agreement, the singular shall include the plural and vice versa, and references to one gender include all genders;

references to time are to London time (unless otherwise specified);

any reference to a day (including within the phrase Business Day) shall mean a period of 24 hours running from midnight to midnight and any reference to a month shall mean a calendar month;

references to any English legal term for any action, remedy, method of judicial proceeding, legal document, legal status, court, official or any legal concept or thing shall, in respect of any jurisdiction other than England, be construed as references to the term or concept which most nearly corresponds to it in that jurisdiction;

references pounds sterling and pence are references to the lawful currency from time to time of the United Kingdom;

any phrase introduced by the terms including, include, in particular or any similar expression shall be construed as illustrative and shall not limit the sense of the words preceding those terms;

a reference to any other document referred to in this Agreement is a reference to that other document as amended, varied or supplemented at any time; and

references to this Agreement include this Agreement as amended or supplemented in accordance with its terms.

The Schedules form part of this Agreement and shall have the same force and effect as if set out in the body of this Agreement and any reference to this Agreement shall include the Schedules.

Publication of the Announcement and the terms of the Acquisition

The obligations of the parties under this Agreement, other than this clause 2.1 and clauses 11 to 19 (inclusive) and 21 to 25 (inclusive), shall be conditional on the release of the Announcement via a Regulatory Information Service at or before 7:30 a.m. on the date of this Agreement or such later time and date as the parties may agree (and, where required by the Code, the Panel may approve). This clause 2.1 and clauses 11 to 19 (inclusive) and 21 to 25 (inclusive) shall take effect on and from execution of this Agreement.

The terms of the Acquisition shall be as set out in the Announcement, together with such other terms as may be agreed by the parties in writing (save in the case of an improvement to the terms of the Acquisition, which will be at the absolute discretion of Parker) and, where required by the Code, approved by the Panel. The terms of the Acquisition at the date of publication of the Acquisition Document shall be set out in the Acquisition Document.

Binding commitments

Parker hereby agrees that it will offer to HM Government legally binding commitments that, following completion of the Acquisition, in substance it will:

ensure that Meggitt will continue to meet its contractual obligations in respect of goods and services supplied to or for the benefit of HM Government, (ii) maintain its existing technology and manufacturing that resides in the UK for the benefit of HM Government, and (iii) ensure that Meggitt continues to comply with and enforce security protocols prescribed by HM Government and allows for officials to inspect Meggitt’s premises to verify compliance, in each case unless HM Government otherwise consents;

maintain Meggitt’s UK headquarters and new operational centre of excellence at Ansty Park to facilitate growth in its UK and European defence and aerospace businesses and it will operate each of Meggitt’s existing divisions under the combined Parker-Meggitt name beneath a UK legal entity;

ensure all four current divisions of Meggitt (being Airframe Systems, Engine Systems, Energy & Equipment and Services & Support) remain in place following completion of the Acquisition;

maintain Meggitt’s existing R&D, product engineering and direct manufacturing labour headcount in the UK at no less than current levels (assuming no material change to current levels and subject to normal productivity improvements and business conditions);

increase by at least ten per cent. the number of overall apprenticeship opportunities currently offered by Meggitt in the UK;

at least maintain Meggitt’s existing level of expenditure with respect to R&D in the UK and, subject to normal levels of growth and activity occurring in the aerospace industry, increase this by at least 20 per cent. over the next five years;

in line the with HM Government’s sustainability commitments, maintain Meggitt’s target of investing at least two-thirds of its research and technology budget for the UK in projects relating to sustainable aviation and low-carbon energy;

ensure the majority of the board of directors of Meggitt, which will be a subsidiary of Parker, and relevant Meggitt UK subsidiaries, will be UK nationals and, where required, security cleared; and

commit to Meggitt’s targets of reducing net carbon emissions by 50 per cent. by 2025 and achieving net zero greenhouse gas emissions by 2050 across the existing Meggitt business.

Meggitt acknowledges and agrees that:

the form, nature and detail (including duration) of any commitments to be entered into between Parker and HM Government following Parker’s offer to HM Government pursuant to clause 3.1 will be agreed in discussions between Parker and HM Government; and

any decision by HM Government not to accept, or any failure by HM Government to accept, any commitment offered to it by Parker pursuant to clause 3.1 shall not constitute a breach of clauses 3 or 4.

For the purposes of engagement with HM Government pursuant to clause 3.1, Parker undertakes that it shall:

contact and correspond with HM Government in relation to its offer of commitments pursuant to clause 3.1; and

keep Meggitt informed as soon as reasonably practicable as to the progress of its discussions with HM Government or any other party in relation to its offer of commitments pursuant to clause 3.1.

In clause 3.1, references to Meggitt shall be deemed to include references to the Meggitt Group.

For the avoidance of doubt, the obligations of the parties under this clause 3 are separate from, and shall not in any way limit, the respective obligations of the parties under clause 4.

Regulatory clearances

Parker shall take or cause to be taken all necessary steps in order to secure the Clearances as promptly as practicable following the date of this Agreement, and in any event in sufficient time to enable the Effective Date to occur prior to the Long Stop Date. This shall include accepting the imposition of, or offering, and executing any Remedies as are required, or can reasonably be expected to be required, to secure satisfaction of any relevant Clearance.

Except where otherwise required by Law or a Relevant Authority, Parker shall:

after prior consultation with Meggitt and having considered (acting in good faith) Meggitt’s reasonable requests in connection therewith (noting that, for the avoidance of doubt, Parker shall be under no obligation to accept any such requests), determine the strategy for obtaining the Clearances including (i) the timing and sequencing regarding the discussion, offer or agreement of Remedies with Relevant Authorities; and (ii) the determination of Remedies discussed with, offered to or agreed with Relevant Authorities;

promptly contact and correspond with the Relevant Authorities in relation to any Clearances, including submitting and preparing, with the assistance of Meggitt in accordance with this Agreement, all necessary filings, notifications and submissions; and

be responsible for the payment of all filing fees required in connection with the Clearances.

Parker and Meggitt shall:

provide each other, in a timely manner, and in any event before any deadline or due date imposed by Law or by this Agreement, such information and assistance as may be reasonably required for:

Parker to determine in which jurisdictions any merger control, regulatory or other filing, notification or submission with a Relevant Authority may be necessary or expedient for the purposes of obtaining the Clearances;

the parties to make any filings, notifications or submissions to the Relevant Authorities as are necessary or expedient in connection with the obtaining of the Clearances, taking into account all applicable waiting periods; and

the identification, structuring and preparation of any Remedies; and

ensure that all information necessary:

for the making of (or responding to any requests for further information consequent upon) any such filings, notifications, submissions (including draft versions); and

the identification, structuring and preparation of any Remedies,

For the purposes of clause 4.3:

each of the parties shall take all reasonable steps to obtain relevant information from third parties (including through the exercise of contractual rights), it being acknowledged that a party shall not be in breach of this clause or clause 4.3 as a consequence of any inaccuracies in any information originating from a third party (being a person other than a member, officer, employee or adviser of the Meggitt Group or the Parker Group (as applicable));

the parties acknowledge that in certain circumstances disclosure by one party to the other may nonetheless be prevented by obligations of confidentiality owed to third parties or by Law; and

the provision of information shall be subject to clause 4.8.

Without prejudice to the generality of clause 4.3, and except to the extent that to do so is prohibited by Law:

Parker, or Meggitt and Parker jointly, or Meggitt, as may be required, will submit a filing, notification or submission (as required) to each Relevant Authority as soon as is reasonably practicable after the signing of this Agreement and in any event within any applicable mandatory time periods where it is necessary or expedient to do so to obtain the Clearances;

each party shall provide such cooperation as is reasonably required by the other party in connection with the preparation of all such filings, notifications or submissions (as required) referred to in clause 4.5(a) and in relation to the preparation of any other submissions, material correspondence or material communications to any Relevant Authority in connection with the Clearances;

each party shall provide, or procure the provision of, draft copies of all filings, notifications, submissions, material correspondence and material communications (including, in the case of material non-written communications, reasonably detailed summaries of such non-written communications) intended to be sent or communicated to any Relevant Authority in relation to obtaining any Clearances to the other party (and/or its legal advisers) at such time as will allow the receiving party (and/or its legal advisers) a reasonable opportunity to provide comments on such filings, submissions, correspondence and communications before they are submitted, sent or made and each party shall provide the other party with copies of all such filings, submissions, material correspondence and material communications in the form finally submitted or sent (including, in the case of material non-written communications, reasonably detailed summaries of such non-written communications);

each party shall have regard in good faith to comments made in a timely manner by the other party on draft copies of filings, notifications, submissions, material correspondence and material communications provided pursuant to clause 4.5(c);

as soon as reasonably practicable, each party shall notify the other party, and provide copies (including, in the case of material non-written communications, reasonably detailed summaries of such non-written communications), of any material correspondence or material communication from any Relevant Authority in relation to obtaining any Clearance;

each party shall keep the other party informed promptly as to the progress of any notification submitted pursuant to clause 4.5(a) and shall allow the other party or its advisers: (i) to attend all meetings, hearings or material calls with any Relevant Authority or other persons or bodies (unless prohibited by the Relevant Authority, Law or other person or body) relating to obtaining any Clearance; and (ii) to make reasonable oral submissions at such meetings, hearings or calls (provided that such oral submissions have been discussed in advance where practicable) and where such attendance and participation is not permitted by the Relevant Authority or by Law, to provide, to the extent so permitted, the other party with a reasonably detailed written summary of such meeting, hearing or call as soon as reasonably practicable following the meeting, hearing or call; and

where reasonably requested by a party, and insofar as permitted by the Relevant Authority, the other party shall make available appropriate representatives for meetings and calls with any Relevant Authority in connection with the obtaining of any Clearances.

Each party undertakes to keep the other party (and/or its legal advisers) informed promptly of: (a) developments which are material or potentially material to the obtaining of a Clearance; and (b) the satisfaction of the Regulatory Conditions.

Each party undertakes not to withdraw a filing, submission or notification made to any Relevant Authority pursuant to clause 4.5(a) without the prior consent of the other party.

If a provision of this Agreement obliges either party to disclose any information to the other party:

that is personally identifiable information of a beneficial owner, director, partner, officer or employee of the disclosing party or any member of its group or any of their respective affiliates, unless that information can reasonably be anonymised (in which case, the disclosing party shall provide the relevant information on an anonymous basis);

which the disclosing party reasonably considers to be commercially or competitively sensitive;

which the disclosing party is prohibited from disclosing by Law or the terms of an existing contract; or

where such disclosure would result in the loss of privilege that subsists in relation to such information (including legal professional privilege),

To the extent that Meggitt provides Parker with any information, assistance and/or access to Meggitt’s senior management for the purposes of preparing for the integration of the businesses of the Parker Group and the Meggitt Group after the Effective Date (which Meggitt is under no obligation to provide), any competitively sensitive information shall be provided on an outside counsel basis only or pursuant to the Clean Team Arrangements.

Until the Effective Date, Parker shall not, and will procure that no other member of the Parker Group or any person acting in concert or deemed to be acting in concert with it shall, take, or omit to take, or permit or cause to be taken or omitted to be taken, any action or enter into an agreement for, or consummate, any acquisition, or other transaction which would, or would be reasonably likely to, have the effect of in any way preventing, impeding, materially delaying or materially prejudicing the satisfaction of the Regulatory Conditions or completion of the Acquisition.

Notwithstanding any other provision of this Agreement to the contrary, nothing contained in this Agreement shall require a party or any of its concert parties to take, or cause to be taken, any action with respect to the divestiture of any assets, properties or businesses, that is not conditional on completion of the Acquisition, except as otherwise agreed by the parties.

Scheme Document

Subject to clause 4.8, Parker agrees:

promptly to provide Meggitt (and/or its legal advisers) all such information about itself, its directors, the Parker Group and any other person acting in concert with Parker as may reasonably be requested by Meggitt (having regard to the Code and other Law) for inclusion in the Scheme Document or in any other Court documentation in connection with the Scheme (including any information required under the Code or other Law, including in relation to the intentions of Parker);

promptly to provide Meggitt with all such other assistance and access as may reasonably be required in connection with the preparation of the Scheme Document and any other document required under the Code or by other Law in connection with the Scheme, including access to, and ensuring the provision of reasonable assistance by, Parker’s relevant professional advisers; and

to procure that the Parker Directors (and any other person connected with Parker, as required by the Panel) accept responsibility, in the terms required by the Code, for all the information (including any expressions of opinion) in the Scheme Document and any other document required under the Code or by other Law to be published in connection with the Scheme relating to themselves (and their close relatives (as defined in the Code), related trusts and other persons connected with them), the Parker Group, the financing of the Acquisition, information on Parker’s future plans for the Meggitt Group, its management, employees, pension schemes and places of business, any statements of opinion, belief or expectation of Parker or the Parker Directors in relation to the Acquisition or the enlarged group of Parker following the Effective Date and any other information in the Scheme Document for which Parker and/or any of the Parker Directors is required to accept responsibility under the Code.

Implementation of the Scheme

Where the Acquisition is being implemented by way of the Scheme:

Parker undertakes that, by no later than 11.59p.m. on the Business Day immediately preceding the Sanction Hearing, it shall deliver a notice in writing to Meggitt either:

confirming the satisfaction or waiver of all Conditions (other than the Scheme Conditions); or

confirming its intention to invoke a Condition (if permitted by the Panel) and providing reasonable details of the event which has occurred, or circumstances which have arisen, which Parker reasonably considers entitle it to invoke the Condition and why Parker considers such event or circumstance to be sufficiently material for the Panel to permit it to invoke such Condition;

where Parker confirms the satisfaction or waiver of all Conditions (other than the Scheme Conditions) in accordance with clause 6.1(a)(i), Parker agrees that Meggitt shall be permitted to take the necessary steps to procure that the Sanction Hearing is duly held as soon as reasonably practicable thereafter (having regard to the proposed timetable agreed between the parties and included in the Scheme Document or in any subsequent agreed announcement regarding the implementation of the Acquisition);

Parker shall instruct counsel to appear on its behalf at the Sanction Hearing and undertake to the Court to be bound by the terms of the Scheme in so far as it relates to Parker. Parker shall provide such documentation or information as may reasonably be required by Meggitt’s counsel or the Court in relation to such undertaking; and

without prejudice to clause 6.1(a), if Parker becomes aware of any fact, matter or circumstance that it considers entitles it to invoke (with the consent of the Panel) one or more Conditions or treat any of the Conditions as unsatisfied or incapable of satisfaction (applying in each case the test set out in Rule 13.5 of the Code), Parker (subject to any restriction under applicable Law) shall inform Meggitt providing reasonable details as soon as reasonably practicable.

Switching to a Takeover Offer

The parties intend as at the date of this Agreement that the Acquisition will be implemented by way of the Scheme. However, Parker shall be entitled, with the consent of the Panel, to implement the Acquisition by way of the Takeover Offer rather than the Scheme (such election being a Switch), only if:

Meggitt provides its prior written consent;

a third party announces a firm intention to make an offer under Rule 2.7 of the Code for all or part of the issued and to be issued ordinary share capital of Meggitt; or

the Meggitt Directors withdraw, adversely modify or adversely qualify the Meggitt Board Recommendation provided that, for the avoidance of doubt, the issuance of a Meggitt Holding Announcement shall not constitute a withdrawal, adverse modification or adverse qualification of the Meggitt Board Recommendation for the purpose of this clause.

In the event of any Agreed Switch, unless otherwise agreed with Meggitt or required by the Panel:

the Acceptance Condition shall be set at seventy-five (75) per cent. of the Meggitt Shares (or such lesser percentage as may be determined by Parker after consultation with Meggitt and, to the extent necessary, the Panel, being in any case more than fifty (50) per cent. of the Meggitt Shares);

Parker shall consult with Meggitt in a timely manner as to the form and content and timing of publication of any announcements (and the related form of acceptance) relating to the Agreed Switch and its implementation and any proposed changes to the timetable in relation to the implementation of the Agreed Switch;

Parker shall prepare the Offer Document and shall consult reasonably with Meggitt in relation thereto and shall allow Meggitt a reasonably opportunity to consider the draft Offer Document for review and comment, and shall consider in good faith comments proposed by Meggitt;

Parker agrees to seek Meggitt’s approval of the contents of the information on Meggitt contained in the Offer Document before it is published, and to afford Meggitt sufficient time to consider such document in order to give its approval of information for which Meggitt or the Meggitt Directors are taking responsibility (such approval not to be unreasonably withheld or delayed). Parker shall only publish the Offer Document once the information in the Offer Document for which Meggitt or the Meggitt directors are taking responsibility is in a form satisfactory to Parker and Meggitt (both acting reasonably), provided that if Meggitt does not approve the Offer Document within 28 days from the date of the Agreed Switch, Parker shall be entitled to publish the Offer Document containing only information required by Rule 24 of the Code and excluding such information as may be approved by the Panel;

Parker shall not take any action which would cause the Takeover Offer not to proceed, to lapse or to be withdrawn, in each case for non-fulfilment of any Condition, prior to midnight on Day 60 (including, without limitation, by publishing any acceptance condition invocation notice under Rule 31.6 of the Code or specifying in the Offer Document an unconditional date which is earlier than Day 60) and Parker shall ensure that the Takeover Offer remains open for acceptance until such time;

Parker shall not, without the prior written consent of Meggitt, make any acceleration statement (as defined in the Code) unless (i) all of the Conditions (other than the Acceptance Condition) have been satisfied or waived (if capable of waiver); (ii) the acceleration statement contains no right for Parker to set the statement aside (except with Meggitt consent and/or in the circumstances envisaged by note 2 or 3 to Rule 31.5); and (iii) Parker undertakes to Meggitt not to take any action or step otherwise to set the acceleration statement aside;

if at any time following the publication of the Offer Document it is reasonably expected that any outstanding Regulatory Conditions are not likely to be satisfied or waived (if capable of waiver) prior to the last date permitted under Rule 31.1 of the Code, Parker shall, before the 30^th day after the publication of the Offer Document (or such later date as Meggitt may agree), consult with Meggitt as to whether the offer timetable should be suspended in accordance with Rule 31.4 or (if Day 39 has passed) Day 60 should be extended in accordance with Rule 31.3 of the Code (or, if applicable, further suspended or extended) and, if required by Meggitt, shall request such suspension or extension to a date agreed with Meggitt and the Panel, provided always that such extended date (as, if applicable, it may be further extended) shall be no later than the Long Stop Date;

Parker shall ensure that the Takeover Offer is made on the same terms as those set out in the Announcement (those terms including, for the avoidance of doubt, the commitments and intention statements set out paragraphs 9 and 10 of the Announcement) and the only conditions to the Takeover Offer shall be the Conditions (subject to replacing the Scheme Conditions with the Acceptance Condition referred to in clause 7.2(a)), unless the parties agree otherwise in writing or with any modification or amendments to such terms and Conditions as may be required by the Panel; and

Parker shall keep Meggitt informed, on a confidential basis on the next Business Day following receipt of a written request from Meggitt, of the number of Meggitt Shareholders that have validly returned their acceptance or withdrawal forms or incorrectly completed their acceptance or withdrawal forms, the identity of such shareholders and the number of Meggitt Shares to which such forms relate.

In the event of any Agreed Switch, the parties agree that all provisions of this Agreement relating to the Scheme and its implementation shall apply to the Takeover Offer or its implementation mutatis mutandis.

For the avoidance of doubt, the parties agree that in the event of any Switch, for so long as this Agreement is in force, all provisions of this Agreement shall continue to apply (including, for the avoidance of doubt, clause 4) save as set out in this clause 7.

Parker hereby represents and warrants that neither it nor any member of its Group is, as at the date of this Agreement, and undertakes that (for so long as this Agreement is in force and during the period prior to the satisfaction or, where applicable, waiver of the Regulatory Conditions) neither it nor any member of its Group shall become, following the date of this Agreement, required to make a mandatory offer for Meggitt

Meggitt Share Schemes

Directors’ and officers’ insurance

If and to the extent such obligations are permitted by Law, for six years after the Effective Date, Parker shall procure that the members of the Meggitt Group honour and fulfil their respective obligations (if any) existing as at the date of this Agreement to indemnify their respective directors and officers and to advance expenses, and to provide such directors and officers with all reasonable assistance to the extent that they need to make a claim against the existing Meggitt directors’ and officers’ insurance policy (including any associated run-off cover) in each case with respect to matters existing or occurring at or prior to the Effective Date.

Parker acknowledges that Meggitt may purchase directors’ and officers’ liability insurance cover for both current and former directors and officers of the Meggitt Group, including directors and officers who retire or whose employment is terminated as a result of the Acquisition, for acts and omissions up to and including the Effective Date, in the form of runoff cover for a period of six years following the Effective Date. Such insurance cover shall be with reputable insurers and provide cover, in terms of amount and breadth, substantially equivalent to that provided under the Meggitt Group’s directors’ and officers’ liability insurance as at the date of this Agreement.

Termination

Subject to clauses 10.2 and 10.3, this Agreement shall terminate and all obligations of the parties under this Agreement shall cease forthwith, as follows:

if agreed in writing between the parties;

if the Announcement is not released at or before the time specified in clause 2.1 (unless, prior to that time, the parties have agreed another time in accordance with that clause);

upon service of written notice by Parker to Meggitt, if one or more of the following occurs:

the Scheme Document (or Offer Document, as the case may be) and (if different) the document convening the Meggitt General Meeting does not include the Meggitt Board Recommendation or Meggitt makes an announcement prior to the publication of such document(s) that: (A) the Meggitt Directors no longer intend to make the Meggitt Board Recommendation or intend adversely to modify or adversely to

the Meggitt Directors publicly withdraw, adversely modify or adversely qualify the Meggitt Board Recommendation or fail to publicly reaffirm or re-issue such unanimous and unqualified recommendation within ten (10) Business Days of Parker’s reasonable request to do so, provided that, for the avoidance of doubt, the issuance of a Meggitt Holding Announcement shall not constitute a withdrawal, adverse modification or adverse qualification of the Meggitt Board Recommendation for the purpose of this clause;

upon service of written notice by Parker to Meggitt, if a Competing Proposal: (i) is publicly recommended by the Meggitt Directors; or (ii) completes, becomes effective or is declared or becomes unconditional in all respects; or

upon service of written notice by either party if one or more of the following occurs:

if a Competing Proposal (within the meaning of limb (a) of that definition only) completes, becomes effective or is declared or becomes unconditional in all respects;

prior to the Longstop Date, any Condition has been invoked by Parker (in circumstances where the invocation of the relevant Condition is permitted by the Panel);

if the Acquisition is, with (where required) the permission of the Panel, withdrawn or lapses in accordance with its terms prior to the Longstop Date (other than where: (i) such lapse or withdrawal is as a result of the exercise of Parker’s right to effect a Switch; or (ii) it is otherwise to be followed within five (5) Business Days by an announcement under Rule 2.7 of the Code made by Parker or a person acting in concert with Parker to implement the Acquisition by a different offer or scheme on substantially the same or improved terms); or

unless otherwise agreed by the parties in writing, if the Effective Date has not occurred on or before the Longstop Date.

Termination of this Agreement shall be without prejudice to the rights of the parties which have arisen prior to termination, including any claim in respect of a breach of this Agreement.

The following provisions shall survive termination of this Agreement: clause 8, clause 9 (but only in circumstances where this Agreement is terminated after the Effective Date), clauses 11 to 19 (inclusive), 21 to 25 (inclusive), this clause 10 and all related provisions of clause 1 (Definitions and Interpretation).

Takeover Code

Nothing in this Agreement shall in any way limit the parties’ obligations under the Code, and any uncontested rulings of the Panel as to the application of the Code in conflict with the terms of this Agreement shall take precedence over such terms of this Agreement.

The parties agree that, if the Panel determines that any provision of this Agreement that requires Meggitt to take or not to take any action, whether as a direct obligation or as a condition to any other person’s obligation (however expressed), is not permitted by Rule 21.2 of the Code, that provision shall have no effect and shall be disregarded.

Nothing in this Agreement shall oblige Meggitt or the Meggitt Directors to recommend a Takeover Offer or a Scheme proposed by Parker or any member of its Group.

Without prejudice to the representations and warranties given by the parties pursuant to clause 12, nothing in this Agreement shall be taken to restrict the directors of any member of the Parker Group or the Meggitt Group from complying with Law, orders of court or regulations, including the Code, the Listing Rules and the rules and regulations of the Panel and the Financial Conduct Authority.

Representations and warranties

Each party represents and warrants to the other party on the date of this Agreement that:

it has the requisite power and authority to enter into and perform its obligations under this Agreement;

this Agreement constitutes its binding obligations in accordance with its terms; and

the execution and delivery of, and performance of its obligations under, this Agreement will not:

result in any breach of any provision of its constitutional documents;

result in a breach of, or constitute a default under, any instrument which is material in the context of the Acquisition to which it is a party or by which it is bound; or

result in a breach of any order, judgment, or decree of any court or governmental agency to which it is a party or by which it is bound.

Parker represents and warrants to Meggitt that, as at the date of this Agreement:

no Parker shareholder resolution is required to implement the Acquisition; and

it is not aware of any matter or circumstance which would or could reasonably be expected to cause any of the Conditions not be satisfied.

No party shall have any claim against any other party pursuant to clause 12.1 for misrepresentation or breach of warranty after the Effective Date (without prejudice to any liability for fraudulent misrepresentation or fraudulent misstatement).

Parker acknowledges and agrees that any information and/or assistance provided by any of the Meggitt directors, officers, employees or advisers (each a Meggitt Representative) to it and/or any member of its Group or any of their respective directors, officers, employees or advisers, whether before, on or after the date of this Agreement: (i) pursuant to the obligations of Meggitt under or otherwise in connection with this Agreement; or (ii) in connection with the Acquisition, shall in each case be (and have been) given on the basis that the relevant Meggitt Representative shall not incur any liability, whether in contract, tort (including negligence) or otherwise, in respect of any loss or damage that any of Parker and/or any member of its Group or any of their respective directors, officers, employees or advisers may suffer as a result of the provision of any such information and/or assistance, save in each case for loss or damage to the extent resulting from the fraudulent misrepresentation of the relevant Meggitt Representative.

Costs

Entire agreement

Without prejudice to the terms of the Announcement or the Acquisition Document, this Agreement, the Clean Team Arrangements and the Confidentiality Agreement (each of which remains in force) together set out the entire agreement between the parties relating to the Acquisition and supersede any previous draft, agreement, arrangement or understanding, whether in writing or not, relating to the Acquisition.

Each party acknowledges that in entering into this Agreement it is not relying upon any pre-contractual statement that is not set out in this Agreement, the Clean Team Arrangements or the Confidentiality Agreement.

Except in the case of fraud or fraudulent misrepresentation, no party shall have any right of action against any other party to this Agreement arising out of or in connection with any pre-contractual statement except to the extent that it is repeated in this Agreement, the Clean Team Arrangements or the Confidentiality Agreement.

For the purposes of this clause, pre-contractual statement means any draft, agreement, undertaking, representation, warranty, promise, assurance or arrangement of any nature whatsoever, whether or not in writing, relating to the subject matter of this Agreement, the Clean Team Arrangements or the Confidentiality Agreement made or given by any person at any time prior to the entry into of this Agreement.

Nothing in this Agreement shall limit any liability for (or remedy in respect of) fraud or fraudulent misrepresentation.

Each party agrees to the terms of this clause 14 on its own behalf.

Assignment

Notices

Any notice to be given by one party to the other party in connection with this Agreement shall be in writing in English and signed by or on behalf of the party giving it. It shall be delivered by hand, e-mail, registered post or courier using an internationally recognised courier company.

A notice shall be effective upon receipt and shall be deemed to have been received (i) at the time of delivery, if delivered by hand; (ii) on signature of a delivery receipt, if delivered by registered post or courier; or (iii) at the time of transmission, if delivered by e-mail. Where delivery occurs outside Working Hours in the place of receipt, notice shall be deemed to have been received at the start of Working Hours on the next following Business Day.

The addresses and e-mail addresses of the parties for the purpose of clause 16.1 are:

Each party shall notify the other party in writing of any change to its details in clause 16.3 from time to time. That notice shall only be effective on the Business Day after the notification has been received or such later date as may be specified in the notice.

The provisions of this clause 16 shall not apply in relation to the service of any claim form, application notice, order, judgment or other document relating to any proceedings, suit or action arising out of or in connection with this Agreement, whether contractual or non-contractual.

Language

Waivers, rights and remedies

The rights and remedies provided for in this Agreement are cumulative and not exclusive of any other rights or remedies, whether provided by Law or otherwise.

No failure to exercise, or delay in exercising, any right under this Agreement or provided by Law shall affect that right or operate as a waiver of the right. The single or partial exercise of any right under this Agreement or provided by Law shall not preclude any other or further exercise of it or the exercise of any other right, power or remedy.

Without prejudice to any other rights or remedies that either party may have, each party acknowledges and agrees that damages may not be an adequate remedy for any breach by it of this Agreement and that accordingly the other party may be entitled, without proof of special damages, to the remedies of injunction, specific performance or other equitable relief for any threatened or actual breach of this Agreement by any party and no proof of special damages shall be necessary for the enforcement by any party of the rights under this Agreement.

Without prejudice to the generality of clause 11.2, nothing in this Agreement shall oblige Meggitt to pay any amount in damages which the Panel determine would not be permitted by Rule 21.2 of the Code.

No partnership

Further assurances

Counterparts

Variations

No variation of this Agreement shall be valid unless it is in writing (which, for this purpose, does not include e-mail) and duly executed by or on behalf of all of the parties to it.

If this Agreement is varied, unless otherwise agreed between the parties:

the variation shall not constitute a general waiver of any provisions of this Agreement;

the variation shall not affect any rights, obligations or liabilities under this Agreement that have already accrued up to the date of variation; and

the rights and obligations of the parties under this Agreement shall remain in force, except as, and only to the extent that, they are varied.

Invalidity

Each of the provisions of this Agreement is severable.

If and to the extent that any provision of this Agreement:

is held to be, or becomes, invalid or unenforceable under the Law of any jurisdiction; but

would be valid, binding and enforceable if some part of the provision were deleted or amended,

Third party enforcement rights

Each of the third parties to whom clauses 9.1, 9.2 and/or 12.4 applies (each a Relevant Third Party) may under the Contracts (Rights of Third Parties) Act 1999 enforce the terms of clauses 9.1, 9.2 and/or 12.4 (as applicable). This right is subject to: (i) the rights of the parties to rescind or vary this Agreement without the consent of any other person (save that any amendment, waiver or variation of clauses 9.1, 9.2 and/or 12.4 shall require the prior consent of the affected Relevant Third Party; and (ii) the other terms and conditions of this Agreement.

Paragraphs 9 and 10 of Part 1 and paragraph 3 of Part 2 of Schedule 2 (Meggitt Share Schemes and Employee Related Matters) confer a benefit on the members of the Meggitt Remuneration Committee, who may under the Contracts (Rights of Third Parties) Act 1999 enforce the terms of Parker’s agreement in paragraphs 9 and 10 of Part 1 and paragraph 3 of Part 2 of Schedule 2.

Except as set out in clause 24.1, a person who is not a party to this Agreement shall have no right under the Contracts (Rights of Third Parties) Act 1999 to enforce any of its terms.

Governing law and jurisdiction

This Agreement and any non-contractual obligations arising out of or in connection with this Agreement are governed by, and shall be interpreted in accordance with, English law.

The English courts shall have exclusive jurisdiction in relation to all disputes (including claims for set-off and counterclaims) arising out of or in connection with this Agreement including, without limitation, disputes arising out of or in connection with: (i) the creation, validity, effect, interpretation, performance or non-performance of, termination or the legal relationships established by, this Agreement; and (ii) any non-contractual obligations arising out of or in connection with this Agreement. For such purposes each party irrevocably submits to the jurisdiction of the English courts and waives any objection to the exercise of such jurisdiction. Each party also irrevocably waives any objection to the recognition or enforcement in the courts of any other country of a judgment delivered by an English court exercising jurisdiction pursuant to this clause.

Parker shall at all times maintain an agent for service of process and any other documents in proceedings in England and Wales or any other proceedings in connection with this Agreement. That agent shall be Parker Hannifin (Holdings) Limited currently of 55 Maylands Avenue, Hemel Hempstead, Hertfordshire HP2 4SJ. Any claim form, judgment or other notice of legal process shall be sufficiently served on Parker if delivered to such agent at its address for the time being. Parker waives any objection to such service.

Parker irrevocably undertakes not to revoke the authority of its agent and if, for any reason, Meggitt requests Parker to do so, Parker shall promptly appoint another such agent with an address in England and advise Meggitt of the agent’s details. If, following such a request, Parker fails to appoint another agent within 10 Business Days, Meggitt shall be entitled to appoint one on behalf of Parker at Parker’s expense. Nothing in this Agreement shall affect Meggitt’s right to serve process in any other manner permitted by Law.

SIGNED by Thomas L. Williams

)

/s/ Thomas L. Williams

for and on behalf of

)

Title: Chief Executive Officer

SIGNED by Antony Wood

)

/s/ Antony Wood

for and on behalf of

)

Title: Chief Executive Officer

The boards of directors of Parker-Hannifin Corporation (Parker) and Meggitt PLC (Meggitt) are pleased to announce that they have reached agreement on the terms of a recommended cash acquisition of the entire issued and to be issued ordinary share capital of Meggitt by Parker.

Under the terms of the Acquisition, each Scheme Shareholder will receive:

The price of 800 pence per Meggitt Share represents:

a premium of approximately 70.5 per cent. to the Closing Price of 469.1 pence per Meggitt Share on 30 July 2021, the last business day before this announcement; and

a premium of approximately 73.8 per cent. to the volume-weighted average Closing Price of 460.2 pence per Meggitt Share for the six-month period ended on 30 July 2021, the last business day before this announcement.

It is intended that the Acquisition will be implemented by means of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act.

Parker believes Meggitt is very well aligned with Parker and the goals of The Win Strategy^™, Parker’s global business system, representing a unified strategic vision for its team members worldwide. Parker believes that the Acquisition would be strategically and culturally compelling, and enhance the future prospects of the Combined Group within global aerospace and defence industries, for the following key reasons:

Meggitt is an international group headquartered in the United Kingdom and is a high-value, leading provider of proprietary and differentiated aerospace & defence technologies with over 70 per cent. of revenue from sole-source positions.

Meggitt, like Parker, has a rich heritage in the aerospace and defence segments with a strong culture, underpinned by a number of core values focusing on teamwork, engagement, integrity, operational excellence, and innovation.

Meggitt has a global brand, a complementary business mix, an impressive international base of blue-chip customers and a leading product portfolio.

Meggitt has been transforming its business over the last four years through its focused strategy, streamlining its portfolio, investing in new technologies, and growing through its customer-aligned divisions.

Meggitt and Parker are complementary across diverse portfolios of products.

The acquisition of Meggitt nearly doubles the size of Parker’s Aerospace Systems segment.

Parker believes the Combined Group will be able to provide a stronger value proposition for customers. Parker also believes the Combined Group is poised for strong growth, supported by the commercial aerospace recovery, and will be able to maximise its potential by building on a combined product portfolio and geographic footprint and by sharing operational and functional best practices.

Meggitt and Parker share a heritage as established manufacturers with significant presence across the UK, serving as trusted defence suppliers to the UK and US governments, and governments across the EU and globally. The UK is an important market to Parker and a key part of its business. Parker is a highly experienced acquirer with prior experience of successfully integrating UK companies in the industrial sector (including a publicly listed company) into its business. These continue to thrive within the Parker Group.

Parker expects the combination to be earnings accretive in the first full 12 months after closing. The Acquisition is expected to drive incremental sales growth and cash flow accretion, and to deliver a high single-digit ROIC in year 5 which should grow thereafter.¹ Parker remains committed to maintaining a strong balance sheet and investment grade credit rating.

Recognising the importance of Meggitt’s rich UK heritage and relationships with its key stakeholders, Parker has agreed with Meggitt that it will offer a number of legally binding commitments to HM Government, including to:

(i) ensure that Meggitt will continue to meet its contractual obligations in respect of goods and services supplied to or for the benefit of HM Government,

Excludes one-time costs and deal related amortisation.

(ii) maintain its existing technology and manufacturing that resides in the UK for the benefit of HM Government, and (iii) ensure that Meggitt continues to comply with and enforce security protocols prescribed by HM Government and allows for officials to inspect Meggitt’s premises to verify compliance, in each case unless HM Government otherwise consents;

ensure that the majority of the board of directors of Meggitt will be UK nationals;

maintain Meggitt’s UK headquarters, operate each of Meggitt’s existing divisions under the combined Parker-Meggitt name and ensure all four current divisions of Meggitt remain in place;

maintain Meggitt’s existing R&D, product engineering and direct manufacturing labour headcount in the UK at no less than current levels, while increasing by at least ten per cent. the number of overall apprenticeship opportunities currently offered by Meggitt in the UK;

at least maintain Meggitt’s existing level of R&D expenditure in the UK and, subject to normal levels of aerospace industry growth and activity, increase this by at least 20 per cent. over the next five years; and

commit to Meggitt’s targets of reducing net carbon emissions by 50 per cent. by 2025 and achieving net zero greenhouse gas emissions by 2050 across the existing Meggitt business.

Parker is delighted to confirm that it has entered into a legally binding memorandum of understanding with the trustee of the Meggitt UK DB Pension Plan which sets out the parties’ agreement with respect to the future funding of the Meggitt UK DB Pension Plan.

The directors of Meggitt, who have been so advised by Rothschild & Co and Morgan Stanley as to the financial terms of the Acquisition, consider the terms of the Acquisition to be fair and reasonable. In providing their advice, Rothschild & Co and Morgan Stanley have taken into account the commercial assessments of the directors of Meggitt.

In addition to the financial terms of the Acquisition, the directors of Meggitt have carefully considered Parker’s plans for the Meggitt business under Parker’s ownership, including the complementary cultures of Parker and Meggitt, the alignment of both Groups’ long-term strategies and the commitments Parker has agreed with Meggitt to offer to HM Government to safeguard the interests of Meggitt’s key stakeholders.

Accordingly, the directors of Meggitt intend unanimously to recommend that Meggitt Shareholders vote in favour of the Scheme at the Court Meeting and the Resolutions to be proposed at the General Meeting as the directors of Meggitt have irrevocably undertaken to do in respect of those Meggitt Shares they hold and in respect of which they control the voting rights (representing approximately 0.05 per cent. of the issued ordinary share capital of Meggitt on 30 July 2021 (being the last business day before this announcement)). Further details of these undertakings, including the circumstances in which they cease to be binding, are set out in Appendix 3 to this announcement.

Parker is a leading worldwide diversified manufacturer of motion and control technologies and systems, providing precision engineered solutions for a wide variety of mobile, industrial and aerospace markets.

Parker has a long and successful history in the UK, having operated in the UK for over 50 years, and currently employs more than 2,100 team members in 18 facilities across the country.

Commenting on today’s announcement, Tom Williams, Chairman and Chief Executive Officer of Parker said:

Commenting on today’s announcement, Sir Nigel Rudd, Chairman of Meggitt, said:

Tony Wood, Chief Executive of Meggitt, said:

The terms of the Acquisition will be put to Meggitt Shareholders at the Court Meeting and the General Meeting. The Court Meeting and the General Meeting are required to enable Meggitt Shareholders to consider and, if thought fit, vote in favour of the Scheme and the Resolutions to implement the Scheme. In order to become effective, the Scheme must be approved by a majority in number of Scheme Shareholders, present and voting at the Court Meeting, whether in person or by proxy, representing 75 per cent. or more in value of the Scheme Shares voted. In addition, a special resolution implementing the Scheme must be passed by Meggitt Shareholders representing at least 75 per cent. of votes cast at the General Meeting.

The Acquisition will be on the terms and subject to the Conditions set out in Appendix 1 to this announcement and to the full terms and conditions to be set out in the Scheme Document.

The Acquisition is conditional on a number of antitrust and regulatory approvals and Parker will make further announcements in respect of such approvals as appropriate.

It is expected that the Scheme Document, containing further information about the Acquisition and notices of the Court Meeting and General Meeting, together with the Forms of Proxy, will be sent to Meggitt Shareholders as soon as practicable and in any event within 28 days of this announcement. It is expected that the Acquisition will complete during Q3 of 2022, subject to the satisfaction (or, where applicable, waiver) of the Conditions and certain further terms set out in Appendix 1 to this announcement. An expected timetable of principal events will be included in the Scheme Document.

Aidan Gormley, Director, Global Communications and Branding

Introduction

The Acquisition

a premium of approximately 70.5 per cent. to the Closing Price of 469.1 pence per Meggitt Share on 30 July 2021, the last business day before this announcement; and

a premium of approximately 73.8 per cent. to the volume-weighted average Closing Price of 460.2 pence per Meggitt Share for the six-month period ended on 30 July 2021, the last business day before this announcement.

Background to and reasons for the Acquisition

Meggitt is an international group headquartered in the United Kingdom and is a high-value, leading provider of proprietary and differentiated aerospace & defence technologies with over 70 per cent. of revenue from sole-source positions.

Meggitt, like Parker, has a rich heritage in the aerospace and defence segments with a strong culture, underpinned by a number of core values focusing on teamwork, engagement, integrity, operational excellence, and innovation.

Meggitt has a global brand, a complementary business mix, an impressive international base of blue-chip customers and a leading product portfolio.

Meggitt has been transforming its business over the last four years through its focused strategy including: (i) streamlining its portfolio and investing in new technologies; (ii) delivering organic growth through its customer-aligned divisions; (iii) creating a high performance culture across the group; and (iv) improving operational performance and execution through strategic footprint reductions and supplier consolidations, an area where Parker intends to continue to deliver savings across the Combined Group.

Meggitt and Parker are complementary across diverse portfolios of products, and will thus expand and develop core product lines, add new capabilities, and enable innovations on more-electric, low-carbon and other key technologies.

The acquisition of Meggitt nearly doubles the size of Parker’s Aerospace Systems segment, increasing the proportion of the business focused on the aerospace aftermarket by 500 bps.

Parker believes the Combined Group will be able to provide a stronger value proposition for customers. Parker also believes the Combined Group is poised for strong growth, supported by the commercial aerospace recovery, and will be able to maximise its potential by building on a combined product portfolio and geographic footprint and by sharing operational and functional best practices.

Excludes one-time costs and deal related amortisation.

Recommendation

Background to and reasons for the recommendation

the terms of the Acquisition represent an immediate and significant premium to the current share price, reflective of the significant value inherent in the Meggitt Group, whilst also providing Meggitt Shareholders with certainty of value in cash;

the terms of the Acquisition represent a premium of approximately 70.5 per cent. to the Closing Price of 469.1 pence per Meggitt Share on 30 July 2021, the last business day before this announcement;

the terms of the Acquisition represent a premium of approximately 73.8 per cent. to the volume weighted average Closing Price of 460.2 pence per Meggitt Share for the six-month period ended on 30 July 2021, the last business day before this announcement; and

the terms of the Acquisition imply an IFRS Enterprise Value multiple of approximately 24.5x 2020 IFRS EBITDA for Meggitt.

the interests of its wider stakeholders and accordingly held extensive discussions with Parker in relation to the commitments Parker would be willing to offer in order to appropriately safeguard these interests as part of the Acquisition. The Meggitt Board has therefore taken due account of Parker’s agreement to offer HM Government a number of legally binding commitments, as further detailed in paragraph 9 below;

the alignment of Parker and Meggitt’s respective business models and long-term outlook to support customers, as well as the investment required to develop next generation programmes and the benefits the enhanced scale of the Combined Group would bring to a broader and more diversified customer base globally;

Meggitt’s cultural compatibility with Parker, which shares Meggitt’s core values of high performance teamwork, integrity and excellence, in addition to Parker’s long history of operating within the UK and other geographies in which Meggitt has a presence; and

the legally binding Memorandum of Understanding that Parker and Meggitt have entered into with the trustee of the Meggitt UK DB Pension Plan.

Irrevocable undertakings

Information relating to Parker

Information relating to Meggitt

Airframe Systems – Meggitt is a market-leading industry provider of braking systems for commercial, business and defence aircraft, fire protection and safety systems, power and motion, fuel systems, avionics and sensors and advanced polymer seals for around 51,000 in-service civil and 22,000 defence aircraft.

Engine Systems – Meggitt holds a market-leading position in advanced engine composites, thermal and safety systems with a broad range of technologies including vibration monitoring and engine health management systems. This division also provides aerospace engine flow control and sensing solutions.

Energy & Equipment – Meggitt specialises in energy and defence equipment ranging from electronics cooling to ammunition handling systems and heat transfer equipment for off-shore oil and gas facilities and renewable energy applications.

Services & Support – Meggitt provides a full-service aftermarket offering including spares distribution and maintenance, repair and overhaul to its commercial, business jet and defence customers throughout the lifecycle of our products.

Binding commitments to HM Government

(i) ensure that Meggitt will continue to meet its contractual obligations in respect of goods and services supplied to or for the benefit of HM Government, (ii) maintain its existing technology and manufacturing that resides in the UK for the benefit of HM Government, and (iii) ensure that Meggitt continues to comply with and enforce security protocols prescribed by HM Government and allows for officials to inspect Meggitt’s premises to verify compliance, in each case unless HM Government otherwise consents;

maintain Meggitt’s UK headquarters and new operational centre of excellence at Ansty Park to facilitate growth in its UK and European defence and aerospace businesses and operate each of Meggitt’s existing divisions under the combined Parker-Meggitt name beneath a UK legal entity;

ensure all four current divisions of Meggitt (being Airframe Systems, Engine Systems, Energy & Equipment and Services & Support) remain in place following completion of the Acquisition;

maintain Meggitt’s existing R&D, product engineering and direct manufacturing labour headcount in the UK at no less than current levels (assuming no material change to current levels between the date of this announcement and the Effective Date and subject to normal productivity improvements and business conditions);

increase by at least ten per cent. the number of overall apprenticeship opportunities currently offered by Meggitt in the UK;

at least maintain Meggitt’s existing level of expenditure with respect to R&D in the UK and, subject to normal levels of growth and activity occurring in the aerospace industry, increase this by at least 20 per cent. over the next five years;

in line the with HM Government’s sustainability commitments, maintain Meggitt’s target of investing at least two-thirds of its research and technology budget for the UK in projects relating to sustainable aviation and low-carbon energy;

ensure the majority of the board of directors of Meggitt, which will be a subsidiary of Parker, and relevant Meggitt UK subsidiaries, will be UK nationals and, where required, security cleared; and

commit to Meggitt’s targets of reducing net carbon emissions by 50 per cent. by 2025 and achieving net zero greenhouse gas emissions by 2050 across the existing Meggitt business.

Intentions regarding business, employees, pension schemes, locations and research and development

engaging with Meggitt’s customers, suppliers and other key stakeholders;

identifying areas of duplication or overlap across the Combined Group (principally the central corporate and support functions) and other possible efficiencies where Parker may be able to streamline and implement “best-in-class” practices in the Combined Group, including relating to cost management, efficiency improvements, productivity enhancements, and operational and administrative restructuring;

continuing the consolidation of the supply chain for the Meggitt business that Meggitt management have been recently pursuing, and considering any potential additional actions to support this; and

identifying existing and new growth and development opportunities to drive additional profitable growth.

Parker will maintain Meggitt’s existing R&D, product engineering and direct manufacturing labour headcount in the UK at no less than current levels (assuming no material change to current levels between the date of this announcement and the Effective Date and subject to normal productivity improvements and business conditions); and

Parker will increase, by at least ten per cent., the number of overall apprenticeship opportunities currently offered by Meggitt in the UK.

Parker anticipates overlap between the two businesses, particularly in central corporate and support functions and a reduced need for roles currently supporting Meggitt’s status as a public listed company at Meggitt’s UK headquarters; and

the Acquisition may give rise to operational economies of scale and opportunities for commercial benefits, which will be assessed as part of the Evaluation and may result in headcount reductions or relocation of Meggitt employees.

an open-ended uncapped parent company guarantee from Parker from completion of the Acquisition in respect of all present and future employer obligations and liabilities in respect of the Meggitt UK DB Pension Plan;

a lump sum cash payment of £25 million to be paid to the Meggitt UK DB Pension Plan within one month of completion of the Acquisition;

the payment of employer contributions to the Meggitt UK DB Pension Plan from completion of the Acquisition at a flat rate of £35 million per annum until the statutory funding deficit under the Meggitt UK DB Pension Plan’s valuation as at 5 April 2021 is eliminated or the actuarial valuation of the Meggitt UK DB Pension Plan as at 5 April 2024 is completed; and

a commitment from Parker to agree appropriate information sharing provisions with the Trustee for the benefit of the Meggitt UK DB Pension Plan following the date of this announcement.

Financing

Meggitt Share Schemes

Offer-related arrangements and Memorandum of Understanding

Parker has agreed to take or cause to be taken all necessary steps in order to secure the regulatory clearances and authorisations necessary to satisfy Conditions 3 to 20 (inclusive) of Part A of Appendix 1 to this announcement, in sufficient time to enable the Effective Date to occur prior to the Long-Stop Date; and

Parker and Meggitt have each agreed to certain undertakings to co-operate and provide each other with reasonable information, assistance and access in relation to the filings, submissions and notifications to be made in relation to such regulatory clearances and authorisations.

Structure of the Acquisition

a resolution to approve the Scheme is passed by a majority in number of the Scheme Shareholders present and voting (and entitled to vote) at the Court Meeting, either in person or by proxy, representing 75 per cent. or more in value of the Scheme Shares held by those Scheme Shareholders (or the relevant class or classes thereof);

the Resolutions are passed by the requisite majority of Meggitt Shareholders at the General Meeting (which will require the approval of Meggitt Shareholders representing at least 75 per cent. of the votes cast at the General Meeting either in person or by proxy);

certain antitrust and foreign investment approvals and clearances are obtained as detailed in Appendix 1 to this announcement;

the Scheme is sanctioned by the Court (with or without modification, on terms agreed by Parker and Meggitt); and

an office copy of the Scheme Court Order is delivered to the Registrar of Companies.

Delisting and re-registration

Disclosure of interests in Meggitt relevant securities

Overseas shareholders

Meggitt’s issued share capital

Documents published on a website

this announcement;

the irrevocable undertakings described in paragraph 6 above;

the documents relating to the Bridge Facility referred to in paragraph 11 above;

the Confidentiality Agreement, Cooperation Agreement, Clean Team Agreement and CJDA referred to in paragraph 13 above; and

the consent letters from each of Citi, Morgan Stanley, BofA Securities and Rothschild & Co referred to in paragraph 20 below.

General

Citigroup Global Markets Limited

(Financial Adviser and Corporate Broker to Parker)

Morgan Stanley & Co. International plc

(Financial Adviser, Rule 3 Adviser and Corporate Broker to Meggitt)

Conditions to the Scheme and Acquisition

The Acquisition will be conditional upon the Scheme becoming unconditional and becoming effective, subject to the provisions of the Code, by no later than the Long-Stop Date.

The Scheme will be conditional upon:

(i) approval of the Scheme by a majority in number representing not less than 75 per cent. in value of the Scheme Shareholders (or the relevant class or classes thereof), who are present and voting (and who are entitled to vote), either in person or by proxy, at the Court Meeting and at any separate class meeting which may be required by the Court (or at any adjournment of any such meeting); and (ii) the Court Meeting being held on or before the 22^nd day after the expected date of the Court Meeting to be set out in the Scheme Document in due course (or such later date (if any) as Parker and Meggitt may agree, with the consent of the Panel (and that the Court may allow, if required));

(i) all Resolutions being duly passed by the requisite majority at the General Meeting (or at any adjournment thereof); and (ii) the General Meeting being held on or before the 22^nd day after the expected date of the General Meeting to be set out in the Scheme Document in due course (or such later date (if any) as Parker and Meggitt may agree, with the consent of the Panel (and that the Court may allow, if required)); and

(i) the sanction of the Scheme by the Court without modification or with modification on terms acceptable to Parker and Meggitt and the delivery of an office copy of the Scheme Court Order to the Registrar of Companies for registration; and (ii) the Scheme Court Hearing being held on or before the 22^nd day after the expected date of the Scheme Court Hearing to be set out in the Scheme Document in due course (or such later date (if any) as Parker and Meggitt may agree, with the consent of the Panel (and that the Court may allow, if required)).

Insofar as the Acquisition creates a relevant merger situation within the meaning of Section 23 of the Enterprise Act 2002, the CMA or, as the case may be, the Secretary of State adopting and formally notifying to the parties all decisions and approvals necessary to clear the Acquisition and to permit the Acquisition and any matters arising therefrom to proceed (and, to the extent relevant, all conditions or obligations contained in such decisions and approvals necessary for clearance of the Acquisition having been satisfied or complied with).

Insofar as the Acquisition falls within the scope of Council Regulation (EC) 139/2004 (the EUMR), closing shall be conditional upon:

either:

the European Commission adopting and formally notifying to the parties, or having been deemed under the EUMR or Protocol 24 to the European Economic Area Agreement (the EEA Agreement) to have adopted, all decisions and approvals necessary to allow closing of the Acquisition (and, to the extent relevant, all conditions or obligations contained in such decisions and approvals necessary to allow closing of the Acquisition having been satisfied or complied with); or

in the event that all or any part of the Acquisition is referred, or is deemed under the EUMR or Protocol 24 of the EEA Agreement to have been referred, by the European Commission to the competent authorities of one or more EU Member State or EFTA State:

all such competent authorities adopting, or having been deemed under relevant laws to have adopted, all decisions and approvals necessary to allow closing of the Acquisition (and, to the extent relevant, all conditions contained in such decisions and approvals necessary to allow closing of the Acquisition having been satisfied or complied with) or any waiting periods applicable to the Acquisition otherwise having expired or been terminated; and

Condition 4(a)(i) above being satisfied in respect of all parts of the Acquisition not so referred; and

in the event that any EU Member State or EFTA State has indicated that it is considering whether, or intends, to take measures in relation to the Acquisition to protect legitimate interests pursuant to Article 21(4) of the EUMR or Article 7 of Protocol 24 of the EEA Agreement, all such EU Member States and EFTA States adopting, or having been deemed under relevant laws to have adopted, all decisions and approvals necessary to allow closing of the Acquisition (and, to the extent relevant, all conditions contained in such decisions and approvals necessary to allow closing of the Acquisition having been satisfied or complied with).

all filings having been made and all or any applicable waiting periods (including any extensions thereof or any timing agreements with the United States antitrust authorities) under the United States Hart-Scott Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations thereunder having expired, lapsed or been terminated as appropriate in each case in respect of the Acquisition, or any matters arising from the Acquisition; and

no law, injunction (whether temporary, preliminary or permanent), or legal order having been enacted, entered, promulgated or enforced by any United States antitrust authority of competent jurisdiction which prevents, makes illegal, prohibits, restrains or enjoins the consummation of the Acquisition.

Insofar as a filing is considered necessary or appropriate by Parker, Parker having received notice in writing from the Australian Competition and Consumer Commission (ACCC) that it does not intend to investigate further, or has no objection to, and does not intend to take any action to prevent or oppose the Acquisition (including where subject to the implementation of conditions).

Insofar as the Acquisition triggers a mandatory filing requirement, the Administrative Council for Economic Defense of Brazil (CADE) having approved the consummation of the Acquisition either by means of:

a final clearance decision issued by CADE’s Superintendence-General, and the expiration of the 15-day waiting period with no third party appeals or request for further review by CADE’s Administrative Tribunal for Economic Defense;

a final clearance decision issued by CADE’s Administrative Tribunal for Economic Defense, subject to the implementation of conditions agreed with CADE (if applicable); or

the expiration of the formal review period provided for under article 88, paragraphs 2 and 9, of the Brazilian competition law No 12529 of 30 November 2011, without a final decision being made by CADE.

Insofar as the Acquisition triggers a mandatory filing requirement, a filing having been made to and accepted by the State Administration for Market Regulation (SAMR) pursuant to the Anti-Monopoly Law and SAMR having issued a formal notice confirming that it will not conduct further review of the Acquisition or allowing the Acquisition to proceed with or without conditions, or all applicable waiting periods under the Anti-Monopoly Law in respect of the review of the Acquisition having expired.

Insofar as the Acquisition triggers a mandatory filing requirement, the Mexican Competition Authority having cleared the Acquisition, whether unconditionally pursuant to Article 90 of the Mexican Federal Economic Competition Law or subject to conditions pursuant to Articles 90 and 91 of the Mexican Federal Economic Competition Law, or the Mexican Competition Authority not having issued a decision within the required deadlines, with the consequence of deeming the Acquisition as authorized pursuant to Article 90 of the Mexican Federal Economic Competition Law.

Insofar as the Acquisition triggers a mandatory filing requirement, pursuant to Law No. 4054 on the Protection of Competition (Law No. 4054) and Communiqué No. 2010/4 on Mergers and Acquisitions Subject to the Approval of the Competition Board:

the Turkish Competition Board (Rekabet Kurulu), the competent decision-making organ of the Turkish Competition Authority (Türk Rekabet Kurumu) having declined jurisdiction over the Acquisition or approved the Acquisition conditionally or unconditionally; or

the applicable waiting period having expired pursuant to Article 10(2) of the Law No. 4054.

Insofar as a filing is considered necessary by Parker, the occurrence of one of the following events:

Parker receiving a written notice under the Foreign Acquisitions and Takeovers Act 1975 (Cth) (FATA), by or on behalf of the Treasurer of the Commonwealth of Australia stating, or to the effect that, that the Commonwealth Government does not object to the Acquisition, with or without imposing conditions; or

it having been determined by Parker that the Acquisition is not a significant action, a notifiable action or a notifiable national security action under FATA and, to the extent that any notification has already been made under the FATA in connection with the Acquisition, such notification having been withdrawn; or

the Treasurer of the Commonwealth of Australia becoming precluded from making an order under Division 2 of Part 3 of FATA in relation to the Acquisition under the FATA; or

if an interim order is made under the FATA in respect of the Acquisition, the subsequent period for making a final order prohibiting the transactions contemplated by this announcement elapsing without a final order being made.

Insofar as a filing is considered necessary by Parker), obtaining Danish FDI clearance by means of a decision of the Danish Business Authority under Act no. 842 of 10 May 2021, Act on screening of certain foreign direct investments etc. in Denmark or the Ministry of Justice under the Consolidated Act no. 1004 of 22 October 2012, Consolidated Act on War Material etc or any other office, department or branch of the Danish State competent to issue and release the clearance under the Danish FDI Regulation stating that:

the Acquisition does not fall within the scope of the Danish FDI Regulation; or

the Acquisition is expressly approved without any requirements, measures and/or conditions to be complied with; or

the Acquisition is expressly approved with the imposition of requirements and conditions.

Insofar as a filing is considered necessary by Parker, obtaining French foreign investment clearance for the Acquisition pursuant to Articles L. 151-3 and R. 151-1 et seq. of the French Monetary and Financial Code, by means of the French Ministry of the Economy having:

issued a decision stating that the Acquisition does not fall within the scope of the French foreign investment regulation; or

expressly approved the Acquisition without any requirements, measures and/or conditions to be complied with; or

expressly approved the Acquisition with the imposition of requirements and conditions.

Insofar as a filing under the German AWG is necessary or considered appropriate by Parker, the Acquisition not having been prohibited according to sec. 4 para. 1 no. 4, sec. 5 para. 2 of the German Foreign Trade Act (Außenwirtschaftsgesetz – AWG) in conjunction with sec. 59 or sec. 62 of the German Foreign Trade Ordinance (Außenwirtschaftsverordnung – AWV). This condition shall be deemed satisfied if the German Federal Ministry for Economic Affairs and Energy (Bundeswirtschaftsministerium – BMWi) has:

granted a Certificate of non-objection (Unbedenklichkeitsbescheinigung) in accordance with sec. 58 para. 1 sentence 1 AWV or issued a clearance decision (Freigabe) in accordance with sec. 58a or sec. 61 AWV or otherwise informed Parker that it will not initiate formal proceedings (Prüfverfahren) within the two months’ time period specified in sec 14a para. 1 no. 1 AWG; or

informed Parker in writing, after initiating formal proceedings (Prüfverfahren), that the Acquisition will not be prohibited or does not meet the requirements for a prohibition; or

not prohibited the Acquisition, after initiating formal proceedings (Prüfverfahren), within the four months’ time period specified in sec. 14a para. 1 no. 2 AWG, as possibly extended pursuant to sec. 14a paras. 4, 5 and 6 AWG; or

declared in writing that the Acquisition can be closed without having obtained prior approval from the German Federal Ministry for Economic Affairs and Energy.

Insofar as a filing is necessary or considered appropriate by Parker, obtaining Italian FDI clearance, by means of, alternatively, either:

a decision of the Italian FDI Authority stating that: (i) the Acquisition does not fall within the scope of the Italian FDI Regulation; or (ii) the Acquisition is expressly approved without any requirements, measures and/or conditions to be complied with; or (iii) the Acquisition is expressly approved with the imposition of requirements and conditions; or

the expiration of all the applicable statutory periods for the issuance by the Italian FDI Authority of an express decision on the Acquisition pursuant to the Italian FDI Regulation, that is qualified as tacit approval of the Acquisition under the Italian FDI Regulation.

To the extent that the NS&I Act commences prior to the Effective Date and a mandatory and suspensory notification is required under that Act, a notification having been accepted and:

the Secretary of State confirming before the end of the review period that no further action will be taken in relation to the Acquisition; or

if the Secretary of State issues a call-in notice in relation to the Acquisition, the parties receiving a final notification containing confirmation that the Secretary of State will take no further action in relation to the call-in notice and the Acquisition under the NS&I Act; or

the Secretary of State making a final order in relation to the Acquisition (and, to the extent relevant, all conditions or obligations contained in such an order necessary for completion of the Acquisition having been satisfied or complied with).

To the extent that any new or amended public interest, foreign investment or national security laws, rules or regulations become effective before the Effective Date, and such laws, rules or regulations apply to the Acquisition, all mandatory and suspensory approvals as are legally required, or in the reasonable opinion of Parker advisable, pursuant to such laws, rules or regulations to permit the Acquisition to occur having been obtained.

Excluding filings, applications, obligations, notifications, waiting and other time periods, and clearances relating to those antitrust, merger control or national security or foreign investment screening referred to in paragraphs 3 to 17, all notifications to and filings with, Third Parties which are necessary or considered appropriate by Parker having been made, all appropriate or necessary waiting and other time periods (including any extensions of such waiting and other time periods) under any applicable legislation or regulation of any relevant jurisdiction having expired, lapsed or been terminated (as appropriate) and all statutory or regulatory obligations in any relevant jurisdiction having been complied with in each case in connection with the Acquisition or the acquisition of any shares or other securities in, or control or management of, Meggitt or any other member of the Wider Meggitt Group by any member of the Wider Parker Group or the carrying on by any member of the Wider Meggitt Group of any material aspect of its business.

No Third Party having intervened (other than any Third Party having intervened in respect of those antitrust, merger control or national security or foreign investment screening referred to in paragraphs 3 to 17, in respect of which those aforementioned paragraphs shall apply) and there not continuing to be outstanding any statute, regulation or order of any Third Party (other than any statute, regulation or order of any Third Party relating to those antitrust or merger control or national security or foreign investment screening referred to in paragraphs 3 to 17, in respect of which those aforementioned paragraphs shall apply) in each case which would or would reasonably be expected to:

make the Scheme or the Acquisition or, in each case, its implementation or the acquisition by Parker or any member of the Wider Parker Group of any shares or other securities in, or control or management of, Meggitt or any member of the Wider Meggitt Group void, illegal or unenforceable in any jurisdiction, or otherwise directly or indirectly materially restrain, prevent, prohibit, restrict or delay the same or impose additional material conditions or obligations with respect to the Scheme or the Acquisition or such acquisition, or otherwise materially impede, challenge or interfere with the Scheme or Acquisition or such acquisition, or require material amendment to the terms of the Scheme or Acquisition or the acquisition of any Meggitt Shares or the acquisition of control or management of Meggitt or the Wider Meggitt Group by Parker or any member of the Parker Group;

materially limit or delay, or impose any material limitations on, the ability of any member of the Wider Parker Group or any member of the Wider Meggitt Group to acquire or to hold or to exercise effectively, directly or indirectly, all or any rights of ownership in respect of shares or other securities in, or to exercise voting or management control over, any member of the Wider Meggitt Group or any member of the Wider Parker Group;

require, prevent or materially delay the divestiture or materially alter the terms envisaged for any proposed divestiture by any member of the Wider Parker Group of any shares or other securities in any member of the Meggitt Group;

require, prevent or materially delay the divestiture or materially alter the terms envisaged for any proposed divestiture by any member of the Wider Parker Group or by any member of the Wider Meggitt Group of all or a material part of their respective businesses, assets or properties or materially limit the ability of any of them to conduct any of their respective businesses or to own or control any of their respective assets or properties or any part thereof;

except pursuant to the implementation of the Acquisition or, if applicable, sections 974 to 991 of the Companies Act, require any member of the Wider Parker Group or of the Wider Meggitt Group to acquire, or to offer to acquire, any shares or other securities (or the equivalent) in any member of either group owned by any third party;

materially adversely limit the ability of any member of the Wider Parker Group or of the Wider Meggitt Group to conduct or integrate or co-ordinate its business, or any part of it, with the businesses or any part of the businesses of any other member of the Wider Parker Group or of the Wider Meggitt Group;

result in any member of the Wider Meggitt Group or the Wider Parker Group ceasing to be able to carry on business under any name under which it presently does so; or

otherwise materially adversely affect any or all of the business, assets, profits, financial or trading position or prospects of any member of the Wider Meggitt Group or of the Wider Parker Group,

All Authorisations which are necessary in any relevant jurisdiction for or in respect of the Scheme or Acquisition or the acquisition of any shares or other securities in, or control or management of, Meggitt or any other member of the Wider Meggitt Group by any member of the Wider Parker Group or the carrying on by any member of the Wider Meggitt Group of its business having been obtained from all appropriate Third Parties or from any persons or bodies with whom any member of the Wider Meggitt Group has entered into contractual arrangements in each case where the absence of such Authorisation would have a material adverse effect on the Meggitt Group taken as a whole and all such Authorisations remaining in full force and effect and there being no notice or intimation of any intention to revoke, suspend, restrict, modify or not to renew any of the same.

Except as Disclosed, there being no provision of any arrangement, agreement, licence, permit, franchise or other instrument to which any member of the Wider Meggitt Group is a party, or by or to which any such member or any of its assets is or are or may be bound, entitled or subject, which, in each case as a consequence of the Scheme or Acquisition or the acquisition or proposed acquisition of any shares or other securities in, or control of, Meggitt or any other member of the Wider Meggitt Group by any member of the Wider Parker Group or otherwise, would or would reasonably be expected to result in, (in any case to an extent which is or would be material and adverse in the context of the Wider Meggitt Group taken as a whole):

any monies borrowed by or any other indebtedness or liabilities (actual or contingent) of, or any grant available to, any such member of the Wider Meggitt Group being or becoming repayable or capable of being declared repayable immediately or prior to its stated maturity date or repayment date or the ability of any such member of the Wider Meggitt Group to borrow monies or incur any indebtedness being withdrawn or inhibited or becoming capable of being withdrawn or inhibited;

other than in the ordinary course of business, the creation or enforcement of any mortgage, charge or other security interest over the whole or any part of the business, property, assets or interests of any such member of the Wider Meggitt Group;

any such arrangement, agreement, licence, permit, franchise or instrument, or the rights, liabilities, obligations or interests of any such member of the Wider Meggitt Group thereunder, being terminated or adversely modified or affected or any adverse action being taken or any obligation or liability arising thereunder;

any asset or interest of any such member of the Wider Meggitt Group being or falling to be disposed of or charged or ceasing to be available to any such member of the Wider Meggitt Group or any right arising under which any such asset or interest could be required to be disposed of or could cease to be available to any such member of the Wider Meggitt Group otherwise than in the ordinary course of business;

any such member of the Wider Meggitt Group ceasing to be able to carry on business under any name under which it presently does so;

the creation of material liabilities (actual or contingent) by any such member of the Wider Meggitt Group other than trade creditors or other liabilities incurred in the ordinary course of business;

the rights, liabilities, obligations or interests of any such member of the Wider Meggitt Group under any such arrangement, agreement, licence, permit, franchise or other instrument or the interests or business of any such member in or with any other person, firm, company or body (or any arrangement or arrangements relating to any such interests or business) being terminated or adversely modified or adversely affected; or

the financial or trading position or the value of any member of the Wider Meggitt Group being prejudiced or adversely affected, and no event having occurred which, under any provision of any such arrangement, agreement, licence, permit or other instrument, would reasonably be expected to result in any of the events or circumstances which are referred to in paragraphs (a) to (h) of this Condition 21 occurring, in any case to an extent which is or would be material and adverse in the context of the Meggitt Group taken as a whole.

Since 31 December 2020 and except as Disclosed, no member of the Wider Meggitt Group having:

issued or agreed to issue, or authorised the issue of, additional shares of any class, or securities convertible into or exchangeable for, or rights, warrants or options to subscribe for or acquire, any such shares or convertible securities or transferred or sold any shares out of treasury, in each case other than as between Meggitt and wholly-owned subsidiaries of Meggitt and/or on the exercise of options or vesting of awards granted in the ordinary course under or in connection with the Meggitt Share Schemes;

purchased or redeemed or repaid any of its own shares or other securities or reduced or made any other change to any part of its share capital, in each case to an extent which (other than in the case of Meggitt) is material in the context of the Meggitt Group taken as a whole;

recommended, declared, paid or made any dividend or other distribution whether payable in cash or otherwise or made any bonus issue (other than to Meggitt or a wholly-owned subsidiary of Meggitt);

save for intra-Meggitt Group transactions, made or authorised any change in its loan capital (other than in connection with ordinary course financing arrangements) in any case to an extent which is material and adverse in the context of the Meggitt Group taken as a whole;

other than pursuant to the Acquisition (and except for any transactions in the ordinary course of business or between Meggitt and its wholly-owned subsidiaries or between such wholly-owned subsidiaries) merged with, demerged or acquired any body corporate, partnership or business or acquired or disposed of or transferred, mortgaged, charged or created any security interest over any assets or any right, title or interest in any assets (including shares in any undertaking) or authorised the same (in each case to an extent which is material in the context of the Meggitt Group taken as a whole);

except in the ordinary course of business or except as between Meggitt and its wholly-owned subsidiaries or between such wholly-owned subsidiaries, issued or authorised the issue of, or made any change in or to, any debentures or incurred or increased any indebtedness or liability (actual or contingent) which in any case is material and adverse in the context of the Meggitt Group taken as a whole;

entered into, varied, or authorised any material agreement, transaction, arrangement or commitment (whether in respect of capital expenditure or otherwise) which:

is of a long term, onerous or unusual nature or magnitude or which would or would be reasonably expected to involve an obligation of such nature or magnitude (save in the ordinary course of business); or

would or would reasonably be likely to restrict the business of any member of the Wider Meggitt Group other than to a nature and extent which is normal in the context of the business concerned,

entered into or materially varied the terms of, any contract, agreement or arrangement with any of the directors or senior executives of any member of the Wider Meggitt Group which is material and adverse in the context of the Wider Meggitt Group taken as a whole;

(other than in respect of a member which is dormant or which is solvent at the relevant time) taken any corporate action or had any legal proceedings instituted or threatened against it, or petition presented or order made, for its winding-up (voluntarily or otherwise), dissolution or reorganisation or for the appointment of a receiver, administrator, administrative receiver, trustee or similar officer of all or any material part of its assets and revenues or any analogous proceedings in any jurisdiction or appointed any analogous person in any jurisdiction which in any case is material in the context of the Wider Meggitt Group taken as a whole;

been unable, or admitted in writing that it is unable, to pay its debts or having stopped or suspended (or threatened to stop or suspend) payment of its debts generally or ceased or threatened to cease carrying on all or a substantial part of its business in any case with a material adverse effect on the Wider Meggitt Group taken as a whole;

other than claims between Meggitt and its wholly-owned subsidiaries or between such wholly-owned subsidiaries, waived or compromised any claim, otherwise than in the ordinary course of business, which is material in the context of the Wider Meggitt Group taken as a whole;

other than in connection with the Scheme, made any alteration to its memorandum or articles of association which is material in the context of the Acquisition;

(except in relation to changes made or agreed as a result of, or arising from, applicable law or changes to applicable law) made or agreed or consented to:

any material change:

to the terms of the trust deeds constituting the pension scheme(s) established for its directors, employees or their dependants; or

the contributions payable to any such scheme(s) or to the benefits which accrue or to the pensions which are payable thereunder; or

the basis on which qualification for, or accrual or entitlement to such benefits or pensions are calculated or determined; or

the basis upon which the liabilities (including pensions) or such pension schemes are funded, valued or made; or

any non-ordinary course change to the trustees of the pension scheme(s) including the appointment of a trust corporation;

(other than pursuant to the directors’ remuneration policy approved by Meggitt Shareholders at the annual general meeting of Meggitt held on 29 April 2021) proposed, agreed to provide or modified the terms of any share option scheme, incentive scheme or other benefit relating to the employment or termination of employment of any person employed by the Wider Meggitt Group in a manner which is material in the context of the Meggitt Group taken as a whole, other than in accordance with the terms of the Acquisition or as agreed by the Panel or Parker; or

entered into any agreement, commitment or arrangement or passed any resolution or made any offer (which remains open for acceptance) or proposed or announced any intention with respect to any of the transactions, matters or events referred to in this Condition 22.

Since 31 December 2020 and except as Disclosed:

there having been no adverse change or deterioration in the business, assets, financial or trading positions or profit or prospects of any member of the Wider Meggitt Group which in any case is material and adverse in the context of the Meggitt Group taken as a whole;

no contingent or other liability of any member of the Wider Meggitt Group having arisen or become apparent or increased other than in the ordinary course of business which in any case is material and adverse in the context of the Wider Meggitt Group taken as a whole;

(other than as a result of or in connection with the Acquisition) no litigation, arbitration proceedings, prosecution or other legal proceedings to which any member of the Wider Meggitt Group is or may become a party (whether as plaintiff, defendant or otherwise) having been threatened in writing, announced, implemented or instituted by or against or remaining outstanding against or in respect of any member of the Wider Meggitt Group which in any case is or would reasonably be expected to have a material adverse effect in the context of the Wider Meggitt Group taken as a whole;

(other than as a result of or in connection with the Acquisition) no enquiry or investigation by, or complaint or reference to, any Third Party having been threatened in writing, announced, implemented, instituted by or against or remaining outstanding against or in respect of any member of the Wider Meggitt Group which in any case would reasonably be expected to have an adverse effect that is material in the context of the Meggitt Group taken as a whole;

on or after the date of this announcement, and other than with the consent of Parker, no action having been taken or proposed by any member of the Wider Meggitt Group, or having been approved by Meggitt Shareholders, which requires or would require the approval of Meggitt Shareholders in general meeting in accordance with, or as contemplated by, Rule 21.1 of the Code; or

no member of the Wider Meggitt Group having conducted its business in breach of any applicable laws and regulations which in any case is material in the context of the Meggitt Group taken as a whole.

Except as Disclosed, Parker not having discovered:

that any financial or business or other information concerning the Wider Meggitt Group disclosed at any time by or on behalf of any member of the Wider Meggitt Group, whether publicly, to any member of the Wider Parker Group or otherwise, is materially misleading or contains any material misrepresentation of fact or omits to state a fact necessary to make any information contained therein not misleading and which was not subsequently corrected before 2 August 2021 by disclosure either publicly or otherwise to Parker, in each case to an extent which is material in the context of the Wider Meggitt Group taken as a whole;

that any member of the Wider Meggitt Group is subject to any liability (actual or contingent) which in any case is material in the context of the Wider Meggitt Group taken as a whole;

any information which affects the import of any information disclosed at any time by or on behalf of any member of the Wider Meggitt Group and which is material in the context of the Wider Meggitt Group taken as a whole;

that any past or present member of the Wider Meggitt Group has not complied with any applicable legislation or regulations of any jurisdiction with regard to the use, treatment, handling, storage, transport, release, disposal, discharge, spillage, leak or emission of any waste or hazardous substance or any substance likely to impair the environment or harm human health, or otherwise relating to environmental matters or the health and safety of any human, or that there has otherwise been any such use, treatment, handling, storage, transport, release, disposal, discharge, spillage, leak or emission (whether or not this

that there is, or is reasonably likely to be, any material liability, whether actual or contingent, to make good, repair, reinstate or clean up any property now or previously owned, occupied or made use of by any past or present member of the Wider Meggitt Group or any other property or any controlled waters under any environmental legislation, regulation, notice, circular, order or other lawful requirement of any relevant authority or third party or otherwise which in any case is material in the context of the Meggitt Group taken as a whole.

Parker not having discovered other than Disclosed that:

(i) any past or present member, director, officer or employee of the Wider Meggitt Group is or has at any time engaged in any activity, practice or conduct which would constitute an offence under the Bribery Act 2010, the US Foreign Corrupt Practices Act of 1977 or any other applicable anti-corruption legislation or (ii) any person that performs or has performed services for or on behalf of the Wider Meggitt Group is or has at any time engaged in any activity, practice or conduct in connection with the performance of such services which would constitute an offence under the Bribery Act 2010, the US Foreign Corrupt Practices Act of 1977 or any other applicable anti-corruption legislation; or

to an extent which is or would reasonably be expected to be material in the context of the Wider Meggitt group taken as a whole, any asset of any member of the Wider Meggitt Group constitutes criminal property as defined by section 340(3) of the Proceeds of Crime Act 2002 (but disregarding paragraph (b) of that definition); or

any past or present member, director, officer or employee of the Meggitt Group, or any other person for whom any such person may be liable or responsible, has engaged in any business with, made any investments in, made any funds or assets available to or received any funds or assets from: (i) any government, entity or individual in respect of which US or European Union persons, or persons operating in those territories, are prohibited from engaging in activities or doing business, or from receiving or making available funds or economic resources, by US or European Union laws or regulations, including the economic sanctions administered by the United States Office of Foreign Assets Control, or HM Treasury & Customs; or (ii) any government, entity or individual targeted by any of the economic sanctions of the United Nations, the United States, the European Union or any of its member states, which in each case would cause any member of Meggitt Group to be in breach of any economic sanctions laws applicable to the Meggitt Group; or

a member of the Meggitt Group has engaged in any transaction which would cause the Meggitt Group to be in breach of any law or regulation prior to completion of the Acquisition, including the economic sanctions of the United States Office of Foreign Assets Control, or HM Treasury & Customs, or any government, entity or individual targeted by any of the economic sanctions of the United Nations, the United States, the European Union or any of its member states.

“Third Party” means any central bank, government, government department or governmental, quasi-governmental, supranational, statutory, regulatory, environmental or investigative body, authority, court, trade agency, association, institution or professional or environmental body in any relevant jurisdiction, including, for the avoidance of doubt, the Panel;

a Third Party shall be regarded as having “intervened” if it has decided to take, institute, implement or threaten any action, proceeding, suit, investigation, enquiry or reference or made, proposed or enacted any statute, regulation, decision or order or taken any measures or other steps or required any action to be taken or information to be provided or otherwise having done anything and “intervene” shall be construed accordingly; and

“Authorisations” means authorisations, orders, grants, recognitions, determinations, certificates, confirmations, consents, licenses, clearances, provisions and approvals, in each case, of a Third Party.

Waiver and invocation of the Conditions

Subject to the requirements of the Panel, Parker reserves the right in its sole discretion to waive in whole or in part, all or any of the Conditions set out in Part A above, except Conditions 2(a)(i), 2(b)(i) and 2(c)(i) which cannot be waived. If any of Conditions 2(a)(ii), 2(b)(ii) or 2(c)(ii) is not satisfied by the relevant deadline specified in the relevant Condition, Parker shall make an announcement by 8.00 a.m. on the business day following such deadline confirming whether it has invoked the relevant Condition, waived the relevant deadlines or agreed with Meggitt to extend the relevant deadline.

Parker shall be under no obligation to waive (if capable of waiver), to determine to be or remain satisfied or to treat as fulfilled any of Conditions set out in paragraphs 3 to 25 in Part A above by a date earlier than the latest date for the fulfilment of that Condition, notwithstanding that the other Conditions may at an earlier date have been waived or fulfilled and that there are, at such earlier date, no circumstances indicating that any Condition may not be capable of fulfilment.

Under Rule 13.5(a) of the Code and subject to paragraph 4, Parker may only invoke a Condition so as to cause the Acquisition not to proceed, to lapse or to be withdrawn with the consent of the Panel. The Panel will normally only give its consent if the circumstances which give rise to the right to invoke the Condition are of material significance to Parker in the context of the Acquisition. This will be judged by reference to the facts of each case at the time that the relevant circumstances arise.

Conditions 2(a)(i), 2(b)(i) and 2(c)(i) of Part A of this Appendix 1 (and any Takeover Offer acceptance condition adopted on the basis specified in Part C of this Appendix 1) are not subject to Rule 13.5(a) of the Code.

Any Condition that is subject to Rule 13.5(a) of the Code may be waived by Parker.

The Scheme will not become effective unless the Conditions have been fulfilled or (to the extent capable of waiver) waived or, where appropriate, have been determined by Parker to be or remain satisfied by no later than the Long-Stop Date.

If the Panel requires Parker to make an offer or offers for any Meggitt Shares under the provisions of Rule 9 of the Code, Parker may make such alterations to the Conditions as are necessary to comply with the provisions of that Rule.

Each of the Conditions shall be regarded as a separate Condition and shall not be limited by reference to any other Condition.

Implementation by way of Takeover Offer

Certain further terms of the Acquisition

Meggitt Shares will be acquired by Parker fully paid and free from all liens, equitable interests, charges, encumbrances, rights of pre-emption and other third party rights of any nature whatsoever and together with all rights attaching to them as at the Effective Date, including the right to receive and retain, in full, all dividends and other distributions (if any) declared, made, paid or payable, or any other return of capital or value made, on or after Effective Date.

If, on or after the date of this announcement, any dividend and/or other distribution and/or other return of capital or value is declared, made or paid or becomes payable in respect of the Meggitt Shares, Parker reserves the right (without prejudice to any right of Parker, with the consent of the Panel, to invoke Condition 22(c) in Part A of this Appendix 1 to reduce the consideration payable under the terms of the Acquisition for the Meggitt Shares by an amount up to the amount of such dividend and/or distribution

The Acquisition will be subject, inter alia, to the Conditions and certain further terms which are set out in this Appendix 1 and to the full terms and conditions which will be set out in the Scheme Document and such further terms as may be required to comply with the Listing Rules and the provisions of the Code.

This announcement and any rights or liabilities arising hereunder are, and the Acquisition, the Scheme, and any proxies will be, governed by English law and will be subject to the jurisdiction of the courts of England and Wales. The Scheme will be subject to the applicable requirements of the Code, the Panel, the London Stock Exchange, the FCA and the Listing Rules.

The financial information on Parker is extracted (without material adjustment) from Parker’s Annual Report and Accounts for the year ended 30 June 2020, from Parker’s results for the three months ended 31 March 2021 and from Parker’s internal records.

The financial information on Meggitt is extracted (without material adjustment) from Meggitt’s Annual Report and Accounts for the year ended 31 December 2020 and from the announcement of Meggitt’s interim results for the six months ended 30 June 2021.

The value attributed to the existing issued and to be issued ordinary share capital of Meggitt is based upon the 781,381,883 Meggitt Shares in issue on 30 July 2021 (except for the 9,859 Meggitt Shares held as treasury shares on such date) and the 8,957,944 Meggitt Shares which are the subject of share-settled options and awards outstanding on 30 July 2021 and those expected to be granted prior to 31 December 2021, offset by 1,782,457 Meggitt Shares held in Meggitt’s employee benefit trust.

The implied US GAAP Enterprise Value for Meggitt of £7.1 billion incorporates the value attributed to the existing issued and to be issued ordinary share capital of Meggitt set out under paragraph 3, plus total bank and other borrowings of £798.0 million, plus retirement benefit obligations relating to Meggitt’s pension and healthcare schemes of £201.1 million (adjusted for an estimated effective tax rate of 22.0 per cent., resulting in estimated tax-adjusted retirement benefit obligations relating to Meggitt’s pension and healthcare schemes of £156.9 million), less cash and cash equivalents of £139.3 million, less investments of £19.8 million.

The implied IFRS Enterprise Value for Meggitt of £7.3 billion incorporates the US GAAP Enterprise Value set out under paragraph 4, plus total lease liabilities of £163.9 million.

Meggitt’s US GAAP EBITDA of £240.6 million for the financial year ended 31 December 2020 is calculated as Meggitt’s Underlying EBITDA of £296.9 million, less capitalised R&D development costs of £41.4 million, less capitalised programme participation costs of £1.6 million, less depreciation charges for right-of-use assets in respect of Meggitt’s lease liabilities of £16.0 million, plus administrative expenses borne directly by Meggitt in relation to Meggitt’s defined benefit pension schemes of £2.6 million, plus past service costs of £0.1 million.

The implied multiple of Meggitt’s US GAAP Enterprise Value to Meggitt’s US GAAP EBITDA of 16.3x is calculated with reference to the US GAAP Enterprise Value set out under paragraph 4, divided by US GAAP EBITDA of £436.8 million, calculated as Meggitt’s Underlying EBITDA of £507.3 million, less capitalised R&D development costs of £54.7 million, less capitalised programme participation costs of £2.0 million, less depreciation charges for right-of-use assets in respect of Meggitt’s lease liabilities of £16.5 million, plus administrative expenses borne directly by Meggitt in relation to Meggitt’s defined benefit pension schemes of £2.7 million.

The implied multiple of Meggitt’s US GAAP Enterprise Value to Meggitt’s US GAAP EBITDA (including estimated pre-tax synergies of £216 million) of 10.9x is calculated with reference to the US GAAP Enterprise Value set out under paragraph 5, divided by US GAAP EBITDA of £652.6 million, calculated as Meggitt’s Underlying EBITDA of £507.3 million, less capitalised R&D development costs of £54.7 million, less capitalised programme participation costs of £2.0 million, less depreciation charges for right-of-use assets in respect of Meggitt’s lease liabilities of £16.5 million, plus administrative expenses borne directly by Meggitt in relation to Meggitt’s defined benefit pension schemes of £2.7 million, plus estimated pre-tax synergies of £215.8 million (based on estimated pre-tax synergies of $300.0 million).

The implied multiple of Meggitt’s IFRS Enterprise Value to Meggitt’s IFRS EBITDA of 24.5x is calculated with reference to the IFRS Enterprise Value set out under paragraph 5, divided by IFRS EBITDA of £296.9 million.

ROIC is calculated as Parker’s expected Net Operating Profit After Tax attributable to Meggitt, including the after-tax impact of expected synergies and costs to achieve, divided by the US GAAP Enterprise Value set out under paragraph 4.

Unless otherwise stated, all market prices for Meggitt Shares are derived from information published by the London Stock Exchange and represent Closing Prices on the relevant date(s).

The conversion of all figures originally reported in Pounds Sterling into U.S. Dollars has been calculated at an exchange rate of 1.3900, derived from Bloomberg on 30 July 2021.

The conversion of all figures originally reported in U.S. Dollars into Pounds Sterling has been calculated at an exchange rate of 0.7194, derived from Bloomberg on 30 July 2021.

The referenced volume weighted average prices are derived from Bloomberg and refer to trading on the London Stock Exchange only.

Certain figures in this announcement have been subject to rounding adjustments.

Sir Nigel Rudd

Colin Day

Tony Wood

Guy Berruyer

Louisa Burdett

Alison Goligher

Caroline Silver

Guy Hachey

Nancy Gioia

Total

Guy Berruyer’s holding of a further 25,000 Meggitt Shares beyond those Meggitt Shares set against his name above; and

Nancy Gioia’s holding of 3,188 Meggitt Shares,

if the Scheme Document is not despatched to Meggitt Shareholders within 28 days (or such longer period as may be permitted by the Panel) after the date of this announcement;

Parker announces that it does not intend to make or proceed with the Acquisition and no new, revised or replacement Takeover Offer or Scheme is announced in accordance with Rule 2.7 of the Code at the same time;

if the Takeover Offer or Scheme lapses or is withdrawn and no new, revised or replacement Takeover Offer or Scheme has been announced, in accordance with Rule 2.7 of the Code, in its place or is announced, in accordance with Rule 2.7 of the Code, at the same time; or

any competing offer for the entire issued and to be issue share capital of Meggitt becomes or is declared wholly unconditional or, if proceeding by way of a scheme of arrangement, becomes effective.

Meggitt Shares:

(a)   in issue as at the date of the Scheme Document;

(b)   (if any) issued after the date of the Scheme Document and prior to the Scheme Voting Record Time; and

(c)   (if any) issued on or after the Scheme Voting Record Time and before the Scheme Record Time, either on terms that the original or any subsequent holders thereof shall be bound by the Scheme or in respect of which the holders thereof shall have agreed in writing to be bound by the Scheme,

in each case, and where the context requires, which remain in issue at the Scheme Record Time but excluding the Excluded Shares

As at 30 July 2021, the following options and awards were outstanding under the Meggitt Share Schemes:

Form of award(s)

LTIP

SIRP

Sharesave

SIP

EPP

ESOS

Meggitt confirms that no additional options or awards have been granted since 29 April 2021.

Parker acknowledges that, before the Effective Date, subject to the consent of the Panel where applicable, Meggitt reserves the right to operate the Meggitt Share Schemes in accordance with the rules of the relevant plan, Meggitt’s normal practice and, where applicable, the Meggitt Remuneration Policy. For the avoidance of doubt, the operation of the Meggitt Share Schemes includes (without limitation): granting awards, determining the extent to which awards vest, and satisfying the vesting of awards and the exercise of options.

Parker and Meggitt acknowledge that:

The Scheme Record Time (as defined in the Announcement) shall take place after the Court Sanction Date, to allow those participants in Meggitt Share Schemes who acquire Meggitt Shares on or before the Court Sanction Date to have those Meggitt Shares acquired by Parker and dealt with through the Scheme.

Meggitt may amend the rules of the Meggitt Share Schemes if the Meggitt Directors (or the relevant committee) are of the opinion that such amendments are necessary to implement the Scheme or the treatment set out in this Agreement, to facilitate the administration of the Meggitt Share Schemes or to obtain or maintain favourable tax treatment for participants or for Meggitt.

Parker and Meggitt intend to jointly write to participants in the Meggitt Share Schemes on, or as soon as practicable after, the posting of the Scheme Document to inform them of the impact of the Scheme on their outstanding options and awards under the Meggitt Share Schemes (“Awards”), the extent to which their Awards will vest and become exercisable as a result of the Scheme and any actions they may need to take in connection with their Awards as a result of the Scheme.

Meggitt Shareholder approval will be sought for an amendment to the articles of association of Meggitt so that any Meggitt Shares issued or transferred on or after the Scheme Record Time will be automatically transferred to, or to the order of, Parker in exchange for the provision by Parker of the same consideration payable per Meggitt Share under the Scheme (or such other consideration as may be agreed between Parker and Meggitt and disclosed in the Scheme Document).

Parker acknowledges and agrees that if, for any reason, Meggitt Shares cannot be issued or transferred when options are exercised or awards vest under any of the Meggitt Share Schemes (or if the Meggitt Remuneration Committee considers that it is inconvenient or costly to do so), such Awards may be settled by Meggitt in cash.

Parker acknowledges that Meggitt may make any submission to the Panel which it deems necessary to implement the arrangements referred to in this Schedule 2, having consulted with Parker before making such submission, and Parker agrees to co-operate as soon as possible and in good faith in the making of any such submission.

Parker confirms that none of the Awards will be exchanged for, converted into or replaced by any options or awards issued or granted by Parker or any member of the Parker Group in respect of the shares in Parker or any member of the Parker Group.

Parker acknowledges that any outstanding Awards under the LTIP that are unvested on the Court Sanction Date will vest and become exercisable on the Court Sanction Date in accordance with the rules of the LTIP.

Parker acknowledges that the extent to which unvested Awards outstanding under the LTIP vest in connection with the Acquisition is to be determined solely by the Meggitt Remuneration Committee subject to its discretions under the rules of the LTIP and the Meggitt Remuneration Policy to: (A) assess the achievement of performance conditions; and (B) apply or disapply time pro-rating.

Parker acknowledges that:

it is the current intention of the Meggitt Remuneration Committee to determine that all outstanding Awards granted under the LTIP shall be time pro-rated by reference to the period of time between the Grant Date (as defined in the rules of the LTIP) and the Court Sanction Date relative to the period of three years; and

the satisfaction of performance conditions will be assessed by the Meggitt Remuneration Committee on, or shortly prior to, the Court Sanction Date.

Parker acknowledges that all options granted under the LTIP that have vested before or on the Court Sanction Date will be exercisable until the date one month after the Court Sanction Date (unless they lapse earlier under the rules of the LTIP).

Parker agrees that it will, conditional on completion of the Acquisition, implement a new transitional cash plan and will grant under such plan to all individuals who:

are Meggitt Employees on the Effective Date (or who have left Meggitt employment before the Effective Date due to a Qualifying Termination under Part 2, paragraph 9(f)(ii) below); and

held unvested Awards granted under the LTIP in 2019, 2020 and/or 2021 (the “2019, 2020 and/or 2021 LTIP Awards”) immediately prior to the Court Sanction Date, and/or where applicable (due to the timetable of the Acquisition) whose 2019 LTIP awards had vested in accordance with the rules of the LTIP before the Court Sanction date,

Parker agrees that the Transition Awards granted to each Relevant LTIP Participant under paragraph 12 will vest:

in the case of Transition Awards in respect of 2019 LTIP Awards, on the Effective Date; and

in the case of Transition Awards in respect of 2020 and/or 2021 LTIP Awards, on the Normal Vesting Date (as defined in the LTIP) of the relevant 2020 and/or 2021 LTIP Award,

Parker and Meggitt acknowledge that, after the date of this Agreement, they intend to determine, for each jurisdiction in which a Relevant LTIP Participant is tax-resident, the most tax-efficient approach to structuring the Transition Awards for Relevant LTIP Participants in that jurisdiction. Parker and Meggitt further acknowledge that it may be necessary to scale back the amount payable to a Relevant LTIP Participant under a Transition Award to reduce potential tax inefficiencies in the jurisdiction in which the Relevant LTIP Participant in question is resident.

Parker acknowledges that:

subject to the consent of the Panel, Meggitt currently intends to make further Awards under the LTIP in the ordinary course of business and in accordance with its usual practice for the financial year ending 31 December 2022 (the “2022 LTIP Awards”), if the Acquisition has not completed by the date in 2022 on which Meggitt would usually make Awards under the LTIP; and

the Meggitt Remuneration Committee currently intends to determine that any 2022 LTIP Awards (if granted) vest in connection with the Acquisition subject to both time pro-rating and the assessment of applicable performance conditions by the Meggitt Remuneration Committee; and

the satisfaction of performance conditions in respect of any 2022 LTIP Awards (if granted) will be assessed by the Meggitt Remuneration Committee on, or shortly prior to, the Court Sanction Date.

Parker acknowledges that, in respect of subsisting Awards under the SIRP, the Meggitt Shares subject to such Awards will vest, in full, with no application of time pro-rating on the Court Sanction Date in accordance with the rules of the SIRP and the Meggitt Remuneration Policy (as applicable).

Parker acknowledges that, subject to the consent of the Panel, Meggitt reserves the right to grant further Awards for the financial years ending 31 December 2021 and 31 December 2022 under the SIRP in the ordinary course of business and in accordance with its usual practice.

Parker acknowledges that options granted under the Sharesave which would not otherwise have been exercisable prior to the Court Sanction Date will (in consequence of the Acquisition and in accordance with participants’ contractual rights under the rules of the Sharesave) be exercisable in the six months after the Court Sanction Date and, in many cases, will be exercisable over less than the full number of Meggitt Shares than would otherwise be the case on maturity of the relevant savings contract.

Parker agrees that it will make (or procure payment of) a one-off cash payment to those participants in the Sharesave who exercise their options conditional on the Effective Date or earlier in consequence of the Acquisition of an amount equal to the additional profit which the participants would have received if they had continued making their monthly savings contributions after the Effective Date and exercised their options at the end of the earlier of: (i) six months following the Effective Date; and (ii) the maturity of the relevant savings contract, and had those Meggitt Shares been acquired on the terms of the Scheme, provided that no such cash payment will be made in respect of options granted under the Sharesave after the date of this Agreement.

Parker acknowledges that any such one-off cash payment made or procured by Parker in accordance with paragraph 19 above in relation to options exercised under Sharesave will be subject to deductions for income tax and employee’s social security contributions. Parker therefore agrees that the one-off cash payment in respect of options exercised under the Sharesave will be of such amount as shall, after taking account of the participants’ liability to income tax and employee’s national insurance contributions or social security deductions thereon, provide them with an after-tax amount equal to the amount of gain they would have received had they continued making their monthly savings contributions after the Effective Date and exercised their options (by paying over all savings) at the end of the earlier of: (i) six months following the Effective Date; and (ii) maturity of the relevant savings contract and had those Meggitt Shares been acquired on the terms of the Scheme.

Parker acknowledges that, subject to the consent of the Panel, Meggitt reserves the right to grant additional options under the Sharesave in or around the fourth quarter of 2021 or the first quarter of 2022.

Parker agrees that after the Effective Date Meggitt Employees will be eligible to participate in the Parker Global Employee Stock Purchase Plan in countries where that plan is operated.

Parker acknowledges and agrees that the acquisition of “Partnership Shares” under the SIP may continue until the last reasonably practicable normal purchase date before the Effective Date.

Parker and Meggitt acknowledge and agree that Meggitt Shares held in the SIP trust on behalf of the SIP participants will participate in the Scheme (on the same terms as for other Meggitt Shareholders).

Parker acknowledges that all outstanding options under the EPP have vested and will remain exercisable for a period of one month following the date on which the Meggitt Remuneration Committee notifies participants of the occurrence of the Court Sanction Date, unless the options lapse earlier under the rules of the EPP.

Parker acknowledges that all outstanding Awards under the ESOS have vested and will remain exercisable for a period of one month after the Court Sanction Date, unless the Awards lapse earlier under the rules of the ESOS.

As at 30 July 2021, the Meggitt Employees’ Share Ownership Plan Trust (the “Trust”) held approximately 1,782,457 Meggitt Shares and £632,110.74 in cash (the “Cash Amount”).

Parker and Meggitt acknowledge that the expectation is that the trustee of the Trust will be requested to use the Meggitt Shares that it holds to satisfy outstanding Awards as far as possible. To the extent there are insufficient Meggitt Shares in the Trust to satisfy outstanding Awards, Meggitt intends to request the trustee of the Trust to use the Cash Amount to the extent necessary to subscribe for new Meggitt Shares or purchase existing Meggitt Shares to satisfy outstanding Awards.

Parker acknowledges and agrees that Meggitt intends to carry out annual (or other periodic) pay reviews, appraisals and promotion rounds in the ordinary course of business, including a Meggitt Group salary increase of 2.5% currently expected to take effect in October 2021 and an ordinary course pay review in April 2022.

Parker agrees that it shall, or shall cause the relevant employing entity in the Meggitt Group or the Parker Group to, at a minimum, for the twelve month period immediately following the Effective Date:

in respect of each person who was a Meggitt Employee immediately prior to the Effective Date and who remains in employment within the Meggitt Group or the Parker Group, maintain at least the same base salary or wage rate, cash incentive compensation opportunities and equity incentive compensation opportunities (or a cash incentive with the same grant date fair value) as were provided to each such Meggitt Employee immediately prior to the Effective Date; and

provide a benefits and allowance package (including pension benefits), which, taken as a whole, is at least substantially comparable in the aggregate to the existing benefits and allowances available to such Meggitt Employee immediately prior to the Effective Date.

Parker acknowledges that:

Meggitt operates annual bonus arrangements which are conditional on financial and individual performance;

bonus determinations for any Meggitt financial year completed before the Effective Date will be undertaken by Meggitt and determined and, if applicable, paid by Meggitt in accordance with the Meggitt Remuneration Policy (where applicable) and consistent with normal Meggitt practice with payment being made on the normal bonus payment date;

bonus determinations for the Meggitt financial year ending on 31 December 2021 for certain Meggitt Employees (excluding the executive directors and any Meggitt Employee who is entitled to receive a payment under Part 1, paragraph 12 above) will recognise and reward such Meggitt Employee’s commitments during the COVID-19 pandemic and the size of Meggitt’s annual corporate bonus pool for that financial year will be increased accordingly;

for the Meggitt financial year in which the Effective Date occurs:

bonus determinations for the period from the start of the Meggitt financial year up to the Effective Date (or up to the date of a Qualifying Termination, if earlier, where such Qualifying Termination falls under Part 2, paragraph 9(f)(ii) below) will be undertaken by Meggitt on or around the Court Sanction Date on a pro-rated basis; and