e10vk
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended June 30, 2010, or
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number 1-2299
APPLIED INDUSTRIAL TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
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| Ohio
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34-0117420 |
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.) |
1 Applied Plaza, Cleveland, Ohio 44115
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (216) 426-4000.
Securities registered pursuant to Section 12(b) of the Act:
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| Title of each class
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Name of each exchange on which registered |
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| Common Stock, without par value
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New York Stock Exchange |
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of
the Securities Act. þ Yes o No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934. o Yes þ No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
þ Yes o No
Indicate by check mark whether the registrant has submitted electronically and posted on its
corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant
to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for
such shorter period that the registrant was required to submit and post such files). o Yes o
No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is
not contained herein, and will not be contained, to the best of registrant’s knowledge, in
definitive proxy or information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated
filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
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| Large accelerated filer þ
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Accelerated filer o
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Non-accelerated filer o
(Do not check if a smaller reporting company)
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Smaller reporting company o |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act). o Yes þ No
State the aggregate market value of the voting and non-voting common equity held by non-affiliates
computed by reference to the price at which the common equity was last sold, or the average bid and
asked price of such common equity, as of the last business day of the registrant’s most recently
completed second fiscal quarter (December 31, 2009): $906,576,000.
Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as
of the latest practicable date.
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| Class
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Outstanding at August 6, 2010 |
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| Common Stock, without par value
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42,383,376 |
DOCUMENTS INCORPORATED BY REFERENCE
Listed hereunder are the documents, portions of which are incorporated by reference, and the Parts
of this Form 10-K into which such portions are incorporated:
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(1) |
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Applied Industrial Technologies, Inc. annual report to shareholders for the
fiscal year ended June 30, 2010, portions of which are incorporated by reference into
Parts I, II and IV of this Form 10-K, and |
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Applied’s proxy statement for the annual meeting of shareholders to be held October 26, 2010,
portions of which are incorporated by reference into Parts II, III, and IV of this Form 10-K. |
CAUTIONARY STATEMENT
UNDER PRIVATE SECURITIES LITIGATION REFORM ACT
This report, including the documents incorporated by reference, contains statements that are
forward-looking, based on management’s current expectations about the future. Forward-looking
statements are often identified by qualifiers such as “guidance,” “expect,” “believe,” “plan,”
“intend,” “will,” “should,” “could,” “would,” “anticipate,” “estimate,” “forecast,” “may,” and
derivative or similar words or expressions. Similarly, descriptions of our objectives, strategies,
plans, or goals are also forward-looking statements. These statements may discuss, among other
things, expected growth, future sales, future cash flows, future capital expenditures, future
performance, and the anticipation and expectations of Applied and its management as to future
occurrences and trends. Applied intends that the forward-looking statements be subject to the safe
harbors established in the Private Securities Litigation Reform Act of 1995 and by the Securities
and Exchange Commission in its rules, regulations, and releases.
Readers are cautioned not to place undue reliance on any forward-looking statements. All
forward-looking statements are based on current expectations regarding important risk factors, many
of which are outside Applied’s control. Accordingly, actual results may differ materially from
those expressed in the forward-looking statements. The making of those statements should not be
regarded as a representation by Applied or any other person that the results expressed in the
statements will be achieved. In addition, Applied assumes no obligation publicly to update or
revise any forward-looking statements, whether because of new information or events, or otherwise,
except as may be required by law.
Applied believes its primary risk factors include, but are not limited to, those identified in
“Risk Factors” at Part I, Item 1A, and in “Narrative Description of Business,” at Part I, Item 1,
section (c), in this annual report on Form 10-K, as well as in “Management’s Discussion and
Analysis” in Applied’s 2010 annual report to shareholders. PLEASE READ THOSE DISCLOSURES
CAREFULLY.
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PART I.
ITEM 1. BUSINESS.
In this annual report on Form 10-K, “Applied” refers to Applied Industrial Technologies, Inc.,
an Ohio corporation. References to “we,” “us,” “our,” and “the company” refer to Applied and its
subsidiaries.
The company is one of North America’s leading industrial distributors, supplying customers in
a wide range of industries with products including bearings, power transmission components, fluid
power components and systems, industrial rubber products, linear motion components, tools, safety
products, and general maintenance and mill supply products. We also provide customized fluid
power, mechanical, and rubber shop services, as well as storeroom management services and
maintenance training.
Customers use our products primarily to maintain and to repair their machinery and equipment.
We also sell for original equipment manufacturing uses. We offer technical application support for
our products and provide solutions to help customers minimize their production downtime, improve
machine performance, and reduce overall procurement and maintenance costs. Although we do not
generally manufacture the products we sell, we do assemble and repair various products and systems.
Applied and its predecessor companies have engaged in this business since 1923, when Joseph M.
Bruening formed The Ohio Ball Bearing Company. Applied reincorporated in Ohio in 1988.
Our Internet address is www.applied.com. The following documents are available free of charge
via hyperlink from the investor relations area of our website:
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Applied’s annual report on Form 10-K, quarterly reports on Form 10-Q, current
reports on Form 8-K, and amendments to those reports, together with Section 16 insider
beneficial stock ownership reports, all as soon as reasonably practicable after they
are electronically filed with, or furnished to, the Securities and Exchange Commission |
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Applied’s Code of Business Ethics |
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Applied’s Board of Directors Governance Principles and Practices |
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Applied’s Director Independence Standards |
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Charters for the Audit, Corporate Governance, and Executive Organization &
Compensation Committees of Applied’s Board of Directors |
The information available via hyperlink from our website is not incorporated into this annual
report on Form 10-K.
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(a) |
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General Development of Business. |
Information regarding developments in our business can be found in Applied’s 2010 annual
report to shareholders under the caption “Management’s Discussion and Analysis” on pages 5 — 11.
This information is incorporated here by reference.
Subsequent to fiscal 2010 year-end, Applied acquired two businesses listed below for an
aggregate cash purchase price of approximately $32 million. These businesses, except as otherwise
noted, are not reflected in the information included in, or incorporated by reference into, this
annual report on Form 10-K.
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On July 31, 2010, Applied acquired UZ Engineered Products, a distributor of
fasteners, fittings, lubricants, electrical components, welding supplies, cutting
tools, and other specialty maintenance items to government and industrial customers in
the United States and Canada. The business operates from one location in Cleveland,
Ohio. |
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On August 3, 2010, Applied acquired SCS Supply Group, a distributor of bearings,
mechanical and electrical power transmission components, fluid power components, and
industrial supplies, serving a diverse mix of customers from eight locations in
Ontario, Canada. |
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Financial Information about Segments. |
We have identified two reportable segments, service center-based distribution and fluid power
businesses.
The service center-based distribution segment provides customers with a wide range of
industrial products through a network of service centers stretching across North America. The
fluid power businesses segment consists of specialized regional companies that distribute fluid
power components and operate shops to assemble fluid power systems and perform equipment repair.
The fluid power businesses primarily sell products and services directly to customers rather than
through the service centers. Both segments offer technical support and provide solutions to help
customers minimize their production downtime, improve machine performance, and reduce overall
procurement and maintenance costs.
Segment financial information can be found in the 2010 annual report to shareholders in note
12 to the consolidated financial statements on pages 31 — 32. That information is incorporated
here by reference.
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Narrative Description of Business. |
Overview. Our field operating structure is built on two platforms — service center-based
distribution and fluid power businesses:
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Service Center-Based Distribution. We distribute a wide range of industrial
products through service centers across North America. Customers primarily purchase
our products for scheduled maintenance of their machinery and equipment and for
emergency repairs. In addition, we operate regional fabricated rubber shops, which
modify and repair conveyor belts and make hose assemblies in accordance with customer
requirements, and rubber service field crews, which install and repair belts and rubber
linings at customer locations. The service center-based distribution business accounts
for a substantial majority of our field operations and 81% of our 2010 sales dollars.
The business operates in the United States using the Applied Industrial Technologies
trade name. We also are known as Bearing & Transmission and Groupe GLM in Canada,
Applied México in Mexico, and Rafael Benitez Carrillo in Puerto Rico. |
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Fluid Power Businesses. Our specialized fluid power businesses primarily market
products and services to customers within the businesses’ geographic regions. In the
United States, the businesses also market products and services through our service
center network. In addition to distributing fluid power components, the businesses
assemble fluid power systems and components, perform equipment repair, and offer
technical advice to customers. Customers include firms purchasing for maintenance,
repair, and operational needs, as well as for original equipment manufacturing
applications. Our fluid power businesses include the following: |
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International |
A&H Fluid Technologies
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ESI Power Hydraulics
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Atelier P.V. Hydraulique (Canada) |
Air Draulics Engineering
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Elect-Air
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HyPower (Canada) |
Air-Hydraulic Systems
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Engineered Sales
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Pro-Hydraulique (Canada) |
Applied Engineered Systems
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FluidTech
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Vycmex (Mexico) |
Bay Advanced Technologies
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HydroAir Hughes
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Carolina Fluid Components
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Kent Fluid Power |
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DTS Fluid Power
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Power Systems |
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Dees Fluid Power
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Spencer Fluid Power |
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Products. We are one of North America’s leading distributors of bearings, power transmission
components, fluid power components and systems, industrial rubber products, linear motion
components, tools, safety products, and general maintenance and mill supply products. Fluid power
products include hydraulic, pneumatic, lubrication, and filtration components and systems.
These products are generally supplied to us by manufacturers whom we serve as a non-exclusive
distributor. The suppliers also may provide us product training, as well as sales and marketing
support. Authorizations to represent particular suppliers and product lines may vary by geographic
region, particularly for our fluid power businesses. We believe our supplier relationships are
generally good, and many have existed for decades. The disruption of relationships with certain
suppliers, or the disruption of their operations, could adversely affect our business.
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Our product suppliers generally confine their direct sales activities to large-volume
transactions, mainly with original equipment manufacturers. The suppliers generally do not sell
maintenance and repair products directly to the customer, but instead refer the customer to us or
another distributor. There is no assurance this practice will continue and its discontinuance
could adversely affect our business.
Net sales by product category for the most recent three fiscal years is detailed in the 2010
annual report to shareholders in note 12 to the consolidated financial statements on page 32. That
information is incorporated here by reference.
Services. Our associates advise and assist customers in selecting and applying products, and
in managing inventory. We consider this advice and assistance to be an integral part of our sales
efforts. Beyond mere logistical distribution services, we offer product and process solutions
involving multiple technologies. These solutions help customers minimize production downtime,
improve machine performance, and reduce overall procurement and maintenance costs. By providing
high levels of service, product and industry expertise, and technical support, while at the same
time offering product breadth and competitive pricing, we believe we develop stronger,
longer-lasting, and more profitable customer relationships.
Our service center sales associates include customer sales and service representatives and
account managers, as well as product and industry specialists. Customer sales and service
representatives receive, process, and expedite customer orders, provide product information, and
assist account managers in serving customers. Account managers make on-site calls to current and
potential customers to provide product information, identify customer requirements, make
recommendations, and assist in implementing equipment maintenance and storeroom management
programs, as well as automated dispensing systems. Account managers also measure and document the
value of the cost savings and increased productivity we help generate. Product and industry
specialists assist with applications in their areas of expertise.
We maintain product inventory levels at each service center tailored to the local market.
These inventories consist of standard items as well as other items specific to local customer
demand. Seven distribution centers replenish service center inventories and also may ship products
directly to customers. Having product in stock helps us satisfy customers’ immediate needs.
Timely delivery of products is an integral part of our service, particularly when customers
require products for emergency repairs. Service centers and distribution centers use the most
effective method of transportation available to meet customer needs. These methods include our own
delivery vehicles, dedicated third-party transportation providers, as well as surface and air
common carrier and courier services. Customers can also pick up items at our service centers.
Our information systems enhance our customer service. Customers turn to our website at
www.applied.com to search for products in a comprehensive electronic catalog, research product
attributes, view prices, check inventory levels, place orders, and track order status. We also
transact
with customers through electronic data interchange (EDI) and interface with customers’ technology
platforms and plant maintenance systems.
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In addition to our electronic capabilities, we serve customers with our paper catalog, a
comprehensive resource for nearly 38,000 industrial products.
We supplement the service center product offering with our MaintenancePro® fee-based technical
training seminars. These courses provide customer personnel with information on maintenance,
troubleshooting, component application, and failure analysis in the areas of hydraulics and
pneumatics, lubrication, bearings, and power transmission.
In addition to distributing products, we offer shop services in select geographic areas. Our
fabricated rubber shops modify and repair conveyor belts and provide hose assemblies (also
available at select service centers and distribution centers) in accordance with customer
requirements. Field crews install and repair belts and rubber lining, primarily at customer
locations. Among the other services we offer, either performed by us directly or by third party
providers, are the rebuilding or assembly of speed reducers, pumps, valves, cylinders, and electric
and hydraulic motors, and custom machining.
Our specialized fluid power businesses generally operate independently of the service centers,
but as product distributors, share the same focus on customer service. Product and application
recommendations, inventory availability, and delivery speed are all critical to the businesses’
success.
The fluid power businesses distinguish themselves from most component distributors by offering
engineering, design, system fabrication, installation, and repair services. These services can
represent a significant portion of the overall value provided to customers. Each business has
account managers with extensive technical knowledge, who handle sophisticated projects, including
original equipment manufacturing applications. The businesses also provide technical support to
our service centers and their customers.
With the businesses acquired from Fluid Power Resource in August 2008, we expanded our
capabilities in providing the following value-added services: fluid power system integration;
manifold design, machining, and assembly; and the integration of hydraulics with electronics for
complete machine design.
Markets. We purchase from over 2,000 product manufacturers and resell the products to
thousands of customers in a wide variety of industries, including agriculture and food processing,
automotive, chemical processing, forest products, industrial machinery and equipment, mining,
primary metals, transportation, and utilities, as well as to government agencies. Customers range
from the largest concerns in North America, with whom we may have multiple-location relationships,
to the smallest. We are not significantly dependent on a single customer or group of customers,
the loss of which would have a material adverse effect on our business as a whole, and no single
customer accounts for more than 4% of our net sales.
Competition. We consider our business to be highly competitive. In addition, our markets
present few economic or technological barriers to entry, contributing to a high fragmentation of
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market share in our industry. Longstanding supplier and customer relationships, geographic
coverage, name recognition, and our associates’ knowledge and experience do, however, support our
competitive position. Competition is based generally on breadth and quality of product and service
offerings, product availability, price, ease of product selection and ordering, online capability,
catalogs, and having a local presence. In the fluid power businesses, product manufacturer
authorizations are often more selective and can be a more significant competitive factor, along
with market reputation and product application knowledge.
Our principal competitors are other bearing, power transmission, industrial rubber, fluid
power, linear motion, and general maintenance and safety product distributors, and, to a lesser
extent, mill supply and catalog companies. These competitors include local, regional, national,
and multinational operations. We also compete with original equipment manufacturers and their
distributors in the sale of maintenance and replacement components. Some competitors have greater
financial resources than we do. The identity and number of our competitors vary throughout the
geographic and product markets we serve.
Although we are one of the leading distributors in North America for the primary categories of
products we carry, our market share for those products in any given geographic area may be
relatively small compared to the portion of the market served by original equipment manufacturers
and other distributors.
Backlog Orders and Seasonality. Because of our product resources and distribution network, we
do not have a substantial backlog of orders, nor are backlog orders material at any given time to
our business as a whole, although they are a more important factor for our fluid power businesses.
Our business has exhibited minor seasonality — in particular, sales per day during the first half
of our fiscal year have tended in the past to be slightly lower compared with the second half due,
in part, to the impact of customer plant shutdowns and holidays.
Patents, Trademarks, Trade Names, and Licenses. Customer recognition of our service marks and
trade names, including Applied Industrial TechnologiesÒ, AppliedÒ, and AITÒ, is an important
contributing factor to our sales. Patents and licenses are not of material importance to our
business.
Raw Materials and General Business Conditions. Our operations are dependent on general
industrial and economic conditions. We would be adversely affected by the unavailability of raw
materials to our suppliers, prolonged labor disputes experienced by suppliers or customers, or by
any recession or depression that has an adverse effect on North American industrial activity
generally or on key customer industries.
Number of Employees. At June 30, 2010, we had 4,468 employees.
Working Capital. Our working capital position is discussed in “Management’s Discussion and
Analysis” in the 2010 annual report to shareholders on pages 7 — 8.
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We require substantial working capital related to accounts receivable and inventories.
Significant amounts of inventory are carried to meet customers’ delivery requirements. We
generally require payments for sales on account within 30 days. Returns are not considered to have
a material effect on our working capital requirements. We believe these practices are generally
consistent among companies in our industry.
Environmental Laws. We believe that compliance with laws regulating the discharge of
materials into the environment or otherwise relating to environmental protection will not have a
material adverse effect on our capital expenditures, earnings, or competitive position.
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Financial Information about Geographic Areas. |
Information regarding our foreign operations, including information about revenues and
long-lived assets, is included in the 2010 annual report to shareholders in note 12 to the
consolidated financial statements on page 32 and in “Quantitative and Qualitative Disclosures About
Market Risk” on page 11. That information is incorporated here by reference.
ITEM 1A. RISK FACTORS.
In addition to other information set forth in this report, you should carefully consider the
following factors that could materially affect our business, financial condition, or results of
operations. The risks described below are not the only risks facing our company. Certain risks
are identified in “Management’s Discussion and Analysis” on pages 5 — 11 in Applied’s 2010 annual
report to shareholders, and that information is incorporated here by reference. Additional risks
not currently known to us, risks that could apply broadly to issuers, or risks that we currently
deem immaterial, may also impact our business and operations.
Our business depends heavily on the operating levels of our customers and the economic factors
that affect them. Many of the primary markets for the products and services we sell are subject to
cyclical fluctuations that affect demand for goods and materials that our customers produce.
Consequently, demand for our products and services has been and will continue to be influenced by
most of the same economic factors that affect demand for and production of customers’ goods and
materials.
When, as occurred in the recent economic downturn, customers or prospective customers reduce
production levels because of lower demand or tight credit conditions, their need for our products
and services diminishes. Selling prices and terms of sale come under pressure, adversely affecting
the profitability and the durability of customer relationships. Credit losses increase too.
Volatile economic and credit conditions also make it more difficult for distributors, as well as
customers and suppliers, to forecast and plan future business activities.
In addition, our industry confronts the longer-term secular trend of manufacturing customers
moving production overseas to reduce costs. Our ability to continue to serve such
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customers may be
impaired and the size of our overall market opportunity in North America could be adversely
affected.
Consolidation occurring in our customers’ and suppliers’ industries could adversely affect our
business and financial results. In recent years, we have witnessed increased consolidation among
our product suppliers and customers. As customer industries consolidate, a greater proportion of
our sales could be derived from higher volume contracts, which could adversely impact the amount
and volatility of our earnings. Consolidation among customers can trigger changes in their
purchasing strategies, potentially moving large blocks of business among competing industrial
distributors and contributing to volatility in our sales. In addition, consolidation increases the
risk of larger customers seeking to purchase industrial products directly from manufacturers rather
than through distributors. Similarly, continued consolidation among our suppliers could reduce our
ability to negotiate favorable pricing and other commercial terms for our inventory purchases.
Loss of key supplier authorizations, lack of product availability, or changes in supplier
distribution programs could adversely affect our sales and earnings. Our business depends on
maintaining an immediately available supply of various products to meet customer demand. Many of
our relationships with key product suppliers are longstanding, but are terminable by either party.
The loss of key supplier authorizations, or a substantial decrease in the availability of their
products, could put us at a competitive disadvantage and have a material adverse effect on our
business. Supply interruptions could arise from raw materials shortages, inadequate manufacturing
capacity or utilization to meet demand, financial problems, labor disputes or weather conditions
affecting suppliers’ production, transportation disruptions, or other reasons beyond our control.
Furthermore, we cannot be certain that particular products will be available to us, or available in
quantities sufficient to meet customer demand, especially if demand outpaces supply in an economic
recovery.
In addition, as a distributor, we face the risk of key product suppliers changing their
relationships with distributors generally, or Applied in particular, in a manner that adversely
impacts us. For example, key suppliers could change any of the following: the prices we must pay
for their products relative to other distributors or relative to competing products; the geographic
or product line breadth of distributor authorizations; supplier support programs; or product
purchase or stocking expectations.
An increase in competition could decrease sales or earnings. We operate in a highly
competitive industry. Our competitors include local, regional, national, and multinational
distributors of industrial machinery parts, equipment, and supplies. Competition is largely
focused in the local service area and is generally based on product line breadth, product
availability, service capabilities, and price. Some existing competitors have, and potential
market entrants may have, greater financial or other resources than we do. If existing or future
competitors seek to gain or to retain market share by reducing prices, we may need to lower
our prices for products or services, thereby adversely affecting financial results.
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The purchasing incentives we earn from product suppliers can be impacted if we reduce our
purchases in response to declining customer demand. Certain of our product suppliers have
historically offered to their distributors, including us, incentives for purchasing their products.
The programs often pay incentives to the distributor for attaining specific purchase volumes
during the program period. In some cases, in order to earn incentives, we must achieve
year-over-year growth in purchases with the supplier. When customer demand for our products
declines, we may be less willing to add inventory to take advantage of certain incentive programs,
thereby potentially adversely impacting our profitability.
Volatility in product and energy costs can affect our profitability. In recent years, cost
increases in commodity materials, such as steel and energy, led product manufacturers to increase
the prices of products we distribute. In addition, a portion of our own distribution costs is
comprised of fuel for our sales and delivery vehicles, freight, and utility expenses for our
facilities. All of these costs have fluctuated significantly in recent years. Our ability to pass
along to customers the increases in our costs depends on market conditions. Raising our prices
could result in decreased sales volume, which could significantly reduce our profitability. When
costs fall, market prices can fall too, again potentially affecting profitability.
Future acquisitions are a key component of our anticipated growth. We may not be able to
identify or to complete future acquisitions, to integrate them effectively into our operations, or
to realize their anticipated benefits. Many industries we serve are mature. As a result, our
growth in recent years has resulted substantially from the acquisition of other businesses. While
we wish to continue to acquire businesses, we may not be able to identify and to negotiate suitable
acquisitions, to obtain financing for them on satisfactory terms, or otherwise to complete
acquisitions. In addition, existing or future competitors may increasingly seek to compete with us
for acquisitions, which could have the effect of increasing the price and reducing the number of
suitable opportunities.
We seek acquisition opportunities that complement and expand our operations. However,
substantial costs, delays, or other difficulties related to integrating acquisitions into our
operations could adversely affect our business or financial results. We could face significant
challenges in consolidating functions and integrating procedures, information systems, personnel,
and operations in a timely and efficient manner.
Further, even if we successfully integrate the acquisitions with our operations, we may not be
able to realize the cost savings, sales increases, or other benefits that we anticipate from these
acquisitions, either as to amount or in the time frame we expect. Our ability to realize
anticipated benefits may be affected by a number of factors, including the following: our ability
to reduce duplicative expenses and inventory effectively, and to consolidate facilities; the
incurrence of significant integration costs or charges in order to achieve those benefits; and our
ability to retain key product supplier authorizations, customer relationships, and employees. In
addition, future acquisitions could place significant demand on administrative, operational,
and financial resources.
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Tight credit markets could impact our ability to obtain financing on reasonable terms or
increase the cost of future financing. Although the recent credit market turmoil has not had a
significant adverse impact on our liquidity or borrowing costs, the availability of funds has
tightened and credit spreads on corporate debt have increased. Obtaining additional or replacement
financing may be more difficult and the cost of issuing new debt or replacing a credit facility
would likely be higher than under our current facilities. Tight credit conditions could limit our
ability to finance acquisitions on terms acceptable to us. For more information relating to
borrowing and interest rates, see the following sections of Applied’s 2010 annual report to
shareholders: “Liquidity and Capital Resources” on pages 7 — 8, “Quantitative and Qualitative
Disclosures About Market Risk” on page 11, and notes 5 and 6 to the consolidated financial
statements on pages 21 — 22.
Our growth outside the United States increases our exposure to global economic and political
conditions. Foreign operations contributed 13% of our sales in 2010. If we continue to grow
outside the U.S., the risks associated with exposure to more volatile economic conditions,
political instability, cultural and legal differences in conducting business, and currency
fluctuations will increase. In particular, our results are affected by fluctuations in currency
exchange rates for the Canadian dollar and the Mexican peso.
Our ability to transact business has become increasingly reliant on our information systems.
We depend on information systems to process customer orders, manage inventory and accounts
receivable collections, purchase products, ship products to customers on a timely basis, maintain
cost-effective operations, and provide superior service to customers. A serious, prolonged
disruption of our information systems could materially impair fundamental business processes and
increase expenses, decrease sales, or otherwise reduce earnings. In addition, key business
transaction systems are homegrown, which could limit our flexibility to access new functionality
and to adapt to new business requirements.
Our business depends on our ability to retain and to attract qualified sales and customer
service personnel. There are significant costs associated with hiring and training sales and
customer service professionals. We greatly benefit from having employees who are familiar with the
products we sell and their applications, as well as with our customer and supplier relationships.
We could be adversely affected by a shortage of available skilled workers or the loss of a
significant number of our sales or customer service professionals, including through retirement as
the workforce ages.
An interruption of operations at our headquarters or distribution centers could adversely
impact our business. Our business depends on maintaining operations at our headquarters and
distribution centers. A serious, prolonged interruption due to power outage, telecommunications
outage, terrorist attack, earthquake, hurricane, fire, flood or other natural disaster, or other
interruption could have a material adverse effect on our business and financial results.
We are subject to litigation risk due to the nature of our business, which may have a material
adverse effect on our business. From time to time, we are involved in lawsuits or other legal
proceedings that arise from business transactions. These may, for example, relate to
13
product
liability claims, commercial disputes, or employment matters. In addition, we could face claims
over other matters, such as claims arising from our status as a government contractor or corporate
or securities law matters. The defense and ultimate outcome of lawsuits or other legal proceedings
may result in higher operating expenses, which could have a material adverse effect on our
business, financial condition, or results of operations.
In addition to the risks identified above, other risks to our future performance include, but
are not limited to, the following:
| |
• |
|
changes in customer preferences for products and services of the nature, brands,
quality, or cost sold by Applied; |
| |
• |
|
changes in customer procurement policies and practices; |
| |
• |
|
changes in the market prices for products and services relative to the costs of
providing them; |
| |
• |
|
changes in operating expenses; |
| |
• |
|
organizational changes within the company; |
| |
• |
|
adverse regulation and legislation, both enacted and under consideration, including
with respect to health care and federal tax policy (e.g., affecting the use of the LIFO
inventory accounting method and the taxation of foreign-sourced income); |
| |
• |
|
the variability and timing of new business opportunities including acquisitions,
alliances, customer relationships, and supplier authorizations; |
| |
• |
|
the incurrence of debt and contingent liabilities in connection with acquisitions; |
| |
• |
|
volatility of our stock price and the resulting impact on our consolidated financial
statements; |
| |
• |
|
changes in accounting policies and practices that could impact our financial
reporting and increase compliance costs; and |
| |
• |
|
instability in the U.S., Canadian, or Mexican banking systems, which could affect
our access to, or result in loss of, cash deposits at commercial banks or investments
in money market funds. |
ITEM 1B. UNRESOLVED STAFF COMMENTS.
Not applicable.
ITEM 2. PROPERTIES.
We believe having a local presence is important to serving our customers, so we maintain
service centers and other operations in local markets throughout North America. At June 30, 2010,
we owned real properties at 135 locations and leased 298 locations. Certain properties house more
than one operation.
14
The following were our principal owned real properties (each of which has more than 30,000
square feet of floor space) at June 30, 2010:
| |
|
|
| Location of Principal Owned |
|
|
| Real Property |
|
Type of Facility |
Atlanta, Georgia
|
|
Distribution center and service center |
Florence, Kentucky
|
|
Distribution center |
Carlisle, Pennsylvania
|
|
Distribution center |
Fort Worth, Texas
|
|
Distribution center and rubber shop |
Our principal leased real properties (each of which has more than 30,000 square feet of
floor space) at June 30, 2010 were:
| |
|
|
| Location of Principal Leased |
|
|
| Real Property |
|
Type of Facility |
Cleveland, Ohio
|
|
Corporate headquarters |
Fontana, California
|
|
Distribution center, rubber shop, fluid
power shop, and service center |
Newark, California
|
|
Fluid power shop |
Denver, Colorado
|
|
Rubber shop and service center |
Lenexa, Kansas
|
|
Fluid power shop |
Chanhassen, Minnesota
|
|
Fluid power shop |
Billings, Montana
|
|
Fluid power shop |
Elyria, Ohio
|
|
Product return center and service center |
Portland, Oregon
|
|
Distribution center |
Kent, Washington
|
|
Offices and fluid power shop |
Longview, Washington
|
|
Service center, rubber shop and fluid
power shop |
Appleton, Wisconsin
|
|
Offices, service center, and rubber shop |
Winnipeg, Manitoba
|
|
Distribution center and service center |
The properties in Newark, Lenexa, Chanhassen, Billings, and Kent are used in our fluid
power businesses segment. The Fontana and Longview properties are used in operations both in the
service center-based distribution segment and the fluid power businesses segment. The remaining
properties are used in the service center-based distribution segment.
We consider our properties generally sufficient to meet our requirements for office space and
inventory stocking. A service center’s size is primarily influenced by the amount of inventory the
service center requires to meet customers’ needs. We use all of our owned and leased properties
except for certain properties which in the aggregate are not material and are either for sale,
lease, or sublease to third parties due to a relocation or closing. We also may lease or sublease
to others unused portions of buildings.
In recent years, when opening new operations, we have tended to lease rather than purchase
real property. We do not consider any of our service center, distribution center, or shop
properties to
15
be material, because we believe that, if it becomes necessary or desirable to
relocate an operation, other suitable property could be found.
Additional information regarding our properties is included in the 2010 annual report to
shareholders in note 11 to the consolidated financial statements on page 31. That information is
incorporated here by reference.
ITEM 3. LEGAL PROCEEDINGS.
Applied and/or one of its subsidiaries is a party to pending legal proceedings with respect to
product liability, commercial, and other matters. Although it is not possible to predict the
outcome of these proceedings or the range of possible loss, we believe, based on circumstances
currently known, that the likelihood is remote that the ultimate resolution of any of these
proceedings will have, either individually or in the aggregate, a material adverse effect on
Applied’s consolidated financial position, results of operations, or cash flows.
ITEM 4.
Reserved.
EXECUTIVE OFFICERS OF THE REGISTRANT.
Applied’s executive officers are elected by the Board of Directors for a term of one year, or
until their successors are chosen and qualified, at the Board’s organizational meeting held
following the annual meeting of shareholders. The following is a list of the executive officers
and a description of their business experience during the past five years. Except as otherwise
stated, the positions and offices indicated are with Applied, and the persons were elected to their
current positions on October 20, 2009:
| |
|
|
|
|
|
|
| Name |
|
Positions and Experience |
|
Age |
David L. Pugh
|
|
Chairman & Chief Executive Officer, and a member of Board
of Directors
|
|
|
61 |
|
|
|
|
|
|
|
|
Benjamin J. Mondics
|
|
President & Chief Operating Officer (since January 2008);
previously served as Executive Vice President & Chief
Operating Officer (from February 2007 — December 2007)
and Vice President-Midwest Area (prior to February 2007)
|
|
|
52 |
|
|
|
|
|
|
|
|
Thomas E. Armold
|
|
Vice President-Marketing and Strategic Accounts (since
January 2008); previously served as Vice President-Product
Management and Marketing
|
|
|
55 |
|
|
|
|
|
|
|
|
Todd A. Barlett
|
|
Vice President-Acquisitions and Global Business Development
|
|
|
55 |
|
|
|
|
|
|
|
|
Fred D. Bauer
|
|
Vice President-General Counsel & Secretary
|
|
|
44 |
|
16
| |
|
|
|
|
|
|
| Name |
|
Positions and Experience |
|
Age |
Michael L. Coticchia
|
|
Vice President-Chief Administrative Officer and
Government Business (since July 2006); previously
served as Vice President-Human Resources and
Administration
|
|
|
47 |
|
|
|
|
|
|
|
|
Mark O. Eisele
|
|
Vice President-Chief Financial Officer & Treasurer
|
|
|
53 |
|
|
|
|
|
|
|
|
Jeffrey A. Ramras
|
|
Vice President-Supply Chain Management (since
January 2008); previously served as Vice
President-Marketing and Supply Chain Management
|
|
|
55 |
|
|
|
|
|
|
|
|
Richard C. Shaw
|
|
Vice President-Communications and Learning
|
|
|
61 |
|
PART II.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED
STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
Applied’s common stock, without par value, is listed for trading on the New York Stock
Exchange with the ticker symbol “AIT.” Information concerning the principal market for Applied’s
common stock, the quarterly stock prices and dividends for the fiscal years ended June 30, 2010,
2009, and 2008 and the number of shareholders of record as of August 6, 2010 is set forth in the
2010 annual report to shareholders on page 37, under the caption “Quarterly Operating Results and
Market Data,” and that information is incorporated here by reference.
The following table summarizes Applied’s repurchases of its common stock in the quarter ended
June 30, 2010.
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
(c) Total Number of |
|
|
(d) Maximum Number |
|
| |
|
|
|
|
|
|
|
|
|
Shares Purchased as |
|
|
of Shares that May |
|
| |
|
|
|
|
|
|
|
|
|
Part of Publicly |
|
|
Yet Be Purchased |
|
| |
|
(a) Total Number of |
|
|
(b) Average Price |
|
|
Announced Plans or |
|
|
Under the Plans or |
|
| Period |
|
Shares (1) |
|
|
Paid per Share ($) |
|
|
Programs |
|
|
Programs (2) |
|
April 1, 2010 to
April 30, 2010 |
|
|
1,000 |
|
|
|
30.82 |
|
|
|
1,000 |
|
|
|
879,100 |
|
May 1, 2010 to
May 31, 2010 |
|
|
20,000 |
|
|
|
28.62 |
|
|
|
20,000 |
|
|
|
859,100 |
|
June 1, 2010 to
June 30, 2010 |
|
|
21,900 |
|
|
|
26.84 |
|
|
|
21,900 |
|
|
|
837,200 |
|
Total |
|
|
42,900 |
|
|
|
27.76 |
|
|
|
42,900 |
|
|
|
837,200 |
|
|
|
|
| (1) |
|
During the quarter ended June 30, 2010, Applied purchased 25 shares in
connection with an employee deferred compensation program. This purchase is not
counted in the Board of Directors authorization in note (2). |
| |
| (2) |
|
On January 23, 2008, the Board of Directors authorized the purchase of up
to 1.5 million shares of Applied’s common stock. We publicly announced the
authorization that day. Purchases may be made in the open market or in privately
negotiated transactions. This authorization is in effect until all shares are
purchased, or the Board revokes or amends the authorization. |
17
ITEM 6. SELECTED FINANCIAL DATA.
The summary of selected financial data for the last five years is set forth in the 2010 annual
report to shareholders in the table on pages 38 — 39 under the caption “10 Year Summary.” That
information is incorporated here by reference.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
“Management’s Discussion and Analysis” is set forth in the 2010 annual report to shareholders
on pages 5 — 11 and is incorporated here by reference.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK.
The disclosures about market risk required by this item are set forth in Applied’s 2010 annual
report to shareholders on page 11, which information is incorporated here by reference. For more
information relating to borrowing and interest rates, see the “Liquidity and Capital Resources”
section of “Management’s Discussion and Analysis” and notes 5 and 6 to the consolidated financial
statements in Applied’s 2010 annual report to shareholders on pages 7 — 8, and 21 — 22. That
information is also incorporated here by reference. In addition, see “Risk Factors” at pages 10 -
14, above, for additional risk factors relating to our business.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The following consolidated financial statements and supplementary data of Applied and its
subsidiaries and the reports of the independent registered public accounting firm listed below,
which are included in the 2010 annual report to shareholders at the pages indicated, are
incorporated here by reference and filed with this report:
| |
|
|
| Caption |
|
Page No. |
Financial Statements: |
|
|
|
|
|
Statements of Consolidated Income |
|
12 |
for the Years Ended
June 30, 2010, 2009, and 2008 |
|
|
|
|
|
18
| |
|
|
| Caption |
|
Page No. |
Consolidated Balance Sheets June 30, 2010 and 2009 |
|
13 |
|
|
|
Statements of Consolidated Cash Flows for the Years Ended
June 30, 2010, 2009, and 2008 |
|
14 |
|
|
|
Statements of Consolidated Shareholders’ Equity for the Years Ended
June 30, 2010, 2009, and 2008 |
|
15 |
|
|
|
Notes to Consolidated Financial Statements for the Years Ended
June 30, 2010, 2009, and 2008 |
|
16 — 33 |
|
|
|
Reports of Independent Registered Public Accounting Firm |
|
34, 36 |
|
|
|
Supplementary Data: |
|
|
|
|
|
Quarterly Operating Results & Market Data |
|
37 |
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE.
Not applicable.
ITEM 9A. CONTROLS AND PROCEDURES.
Applied’s management, under the supervision and with the participation of the chief executive
officer and the chief financial officer, has evaluated the effectiveness of Applied’s disclosure
controls and procedures, as defined in Rule 13a-15(e) of the Exchange Act, as of the end of the
period covered by this report. Based on that evaluation, management has concluded that the
disclosure controls and procedures are effective.
Management’s annual report on Applied’s internal control over financial reporting and the
attestation report of the independent registered public accounting firm are set forth in the 2010
annual report to shareholders on pages 35 — 36 and are incorporated here by reference.
Management has not identified any change in internal control over financial reporting
occurring during the fourth quarter that has materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting.
19
ITEM 9B. OTHER INFORMATION.
Not applicable.
PART III.
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
The information required by this Item as to Applied’s directors is incorporated by reference
to Applied’s proxy statement relating to the annual meeting of shareholders to be held October 26,
2010, under the caption “Item 1 — Election of Directors.” The information required by this Item as
to Applied’s executive officers has been furnished in this Report on pages 16 — 17 in Part I, after
Item 4, under the caption “Executive Officers of the Registrant.”
The information required by this Item regarding compliance with Section 16(a) of the
Securities Exchange Act of 1934 is incorporated by reference to Applied’s proxy statement, under
the caption “Section 16(a) Beneficial Ownership Reporting Compliance.”
Applied has a code of ethics, named the Code of Business Ethics, that applies to our
employees, including our chief executive officer, chief operating officer, chief financial officer,
and corporate controller. The Code of Business Ethics is posted via hyperlink at the investor
relations area of our www.applied.com website. In addition, amendments to and waivers from the
Code of Business Ethics will be disclosed promptly at the same location.
Information regarding the composition of Applied’s audit committee and the identification
of audit committee financial expert(s) serving on the audit committee is incorporated by reference
to Applied’s proxy statement, under the caption “Corporate Governance.”
ITEM 11. EXECUTIVE COMPENSATION.
The information required by this Item is incorporated by reference to Applied’s proxy
statement for the annual meeting of shareholders to be held October 26, 2010, under the captions
“Executive Compensation” and “Compensation Committee Report.”
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
Applied’s shareholders have approved the following equity compensation plans: the 1997
Long-Term Performance Plan, the 2007 Long-Term Performance Plan, the Deferred Compensation Plan,
and the Deferred Compensation Plan for Non-Employee Directors. All of these plans are currently in
effect.
20
The following table shows information regarding the number of shares of Applied common
stock that may be issued pursuant to equity compensation plans or arrangements of Applied as of
June 30, 2010.
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Number of |
|
|
Weighted- |
|
|
|
|
| |
|
Securities |
|
|
Average |
|
|
|
|
| |
|
to be |
|
|
Exercise |
|
|
Number of |
|
| |
|
Issued upon |
|
|
Price of |
|
|
Securities |
|
| |
|
Exercise of |
|
|
Outstanding |
|
|
Remaining |
|
| |
|
Outstanding |
|
|
Options, |
|
|
Available for Future |
|
| |
|
Options, |
|
|
Warrants |
|
|
Issuance Under |
|
| |
|
Warrants and |
|
|
and |
|
|
Equity |
|
| Plan Category |
|
Rights |
|
|
Rights |
|
|
Compensation Plans |
|
Equity compensation plans approved by security holders |
|
|
2,399,656 |
|
|
$ |
18.19 |
|
|
|
* |
|
Equity compensation plans not approved by security
holders |
|
|
0 |
|
|
|
— |
|
|
|
0 |
|
Total |
|
|
2,399,656 |
|
|
$ |
18.19 |
|
|
|
* |
|
|
|
|
| * |
|
The 2007 Long-Term Performance Plan was adopted to replace the 1997
Long-Term Performance Plan, under which previously awarded stock
options and stock appreciation rights remain outstanding. The
aggregate number of shares that remained available for awards under
the 2007 Long-Term Performance Plan at June 30, 2010, was 995,610.
The number of shares issuable under the Deferred Compensation Plan for
Non-Employee Directors and the Deferred Compensation Plan depends on
the dollar amount of participant contributions deemed invested in
Applied common stock. |
Information concerning the security ownership of certain beneficial owners and management
is incorporated by reference to Applied’s proxy statement for the annual meeting of shareholders to
be held October 26, 2010, under the caption “Beneficial Ownership of Certain Applied Shareholders
and Management.”
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,
AND DIRECTOR INDEPENDENCE.
The information required by this Item is incorporated by reference to Applied’s proxy
statement for the annual meeting of shareholders to be held October 26, 2010, under the caption
“Corporate Governance.”
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
The information required by this Item is incorporated by reference to Applied’s proxy
statement for the annual meeting of shareholders to be held October 26, 2010, under the caption
“Item 2 – Ratification of Auditors.”
21
PART IV.
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a)1. Financial Statements.
The following consolidated financial statements, notes thereto, the reports of independent
registered public accounting firm, and supplemental data are included in the 2010 annual report to
shareholders on pages 12 – 34 and 36 – 37, and are incorporated by reference in Item 8 of this
report.
| |
|
|
|
|
|
|
| |
|
Caption |
|
|
|
|
|
|
Statements of Consolidated Income for the
Years Ended June 30, 2010, 2009, and 2008 |
|
|
|
|
|
Consolidated Balance Sheets
June 30, 2010 and 2009 |
|
|
|
|
|
Statements of Consolidated Cash Flows for
the Years Ended June 30, 2010, 2009, and 2008 |
|
|
|
|
|
Statements of Consolidated Shareholders’
Equity for the Years Ended June 30, 2010,
2009, and 2008 |
|
|
|
|
|
Notes to Consolidated Financial Statements
for the Years Ended June 30, 2010, 2009, and 2008 |
|
|
|
|
|
Reports of Independent Registered Public Accounting Firm |
|
|
|
|
|
Supplementary Data: |
|
|
Quarterly Operating Results & Market Data |
(a)2. Financial Statement Schedule.
The following report and schedule are included in this Part IV, and are found in this report
at the pages indicated:
| |
|
|
|
|
|
|
| |
|
Caption |
|
Page No. |
|
|
Report of Independent Registered Public Accounting Firm
|
|
|
29 |
|
|
|
Schedule II — Valuation and Qualifying Accounts
|
|
|
30 |
|
22
All other schedules for which provision is made in the applicable accounting regulation of the
Securities and Exchange Commission have been omitted because they are not required under the
related instructions, are not applicable, or the required information is included in the
consolidated financial statements and notes thereto.
(a)3. Exhibits.
| |
* |
|
Asterisk indicates an executive compensation plan or
arrangement. |
| |
|
|
| Exhibit |
|
|
| No. |
|
Description |
3.1
|
|
Amended and Restated Articles of Incorporation of Applied
Industrial Technologies, Inc., as amended on October 25, 2005 (filed as Exhibit
3(a) to Applied’s Form 10-Q for the quarter ended December 31, 2005, SEC File
No. 1-2299, and incorporated here by reference). |
|
|
|
3.2
|
|
Code of Regulations of Applied Industrial Technologies, Inc.,
as amended on October 19, 1999 (filed as Exhibit 3(b) to Applied’s Form 10-Q
for the quarter ended September 30, 1999, SEC File No. 1-2299, and incorporated
here by reference). |
|
|
|
4.1
|
|
Certificate of Merger of Bearings, Inc. (Ohio) and Bearings,
Inc. (Delaware) filed with the Ohio Secretary of State on October 18, 1988,
including an Agreement and Plan of Reorganization dated September 6, 1988
(filed as Exhibit 4(a) to Applied’s Registration Statement on Form S-4 filed
May 23, 1997, Registration No. 333-27801, and incorporated here by reference). |
|
|
|
4.2
|
|
Private Shelf Agreement dated as of November 27, 1996, between
Applied and Prudential Investment Management, Inc. (assignee of The Prudential
Insurance Company of America), conformed to show all amendments (filed as
Exhibit 4.2 to Applied’s Form 10-Q for the quarter ended March 31, 2010, SEC
File No. 1-2299, and incorporated here by reference). |
|
|
|
4.3
|
|
Credit Agreement dated as of June 3, 2005, among Applied,
KeyBank National Association as Agent, and various financial institutions
(filed as Exhibit 4.7 to Applied’s Form 10-Q for the quarter ended
December 31, 2009, SEC File No. 1-2299, and incorporated here by reference). |
23
| |
|
|
| Exhibit |
|
|
| No. |
|
Description |
4.4
|
|
First Amendment Agreement dated as of June 6, 2007, among
Applied, KeyBank National Association as Agent, and various financial
institutions, amending June 3, 2005 Credit Agreement (filed as Exhibit 4 to
Applied’s Form 8-K dated June 11, 2007, SEC File No. 1-2299, and incorporated
here by reference). |
|
|
|
*10.1
|
|
Form of Change in Control Agreement between Applied and each of its
executive officers (filed as Exhibit 99.1 to Applied’s Form 8-K
dated April 25, 2008, SEC File No. 1-2299, and incorporated here by
reference). |
|
|
|
*10.2
|
|
A written description of Applied’s director compensation program is
incorporated by reference to Applied’s proxy statement for the
annual meeting of shareholders to be held October 26, 2010 under the
caption “Director Compensation.” |
|
|
|
*10.3
|
|
Deferred Compensation Plan for Non-Employee Directors (September 1,
2003 Restatement), the terms of which govern benefits vested as of
December 31, 2004, for certain directors (filed as Exhibit 10(c) to
Applied’s Form 10-K for the year ended June 30, 2003, SEC File No.
1-2299, and incorporated here by reference). |
|
|
|
*10.4
|
|
Deferred Compensation Plan for Non-Employee Directors (Post-2004
Terms) (filed as Exhibit 10.2 to Applied’s Form 10-Q for the quarter
ended December 31, 2008, SEC File No. 1-2299, and incorporated here
by reference). |
|
|
|
*10.5
|
|
A written description of Applied’s Life and Accidental Death and
Dismemberment Insurance for executive officers (filed as Exhibit
10(d) to Applied’s Form 10-K for the year ended June 30, 2007, SEC
File No. 1-2299, and incorporated here by reference). |
|
|
|
*10.6
|
|
A written description of Applied’s Long-Term Disability Insurance
for executive officers (filed as Exhibit 10(c) to Applied’s Form
10-Q for the quarter ended December 31, 1997, SEC File No. 1-2299,
and incorporated here by reference). |
|
|
|
*10.7
|
|
Form of Director and Officer Indemnification Agreement entered into
between Applied and each of its directors and executive officers
(filed as Exhibit 10(g) to Applied’s Registration Statement on Form
S-4 filed May 23, 1997, Registration No. 333-27801, and incorporated
here by reference). |
|
|
|
*10.8
|
|
Supplemental Executive Retirement Benefits Plan (January 1, 2002
Restatement), the terms of which govern benefits vested as of December 31, 2004, for one executive officer, R. C. Shaw (filed as
Exhibit 10 to Applied’s Form 10-Q for the quarter ended March 31,
2002, SEC File No. 1-2299, and incorporated here by reference). |
24
| |
|
|
| Exhibit |
|
|
| No. |
|
Description |
*10.9
|
|
First Amendment to Supplemental Executive Retirement
Benefits Plan (January 1, 2002 Restatement) (filed as Exhibit 10
to Applied’s Form 10-Q for the quarter ended September 30,
2004, SEC File No. 1-2299, and incorporated here by reference). |
|
|
|
*10.10
|
|
Supplemental Executive Retirement Benefits Plan (Restated Post-2004 Terms)
(filed as Exhibit 10.1 to Applied’s Form 10-Q for the quarter ended December
31, 2008, SEC File No. 1-2299, and incorporated here by reference). |
|
|
|
*10.11
|
|
Deferred Compensation Plan (September 1, 2003 Restatement), the terms of
which govern benefits vested as of December 31, 2004, for certain executive
officers (filed as Exhibit 10(h) to Applied’s Form 10-K for the year ended June
30, 2003, SEC File No. 1-2299, and incorporated here by reference). |
|
|
|
*10.12
|
|
First Amendment to Deferred Compensation Plan (September 1, 2003 Restatement)
(filed as Exhibit 10 to Applied’s Form 10-Q for the quarter ended December 31,
2003, SEC File No. 1-2299, and incorporated here by reference). |
|
|
|
*10.13
|
|
Deferred Compensation Plan (Post-2004 Terms) (filed as Exhibit 10.3
to Applied’s Form 10-Q for the quarter ended December 31, 2008, SEC
File No. 1-2299, and incorporated here by reference). |
|
|
|
*10.14
|
|
1997 Long-Term Performance Plan, as amended April 19, 2007 (filed
as Exhibit 10(k) to Applied’s Form 10-K for the year ended June 30,
2007, SEC File No. 1-2299, and incorporated here by reference). |
|
|
|
*10.15
|
|
Section 409A Amendment to the 1997 Long-Term Performance Plan
(filed as Exhibit 10.4 to Applied’s Form 10-Q for the quarter ended
December 31, 2008, SEC File No. 1-2299, and incorporated here by
reference). |
|
|
|
*10.16
|
|
2007 Long-Term Performance Plan (filed as Exhibit 10 to Applied’s
Form 8-K dated October 23, 2007, SEC File No. 1-2299, and
incorporated here by reference). |
|
|
|
*10.17
|
|
Section 409A Amendment to the 2007 Long-Term Performance Plan
(filed as Exhibit 10.5 to Applied’s Form 10-Q for the quarter ended December 31, 2008, SEC File No. 1-2299, and incorporated here by
reference). |
25
| |
|
|
| Exhibit |
|
|
| No. |
|
Description |
*10.18
|
|
Supplemental Defined Contribution Plan (January 1, 1997
Restatement) the terms of which govern benefits vested as of
December 31, 2004, for certain executive officers (filed as Exhibit
10(m) to Applied’s Registration Statement on Form S-4 filed May 23,
1997, Registration No. 333-27801, and incorporated here by
reference). |
|
|
|
*10.19
|
|
First Amendment to Supplemental Defined Contribution Plan effective
as of October 1, 2000 (filed as Exhibit 10(a) to Applied’s Form
10-Q for the quarter ended September 30, 2000, SEC File No. 1-2299,
and incorporated here by reference). |
|
|
|
*10.20
|
|
Second Amendment to Supplemental Defined Contribution Plan
effective as of January 16, 2001 (filed as Exhibit 10(a) to
Applied’s Form 10-Q for the quarter ended March 31, 2001, SEC File
No. 1-2299, and incorporated here by reference). |
|
|
|
*10.21
|
|
Supplemental Defined Contribution Plan (Post-2004 Terms) (filed as
Exhibit 10.6 to Applied’s Form 10-Q for the quarter ended December
31, 2008, SEC File No. 1-2299, and incorporated here by reference). |
|
|
|
*10.22
|
|
Non-Statutory Stock Option Award Terms and Conditions (Directors)
(filed as Exhibit 10 to Applied’s Form 8-K dated November 30, 2005,
SEC File No. 1-2299, and incorporated here by reference). |
|
|
|
*10.23
|
|
Restricted Stock Award Terms (Directors) (filed as Exhibit 10(b) to
Applied’s Form 10-Q for the quarter ended March 31, 2007, SEC File
No. 1-2299, and incorporated here by reference). |
|
|
|
*10.24
|
|
Stock Appreciation Rights Award Terms and Conditions (Officers)
(filed as Exhibit 10.02 to Applied’s Form 8-K dated September 16,
2009, SEC File No. 1-2299, and incorporated here by reference). |
|
|
|
*10.25
|
|
Performance Grant Terms and Conditions (filed as Exhibit 10.3 to
Applied’s Form 10-Q for the quarter ended September 30, 2008, SEC
File No. 1-2299, and incorporated here by reference). |
|
|
|
*10.26
|
|
Performance Shares Terms and Conditions (filed as Exhibit 10.04 to
Applied’s Form 8-K dated September 16, 2009, SEC File No. 1-2299,
and incorporated here by reference). |
26
| |
|
|
| Exhibit |
|
|
| No. |
|
Description |
*10.27
|
|
Restricted Stock Units Terms and Conditions (filed as Exhibit 10.03
to Applied’s Form 8-K dated September 16, 2009, SEC File No.
1-2299, and incorporated here by reference). |
|
|
|
*10.28
|
|
Management Incentive Plan General Terms (filed as Exhibit 10.01 to Applied’s
Form 8-K dated September 16, 2009, SEC File No. 1-2299, and incorporated here
by reference). |
|
|
|
*10.29
|
|
Non-qualified Deferred Compensation Agreement between Applied and J. Michael
Moore effective as of December 31, 1997 (filed as Exhibit 10(a) to Applied’s
Form 10-Q for the quarter ended March 31, 1998, SEC File No. 1-2299, and
incorporated here by reference). |
|
|
|
10.30
|
|
Lease dated as of March 1, 1996 between Applied and the
Cleveland-Cuyahoga County Port Authority (filed as Exhibit 10(n) to Applied’s
Registration Statement on Form S-4 filed May 23, 1997, Registration No.
333-27801, and incorporated here by reference). |
|
|
|
10.31
|
|
Asset Purchase Agreement made as of July 14, 2008, among
Applied, Fluid Power Resource, LLC (“FPR”), and certain
FPR subsidiaries (filed as Exhibit 2.1 to Applied’s Form 8-K
dated July 16, 2008, SEC File No. 1-2299, and incorporated here
by reference). |
|
|
|
13
|
|
Applied’s 2010 annual report to shareholders (not deemed
“filed” as part of this Form 10-K except for those portions that are expressly
incorporated by reference). |
|
|
|
21
|
|
Applied’s subsidiaries at June 30, 2010. |
|
|
|
23
|
|
Consent of Independent Registered Public Accounting Firm. |
|
|
|
24
|
|
Powers of attorney. |
|
|
|
31
|
|
Rule 13a-14(a)/15d-14(a) certifications. |
|
|
|
32
|
|
Section 1350 certifications. |
Applied will furnish a copy of any exhibit described above and not contained herein upon
payment of a specified reasonable fee, which shall be limited to Applied’s reasonable expenses in
furnishing the exhibit.
Certain long-term debt instruments have not been filed as exhibits because the total amount of
securities authorized under any one of the instruments does not exceed 10 percent of the total
27
assets of Applied and its subsidiaries on a consolidated basis. Applied agrees to furnish to the
Securities and Exchange Commission, upon request, a copy of each such instrument.
28
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of Applied Industrial Technologies, Inc.
We have audited the consolidated financial statements of Applied Industrial Technologies, Inc. and
subsidiaries (the “Company”) as of June 30, 2010 and 2009, and for each of the three years in the
period ended June 30, 2010, and the Company’s internal control over financial reporting as of June
30, 2010, and have issued our reports thereon dated August 13, 2010; such consolidated financial
statements and reports are included in your 2010 Annual Report to Shareholders and are incorporated
herein by reference. Our audits also included the consolidated financial statement schedule of the
Company listed in Item 15. This consolidated financial statement schedule is the responsibility of
the Company’s management. Our responsibility is to express an opinion based on our audits. In our
opinion, such consolidated financial statement schedule, when considered in relation to the basic
consolidated financial statements taken as a whole, presents fairly, in all material respects, the
information set forth therein.
/s/ Deloitte & Touche LLP
Cleveland, Ohio
August 13, 2010
29
APPLIED INDUSTRIAL TECHNOLOGIES, INC. & SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED JUNE 30, 2010, 2009 AND 2008
(in thousands)
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| COLUMN A |
|
COLUMN B |
|
|
COLUMN C |
|
|
COLUMN D |
|
|
COLUMN E |
|
| |
|
|
|
|
|
|
|
|
|
ADDITIONS |
|
|
|
|
|
|
|
| |
|
|
|
|
|
ADDITIONS |
|
|
(DEDUCTIONS) |
|
|
|
|
|
|
|
| |
|
BALANCE AT |
|
|
CHARGED TO |
|
|
CHARGED TO |
|
|
DEDUCTIONS |
|
|
BALANCE |
|
| |
|
BEGINNING |
|
|
COSTS AND |
|
|
OTHER |
|
|
FROM |
|
|
AT END OF |
|
| DESCRIPTION |
|
OF PERIOD |
|
|
EXPENSES |
|
|
ACCOUNTS |
|
|
RESERVE |
|
|
PERIOD |
|
| |
YEAR ENDED JUNE 30, 2010: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reserve deducted from assets to
which it applies — accounts receivable
allowances |
|
$ |
6,464 |
|
|
$ |
2,508 |
|
|
|
($95) |
(B) |
|
$ |
2,498 |
(A) |
|
$ |
6,379 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YEAR ENDED JUNE 30, 2009: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reserve deducted from assets to
which it applies — accounts receivable
allowances |
|
$ |
6,119 |
|
|
$ |
4,540 |
|
|
$ |
18 |
(B) |
|
$ |
4,213 |
(A) |
|
$ |
6,464 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YEAR ENDED JUNE 30, 2008: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reserve deducted from assets to
which it applies — accounts receivable
allowances |
|
$ |
6,134 |
|
|
$ |
2,595 |
|
|
$ |
80 |
(B) |
|
$ |
2,690 |
(A) |
|
$ |
6,119 |
|
|
|
|
| (A) |
|
Amounts represent uncollectible accounts charged off. |
| |
| (B) |
|
Amounts represent reserves for the return of merchandise by customers. |
SCHEDULE II
30
SIGNATURES
Pursuant to the requirements of Section 13 of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
APPLIED INDUSTRIAL TECHNOLOGIES, INC.
| |
|
|
|
/s/ David L. Pugh
|
|
/s/ Benjamin J. Mondics |
|
|
|
David L. Pugh, Chairman &
|
|
Benjamin J. Mondics, President & |
Chief Executive Officer
|
|
Chief Operating Officer |
|
|
|
/s/ Mark O. Eisele
|
|
/s/ Daniel T. Brezovec |
|
|
|
Mark O. Eisele
|
|
Daniel T. Brezovec |
Vice President-Chief Financial Officer
|
|
Corporate Controller |
& Treasurer
|
|
(Principal Accounting Officer) |
Date: August 13, 2010
Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been
signed below by the following persons on behalf of the Registrant and in the capacities and on the
date indicated.
| |
|
|
|
*
|
|
* |
|
|
|
William G. Bares, Director
|
|
Thomas A. Commes, Director |
|
|
|
*
|
|
* |
|
|
|
Peter A. Dorsman, Director
|
|
L. Thomas Hiltz, Director |
|
|
|
*
|
|
* |
|
|
|
Edith Kelly-Green, Director
|
|
John F. Meier, Director |
|
|
|
*
|
|
/s/ David L. Pugh |
|
|
|
J. Michael Moore, Director
|
|
David L. Pugh, Chairman & Chief Executive |
|
|
Officer and Director |
|
|
|
*
|
|
* |
|
|
|
Dr. Jerry Sue Thornton, Director
|
|
Peter C. Wallace, Director |
|
|
|
* |
|
|
Stephen E. Yates, Director
|
|
|
|
|
|
/s/ Fred D. Bauer |
|
|
Fred D. Bauer, as attorney in fact
|
|
|
for persons indicated by “*” |
|
|
|
|
|
Date: August 13, 2010 |
|
|
31
APPLIED INDUSTRIAL TECHNOLOGIES, INC.
EXHIBIT INDEX
TO FORM 10-K FOR THE YEAR ENDED JUNE 30, 2010
| |
|
|
|
|
| Exhibit |
|
|
|
|
| No. |
|
Description |
|
|
3.1
|
|
Amended and Restated Articles of Incorporation of Applied Industrial Technologies,
Inc., as amended on October 25, 2005 (filed as Exhibit 3(a) to Applied’s Form 10-Q for
the quarter ended December 31, 2005, SEC File No. 1-2299, and incorporated here by
reference). |
|
|
|
|
|
|
|
3.2
|
|
Code of Regulations of Applied Industrial Technologies, Inc., as amended on October
19, 1999 (filed as Exhibit 3(b) to Applied’s Form 10-Q for the quarter ended September
30, 1999, SEC File No. 1-2299, and incorporated here by reference). |
|
|
|
|
|
|
|
4.1
|
|
Certificate of Merger of Bearings, Inc. (Ohio) and Bearings, Inc. (Delaware) filed
with the Ohio Secretary of State on October 18, 1988, including an Agreement and Plan
of Reorganization dated September 6, 1988 (filed as Exhibit 4(a) to Applied’s
Registration Statement on Form S-4 filed May 23, 1997, Registration No. 333-27801, and
incorporated here by reference). |
|
|
|
|
|
|
|
4.2
|
|
Private Shelf Agreement dated as of November 27, 1996, between Applied and Prudential
Investment Management, Inc. (assignee of The Prudential Insurance Company of America),
conformed to show all amendments (filed as Exhibit 4.2 to Applied’s Form 10-Q for the
quarter ended March 31, 2010, SEC File No. 1-2299, and incorporated here by
reference). |
|
|
|
|
|
|
|
4.3
|
|
Credit Agreement dated as of June 3, 2005, among Applied, KeyBank National
Association as Agent, and various financial institutions (filed as Exhibit 4.7 to
Applied’s Form 10-Q for the quarter ended December 31, 2009, SEC File No. 1-2299, and
incorporated here by reference). |
|
|
|
|
|
|
|
4.4
|
|
First Amendment Agreement dated as of June 6, 2007, among Applied, KeyBank National
Association as Agent, and various financial institutions, amending June 3, 2005 Credit
Agreement (filed as Exhibit 4 to Applied’s Form 8-K dated June 11, 2007, SEC File No.
1-2299, and incorporated here by reference). |
|
|
| |
|
|
|
|
| Exhibit |
|
|
|
|
| No. |
|
Description |
|
|
*10.1
|
|
Form of Change in Control Agreement between Applied and each of its
executive officers (filed as Exhibit 99.1 to Applied’s Form 8-K
dated April 25, 2008, SEC File No. 1-2299, and incorporated here by
reference). |
|
|
|
|
|
|
|
*10.2
|
|
A written description of Applied’s director compensation program is
incorporated by reference to Applied’s proxy statement for the
annual meeting of shareholders to be held October 26, 2010, under
the caption “Director Compensation.” |
|
|
|
|
|
|
|
*10.3
|
|
Deferred Compensation Plan for Non-Employee Directors (September 1,
2003 Restatement) the terms of which govern benefits vested as of
December 31, 2004, for certain directors (filed as Exhibit 10(c) to
Applied’s Form 10-K for the year ended June 30, 2003, SEC File No.
1-2299, and incorporated here by reference). |
|
|
|
|
|
|
|
*10.4
|
|
Deferred Compensation Plan for Non-Employee Directors (Post-2004
Terms) (filed as Exhibit 10.2 to Applied’s Form 10-Q for the
quarter ended December 31, 2008, SEC File No. 1-2299, and
incorporated here by reference). |
|
|
| |
*10.5
|
|
A written description of Applied’s Life and Accidental Death
and Dismemberment Insurance for executive officers (filed as
Exhibit 10(d) to Applied’s Form 10-K for the year ended June 30,
2007, SEC File No. 1-2299, and incorporated here by reference). |
|
|
|
|
|
|
|
*10.6
|
|
A written description of Applied’s Long-Term Disability Insurance
for executive officers (filed as Exhibit 10(c) to Applied’s Form
10-Q for the quarter ended December 31, 1997, SEC File No. 1-2299,
and incorporated here by reference). |
|
|
|
|
|
|
|
*10.7
|
|
Form of Director and Officer Indemnification Agreement entered into
between Applied and each of its directors and executive officers
(filed as Exhibit 10(g) to Applied’s Registration Statement on Form
S-4 filed May 23, 1997, Registration No. 333-27801, and
incorporated here by reference). |
|
|
|
|
|
|
|
*10.8
|
|
Supplemental Executive Retirement Benefits Plan (January 1, 2002
Restatement), the terms of which govern benefits vested as of
December 31, 2004, for one executive officer, R. C. Shaw (filed as
Exhibit 10 to Applied’s Form 10-Q for the quarter ended March 31,
2002, SEC File No. 1-2299, and incorporated here by reference). |
|
|
|
|
|
|
|
*10.9
|
|
First Amendment to Supplemental Executive Retirement
Benefits Plan (January 1, 2002 Restatement) (filed as Exhibit 10
to Applied’s Form 10-Q for the quarter ended September 30,
2004, SEC File No. 1-2299, and incorporated here by reference). |
|
|
| |
|
|
|
|
| Exhibit |
|
|
|
|
| No. |
|
Description |
|
|
*10.10
|
|
Supplemental Executive Retirement Benefits Plan (Restated Post-2004
Terms) (filed as Exhibit 10.1 to Applied’s Form 10-Q for the
quarter ended December 31, 2008, SEC File No. 1-2299, and
incorporated here by reference). |
|
|
|
|
|
|
|
*10.11
|
|
Deferred Compensation Plan (September 1, 2003 Restatement), the
terms of which govern benefits vested as of December 31, 2004, for
certain executive officers (filed as Exhibit 10(h) to Applied’s
Form 10-K for the year ended June 30, 2003, SEC File No. 1-2299,
and incorporated here by reference). |
|
|
|
|
|
|
|
*10.12
|
|
First Amendment to Deferred Compensation Plan (September 1, 2003
Restatement) (filed as Exhibit 10 to Applied’s Form 10-Q for the
quarter ended December 31, 2003, SEC File No. 1-2299, and
incorporated here by reference). |
|
|
|
|
|
|
|
*10.13
|
|
Deferred Compensation Plan (Post-2004 Terms) (filed as Exhibit 10.3
to Applied’s Form 10-Q for the quarter ended December 31, 2008, SEC
File No. 1-2299, and incorporated here by reference). |
|
|
|
|
|
|
|
*10.14
|
|
1997 Long-Term Performance Plan, as amended April 19, 2007 (filed
as Exhibit 10(k) to Applied’s Form 10-K for the year ended June 30,
2007, SEC File No. 1-2299, and incorporated here by reference). |
|
|
|
|
|
|
|
*10.15
|
|
Section 409A Amendment to the 1997 Long-Term Performance Plan
(filed as Exhibit 10.4 to Applied’s Form 10-Q for the quarter ended
December 31, 2008, SEC File No. 1-2299, and incorporated here by
reference). |
|
|
|
|
|
|
|
*10.16
|
|
2007 Long-Term Performance Plan (filed as Exhibit 10 to the
Applied’s Form 8-K dated October 23, 2007, SEC File No. 1-2299, and
incorporated here by reference). |
|
|
|
|
|
|
|
*10.17
|
|
Section 409A Amendment to the 2007 Long-Term Performance Plan
(filed as Exhibit 10.5 to Applied’s Form 10-Q for the quarter ended
December 31, 2008, SEC File No. 1-2299, and incorporated here by
reference). |
|
|
|
|
|
|
|
*10.18
|
|
Supplemental Defined Contribution Plan (January 1, 1997
Restatement) the terms of which govern benefits vested as of
December 31, 2004, for certain executive officers (filed as Exhibit
10(m) to Applied’s Registration Statement on Form S-4 filed May 23,
1997, Registration No. 333-27801, and incorporated here by
reference). |
|
|
| |
|
|
|
|
| Exhibit |
|
|
|
|
| No. |
|
Description |
|
|
*10.19
|
|
First Amendment to Supplemental Defined Contribution Plan effective
as of October 1, 2000 (filed as Exhibit 10(a) to Applied’s Form
10-Q for the quarter ended September 30, 2000, SEC File No. 1-2299,
and incorporated here by reference). |
|
|
|
|
|
|
|
*10.20
|
|
Second Amendment to Supplemental Defined Contribution Plan
effective as of January 16, 2001 (filed as Exhibit 10(a) to
Applied’s Form 10-Q for the quarter ended March 31, 2001, SEC File
No. 1-2299, and incorporated here by reference). |
|
|
|
|
|
|
|
*10.21
|
|
Supplemental Defined Contribution Plan (Post-2004 Terms) (filed as
Exhibit 10.6 to Applied’s Form 10-Q for the quarter ended December
31, 2008, SEC File No. 1-2299, and incorporated here by reference). |
|
|
|
|
|
|
|
*10.22
|
|
Non-Statutory Stock Option Award Terms and Conditions (Directors)
(filed as Exhibit 10 to Applied’s Form 8-K dated November 30, 2005,
SEC File No. 1-2299, and incorporated here by reference). |
|
|
|
|
|
|
|
*10.23
|
|
Restricted Stock Award Terms (Directors) (filed as Exhibit 10(b) to
Applied’s Form 10-Q for the quarter ended March 31, 2007, SEC File
No. 1-2299, and incorporated here by reference). |
|
|
|
|
|
|
|
*10.24
|
|
Stock Appreciation Rights Award Terms and Conditions (Officers)
(filed as Exhibit 10.02 to Applied’s Form 8-K dated September 16,
2009, SEC File No. 1-2299, and incorporated here by reference). |
|
|
|
|
|
|
|
*10.25
|
|
Performance Grant Terms and Conditions (filed as Exhibit 10.3 to
Applied’s Form 10-Q for the quarter ended September 30, 2008, SEC
File No. 1-2299, and incorporated here by reference). |
|
|
|
|
|
|
|
*10.26
|
|
Performance Shares Terms and Conditions (filed as Exhibit 10.04 to
Applied’s Form 8-K dated September 16, 2009, SEC File No.
1-2299, and incorporated here by reference). |
|
|
|
|
|
|
|
*10.27
|
|
Restricted Stock Units Terms and Conditions (filed as Exhibit 10.03
to Applied’s Form 8-K dated September 16, 2009, SEC File No.
1-2299, and incorporated here by reference). |
|
|
|
|
|
|
|
*10.28
|
|
Management Incentive Plan General Terms (filed as Exhibit 10.01 to
Applied’s Form 8-K dated September 16, 2009, SEC File No. 1-2299,
and incorporated here by reference). |
|
|
|
|
|
|
|
*10.29
|
|
Non-qualified Deferred Compensation Agreement between Applied and
J. Michael Moore effective as of December 31, 1997 (filed as |
|
|
| |
|
|
|
|
| Exhibit |
|
|
|
|
| No. |
|
Description |
|
|
|
|
Exhibit 10(a) to Applied’s Form 10-Q for the quarter ended March 31,
1998, SEC File No. 1-2299, and incorporated here by reference). |
|
|
|
|
|
|
|
10.30
|
|
Lease dated as of March 1, 1996 between Applied and the Cleveland-Cuyahoga County
Port Authority (filed as Exhibit 10(n) to Applied’s Registration Statement on Form S-4
filed May 23, 1997, Registration No. 333-27801, and incorporated here by reference). |
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10.31
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Asset Purchase Agreement made as of July 14, 2008, among Applied, Fluid Power
Resource, LLC (“FPR”), and certain
FPR subsidiaries (filed as Exhibit 2.1 to Applied’s Form 8-K
dated July 16, 2008, SEC File No. 1-2299, and incorporated here
by reference). |
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13
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Applied’s 2010 annual report to shareholders (not deemed “filed” as part of this Form
10-K except for those portions that are expressly incorporated by reference).
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Attached |
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21
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Applied’s subsidiaries at June 30, 2010.
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Attached |
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23
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Consent of Independent Registered Public Accounting Firm.
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Attached |
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24
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Powers of attorney.
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Attached |
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31
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Rule 13a-14(a)/15d-14(a) certifications.
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Attached |
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32
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Section 1350 certifications.
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Attached |