income.  It has been the practice of the Company to issue shares from treasury to satisfy requirements of awards paid with shares.  
The aggregate unrecognized compensation cost for share-based award programs paid (or with the potential to be paid) at June 30, 
2012 is $7,434.  Cost of these programs will be recognized as expense over the weigh ted-average remaining vesting period of 
2.1 years.  The aggregate number of shares of common stock which may be awarded under the 2011 Plan is 2,000; shares available 
for future grants at June 30, 2012 were 1,959. 
Stock Appreciation Rights and Stock Options 
The weighted-average assumptions used for SARs and stock option grants issued in fiscal 2012, 2011 and 2010 are:  
 2012 2011 2010 
Expected life, in years 5.6  5.1  5.5  
Risk free interest rate 1.1 % 1.6 % 2.4 % 
Dividend yield 2.5 % 2.5 % 2.5 % 
Volatility 44.2 % 46.2 % 52.2 % 
Per share fair value of SARs and stock options granted during the year $ 9.88  $ 9.78  $ 8.45 
 
The expected life is based upon historical exercise experience of the o fficers, other key associates and members of the Board of 
Directors.  The risk free interest rate is based upon U.S. Treasury zero-coupon bonds with remaining terms equal to the 
expected life of the SARs and stock options.  The assumed dividend yield has been estimated based upon the Company’s 
historical results and expectations for changes in dividends and stock prices.  The volatility ass umption is calculated based upon 
historical daily price observations of the Company’s common stock for a period equal to the expected life. 
SARs are redeemable solely in Company co mmon stock.  The exercise price of stock option awards may be settled by the holder 
with cash or by tendering Company common stock. 
A summary of SARs and stock options activity is pres ented below:  
Year Ended June 30, 2012  
Shares 
Weighted-Average. 
Exercise Price. (Share amounts in thousands)  
Outstanding, beginning of year  1,804   $ 22.68  
Granted  246   30.14  
Exercised  (802 )  21.83  
Forfeited  (20 )  25.94  
Outstanding, end of year  1,228   $ 24.68  
Exercisable at end of year  794   $ 23.37  
  
29Applied Industrial Technologies, Inc. and Subsidiaries
25358_AIT_Report_WT.indd   29 8/23/12   8:33 AM