APPLIED INDUSTRIAL TECHNOLOGIES INC

The Board reviews the director compensation program annually in January. The director compensation program’s primary components are as follows:

Cash Retainers.

Long-Term Incentives. Annually, the Corporate Governance & Sustainability Committee considers long-term incentive awards to directors. In recent years, the awards have been in the form of restricted shares of Applied stock. The shares vest one year after the grant date, subject to conditions as to forfeiture and acceleration of vesting.

To mitigate the impact of short-term stock price volatility, the method for determining the shares’ targeted value uses an average closing share price for 90 trading days prior to the date of grant, similar to the approach used in determining equity awards for Applied’s executives.

Director Compensation

In January 2026, the committee awarded each director 572 restricted shares under the 2023 Long-Term Performance Plan, with a value, based on the average closing share price for 90 trading days prior to the grant date, of $148,000. In addition, after considering the Board Chairman’s extra responsibilities, the committee awarded Mr. Wallace an additional 116 shares, with a value based on the average closing share price for 90 trading days prior to the grant date of $30,000.

Other Benefits. Applied reimburses directors for travel expenses for attending meetings, as well as for attending director education seminars and conferences. The directors also participate in our travel accident insurance plan. Contributory health care coverage is available to directors who joined the Board before 2011; Mr. Wallace is the sole qualifying director and participant in fiscal year 2026. We believe these practices are generally consistent with those of other companies and are relatively modest in their cost to Applied.