Following approval by the Company's shareholders in October 2023, the 2023 Long-Term Performance Plan (the "2023 Plan") replaced the 2019 Long-Term Performance Plan. The 2023 Plan, which expires in 2028, provides for granting of SARs, stock options, stock awards, cash awards, and such other awards or combination thereof as the Executive Organization and Compensation Committee or, in the case of director awards, the Corporate Governance & Sustainability Committee, of the Board of Directors (together referred to as the "Committee") may determine to officers, other key employees and members of the Board of Directors. Grants are generally made at regularly scheduled Committee meetings. Compensation costs charged to expense under award programs paid (or to be paid) with shares (including SARs, performance shares, restricted stock, and RSUs) are summarized in the table below:


Year Ended June 30,	2025		2024		2023
SARs	$	4,713	$	3,448	$	2,785
Performance shares	2,999		4,232		5,302
Restricted stock and RSUs	4,290		5,264		4,274
Total compensation costs under award programs	$	12,002	$	12,944	$	12,361

Such amounts are included in selling, distribution, and administrative expense in the accompanying statements of consolidated income. The total income tax benefit recognized in the statements of consolidated income for share-based compensation plans was $6,270, $5,885, and $7,886 for fiscal 2025, 2024, and 2023, respectively. It has been the practice of the Company to issue shares from treasury to satisfy requirements of awards paid with shares.


June 30,	2025		Average Expected Period of Expected Recognition (Years)
SARs	$	6,543	2.5
Performance shares	7,037		1.7
Restricted stock and RSUs	3,030		2.1
Total unrecognized compensation costs under award programs	$	16,610	2.1

Cost of these programs will be recognized as expense over the weighted-average remaining vesting period of 2.1 years. The aggregate number of shares of common stock which may be awarded under the 2023 Plan is 1,600; shares available for future grants at June 30, 2025 were 1,460.


	2025		2024		2023
Expected life, in years	6.0		6.0		6.2
Risk free interest rate	3.7	%	4.1	%	2.9	%
Dividend yield	0.8	%	1.0	%	1.3	%
Volatility	37.3	%	37.0	%	35.5	%
Per share fair value of SARs granted during the year	$78.15		$55.65		$35.98

The expected life is based upon historical exercise experience of the officers, other key employees, 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. 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 assumption is calculated based upon historical daily price observations of the Company’s common stock for a period equal to the expected life.


	Shares	Weighted-Average Exercise Price
Year Ended June 30, 2025
(Shares in thousands)
Outstanding at beginning of year	712	$	82.65
Granted	83	199.30
Exercised	(82)	67.53
Forfeited	(3)	185.99
Outstanding at end of year	710	$	97.47
Exercisable at end of year	480	$	73.02
Expected to vest at end of year	704	$	96.96

The weighted-average remaining contractual terms for SARs outstanding, exercisable, and expected to vest at June 30, 2025 were 5.5, 4.3, and 5.5 years, respectively. The aggregate intrinsic values of SARs outstanding, exercisable, and expected to vest at June 30, 2025 were $95,798 $76,572, and $95,452, respectively. The aggregate intrinsic value of the SARs exercised during fiscal 2025, 2024, and 2023 was $12,982, $19,700, and $20,170, respectively.

Performance shares are paid in shares of Applied stock at the end of a three-year period provided the Company achieves goals established by the Committee. The number of Applied shares payable will vary depending on the level of the goals achieved.


	Shares	Weighted-Average Grant-Date Fair Value
Year Ended June 30, 2025
(Shares in thousands)
Non-vested at beginning of year	101	$	93.73
Awarded	23	135.53

Vested	(62)	84.86
Non-vested at end of year	62	$	117.80

The Committee established three one-year goals for each of the 2025, 2024, and 2023 grants. Each fiscal year during the three-year term has its own separate goals, tied to the Company’s earnings before interest, tax, depreciation, and amortization (EBITDA) and after-tax return on assets (ROA). Achievement during any particular fiscal year is awarded and “banked” for payout at the end of the three-year term. For the outstanding grants as of June 30, 2025, the maximum number of shares that could be earned in future periods was 41.

Under the 2023 Plan, restricted stock award recipients have voting rights with respect to their shares, but are restricted from selling or transferring the shares prior to vesting; dividends are accrued and paid upon vesting. Restricted stock awards vest over periods of one to four years. RSUs are grants valued in shares of Applied stock, but shares are not issued until the grants vest three to five years from the award date, assuming continued employment with Applied; dividend equivalents on RSUs are accrued and paid upon vesting.


	Shares	Weighted-Average Grant-Date Fair Value
Year Ended June 30, 2025
(Share amounts in thousands)
Non-vested at beginning of year	130	$	99.05
Granted	22	212.71
Forfeitures	(2)	145.77
Vested	(70)	84.44
Non-vested at end of year	80	$	142.41