CODE OF REGULATIONS

                                  OF

                 APPLIED INDUSTRIAL TECHNOLOGIES, INC.

 

                       MEETINGS OF SHAREHOLDERS

 

SECTION 1.        PLACE OF MEETING.

 

                  All meetings of the shareholders shall be held at the offices

of the Corporation in the City of Cleveland, Ohio, or elsewhere, within or

without the State of Ohio, as may be decided from time to time by the Board of

Directors and indicated in the notice of the meeting.

 

SECTION 2.        ANNUAL MEETING.

 

                  The annual meeting of shareholders of the Corporation shall be

held at 1:30 p.m., on the first Tuesday after the fifteenth day of October in

each year, if not a legal holiday, but if a legal holiday, then on the next

succeeding business day, or such other time and date as may be determined by the

Board of Directors. Directors shall be elected thereat to succeed the directors

whose terms are expiring that year, and such other business transacted as may be

specified in the notice of the meeting, or as may properly be brought before the

meeting. In the event that the annual meeting is not held or if directors are

not elected thereat, a special meeting may be called and held for that purpose.

 

SECTION 3.        SPECIAL MEETINGS.

 

                  Special meetings of the shareholders may be held on any

business day when called by the Chairman of the Board, the President, the Board

of Directors at a meeting, a majority of the directors acting without a meeting,

or by holders of not less than fifty percent (50%) of the outstanding voting

stock of the Corporation.

 

SECTION 4.        NOTICE OF MEETINGS.

 

                  A written or printed notice of every annual or special meeting

of the shareholders stating the time, place and purposes thereof shall be given

to each shareholder entitled to vote thereat and to each shareholder entitled to

notice as provided by law, which notice unless served upon a shareholder in

person shall be mailed to his last address appearing on the records of the

Corporation, not less than seven (7) days nor more than sixty (60) days prior to

the date of the meeting. It shall be the duty of the Secretary to give written

notice of the annual meeting, and of each special meeting when requested to do

so by the officer, directors or shareholders calling such meeting. Any

shareholder may waive in writing any notice of any meeting required to be given

by law or under these Regulations and, by attendance or voting at any meeting

without protesting the lack of proper notice, shall be deemed to have waived

notice thereof.

 

 

 

 

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SECTION 5.        SHAREHOLDERS' LIST.

 

                  A complete list of the shareholders entitled to vote at a

meeting of shareholders, arranged in alphabetical order, with the address of

each and the number of shares held of record by each, shall be prepared by or at

the instance of the Secretary and be available during the whole time of the

meeting for inspection by any shareholder who is present.

 

SECTION 6.        VOTING AND PROXIES.

 

                  At all meetings of shareholders, only such shareholders shall

be entitled to vote in person or by proxy, who appear upon the records of the

Corporation as the holders of stock at the time possessing voting power, or if a

record date be fixed as hereinafter provided, those appearing as such on such

record date. Except as otherwise provided in the Corporation's Articles of

Incorporation, at each meeting of the shareholders, every shareholder having the

right to vote shall be entitled to vote in person or by proxy appointed by an

instrument in writing, subscribed by such shareholder and bearing a date not

more that eleven (11) months prior to said meeting unless such instrument

specifies the date on which it is to expire or the length of time it is to

continue in force.

 

SECTION 7.        QUORUM AND ADJOURNMENTS.

 

                  Except as may be otherwise required by law or by the Articles

of Incorporation or by these Regulations, the holders of a majority of the then

outstanding shares entitled to vote at a shareholders' meeting shall constitute

a quorum to hold such meeting; provided, however, that any meeting duly called,

whether a quorum is present or otherwise may, by vote of the holders of a

majority of the voting stock represented thereat, adjourn from time to time and

from place to place without notice other than by announcement at such meeting.

 

                                    DIRECTORS

 

SECTION 8.        NUMBER.

 

                  The number of directors of the Corporation may be determined

by the vote of the holders of a majority of the shares represented at any annual

meeting or special meeting called for the purpose of electing directors or by

resolution adopted by affirmative vote of a majority of the directors then in

office, provided that the number of directors shall in no event be fewer than

nine (9) nor more then fourteen (14). When so fixed, such number shall continue

to be the authorized number of directors until changed by the shareholders or

directors by vote as aforesaid. No decrease in the number of directors shall

have the effect of removing any director prior to the expiration of the term for

which he was elected.

 

 

 

 

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SECTION 9.        CLASSIFICATION, ELECTION AND TERM OF OFFICE.

 

                  The directors shall be divided into three (3) classes,

designated Class I, Class II, and Class III, as nearly equal in size as

possible, and one of the classes shall be elected for a three-year term of

office at each annual shareholders meeting. If the number of directors is

changed, any increase or decrease shall be apportioned among the classes so as

to maintain the number of directors in each class as nearly equal as possible,

and any additional director of any class elected to fill a vacancy resulting

from an increase in such class shall hold office for a term that shall coincide

with the remaining term of such class, but in no case will a decrease in the

number of directors in a particular class shorten the term of any incumbent

director. A director shall hold office until the annual meeting for the year in

which his term expires and his successor shall be elected and shall qualify,

subject, however, to prior death, resignation, or removal from office.

 

SECITON 10.       REMOVAL.

 

                  Except as otherwise provided by law, all the Directors or all

the Directors of a particular class, or any individual Director, may be removed

from office with or without assigning any cause, by the affirmative vote of at

least eighty percent (80%) of the outstanding voting stock present in person or

represented by proxy, entitled to vote in respect thereof, at an annual meeting

or at any special meeting duly called.

 

SECTION 11.       VACANCIES.

 

                  Whenever any vacancy shall occur among the directors, the

remaining Directors shall constitute the directors of the Corporation until such

vacancy is filled or until the number of Directors is changed pursuant to

Section 8 hereof. Except in cases where a Director is removed as provided by law

and these Regulations and his successor is elected by the shareholders, the

remaining directors may, by a vote of a majority of their number, fill any

vacancy for the unexpired term. A majority of the Directors then in office may

also fill any vacancy that results from an increase in the number of Directors.

 

SECTION 12.       ORGANIZATION MEETING.

 

                  Immediately after each annual meeting of the shareholders, or

each special meeting held in lieu thereof, the Board of Directors, including the

newly elected members, if a quorum thereof is present, shall hold an

organization meeting at the same place or at such other place within a 10 mile

radius as may have been fixed by the Chairman of the Board or the President

prior to such meeting of the shareholders, provided that the Directors and

nominees present are advised of the different location, for the purpose of

electing officers and transacting any other business. Notice of such meeting

need not be given. If for any reason such organization meeting is not held at

such time, a special meeting for such purpose shall be held as soon thereafter

as practicable.

 

 

 

 

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SECTION 13.       REGULAR MEETINGS.

 

                  Regular meetings of the Board of Directors for the transaction

of any business may be held at such times and places as may be determined by the

Board of Directors. The Secretary shall give to each director at least five (5)

days written notice of each such meeting.

 

SECTION 14.       SPECIAL MEETINGS.

 

                  Special meetings of the Board of Directors may be held at any

time or place upon call by the Chairman of the Board, the President, or any five

directors. Notice of each such meeting shall be given to each director by

letter, telegram or telephone or in person not less than forty-eight (48) hours

prior to such meeting; provided, however, that such notice shall be deemed to

have been waived by the Directors attending or voting at any such meeting,

without protesting the lack of proper notice, and may be waived in writing, or

by telegram by any Director either before or after such meeting. Unless

otherwise limited in the notice thereof, any business may be transacted at any

organization, regular or special meeting.

 

SECTION 15.       QUORUM.

 

                  At all meetings of the Board of Directors a majority of the

Directors in office at the time shall constitute a quorum for the transaction of

business.

 

SECTION 16.       COMPENSATION.

 

                  If so determined by the Board of Directors, all or any members

of the Board of Directors or of any committee of the Board shall be paid for

their services and given such benefits as may be determined from time to time by

the Board of Directors; and such compensation may be in addition to that

received by any director or any member of a committee as an officer or employee

of the Corporation. Non-resident members may be reimbursed for expenses

reasonably incurred by them in attending such meetings.

 

                                  COMMITTEES

 

SECTION 17.       APPOINTMENT.

 

                  The Board of Directors may from time to time, by resolution

passed by a majority of the whole Board, appoint certain of its members, but not

less than three (3) in any case, to act as a committee or committees in the

intervals between meetings of the Board and may delegate to such committee or

committees any of the authority of the Board, however conferred (subject to the

control and direction of the Board) other than the power to fill any vacancy

among the Directors or in any committee of the Directors. The authority of any

committee of the directors shall be subject to any limitations and conditions

set by the Board. Any act or authorization of an act by any such committee

within the authority delegated to it shall be as effective for all purposes, as

the act or authorized action of the Directors. All action or authorization of

action by any committee shall be reported to the Board of Directors at its first

meeting thereafter, and, if the rights of third parties have not intervened,

shall be subject to revision or recession by the Board. In every case, the

affirmative vote of a majority or the consent of all of the members of

 

 

 

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a committee shall be necessary for the approval of any action, but action may be

taken by a committee without a formal meeting or written consent.

 

SECTION 18.       EXECUTIVE COMMITTEE.

 

                  In particular, the Board of Directors may create from its

membership and define the powers and duties of an Executive Committee. During

the intervals between meetings of the Board of Directors, the Executive

Committee shall possess and may exercise under the control and direction of the

Board all of the powers of the Board of Directors in the management and control

of the business of the Corporation. All action taken by the Executive Committee

shall be reported to the Board of Directors at it first meeting thereafter, and,

if the rights of third parties have not intervened, shall be subject to revision

or recession by the Board. In every case, the affirmative vote of a majority or

the consent of all of the members of the Executive Committee shall be necessary

for the approval of any action, but action may be taken by the Executive

Committee without a formal meeting or written consent. The Executive Committee

shall meet at the call of any member thereof.

 

                                    OFFICERS

 

SECTION 19.       OFFICERS DESIGNATED.

 

                  The officers of the Corporation shall be elected by the Board

of Directors at their organization meeting or at a special meeting held in lieu

thereof. The officers of the Corporation shall consist of the President, a

Secretary and a Treasurer, and, if so determined by the Board of Directors, a

Chairman of the Board, one or more Vice Presidents, a Controller and such other

officers and assistant officers as the Board may determine. The Chairman of the

Board shall be elected from among the directors. The other officers may, but

need not be, elected from among the Directors. Any two offices may be held by

the same person, but in any case where the action of more than one officer is

required no one person shall act in more than one capacity.

 

SECTION 20.       TENURE OF OFFICE.

 

                  The officers of the Corporation shall hold office until the

next organization meeting of the Board of Directors and until their respective

successors are chosen and qualified, except in case of resignation, death or

removal. The Board of Directors may remove any officer at any time with or

without cause by a majority vote of the directors in office at the time. A

vacancy, however created, in any office may be filled by the Board of Directors.

 

SECTION 21.       POWERS AND DUTIES OF OFFICERS IN GENERAL.

 

                  The powers and duties of the officers shall be exercised in

all cases subject to such directions as the Board of Directors may see fit to

give. The respective powers and duties hereinafter set forth are subject to

alteration by the Board of Directors. The Board of Directors is also authorized

to delegate the duties of any officer to any other officer, employee or

committee and to require the performance of duties in addition to those provided

for herein.

 

 

 

 

 

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SECTION 22.       CHAIRIMAN OF THE BOARD.

 

                  The Chairman of the Board shall preside at meetings of the

Board of Directors and, if the Chairman of the Board is the chief executive

officer of the Corporation, at meetings of the shareholders.

 

SECTION 23.       PRESIDENT.

 

                  The President shall preside at all meetings of the

shareholders and directors where the Chairman of the Board does not preside.

 

SECTION 24.       VICE PRESIDENTS.

 

                  In the absence or disability of the President, the Vice

Presidents, in the order designated by the Board of Directors, shall perform the

duties of the President. If so determined by the Board of Directors, a Vice

President may be designated as being in charge of a specified function or of a

specified division.

 

SECTION 25.       SECRETARY, TREASURER AND CONTROLLER.

 

                  The Secretary, the Treasurer and the Controller (if any) shall

perform such duties as are indicated by their respective titles, subject to the

provisions of Section 21 above. The Secretary shall have custody of the

corporate seal and shall have the duty to record the proceedings of the

shareholders and directors in a book to be kept for that purpose.

 

SECITON 26.       OTHER OFFICERS.

 

                  All other officers shall have such powers and duties as may be

prescribed by the Board of Directors or, in the absence of their action, by the

respective officers having supervision over them.

 

SECTION 27.       COMPENSATION.

 

                  The Board of Directors is authorized to determine, or to

provide the method of determining, or to empower a special committee of its

members to determine, the compensation of all officers.

 

SECTION 28.       SIGNING CHECKS AND OTHER INSTRUMENTS.

 

                  The Board of Directors is authorized to determine, or to

provide the method of determining, the manner in which deeds, contracts and

other obligations and instruments of the Corporation shall be signed. However,

persons doing business with the Corporation shall be entitled to rely upon the

action of the Chairman of the Board, the President, any Vice President, the

Secretary, the Treasurer or the Controller in executing contracts and other

obligations and instruments, other than deeds, of the Corporation as having been

duly authorized and to rely upon the action of any two (2) of the Chairman of

the Board, the President, any Vice President

 

 

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and the Secretary or any Assistant Secretary in executing deeds in the name of

the Corporation as having been duly authorized. The Board of Directors of the

Corporation is authorized to designate depositories of the funds of the

Corporation and to determine, or provide the method of determining, the manner

in which checks, notes, bills of exchange and similar instruments shall be

signed, countersigned or endorsed.

 

                                 INDEMNIFICATION

 

SECTION 29.       INDEMNIFICATION OF DIRECTORS AND OFFICERS.

 

                  The Corporation shall indemnify any Director or officer, any

former Director or officer of the Corporation and any person who is or has

served at the request of the Corporation as a director, officer or trustee of

another corporation, partnership, joint venture, trust, or other enterprise (and

his heirs, executors and administrators) against expenses, including attorneys'

fees, judgments, fines and amounts paid in settlement, actually and reasonably

incurred by him by reason of the fact that he is or was such director, officer

or trustee in connection with any threatened, pending or completed action, suit

or proceeding, whether civil, criminal, administrative or investigative to the

full extent and according to the procedures and requirements set forth in the

Ohio General Corporation Law as the same may be in effect from time to time. The

indemnification provided for herein shall not be deemed to restrict the right of

the Corporation to (i) indemnify employees, agents and others as permitted by

such Law, (ii) purchase and maintain insurance or provide similar protection on

behalf of directors, officers or such other persons against liabilities asserted

against them or expenses incurred by them arising out of their service to the

Corporation as contemplated herein, and (iii) enter into agreements with such

directors, officers, employees, agents or others indemnifying them against any

and all liabilities (or such lesser indemnification as may be provided in such

agreements) asserted against them or incurred by them arising out of their

service to the Corporation as contemplated herein.

 

 

                                 CORPORATE SEAL

 

SECTION 30.

 

                  The corporate seal of the Corporation shall be circular in

form and shall have inscribed thereon the name of the Corporation.

 

                     PROVISIONS IN ARTICLES OF INCORPORATION

 

 

SECTION 31.       PROVISIONS IN ARTICLES OF INCORPORATION.

 

                  These Regulations are at all times subject to the provisions

of the Articles of Incorporation of the Corporation as the same may be in effect

from time to time.

 

 

 

 

 

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                                LOST CERTIFICATES

 

SECTION 32.       LOST CERTIFICATES.

 

                  The Directors may direct, or establish procedures for, the

issuance of a new certificate in place of any certificate theretofore issued by

the Corporation alleged to have been lost, stolen or destroyed, upon such terms

and conditions as they may deem advisable.

 

                                  RECORD DATES

 

SECTION 33.       RECORD DATES.

 

                  For any lawful purpose, including, without limitation, the

determination of the shareholders who are entitled to: (i) receive notice of or

to vote at a meeting of shareholders; (ii) receive payment of any dividend or

distribution; (iii) receive or exercise rights or purchase of or subscription

for, or exchange or conversion of, shares or other securities, subject to

contract rights with respect thereto; or (iv) participate in the execution of

written consents, waivers, or releases, the directors may fix a record date

which shall not be a date earlier than the date on which the record date is

fixed and, in the cases provided for in clauses (i), (ii) and (iii) above, shall

not be more than sixty (60) nor fewer than ten (10) days, unless the Articles of

Incorporation specify a shorter or a longer period for such purpose, preceding

the date of the meeting of the shareholders, or the date fixed for the payment

of any dividend or distribution, or the date fixed for the receipt or the

exercise of rights, as the case may be.

 

                                   FISCAL YEAR

 

SECTION 34.

 

                  The fiscal year of the Corporation shall end on June 30 unless

and until the Board of Directors shall otherwise determine.

 

                                   AMENDMENTS

 

SECTION 35.       AMENDMENTS.

 

                  (a) These Regulations may be altered, changed or amended in

any respect or superseded by new Regulations in whole or in part, by the

affirmative vote of the holders of a majority of the voting stock of the

Corporation present in person or by proxy at an annual or special meeting

called for such purpose.

 

                  (b) Notwithstanding the provisions of Section 35(a) hereof and

notwithstanding the fact that a lesser percentage may be specified by law or in

any agreement with any national securities exchange or any other provision of

these Regulations, the amendment, alteration, change or repeal of, or adoption

of any provisions inconsistent with, Section 8, 9, or 10 of these Regulations

shall require the affirmative vote of at least eighty percent (80%) of the

outstanding voting stock of the Corporation, present in person or by proxy,

 

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at any annual meeting or special meeting duly called for the purpose of acting

on any such amendment, alteration, change, repeal or adoption, unless such

amendment, alteration, change, repeal or adoption has been recommended by at

least two-thirds of the Board of Directors of the Corporation then in office, in

which event the provisions of Section 35(a) hereof shall apply.

 

[As Filed: 11-15-1999]