APPLIED INDUSTRIAL TECHNOLOGIES INC
EXHIBIT 10
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                                                                      EXHIBIT 10


        NON-STATUTORY STOCK OPTION AWARD TERMS AND CONDITIONS (DIRECTORS)


         Your Non-Statutory Stock Option Award (the "Award") is made by Applied
Industrial Technologies, Inc., an Ohio corporation ("Applied").

1.       GRANT OF OPTION; EXERCISABILITY. The Award is governed by Applied's
1997 Long-Term Performance Plan (the "Plan"), including the policies adopted by
the Executive Organization & Compensation Committee of the Board of Directors
(the "Committee") under the Plan, and these terms and conditions. Applied grants
you an option to purchase the stated number of shares (the "Shares") of
Applied's common stock, without par value, at the stated price, subject to the
following conditions:

     (a) Your option rights are exercisable, in whole or in part, from the
     option's date of grant (the "Grant Date") until the option expiration date.

     (b) Your option rights expire at the end of the 10-year period commencing
     with the Grant Date (the "Term"), or upon such earlier expiration or
     termination date as may be provided by Section 2 below, and the option
     rights shall not be exercisable thereafter.

2.       TERMINATION OF OPTION. If, during the Term, you cease to be a director
of Applied for any reason, you may exercise your option rights at any time
within one year after your cessation as a director (but only during the Term).

         Notwithstanding anything in these terms and conditions, the Committee
may terminate the option if it determines, in its sole discretion, that you have
committed an act inimical to Applied's interests. The Committee's determination
shall be effective at the time of your act.

3.       METHOD OF EXERCISE.  During your life, your option rights may be
exercised only by you, your guardian, or legal representative. Upon your death,
your option rights may be exercised by the person so entitled by will or by the
laws of descent and distribution.

         Your option may be exercised by delivering to Applied at its principal
executive offices (directed to the attention of the Chief Financial Officer or
Corporate Secretary) a written notice (which may include facsimile transmission
or electronic mail), signed by you or such other person entitled to exercise the
option, of the election to exercise the option and stating the number of Shares
then being purchased. The option shall be deemed exercised as of the date
Applied receives the notice. The notice must be accompanied, as an essential
part thereof, by the payment of the full purchase price of the Shares then being
purchased. If the option is exercised, as provided herein, by any person other
than you, the notice shall be accompanied by appropriate evidence of that
person's right to exercise the option. Payment of the full purchase price may be
made in (a) cash or by certified or official bank check, (b) shares of Applied's
Common Stock ("Stock"), accompanied by appropriate stock powers, or (c) any
combination thereof. Stock used in payment of the purchase price shall be valued
at its Fair Market Value on the exercise date. As a condition to your valid
exercise of option rights, you must take such actions (if any), including the


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payment of cash and/or Stock, as Applied deems necessary pursuant to federal,
state or local tax laws, including withholding requirements. Promptly following
the option's proper exercise, Applied shall issue in the name of the person
exercising the option, and deliver to that person, a certificate or certificates
for the Shares purchased.

         As an option holder, you shall have no rights as a shareholder in
respect of any of the Shares as to which the option shall not have been
effectively exercised. Also, you shall have no rights as a shareholder in
respect of any Shares as to which the option shall have been duly exercised
until and unless Applied has issued a certificate or certificates for the
Shares.

4.       LIMITATIONS ON EXERCISE.  This option shall not be exercisable if the
         exercise would violate:

         (a)      Any state securities law;

         (b)      Any registration or other requirements under the Securities
         Act of 1933, as amended (the "Act"), the Securities Exchange Act of
         1934, as amended, or any stock exchange's listing requirements; or

         (c)      Any other legal requirement of any governmental authority.

         If your exercise of the option is prevented by the terms of any of the
foregoing subsections, and the option terminates pursuant to Section 2, then you
may, within 30 days after Applied notifies you that your exercise is no longer
prevented by this Section 4, exercise the option to the extent it would have
been exercisable but for the operation of this Section 4.

         Furthermore, if a registration statement with respect to the Shares to
be issued upon this option's exercise is not in effect or if Applied's counsel
deems it necessary or desirable in order to avoid possible violation of the Act,
Applied may require, as a condition to its issuance and delivery of certificates
for the Shares, the delivery to Applied of a commitment in writing by the person
exercising the option that (i) at the time of the exercise it is his intention
to acquire the Shares for his own account for investment only and not with a
view to, or for resale in connection with, the distribution thereof; (ii) the
person understands that the Shares may be "restricted securities" as defined in
Rule 144 issued under the Act; and (iii) any resale, transfer or other
disposition of the Shares will be accomplished only in compliance with Rule 144,
the Act, or other or subsequent rules and regulations thereunder. Applied may
place on the certificates a legend reflecting that commitment and Applied may
refuse to permit transfer of the certificates until it has been furnished
evidence satisfactory to it that no violation of the Act or the rules and
regulations thereunder would be involved in the transfer.

5.       NONASSIGNABILITY.  This option and the option rights granted are not
assignable or transferable and may not be otherwise disposed of by you other
than by will or by the laws of descent and distribution.

6.       LIQUIDATION, DISSOLUTION, MERGER, SALE OF SUBSTANTIALLY ALL ASSETS.
If (a) Applied is to be merged, consolidated or reorganized into or with another
entity so that Applied is not the surviving corporation and, immediately after
such event, the holders of Stock immediately prior to the event hold, in the
aggregate, less than a majority of the combined voting power of the then
outstanding securities of the new entity, (b) Applied is to be dissolved or
liquidated, or (c)


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substantially all of Applied's assets are to be sold, then the Committee shall
give you 30 days' prior written notice. Upon the giving of that notice, the
Company may elect to cancel the option and to pay you the greater of (x) the
difference (if positive) between the option purchase price and Fair Market Value
and (y) the difference (if positive) between the option purchase price and the
aggregate consideration that you would have received for the Shares in the
transaction described in clause (a), (b) or (c) above had the option been
exercised by you in whole immediately prior to consummation of such transaction.

7.       ADJUSTMENTS. In the event (a) of a stock dividend or stock split or
(b) the Stock is changed into or exchanged for a different number or kind of
securities of Applied or another entity, then the Shares purchasable hereunder,
and/or the option exercise price, shall be equitably adjusted so that the option
represents the right to purchase that number of Shares or the number and kind of
other securities that the Shares would have represented had the option been
fully exercised immediately preceding such event.

         In the event of other changes or events relating to the Stock that
fundamentally change the value of the Shares or securities for which the option
is exercisable, then the Committee shall make such adjustments in the number or
kind of shares of Stock or other securities covered by the option and in the
number or kind of shares of Stock or other securities purchasable at the option
exercise price, and/or such adjustments in the option exercise price, as the
Committee, in its sole discretion, may determine is equitably required by the
change or event.

         Notwithstanding anything to the contrary contained herein, you shall
not be entitled to purchase a fraction of a share under this option.

8.       COMMITTEE AUTHORITY. The Committee shall have authority, subject to
the Plan's express provisions, to construe these terms and conditions and the
Plan, to establish, amend and rescind rules and regulations relating to the
Plan, and to make all other determinations in the Committee's judgment necessary
or desirable for the Plan's administration. The Committee may correct any defect
or supply any omission or reconcile any inconsistency in the Plan or these terms
and conditions in the manner and to the extent it shall deem expedient to carry
the Plan into effect. All Committee action under this Section's provisions shall
be conclusive for all purposes.

9.       RELATIONSHIP TO THE PLAN. In the event of any inconsistency between
these terms and conditions and the Plan or the Committee's policies, the Plan or
the policies shall govern. Terms not otherwise defined in these terms and
conditions have the meaning ascribed them in the Plan. Notwithstanding any
provisions hereof, these terms and conditions and the option granted shall be
subject to all of the Plan's provisions in effect from time to time, which are
incorporated herein by reference.

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