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                                 FIRST AMENDMENT
                                     TO THE
                      APPLIED INDUSTRIAL TECHNOLOGIES, INC.
                     SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
                           (JULY 1, 1997 RESTATEMENT)


         WHEREAS, the Applied Industrial Technologies, Inc. Supplemental
Executive Retirement Plan (formerly known as the Bearings, Inc. Supplemental
Executive Retirement Plan and hereinafter referred to as the "Plan") was
established on January 21, 1988, by Applied Industrial Technologies, Inc.
(formerly known as Bearings, Inc. and hereinafter referred to as the "Company")
to provide supplemental retirement benefits for certain key executives of the
Company; and

         WHEREAS, effective as of July 1, 1997, the Plan was amended and
restated; and

         WHEREAS, the Company desires to amend certain distribution provisions
of the Plan;

         NOW, THEREFORE, effective as of August 5, 1998, the Plan is hereby
amended in the respects hereinafter set forth.

         1.  Section 1.1 of the Plan is hereby amended by the addition of a
Paragraph (16) at the end thereof to provide as follows:


                     (16)  The term "POTENTIAL CHANGE OF CONTROL" shall mean the
              occurrence of either of the following events:

                           (i)      any "person" becomes the "beneficial owner"
                                    (as those terms are defined by the
                                    Securities Exchange Act of 1934), directly
                                    or indirectly, of Company securities
                                    representing 15% or more of the combined
                                    voting power of then outstanding securities
                                    of the Company; or

                           (ii)     any person publicly announces an intention
                                    to take or to consider taking actions which,
                                    if consummated, would constitute a Change of
                                    Control.

         2.  Section 7.3 of the Plan is hereby amended to provide as follows:

                     7.3 PAYMENT OF BENEFITS UPON A CHANGE IN CONTROL. Except as
              otherwise provided in this Section 7.3 any monthly supplemental
              retirement benefit which is calculated under Section 7.2 and which
              is payable to an eligible Participant shall not be paid in a
              monthly annuity form but instead shall be paid in a single sum




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              determined using the actuarial factors and interest rate set forth
              in Section 11.7, unless such Participant elects (i) during the
              30-day period after a Potential Change of Control, or (ii) prior
              to the occurrence of a Change of Control, whichever occurs
              earlier, to receive, after his termination of employment with the
              Company such monthly supplemental retirement benefits in one of
              the optional payments forms described in Section 6.1 of the Plan.
              Moreover, in the event of a Change of Control, each Participant
              and each Contingent Annuitant of a deceased Participant, who is
              receiving monthly supplemental retirement benefits under the Plan,
              shall receive the actuarial present value of future payments of
              such monthly benefits in a single sum determined pursuant to the
              provisions of Section 11.7. Any such single sum payment payable
              under this Section 7.3 shall be made to an eligible Participant or
              an eligible Contingent Annuitant as soon as reasonably practicable
              but in no event later than 60 days after such Change of Control.

         Executed at Cleveland, Ohio this 21st day of December, 1998.

                                         APPLIED INDUSTRIAL TECHNOLOGIES, INC.



                                         By:   /s/ John R. Whitten
                                            ------------------------------------
                                               Title:  Vice President
