Amendment #1
            
                               AMENDMENT NO. 1 TO
 
                      APPLIED INDUSTRIAL TECHNOLOGIES, INC.
 
                         1997 LONG-TERM PERFORMANCE PLAN
 
      This Amendment No. 1 to Applied Industrial Technologies, Inc. 1997
Long-Term Performance Plan (the "Plan") shall be effective as of August 8, 2003.
 
Section 1. Section 22 of the Plan shall be amended such that that section
provides, in its entirety:
 
            "22. EFFECTIVE AND TERMINATION DATES
 
                  The Plan shall become effective on the date it is first
            approved by the holders of a majority of the Common Shares then
            outstanding. Unless subsequently approved by the holders of a
            majority of the Common Shares then outstanding, the Plan shall
            continue in effect until October 22, 2012 or until earlier
            terminated by the Board pursuant to Section 11. Notwithstanding the
            foregoing, any Awards granted under the Plan prior to its
            termination shall remain outstanding in accordance with the terms of
            such Awards."
 
Section 2. The officers of the Corporation are hereby severally authorized and
directed to do all things necessary and appropriate to carry out the purposes of
this amendment. All actions previously undertaken by the officers of the
Corporation with respect to the subject matter of this amendment are hereby
ratified, confirmed and approved.
 
Executed at Cleveland, Ohio, this 12th day of August, 2003.
 
                                        APPLIED INDUSTRIAL TECHNOLOGIES, INC.
 
 
                                        By: /s/ D. L. Pugh
                                            -----------------------------------
                                            Title:  Chairman & CEO
 
                                        By: /s/ Fred Bauer
                                            -----------------------------------
                                            Title:  Vice President
 
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          APPLIED INDUSTRIAL TECHNOLOGIES, INC.
 
                         1997 LONG-TERM PERFORMANCE PLAN
 
1.  OBJECTIVES
 
         The Applied Industrial Technologies, Inc. 1997 Long-Term Performance
Plan (the "Plan") is designed to foster and promote the long-term growth and
performance of the Company by: (a) strengthening the Company's ability to
develop and retain an outstanding management team, (b) motivating superior
performance by means of long-term performance related incentives and (c)
enabling key management employees and outside directors to participate in the
long-term growth and financial success of the Company. These objectives will be
promoted by awarding to such persons performance-based stock awards, restricted
stock, stock options, stock appreciation rights and/or other performance or
stock-based awards.
 
2.  DEFINITIONS
 
         (a) "Award" -- The grant of stock or any form of stock option, stock
appreciation right, performance share, restricted stock, other stock-based award
or cash whether granted singly, in combination or in tandem, to a Plan
Participant pursuant to such terms, conditions and limitations as the Committee
may establish in order to fulfill the objectives of the Plan.
 
         (b) "Award Agreement" -- An agreement between the Company and a
Participant that sets forth the terms, conditions and limitations applicable to
an Award.
 
         (c) "Board" -- The Board of Directors of the Company.
 
         (d) "Common Shares" or "shares" -- Authorized and issued or unissued
shares of common stock without par value of the Company.
 
         (e) "Code" -- The Internal Revenue Code of 1986, as amended from time
to time.
 
         (f) "Committee" -- The Executive Organization and Compensation
Committee of the Company's Board, or such other committee of the Board that is
designated by the Board to administer the Plan. The Committee shall be
constituted so as to satisfy any applicable legal requirements including the
requirements of Rule 16b-3 promulgated under the Securities Exchange Act of 1934
(the "Exchange Act") or any similar rule which may subsequently be in effect
("Rule 16b-3"). The members shall be appointed by, and serve at the pleasure of,
the Board and any vacancy on the Committee shall be filled by the Board.
 
 
<PAGE>   2
 
 
 
         (g) "Company" -- Applied Industrial Technologies, Inc., an Ohio
corporation, and its direct and indirect subsidiaries.
 
         (h) "Fair Market Value" -- The average of the high and low prices of
Common Shares as reported on the composite tape for securities listed on the New
York Stock Exchange for the date in question, provided that if no sales of
Common Shares were made on said exchange on that date, the average of the high
and low prices of Common Shares as reported on said composite tape for the
preceding day on which sales of Common Shares were made on said Exchange.
 
         (i) "Participant" -- Any employee of the Company, or other person whose
selection the Committee determines to be in the best interests of the Company,
to whom an Award has been made under the Plan.
 
         (j) "Section 162(m) Employee" -- Any employee with respect to which
compensation paid is subject to the restrictions imposed by Section 162(m) of
the Code, or any similar or successor restrictions.
 
3.  ELIGIBILITY
 
         Persons eligible to be selected as Participants shall include employees
of the Company who hold responsible managerial or professional positions and
outside directors whose performance, in the judgment of the Committee, can
contribute to the continued growth and success of the Company. The selection of
Participants shall be within the sole discretion of the Committee. Grants may be
made to the same Participant on more than one occasion.
 
4.  COMMON SHARES AVAILABLE FOR AWARDS
 
         The aggregate number of Common Shares which may be awarded under the
Plan in each fiscal year of the Company, subject to adjustment as provided in
Section 15 hereof, shall be two percent (2%) of the total outstanding Common
Shares as of the first day of such year for which the Plan is in effect;
provided that such number shall be increased in any year by the number of Common
Shares available for grant hereunder in previous years but not the subject of
Awards granted hereunder in such year; and provided further, that no more than
two hundred thousand (200,000) Common Shares shall be cumulatively available for
the grant of incentive stock options under the Plan and that no more than three
hundred thousand (300,000) Common Shares will be available for the grant of
Stock Options, Stock Appreciation Rights, and Stock Awards to any individual
Participant in any one calendar year. In addition, any Common Shares issued by
the Company through the assumption or substitution of outstanding grants from an
acquired corporation or entity shall not reduce the Common Shares available for
grants under the Plan. Such Shares may consist, in whole or in part, of
authorized and unissued shares or treasury shares.
 
         From time to time, the Board and appropriate officers of the Company
shall take whatever actions are necessary to file required documents with
governmental authorities and stock exchanges to 
 
 
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<PAGE>   3
 
 
 
make Common Shares available for issuance pursuant to Awards. Any Common Shares
subject to an Option which for any reason is canceled (excluding shares subject
to an Option canceled upon the exercise of a related stock appreciation right
("SAR") to the extent shares are issued upon exercise of such SAR) or terminated
without having been exercised, or any shares of Restricted Stock or Performance
Shares which are forfeited, shall again be available for Awards under the Plan.
No fractional shares shall be issued, and the Committee shall determine the
manner in which fractional share value shall be treated.
 
5.  ADMINISTRATION
 
         The Plan shall be administered by the Committee which shall have full
and exclusive power and authority to interpret the Plan, to grant waivers of
Plan restrictions and to adopt such rules, regulations and guidelines for
carrying out the Plan as it may deem necessary or proper, all of which powers
shall be executed in the best interests of the Company and in keeping with the
objectives of the Plan. In particular, the Committee shall have the authority
to: (i) select eligible Participants as recipients of Awards; (ii) determine the
number and type of Awards to be granted; (iii) determine the terms and
conditions, not inconsistent with the terms hereof, of any Award granted; (iv)
adopt, alter and repeal such administrative rules, guidelines and practices
governing the Plan as it shall, from time to time, deem advisable; (v) interpret
the terms and provisions of the Plan and any Award granted; (vi) prescribe the
form of any agreement or instrument executed in connection with any Award; and
(vii) otherwise supervise the administration of the Plan. In addition, the Board
shall have authority, without amending the Plan, to grant Awards hereunder to
Participants who are foreign nationals or employed outside the United States or
both, on terms and conditions different from those specified herein as may in
the sole judgment and discretion of the Board, be necessary or desirable to
further the purpose of the Plan. All decisions made by the Committee pursuant to
the provisions hereof shall be made in the Committee's sole discretion and shall
be final and binding on all persons.
 
6. DELEGATION OF AUTHORITY
 
         The Committee may to the extent that any such action will not prevent
the Plan from complying with Rule 16b-3, delegate any of its authority hereunder
to such persons as it deems appropriate.
 
7. AWARDS
 
         The Committee shall determine the type or types of Award(s) to be made
to each Participant and shall set forth in the related Award Agreement the
terms, conditions and limitations applicable to each Award. Awards may include
but are not limited to those listed in this Section 7. Awards may be granted
singly, in combination or in tandem or in exchange for a previously granted
Award; provided that the exercise price for stock options shall not be less than
the Fair Market Value on the date of grant of the new Award. Awards may also be
made in combination or in tandem with, in replacement of, or as alternatives to,
grants or rights under any other employee plan of the Company, including the
plan of any acquired entity.
 
 
                                       3
<PAGE>   4
 
 
 
         (a) Stock Option -- A grant of a right to purchase a specified number
of Common Shares during a specified period and at a specified price not less
than the Fair Market Value on the date of grant, as determined by the Committee.
A stock option may be in the form of an incentive stock option ("ISO") which, in
addition to being subject to applicable terms, conditions and limitations
established by the Committee, complies with Section 422A of the Code which,
among other limitations, currently provides that the aggregate Fair Market Value
(determined at the time the option is granted) of Common Shares exercisable for
the first time by a Participant during any calendar year shall not exceed
$100,000 (or such other limit as may be required by the Code); that the exercise
price shall be not less than 100% of Fair Market Value on the date of the grant;
that such options shall be exercisable for a period of not more than ten years
and may be granted no later than ten years after the effective date of this
Plan.
 
         (b) Stock Appreciation Right or SAR -- A right to receive a payment, in
cash and/or Common Shares, equal to the excess of the Fair Market Value or other
specified valuation of a specified number of Common Shares on the date the SAR
is exercised over the Fair Market Value or other specified valuation on the date
of grant of the SAR as set forth in the applicable Award Agreement, except that
where the SAR is granted in tandem with a stock option, the grant and exercise
valuations must be no less than Fair Market Value.
 
         (c) Stock Award -- An Award made in Common Shares and other Awards that
are valued in whole or in part by reference to, or are otherwise based on,
Common Shares. All or part of any stock award may be subject to conditions
established by the Committee, and set forth in the Award Agreement.
 
         (d) Cash Award -- An Award denominated in cash with the eventual
payment amount subject to future service and such other restrictions and
conditions as may be established by the Committee, and as set forth in the Award
Agreement. The maximum amount of any Cash Award payable to any Participant in
any one calendar year shall be two million dollars ($2,000,000).
 
         (e)(1) With respect to grants of Awards to any Section 162(m) Employee,
the Stock Awards and Cash Awards made pursuant to paragraphs (c) and (d) shall
be based on the satisfaction of performance goals established by the Committee
at the time an Award is granted, which goals shall include one or more of the
following: sales, costs and expenses, cash flow, pre-tax income, net income,
operating profit and margin, earnings per share, retained earnings, return on
equity, return on assets, return on investment, asset turnover, liquidity,
capitalization, value created, stock price, total shareholder return, price
measures, market share, sales to targeted customers, customer satisfaction,
employee satisfaction, safety measures, quality measures, productivity, process
improvement, educational and technical skills of employees, changes in one or
more of the preceding, development of criteria for and programs related to
hiring and promotion, creation and acquisition of new business units,
development and implementation of business plans and programs relating to
product lines or business units, integration of acquired businesses, development
and implementation of employee training and development programs, implementation
of tax and accounting elections, and development 
 
 
 
                                       4
<PAGE>   5
 
 
and implementation of communications and investor relations programs; provided
however, that all performance goals shall be objective performance goals
satisfying the requirements for "performance-based compensation" within the
meaning of section 162(m)(4) of the Code. Such performance goals may also be
based on the attainment of levels of performance of the Company and/or any of
its affiliates under one or more of the measures described above relative to the
performance of other businesses.
 
               (2) With respect to grants of Awards to any Participant who is
not a Section 162(m) Employee, the Awards may be based on any of the goals
described in paragraph (1) and on such other conditions as may be established by
the Committee.
 
8.  PAYMENT OF AWARDS
 
         Payment of Awards may be made in the form of cash, Common Shares or
combinations thereof and may include such restrictions as the Committee shall
determine, including in the case of Common Shares, restrictions on transfer and
forfeiture provisions. When transfer of shares is so restricted or subject to
forfeiture provisions, such shares are referred to as "Restricted Stock."
Further, with Committee approval, payments may be deferred, either in the form
of installments or a future lump sum payment. The Committee may permit selected
Participants to elect to defer payments of some or all types of Awards in
accordance with procedures established by the Committee to assure that such
deferrals comply with applicable requirements of the Code including, at the
choice of Participants, the capability to make further deferrals for payment
after retirement. Any deferred payment, whether elected by the Participant or
specified by the Award Agreement or by the Committee, may require the payment to
be forfeited in accordance with the provisions of Section 13 of the Plan.
Dividends or dividend equivalent rights may be extended to and made part of any
Award denominated in shares or units of Shares, subject to such terms,
conditions and restrictions as the Committee may establish. The Committee may
also establish rules and procedures for the crediting of interest on deferred
cash payments and dividend equivalents for deferred payments denominated in
shares or units of shares. At the discretion of the Committee, a Participant may
be offered an election to substitute an Award for another Award or Awards of the
same or different type; provided that Awards may not be made to substitute for
previously granted stock options having higher exercise prices.
 
 
 
                                       5
<PAGE>   6
 
 
 
9.  STOCK OPTION EXERCISE
 
         The price at which shares may be purchased under a stock option shall
be paid in full at the time of the exercise in cash or, if permitted by the
Committee, by means of tendering Common Shares or surrendering another Award,
including Restricted Stock, valued at Fair Market Value on the date of exercise,
or by any other means which the Committee determines to be consistent with the
Plan's objectives and applicable law and regulations. The Committee shall
determine acceptable methods for tendering Common Shares or other Awards and may
impose such conditions on the use of Common Shares or other Awards to exercise a
stock option as it deems appropriate. In the event shares of Restricted Stock
are tendered as consideration for the exercise of a stock option, a number of
the shares issued upon the exercise of the stock option, equal to the number of
shares of Restricted Stock used as consideration therefor, shall be subject to
the same restrictions as the Restricted Stock so submitted plus any additional
restrictions that may be imposed by the Committee.
 
10.  TAX WITHHOLDING
 
         The Corporation shall have the authority to withhold, or to require a
Participant to remit to the Corporation, prior to issuance or delivery of any
shares or cash hereunder, an amount sufficient to satisfy federal, state and
local tax withholding requirements associated with any Award. In addition, the
Corporation may, in its sole discretion, permit a Participant to satisfy any tax
withholding requirements, in whole or in part, by (i) delivering to the
Corporation shares of common stock held by such Participant having a Fair Market
Value equal to the amount of the tax or (ii) directing the Corporation to retain
Common Shares otherwise issuable to the Participant under the Plan. If Common
Shares are used to satisfy tax withholding, such shares shall be valued based on
the Fair Market Value when the tax withholding is required to be made.
 
11.  AMENDMENT, MODIFICATION, SUSPENSION OR DISCONTINUANCE OF THIS PLAN
 
         The Board may amend, modify, suspend or terminate the Plan for the
purpose of meeting or addressing any changes in legal requirements or for any
other purpose permitted by law. Subject to changes in law or other legal
requirements which would permit otherwise, the Plan may not be amended without
consent of the holders of the majority of the Common Shares then outstanding, to
(i) increase the aggregate number of Common Shares that may be issued under the
Plan (except for adjustments pursuant to the Plan), (ii) materially modify the
requirements as to eligibility for participation in the Plan, or (iii) withdraw
administration of the Plan from the Committee.
 
         The Board may amend the terms of any Award theretofore granted,
prospectively or retroactively, but no such amendment shall impair the rights of
any Participant without his consent and no such amendment shall have the effect,
with respect to any Section 162(m) Employee, of increasing the amount of any
Award from the amount that would otherwise be payable pursuant to the formula
and/or goals previously established for such Participant. The Board may also
make Awards hereunder 
 
 
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<PAGE>   7
 
 
 
in replacement of, or as alternatives to, Awards previously granted to
Participants, except for previously granted options having higher exercise
prices, but including without limitation grants or rights under any other plan
of the Company or of any acquired entity.
 
12.  TERMINATION OF EMPLOYMENT
 
         If the employment of a Participant terminates for any reason, all
unexercised, deferred and unpaid Awards shall be exercisable or paid in
accordance with the applicable Award Agreement, which may provide that the
Committee may authorize, as it deems appropriate, the acceleration and/or
continuation of all or any part of Awards granted prior to such termination.
 
13.  CANCELLATION AND RESCISSION OF AWARDS
 
         Unless the Award Agreement specifies otherwise, the Committee may
cancel any unexpired, unpaid, or deferred Awards at any time if the Participant
is not in compliance with all other applicable provisions of the Award
Agreement, the Plan and with the following conditions:
 
                  (a) A Participant shall not render services for any
         organization or engage directly or indirectly in any business which, in
         the judgment of the Chief Executive Officer of the Company or other
         senior officer designated by the Committee, is or becomes competitive
         with the Company, or which organization or business, or the rendering
         of services to such organization or business, is or becomes otherwise
         prejudicial to or in conflict with the interests of the Company. For
         Participants whose employment has terminated, the judgment of the Chief
         Executive Officer shall be based on the Participant's position and
         responsibilities while employed by the Company, the Participant's
         post-employment responsibilities and position with the other
         organization or business, the extent of past, current and potential
         competition or conflict between the Company and the other organization
         or business, the effect on the Company's customers, suppliers and
         competitors of the Participant's assuming the post-employment position,
         and such other considerations as are deemed relevant given the
         applicable facts and circumstances. A Participant who has retired shall
         be free, however, to purchase as an investment or otherwise, stock or
         other securities of such organization or business so long as they are
         listed upon a recognized securities exchange or traded
         over-the-counter, and such investment does not represent a substantial
         investment to the Participant or a greater than one percent (1%) equity
         interest in the organization or business.
 
                  (b) A Participant shall not, without prior written
         authorization from the Company, disclose to anyone outside the Company,
         or use in other than the Company's business, any confidential
         information or material relating to the business of the Company,
         acquired by the Participant either during or after employment with the
         Company.
 
                  (c) Upon exercise, payment or delivery pursuant to an Award,
         the Participant shall certify on a form acceptable to the Committee
         that he or she is in compliance with the terms and conditions of the
         Plan. Failure to comply with the provisions of paragraph (a), (b) or
         (c) of 
 
 
 
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<PAGE>   8
 
 
 
         this Section 13 prior to, or during the six months after, any exercise,
         payment or delivery pursuant to an Award (except in the event of an
         intervening Change in Control as defined below) shall cause such
         exercise, payment or delivery to be rescinded. The Company shall notify
         the Participant in writing of any such rescission within two years
         after such exercise, payment or delivery. Within ten days after
         receiving such a notice from the Company, the Participant shall pay to
         the Company the amount of any gain realized or payment received as a
         result of the rescinded exercise, payment or delivery pursuant to an
         Award. Such payment shall be made either in cash or by returning to the
         Company the number of Common Shares that the Participant received in
         connection with the rescinded exercise, payment or delivery.
 
14. NONASSIGNABILITY
 
         Except as may be otherwise provided in the relevant Award Agreement, no
Award or any benefit under the Plan shall be assignable or transferable, or
payable to or exercisable by, anyone other than the Participant to whom it was
granted.
 
15.  ADJUSTMENTS; WAIVER OF RESTRICTIONS
 
         (a) In the event of any change in capitalization of the Company by
reason of a stock split, stock dividend, combination, reclassification of
shares, recapitalization,merger,consolidation, exchange of shares, spin-off,
spin-out or other distribution of assets to shareholders, or similar event, the
Committee may adjust proportionally (i) the Common Shares (1) reserved under the
Plan, (2) available for ISOs and (3) covered by outstanding Awards denominated
in stock or units of stock; (ii) the stock prices related to outstanding Awards;
and (iii) the appropriate Fair Market Value and other price determinations for
such Awards. In the event of any other change affecting the Common Shares or any
distribution (other than normal cash dividends) to holders of capital stock,
such adjustments as may be deemed equitable by the Committee, shall be made to
give proper effect to such event. In the event of a corporate merger,
consolidation, acquisition of property or stock, separation, reorganization or
liquidation, the Committee shall be authorized to issue or assume stock options,
whether or not in a transaction to which Section 425(a) of the Code applies, by
means of substitution of new options for previously issued options or an
assumption of previously issued options.
 
         (b) The Board may, in its sole discretion, based on such factors as the
Board or the Award Agreement may deem appropriate, waive in whole or in part,
any remaining restrictions or vesting requirements in connection with any Award
hereunder.
 
 
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<PAGE>   9
 
 
 
16.  CHANGE IN CONTROL
 
         (a) In the event of a Change in Control (as defined below) of the
Company, and except as the Board may expressly provide otherwise, (i) all Stock
Options or Stock Appreciation Rights then outstanding shall become fully
exercisable as of the date of the Change in Control, whether or not then
exercisable, (ii) all restrictions and conditions of all Stock Awards then
outstanding shall be deemed satisfied as of the date of the Change in Control,
and (iii) all Cash Awards shall be deemed to have been fully earned as of the
date of the Change in Control.
 
         (b) A "Change in Control" of the Company shall have occurred when any
of the following events shall occur:
 
         (i) The Company is merged, consolidated or reorganized into or with
         another corporation or other legal person, and immediately after such
         merger, consolidation or reorganization less than a majority of the
         combined voting power of the then-outstanding securities of such
         corporation or person immediately after such transaction are held in
         the aggregate by the holders of Voting Stock (as that term is hereafter
         defined) of the Company immediately prior to such transaction;
 
         (ii) The Company sells all or substantially all of its assets to any
         other corporation or other legal person, less than a majority of the
         combined voting power of the then-outstanding securities of such
         corporation or person immediately after such sale are held in the
         aggregate by the holders of Voting Stock of the Company immediately
         prior to such sale;
 
         (iii) There is a report filed or required to be filed on Schedule 13D
         on Schedule 14D-1 (or any successor schedule, form or report), each as
         promulgated pursuant to the Securities Exchange Act of 1934, as amended
         (the "Exchange Act"), disclosing that any person (as the term "person"
         is used in Section 13(d)(3) or Section 14(d)(2) of the Exchange Act)
         has become the beneficial owner (as the term "beneficial owner, is
         defined under Rule 13d-3 or any successor rule or regulation
         promulgated under the Exchange Act) of securities representing 20% or
         more of the combined voting power of the then-outstanding securities
         entitled to vote generally in the election of directors of the Company
         ("Voting Stock");
 
         (iv) The Company files a report or proxy statement with the Securities
         and Exchange Commission pursuant to the Exchange Act disclosing in
         response to Form 8-K or Schedule 14A (or any successor schedule, form
         or report or item therein) that a change in control of the Company has
         or may have occurred or will or may occur in the future pursuant to any
         then-existing contract or transaction; or
 
         (v) If during any period of two consecutive years, individuals who at
         the beginning of any such period constitute the Directors of the
         Company cease for any reason to constitute at least a majority thereof,
         provided, however, that for purposes of this clause (v), each Director
         who is first elected, or first nominated for election by the Company's
         stockholders by a vote of at least two-thirds of the Directors of the
         Company (or a committee thereof) then still in office who 
 
 
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<PAGE>   10
 
 
 
         were Directors of the Company at the beginning of any such period will
         be deemed to have been a Director of the Company at the beginning of
         such period.
 
         Notwithstanding the foregoing provisions of Section 16(b)(iii) or (iv)
hereof, unless otherwise determined in a specific case by majority vote of the
Board, a "Change in Control" shall not be deemed to have occurred for purposes
of the Plan solely because (i) the Company, (ii) an entity in which the Company
directly or indirectly beneficially owns 50% or more of the voting securities or
interest, or (iii) any Company-sponsored employee stock ownership plan or any
other employee benefit plan of the Company, either files or becomes obligated to
file a report or a proxy statement under or in response to Schedule 13D,
Schedule 14D-1, Form 8-K or Schedule 14A (or any successor schedule, form or
report or item therein) under the Exchange Act, disclosing beneficial ownership
by it of shares of Voting Stock, whether in excess of 20% or otherwise, or
because the Company reports that a change in control of the Company has or may
have occurred or will or may occur in the future by reason of such beneficial
ownership.
 
17.  NOTICE
 
         Any written notice to the Company required by any of the provisions of
the Plan shall be addressed to the Chief Financial Officer or to the Chief
Executive Officer of the Company, and shall become effective when it is received
by the office of the Chief Financial Officer or the Chief Executive Officer.
 
18.  UNFUNDED PLAN
 
         Insofar as it provides for Awards of cash and Common Shares, the Plan
shall be unfunded. Although bookkeeping accounts may be established with respect
to Participants who are entitled to cash, Common Shares or rights thereto under
the Plan, any such accounts shall be used merely as a bookkeeping convenience.
The Company shall not be required to segregate any assets that may at any time
be represented by cash, Common Shares or rights thereto, nor shall the Plan be
construed as providing for such segregation, nor shall the Company nor the Board
nor the Committee be deemed to be a trustee of any cash, Common Shares or rights
thereto to be granted under the Plan. Any liability of the Company to any
Participant with respect to a grant of cash, Common Shares or rights thereto
under the Plan shall be based solely upon any contractual obligations that may
be created by the Plan and any Award Agreement; no such obligation of the
Company shall be deemed to be secured by any pledge or other encumbrance on any
property of the Company. Neither the Company nor the Board nor the Committee
shall be required to give any security or bond for the performance of any
obligation that may be created by the Plan.
 
19.  GOVERNING LAW
 
         The Plan and all determinations made and actions taken pursuant hereto,
to the extent not otherwise governed by the Code or the securities laws of the
United States, shall be governed by the law of the State of Ohio and construed
accordingly.
 
 
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20.  RIGHTS OF EMPLOYEES
 
         Nothing in the Plan shall interfere with or limit in any way the right
of the Company or any subsidiary to terminate any Participant's employment at
any time, nor confer upon any Participant any right to continued employment with
the Company or any subsidiary.
 
21.  STATUS OF AWARDS
 
         Awards hereunder shall not be deemed compensation for purposes of
computing benefits under any retirement plan of the Company and shall not affect
any benefits under any other benefit plan now or hereafter in effect under which
the availability or amount of benefits is related to the level of compensation.
 
22.  EFFECTIVE AND TERMINATION DATES
 
         The Plan shall become effective on the date it is approved by the
holders of a majority of the Common Shares then outstanding. The Plan shall
continue in effect until terminated by the Board pursuant to Section 11.