Management Incentive Plan General Terms

EXHIBIT 10.01

Management Incentive Plan General Terms

Authority

The annual Management Incentive Plan (the “Plan”) is established by the Executive Organization & Compensation Committee of the Board of Directors of Applied Industrial Technologies, Inc. (the “Committee”) under the 2007 Long-Term Performance Plan (the “2007 LTPP”).

Objective

The Plan’s objective is to reward eligible participants for their contributions toward the achievement of Applied’s fiscal year business goals.

Participation

The Plan’s participants are those key employees of Applied who are designated as Plan participants by the Committee.

Plan Goals

The Committee shall establish the Plan’s goals. Notwithstanding the foregoing, in the event of (i) a merger, a consolidation, an acquisition or divestiture, the issuance or repurchase of a substantial amount of capital stock, a reorganization or restructuring, or any other transaction or series of transactions, or (ii) asset write-downs, or litigation or claim judgments or settlements, or foreign exchange gains or losses, or (iii) changes in tax laws, accounting principles, or other laws or provisions affecting reported results, or (iv) other extraordinary nonrecurring items, then the Committee, in its sole discretion, may adjust the Plan goals, in order to prevent diminution or enlargement of the benefits intended to be conferred, in such manner as the Committee determines is equitably required by the changes or events.

Eligibility for Awards

If Plan goals are met, to be eligible for an award under the Plan, a participant must comply with the terms and conditions of the 2007 LTPP. In addition, except as provided in the 2007 LTPP, the participant must be actively employed by Applied on the last day of the fiscal year, except that,