EXHIBIT 10.1


                                   AGREEMENT

         Agreement made this 9th day of May, 1994 by and between Applied Power
Inc. ("API") and Richard G. Sim ("Sim").

                                  WITNESSETH:

         For and in consideration of the mutual promises of the parties and for
other valuable consideration, receipt of which is hereby acknowledged by each
party, the parties hereto agree as follows:

 1.      Employment Agreement.   The Employment Agreement between API and Sim,
dated July 5, 1985, and the First Amendment to the Employment Agreement, dated
September 2, 1986, are hereby terminated, effective as of the date hereof.

2.       Salary Continuation.  Sim shall continue to receive his then current
salary for a period of one year following his termination of employment with
API, and a pro-rata portion of his bonus award earned for the fiscal year of
termination as determined after the end of such fiscal year, if such
termination occurs because of Sim's death or permanent disability that prevents
him from fulfilling his duties to API.

3.       Long-term Disability Benefit.  API will maintain its present long-term
disability benefit plan, or a substantially similar program providing
comparable (or greater) benefits, as to Sim during the term of this Agreement.
In the event Sim qualifies for long-term disability benefits under such plan,
API shall supplement any plan benefit payable to Sim to the extent necessary to
provide to Sim a total long-term disability benefit payment that is equal to
thirty percent (30%) of his then base pay.  Such supplemental amount shall be
payable on the same terms and conditions, and based on the same definitions and
procedures, as are set forth in the long-term disability plan and shall be
provided to Sim at no cost to him.

4.       Miscellaneous.  This Agreement shall be governed by and construed
under the laws of the State of Wisconsin.  If any provision in this Agreement
shall be held invalid and unenforceable for any reason, such provision shall be
deemed deleted and shall not affect the validity and enforceability of all
other provisions contained herein.  No modification of this Agreement shall be
effective unless made in writing and signed by the parties.  This Agreement
shall be binding upon and inure to the benefit of the parties, their respective
successors, representatives and heirs.

IN WITNESS WHEREOF,  the parties have executed this Agreement as of the date
first written above.

                                        APPLIED POWER INC.

                                        By:       /s/   Richard M. Jones 
                                                  Richard M. Jones Chairman,
                                                  Compensation Committee of the
                                                  Board of Directors

                                                  ATTEST:


                                                  /s/ David B. Wescoe
                                                  -------------------
                                                  David B. Wescoe


                                                  /s/ Richard G. Sim
                                                  -------------------
                                                  Richard G. Sim