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                                                                   Exhibit 10.12
                                   APW LTD.
                     OUTSIDE DIRECTORS' STOCK OPTION PLAN


I.   INTRODUCTION

     1.01 Purpose. This plan shall be known as the APW Ltd. Outside Directors'
Stock Option Plan (the "Plan"). The purpose of this Plan is to promote the
growth and development of APW Ltd. by providing increased incentives for the
directors of the Company. This Plan provides for the granting of non-qualified
stock options.

     1.02 Effective Date. The effective date of the Plan shall be
______________, 2000, subject to approval of the Plan by the shareholders of APW
Ltd. Options granted prior to such shareholder approval shall be expressly
conditioned upon such shareholder approval of the Plan.

     1.03 Substitute Options. APW Ltd. is the result of a spin-off from Applied
Power Inc. APW Ltd. directors who were previously directors of Applied Power
Inc. and were granted options to purchase Applied Power Inc. common stock shall
be granted substitute options to purchase APW Ltd. common stock under this Plan
on terms which are to be economically consistent with the prior Applied Power
Inc. stock options.

II.  PLAN DEFINITIONS

     2.01 Definitions. For Plan purposes, except where the context clearly
indicates otherwise, the following terms shall have the meanings set forth
below:

     (a)  "Board" shall mean the Board of Directors of the Company.

     (b)  "Code" shall mean the Internal Revenue Code of 1986, as amended from
          time to time.
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     (c)  "Committee" shall mean the Compensation Committee of the Board, as
           described in Section 4.01.

     (d)  "Company" shall mean APW Ltd., a Bermuda corporation.

     (e)  "Company Stock" shall mean common stock of the Company and such other
          stock and securities as may be substituted therefor pursuant to
          Section 3.02.

     (f)  "Fair Market Value" on any date shall mean, with respect to Company
          Stock, if the stock is then listed and traded on a registered national
          securities exchange, or is quoted in the NASDAQ National Market
          System, the mean of the high and low sale prices recorded in composite
          transactions as reported in the Wall Street Journal (Midwest Edition).
          In the absence of reported sales on such date, or if the stock is not
          so listed or quoted, but is traded in the over-the-counter market,
          "Fair Market Value" shall be the mean of the closing bid and asked
          prices for such shares on such date as reported in the Wall Street
          Journal (Midwest Edition), or, if not so reported as obtained from a
          bona fide market maker in such shares.

     (g)  "Optionee" shall mean any person who has been granted an option under
          the Plan.

     (h)  "Outside Director" shall mean a director of the Company who is not
          also an employee of the Company.

     (i)  "Substitute Options" shall mean an option granted under the Plan in
          substitution for an option to purchase common stock of Applied Power
          Inc.

III. SHARES SUBJECT TO OPTION

     3.01 Available Shares. The total number of shares of Company Stock that may
be issued under the Plan, including shares that may be issued upon exercise of a
Substitute Option, shall in the aggregate not exceed two hundred thousand
(200,000) shares. Shares subject to and not issued under an option which
expires, terminates, is canceled or forfeited for any reason under the Plan
shall again become available for the granting of options.

     3.02 Changes in the Number of Available Shares. If any stock dividend is
declared upon the Company Stock, or if there is any stock split, stock
distribution, or other recapitalization of

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the Company with respect to the Company Stock, resulting in a split or
combination or exchange of shares, the aggregate number and kind of shares which
may thereafter be offered under the Plan shall be proportionately and
approximately adjusted and the number and kind of shares then subject to options
granted to employees under the Plan and the per share option price therefor
shall be proportionately and appropriately adjusted, without any change in the
aggregate purchase prices to be paid therefor.

IV.  ADMINISTRATION

     4.01 Administration by the Committee. The Plan shall be administered by the
Compensation Committee of the Board, or such other committee of the Board as the
Board may from time to time determine. The Committee shall be constituted so as
to permit the Plan to comply with the provisions of Rule 16b-3 under the
Securities Exchange Act of 1934 (or any successor rule).

     4.02 Committee Powers. The Committee is empowered to adopt such rules,
regulations and procedures and take such other action as it shall deem necessary
or proper for the administration of the Plan and, in its discretion, may modify,
extend or renew any option theretofore granted. The Committee shall also have
authority to interpret the Plan, and the decision of the Committee on any
questions concerning the interpretation of the Plan shall be final and
conclusive. The Committee may consult with counsel, who may be counsel for the
Company, and shall not incur any liability for any action taken in good faith in
reliance upon the advice of counsel.

     Subject to the provisions of the Plan, the Committee shall have full and
final authority to:

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     (a)  designate the persons to whom options shall be granted;

     (b)  grant options in such form and amount as the Committee shall
          determine;

     (c)  impose such limitations, restrictions and conditions upon any such
          option as the Committee shall deem appropriate, and

     (d)  waive in whole or in part any limitations, restrictions or conditions
          imposed upon any such option as the Committee shall deem appropriate.

V.   STOCK OPTIONS

     5.01 General. Each year, upon the first meeting of the Company's Board of
Directors following the Company's annual meeting of shareholders, each person
then serving the Company as an Outside Director at that time shall automatically
be granted an option to purchase four thousand (4,000) shares, subject to
adjustment under Section 3.02 hereof. Each option granted under the Plan shall
be evidenced by a stock option agreement between the Company and the Grantee
which shall contain the terms and conditions required by this Article V, and
such other terms and conditions, not inconsistent herewith, as the Committee may
deem appropriate in each case.

     5.02 Option Price. The price at which each share of Company Stock covered
by an option may be purchased shall be one hundred percent (100%) of the Fair
Market Value of the Company Stock on the date the option is granted.

     5.03 Period for Exercise. Each stock option agreement shall state the
period or periods of time within which the option may be exercised by the
Optionee, in whole or in part, which shall be the period or periods of time as
may be determined by the Committee, provided that unless otherwise determined by
the Committee:

     (a) Options will vest eleven (11) months after grant.

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     (b)  If the option is not earlier exercised or terminated, all rights to
          exercise an option shall expire ten (10) years from the date the
          option was granted.

     (c)  Upon termination of service as a director of the Company for any
          reason other than death, after the director shall have continuously so
          served for eleven (11) months after the date of option grant, the
          director may, at any time within two (2) years after the date of such
          termination, but in no event later than the date of expiration of the
          option, exercise the option to the extent he or she was entitled to do
          so on the date of termination.

     (d)  If an Optionee dies while serving as a director of the Company, or
          within two (2) years after termination of such service, the personal
          representative of the Optionee's estate or the person or persons to
          whom the option is transferred by will or the laws of descent and
          distribution may, at any time within two (2) years after the date of
          death, but not later than the date of expiration of the option,
          exercise the option to the extent the Optionee was entitled to do so
          on the date of death.

     (e)  All options shall become immediately exercisable in full upon a change
          in control (as determined by the Committee).

     5.04 Method of Exercise. Each option may be exercised in whole or in part
from time to time as specified in the stock option agreement. Each Optionee may
exercise an option by giving written notice of the exercise to the Company,
specifying the number of shares to be purchased, accompanied by payment in full
of the purchase price therefor. The purchase price may be paid in cash, by
check, or, with the approval of the Committee, by delivering shares of Company
Stock which have been beneficially owned by the Optionee, the Optionee's spouse,
or both of them for a period of at least six months prior to the time of
exercise ("Delivered Stock") or a combination of cash and Delivered Stock.
Delivered Stock shall be valued at its Fair Market Value determined as of the
date of exercise of the option. No Optionee shall be under any obligation to
exercise any option hereunder. An Optionee shall not have any rights of a
stockholder with respect to the shares subject to the option until such shares
shall have been

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delivered to him or her.

     5.05 Merger, Consolidation or Reorganization. In the event of a merger,
consolidation or reorganization with another corporation in which the Company is
not the surviving corporation, the Committee may, subject to the approval of the
Board of Directors of the Company, or the board of directors of any corporation
assuming the obligations of the Company hereunder, take action regarding each
outstanding and unexercised option pursuant to either clause (a) or (b) below:

     (a)  Appropriate provision may be made for the protection of such option by
          the substitution on an equitable basis of appropriate shares of the
          surviving corporation, provided that the excess of the aggregate Fair
          Market Value of the shares subject to such option immediately before
          such substitution over the exercise price thereof is not more than the
          excess of the aggregate fair market value of the substituted shares
          made subject to option immediately after such substitution over the
          exercise price thereof; or

     (b)  The Committee may cancel such option. In such event, the Company, or
          the corporation assuming the obligations of the Company hereunder,
          shall pay the Optionee an amount of cash (less normal withholding
          taxes) equal to the excess of the highest Fair Market Value per share
          of the Company Stock during the 60-day period immediately preceding
          the merger, consolidation or reorganization over the option exercise
          price, multiplied by the number of shares subject to such option.

     5.06 Withholding Taxes. Pursuant to applicable federal and state laws, the
Company is or may be required to collect withholding taxes upon the exercise of
an option or the lapse of stock restrictions. The Company may require, as a
condition to the exercise of an option or the issuance of a stock certificate,
that the Optionee concurrently pay to the Company (either in cash or, at the
request of Grantee but in the discretion of the Committee and subject to such
rules and regulations as the Committee may adopt from time to time, in shares of
Delivered Stock) the entire amount or a portion of any taxes which the Company
is required to withhold by reason of

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such exercise or lapse of restrictions, in such amount as the Committee or the
Company in its discretion may determine. In lieu of part or all of any such
payment, the Optionee may elect, subject to such rules and regulations as the
Committee may adopt from time to time, or the Company may require that the
Company withhold from the shares to be issued that number of shares having a
Fair Market Value equal to the amount which the Company is required to withhold.

VI.  GENERAL

     6.01 Nontransferability. No option shall be transferable by an Optionee
otherwise than by will or the laws of descent and distribution, provided that in
accordance with Internal Revenue Service guidance, the Committee, in its
discretion, may grant options that are transferable, without payment of
consideration, to family members of the Optionee or to trusts or partnerships
for such family members. The Committee may also amend outstanding stock options
to provide for such transferability.

     6.02 General Restriction. Each option shall be subject to the requirement
that if at any time the Board or the Committee shall determine, in its
discretion, that the listing, registration, or qualification of securities upon
any securities exchange or under any state or federal law, or the consent or
approval of any government regulatory body, is necessary or desirable as a
condition of, or in connection with, the granting of such option or the issue or
purchase of securities thereunder, such option may not be exercised in whole or
in part unless such listing, registration, qualification, consent or approval
shall have been effected or obtained free of any conditions not acceptable to
the Board or the Committee.

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     6.03 No Promise of Continued Service as a Director. Nothing in the Plan or
in any option granted under the Plan shall confer on any director any right to
continue as a director of the Company or affect the right of the Company to
terminate his or her service to the Company at any time.

     6.04 Expiration and Termination of the Plan. The Plan will terminate ten
(10) years after the effective date of the Plan, except as to options then
outstanding under the Plan, which options shall remain in effect until they have
been exercised, the restrictions have lapsed or the options have expired or been
forfeited. The Plan may be abandoned or terminated at any time by the Board of
Directors of the Company, except with respect to any options then outstanding
under the Plan.

     6.05 Amendments. The Board may from time to time amend, modify, suspend or
terminate the Plan; provided, however, that no such action shall be made without
shareholder approval where such change would be required in order to comply with
Rule 16b-3 under the Securities Exchange Act of 1934 (or any successor rule) or
the Code. Subject to the terms and conditions and within the limitations of the
Plan, the Committee may modify, extend or renew outstanding options granted
under the Plan, accept the surrender of outstanding options (to the extent not
theretofore exercised), reduce the exercise price of outstanding options, or
authorize the granting of new options in substitution therefor (to the extent
not theretofore exercised). Notwithstanding the foregoing, no modification of an
option (either directly or through modification of the Plan) shall, without the
consent of the Optionee, alter or impair any rights of

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the Optionee under the option.

     6.06 Construction. Except as otherwise required by applicable federal laws,
the Plan shall be governed by, and construed in accordance with, the laws of the
State of ____________________.

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