<PAGE>

                                                                    Exhibit 10.1


                                    APW LTD.
                                2000 STOCK PLAN


I.   INTRODUCTION

     1.01  Purpose.  This plan shall be known as the APW Ltd. 2000 Stock Option
Plan (the "2000 Plan" or the "Plan").  The purpose of the Plan is to provide
incentive for key employees of APW Ltd.  and its Subsidiaries to improve
corporate performance on a long-term basis, and to attract and retain key
employees.

     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.  Any Award 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.   Certain APW Ltd.  employees were previously granted options
to purchase Applied Power Inc. common stock. The Committee shall have the power
to grant APW Ltd. employees substitute options 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)  "Award" shall mean the grant of any form of stock option or restricted
stock.

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

(c)  "Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time.

(d)  "Committee" shall mean the Compensation Committee of the Board, as
described in Section 4.01.

(e)  "Company" shall mean APW Ltd., a Bermuda corporation.
<PAGE>

(f)  "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.

(g)  "Eligible Employee" shall mean any regular salaried employee of the Company
or a Subsidiary who satisfies all of the requirements of Section 5.01.

(h)  "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.

(i)  "Grantee" shall mean any person who has been granted an Award, under the
Plan.

(j)  "Option Period" shall mean the period of time provided pursuant to Section
6.04 within which a stock option may be exercised.

(k)  "Subsidiary" shall mean any corporation now or hereafter in existence in
which the Company owns, directly or indirectly, a voting stock interest of more
than fifty percent (50%).

(l)  "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 five million
(5,000,000) shares. Shares subject to and not issued under an option which
expires, terminates, is canceled or forfeited for any reason under the Plan and
shares of restricted Company Stock which have been forfeited before the Grantee
has received any benefits of ownership, such as dividends from the forfeited
shares, shall again become available for the granting of Awards.

     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 the Company with respect to the
Company Stock, resulting in a split or combination or exchange of shares, the
aggregate
<PAGE>

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) and Section 162(m) of
the Code.

     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.  The Committee may adopt such procedures
and subplans as are necessary or appropriate to permit participation in the Plan
by Eligible Employees who are foreign nationals or employed outside of the
United States.

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

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

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

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

     (d)  waive in whole or in part any limitations, restrictions or conditions
          imposed upon any such
<PAGE>

          Award as the Committee shall deem appropriate.

V.   PARTICIPATION

     5.01  Eligibility.  Key employees of the Company and its Subsidiaries
(including officers and employees who may be members of the Board) who, in the
sole opinion of the Committee, contribute significantly to the growth and
success of the Company or a Subsidiary shall be eligible for Awards under the
Plan. From among all such Eligible Employees, the Committee shall determine from
time to time those Eligible Employees to whom Awards shall be granted. No
Eligible Employee may be granted an Award or Awards covering more than two-
hundred fifty thousand (250,000) shares of Company Stock in any calendar year.
No Eligible Employee shall have any right whatsoever to receive an Award unless
so determined by the Committee.

     5.02  No Employment Rights.  The Plan shall not be construed as conferring
any rights upon any person for a continuation of employment, nor shall it
interfere with the rights of the Company or any Subsidiary to terminate the
employment of any person or to take any other action affecting such person.

VI.  STOCK OPTIONS

     6.01  General.  Stock options granted under the Plan may be in the form of
incentive stock options (within the meaning of the Code) or nonqualified stock
options.  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 VI, and such other terms and
conditions, not inconsistent herewith, as the Committee may deem appropriate in
each case.

     6.02  Option Price.  The price at which each share of Company Stock covered
by an option may be purchased shall be determined in each case by the Committee
and set forth in each stock option agreement.  In no event shall such price be
less than one hundred percent (100%) of the Fair Market Value of the Company
Stock when the option is granted.  Notwithstanding the foregoing, the Committee
may grant nonqualified stock options with an option price of less than 100% of
the Fair Market Value of the
<PAGE>

Company Stock on the condition that the Grantee make a cash payment to the
Company on the date of grant of at least the difference between the Fair Market
Value of the Company Stock and the option price (i.e., the sum of the cash
payment and the option price must be equal to or in excess of the Fair Market
Value of the Company Stock on the date of grant). Employees who own, directly or
indirectly, within the meaning of Code 425(d), more than 10% of the voting power
of all classes of stock of the Company or any parent or subsidiary corporation
shall not be eligible to receive an incentive stock option hereunder unless the
purchase price per share under such option is at least 110% of the Fair Market
Value of the stock subject to the option and such option by its terms is not
exercisable after the expiration of 5 years from the date such option is
granted.

     6.03  Date Option Granted.  For purposes of the Plan, a stock option shall
be considered as having been granted on the date on which the Committee
authorized the grant of the option, except where the Committee has designated a
later date, in which event the later date shall constitute the date of grant of
the option; provided, however, that in either case notice of the grant of the
option shall be given to the employee within a reasonable time.

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

     (a)  No option granted under this Plan may be exercised prior to
shareholder approval of the Plan,
     (b)  No Option Period for an incentive stock option may exceed ten (10)
years from the date the option is granted, and
     (c)  No option may be treated as an incentive stock option unless the
Grantee exercises the option while employed by the Company or a Subsidiary or
within three months after termination of employment, or if termination is caused
by death or disability, within one year after such termination.

     6.05  Special Rule for Incentive Stock Options.  For so long as Section 422
(or any successor
<PAGE>

provision) of the Code so provides, the aggregate Fair Market Value (determined
as of the date the incentive stock option is granted) of the number of shares
with respect to which incentive stock options are exercisable for the first time
by a Grantee during any calendar year shall not exceed One Hundred Thousand
Dollars ($100,000) or such other limit as may be required by the Code.

     6.06  Method of Exercise.  Subject to Section 6.04, each option may be
exercised in whole or in part from time to time as specified in the stock option
agreement.  Each Grantee 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
Grantee, the Grantee'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 Grantee shall be
under any obligation to exercise any option hereunder.  The holder of an option
shall not have any rights of a stockholder with respect to the shares subject to
the option until such shares shall have been delivered to him or her.

     6.07  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
<PAGE>

          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 employee 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.

     6.08 Substitute Options.  Notwithstanding the provisions of Sections 6.02
and 6.03 above, in the event that the Company or a Subsidiary consummates a
transaction described in Section 424(a) of the Code (e.g., the acquisition of
property or stock from an unrelated corporation), persons who become Eligible
Employees on account of such transaction may be granted options in substitution
for options granted by their former employer.  If such substitute options are
granted, the Committee, in its sole discretion and consistent with Section
424(a) of the Code, may determine that such substitute options shall have an
exercise price less than one hundred (100%) of the Fair Market Value of the
shares on the grant date.

     6.09 Deferral of Stock Option Gain.   The Committee may permit, in its
discretion, an optionee who exercises a stock option to defer the taxable income
attributable to such exercise.  In the event the Committee elects to permit such
deferrals, the Committee shall identify the optionees to whom such deferral
elections shall be made available and establish procedures for implementing such
deferrals.  An optionee who defers a stock option gain under this Plan or any
other Company stock option plan shall be credited with deemed dividends under
this Plan on such terms as the Committee shall prescribe.  All deferrals which
are permitted under this section and all deemed dividends shall be distributed
in APW Ltd. common stock.
<PAGE>

VII. RESTRICTED STOCK

     7.01 Administration.  Shares of restricted stock may be issued either alone
or in addition to other Awards granted under the Plan; provided that a maximum
of 150,000 shares of restricted stock may be granted in any calendar year. The
Committee shall determine the Eligible Employees to whom and the time or times
at which grants of restricted stock will be made, the number of shares to be
awarded, the time or times within which such Awards may be subject to forfeiture
and any other terms and conditions of the Awards. The Committee may condition
the grant of restricted stock upon the attainment of specified levels of
revenue, earnings per share, net income, return on assets, return on sales,
customer satisfaction, stock price, costs, individual performance measures or
such other factors or criteria as the Committee shall determine. The provisions
of restricted stock Awards need not be the same with respect to each recipient.

     7.02 Awards and Certificates.  Each individual receiving a restricted stock
Award shall be issued a certificate in respect of such shares of restricted
stock.  Such certificate shall be registered in the name of such individual and
shall bear an appropriate legend referring to the terms, conditions, and
restrictions applicable to such Award, substantially in the following form:

     "The transferability of this certificate and the shares of stock
     represented hereby are subject to the terms and conditions (including
     forfeiture) of the APW Ltd. 2000 Stock Plan and a Restricted Stock
     Agreement.  Copies of such Plan and Agreement are on file at the offices of
     APW Ltd."

The Committee may require that the certificates evidencing such shares be held
in custody by the Company until the restrictions thereon shall have lapsed and
that, as a condition of any restricted stock Award, the Grantee shall have
delivered a stock power, endorsed in blank, relating to the Company Stock
covered by such Award.

     7.03 Terms and Conditions.  Shares of restricted stock shall be subject to
the following terms and conditions:

     (a)  Until the applicable restrictions lapse, the Grantee shall not be
          permitted to sell, assign, transfer, pledge or otherwise encumber
          shares of restricted stock.
<PAGE>

     (b)  The Grantee shall have, with respect to the shares of restricted
          stock, all of the rights of a stockholder of the Company, including
          the right to vote the shares and the right to receive any cash
          dividends.  Unless otherwise determined by the Committee, cash
          dividends shall be automatically paid in cash and dividends payable in
          Company Stock shall be paid in the form of additional restricted
          stock.

     (c)  Except to the extent otherwise provided in the applicable Restricted
          Stock Agreement and (d) below, all shares still subject to restriction
          shall be forfeited by the Grantee upon termination of a Grantee's
          employment for any reason.

     (d)  In the event of hardship or other special circumstances of a Grantee
          whose employment is involuntarily terminated (other than for cause),
          the Committee may waive in whole or in part any or all remaining
          restrictions with respect to such Grantee's shares of restricted
          stock.

     (e)  If and when the applicable restrictions lapse, unlegended certificates
          for such shares shall be delivered to the Grantee.

     (f)  Each Award shall be confirmed by, and be subject to the terms of, a
          Restricted Stock Agreement.

VIII.     WITHHOLDING TAXES.

     8.01 General Rule.  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 Grantee 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 such exercise or lapse of restrictions, in
such amount as the Committee or the Company in its discretion may determine.

     8.02 Withholding from Shares to be Issued.  In lieu of part or all of any
such payment, the Grantee 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.

     8.03 Special Rule for Insiders.  Any such request or election (to satisfy a
withholding obligation
<PAGE>

using shares) by an individual who is subject to the provisions of Section 16 of
the Securities Exchange Act of 1934 shall be made in accordance with the rules
and regulations of the Securities and Exchange Commission promulgated
thereunder.

IX.  GENERAL

     9.01  Nontransferability.  No Award shall be transferable by a Grantee
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 nonqualified stock options that are transferable, without
payment of consideration, to family members of the Grantee or to trusts or
partnerships for such family members.  The Committee may also amend outstanding
stock options to provide for such transferability.

     9.02  General Restriction.  Each Award 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 Award or the issue or
purchase of securities thereunder, such Award 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.

     9.03  Expiration and Termination of the Plan.  The Plan will terminate ten
(10) years after the effective date of the Plan, except as to Awards then
outstanding under the Plan, which Awards shall remain in effect until they have
been exercised, the restrictions have lapsed or the Awards 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 Awards then outstanding
under the Plan.
<PAGE>

     9.04  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
Awards 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 Award (either directly or through modification of the Plan)
shall, without the consent of the Grantee, alter or impair any rights of the
Grantee under the Award.

     9.05  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 ____________________.