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                                                                   Exhibit 10.12


                           MAXWELL TECHNOLOGIES, INC.
                         1999 DIRECTOR STOCK OPTION PLAN

1.       PURPOSE

         The purpose of this Director Stock Option Plan (the "Plan") of Maxwell
Technologies, Inc. (the "Company"), is to encourage ownership in the Company by
its outside directors whose services are considered essential to the Company's
continued progress and thus to provide them with a further incentive to continue
to serve as directors of the Company. The Plan is also intended to assist the
Company through utilization of the incentives provided by the Plan to attract
and retain experienced and qualified candidates to fill vacancies in the Board
which may occur in the future. The Plan is intended to be a "formula plan" for
purposes of ("Rule 16b-3") promulgated under the Securities Exchange Act of 1934
(the "1934 Act") and the interpretations thereof by the Staff or the Securities
and Exchange Commission.

2.       ADMINISTRATION

         The Plan will be administered by the Board of Directors (the "Board")
of the Company.

         Subject to the express provisions of the Plan, the Board will have
authority to amend, suspend or terminate the Plan; to interpret the Plan; to
prescribe, amend, and rescind rules and regulations relating to it; to determine
the terms and provisions of the respective option agreements (which need not be
identical); and to make all other determinations necessary or advisable for the
administration of the plan. The interpretation and construction of the Plan, and
any determination made by the Board in administering and interpreting the
provisions of the Plan, and of any option granted hereunder, shall be conclusive
and binding.

3.       PARTICIPATION IN THE PLAN

         Persons who are now or shall become incumbent directors of the Company
who are not at the time employees of the Company or any subsidiary of the
Company shall be eligible to participate in the Plan (hereinafter "eligible
directors"). A director of the Company shall not be deemed to be an employee of
the Company solely by reason of the existence of a consulting contract between
such director and the Company or any subsidiary thereof pursuant to which the
director agrees to provide consulting services as an independent consultant to
the Company or its subsidiaries on a regular or occasional basis for a stated
consideration. The term "director" as used in this Plan shall include a
"director emeritus".


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4.       STOCK SUBJECT TO THE PLAN

         The stock subject to the Plan shall consist of 75,000 shares of the
$.10 par value Common Stock of the Company ("Common Stock"). Such shares may, as
the Board shall from time to time determine, be either authorized and unissued
shares of Common Stock or issued shares of Common Stock which have been
reacquired by the Company.

5.       STOCK OPTIONS

         Each option granted under this Plan shall be evidenced by a written
agreement in such form as the Board shall from time to time approve, which
agreement shall comply with and be subject to the following terms and
conditions:

                A. AUTOMATIC GRANT DATES. Options shall be granted to each
eligible director automatically on the first business day after the
organizational meeting of the Board in each year, which is the first meeting of
the Board following the Company's Annual Meeting of Shareholders (hereinafter a
"Grant Date").

                B. NUMBER OF SHARES. The initial grant of options under this
Plan for each eligible director on the first Grant Date on which such individual
is an eligible director shall constitute a grant of options to purchase 10,000
shares of Common Stock. Thereafter each annual grant to each such eligible
director on succeeding Grant Dates shall constitute a grant of options to
purchase 3,000 shares of Common Stock.

                C. DISCRETIONARY GRANTS. In addition to automatic grants under
Section 5(A) above, the Board may, from time to time, grant options to one or
more eligible directors to purchase such number of shares as the Board shall
determine, subject to all of the terms and conditions of the Plan (other than
Section 5(A) and Section 5(B) above). The Grant Date for such discretionary
options shall be the date on which the Board approves the grant.

                D. OPTION PRICE PER SHARE. All options granted hereunder shall
be exercisable at a price per share equal to the Fair Market Value of the Common
Stock on the date of the grant of the option. "Fair Market Value" for purposes
of this Plan shall be defined as the mean between the closing bid and asked
quotations for such stock (or the closing selling price for such stock, if
applicable) on the Grant Date (as reported by a newspaper of general circulation
or a recognized stock quotation service) or, in the event that there shall be no
bid or asked quotations (or reported closing selling price) on the Grant Date,
then upon the basis of the mean between the closing bid and asked quotations (or
the closing selling price, as the case may be,) on the date nearest preceding
the Grant Date. In the event that the Company's Common Stock shall become listed
and traded upon a recognized securities exchange, then the Fair Market Value
shall be determined upon the basis of the closing


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selling price at which shares of the Common Stock were traded on such
recognized securities exchange on the date of grant or, if the Common Stock
was not traded on said date, upon the basis of the closing selling price on
the date nearest preceding the date of grant.

                E. TRANSFERABILITY. Except as provided below, each option
granted under the Plan by its terms shall be exercisable during the lifetime of
the optionee only by him and shall not be transferable by the optionee in whole
or in part, by sale, assignment, pledge or otherwise, except by will, or by the
laws of descent and distribution, nor be made subject to execution, attachment,
or similar process. Notwithstanding the foregoing, the Board may, in its
discretion, limit or eliminate these restrictions on transferability to the
extent such restrictions are not at the time required for the Plan to continue
to meet the requirements of Rule 16b-3 or otherwise result in adverse
consequences to the Company.

                F. PERIOD OF OPTION. Each option granted under this Plan shall
become exercisable on the first anniversary of the date upon which it was
granted. Except for earlier termination as provided below, no option shall be
exercisable after the expiration of ten years from the date upon which such
option was granted. In the event of the death of an optionee, the option
privileges of said optionee shall be limited to the shares which were
immediately purchasable by such optionee at the date of death and such option
shall terminate unless exercised by said optionee's successor within one (1)
year after the date of death. In the event that an optionee ceases to serve as a
director of the Company other than by reason of death, the option privileges of
such optionee shall be limited to the shares which were immediately purchasable
by him at the date of such termination. If any option granted under the Plan is
canceled by mutual consent or terminates or expires for any reason without
having been exercised in full, the number of shares subject thereto shall again
be available for purposes of the Plan.

                  G. EXERCISE OF OPTIONS. Options may be exercised only by
written notice delivered to the Company at its corporate office and the exercise
price of each option being exercised shall be paid in full upon exercise,
including any federal, state, and/or local income tax withholding amount due and
shall be payable in cash in United States dollars (including check, bank draft
or money order); provided, however, that in lieu of such cash the person
exercising the option may pay the option price in whole or in part by delivering
to the Company shares of the Common Stock. For this purpose, the Common Stock
shall be treated as having a Fair Market Value on the date of exercise of the
stock option, determined as provided in Section 5(D), except that no shares of
the Common Stock which have been held for less than six months may be delivered
in payment of the option price of an option, if that would result in adverse
accounting or tax consequences to the Company as determined by the Board, in its
sole discretion. Delivery of shares may also be accomplished through the
effective transfer


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to the Company of shares held by a broker or other agent. The Company will also
cooperate with any person exercising an option who participates in a cashless
exercise program of a broker or other agent under which all or part of the
shares received upon exercise of the option are sold through the broker or other
agent or under which the broker or other agent makes a loan to such person.
Notwithstanding the foregoing, the exercise of the option shall not be deemed to
occur and no shares of the Common Stock will be issued by the Company upon
exercise of the option until the Company has received payment of the option
price in full. The number of shares of the Common Stock deemed issued upon an
exercise paid for with shares shall be the number of shares issued upon exercise
less the number of shares delivered in satisfaction of the exercise price. No
options may be exercised as a fraction of a share.

                H. NONSTATUTORY OPTIONS. No option granted hereunder shall
constitute an incentive stock option" as that term is defined in the Internal
Revenue Code of 1986, as amended.

6.       MODIFICATION, EXTENSION, AND RENEWAL OF OPTIONS

         The Board shall have the power to modify, extend, or renew outstanding
options and authorize the grant of new options in substitution therefor,
provided that such power may not be exercised in a manner which would (i) alter
or impair any rights or obligations of any option previously granted without the
written consent of the optionee or (ii) adversely affect the qualification of
the Plan or any other stock-related plan of the Company under Rule 16b-3 or any
successor provision.

7.       LIMITATION OF RIGHTS

                A. NO RIGHT TO CONTINUE AS A DIRECTOR. Neither the existence of
the Plan nor the granting of an option nor any other action taken pursuant to
the Plan, shall constitute or be evidence of any agreement or understanding,
express or implied, that the Company will retain a director for any period of
time, or at any particular rate of compensation.

                B. NO STOCKHOLDERS' RIGHTS FOR OPTIONEES. Neither an optionee
nor his representative shall have rights as a stockholder with respect to the
shares covered by his options until the date of the issuance to him or his
representative of a stock certificate therefor, and except as provided in
Paragraph 8 below, no adjustment will be made for dividends or other rights for
which the record date is prior to the date such certificate is issued.

8.       ADJUSTMENTS


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                (i) In the event that the outstanding shares of Common Stock are
hereafter increased or decreased or changed into or exchanged for a different
number or kind of shares or other securities of the Company or of another
corporation, by reason of a recapitalization, reclassification, stock split-up,
combination of shares, dividend or other distribution payable in capital stock,
an appropriate adjustment shall be made by the Board in the number, kind and
exercise price of shares for the purchase of which options have theretofore been
or may thereafter be granted under the Plan.

                (ii) In the event that the Company shall determine to merge,
consolidate or enter into any other reorganization with or into any other
corporation, or in the event of any dissolution or liquidation of the Company,
and in the further event that neither (i) appropriate adjustment is made in the
number, kind and exercise price of shares for the purchase of which options have
theretofore been granted under the Plan, nor (ii) does the surviving entity
(which may be the Company) tender to any holder of options, substitute options
to purchase shares or equity interests of the surviving entity which substituted
options shall contain terms substantially preserving the rights and benefits
(including economic value) of the options outstanding hereunder, plus any
reasonable changes to reflect the circumstances of the surviving entity, then
the Plan and any options theretofore granted under the Plan shall terminate as
of the date of such merger, consolidation, reorganization, dissolution or
liquidation, provided that written notice of such event shall have been given to
each optionee not less than five (5) days prior to the date of such event. If
the Plan will be terminated as contemplated in the preceding sentence, each
optionee shall have the right during the period commencing on the date the
notice referred to above is given and concluding on the date of such merger,
consolidation, reorganization, dissolution or liquidation, as the case may be,
to exercise such optionee's outstanding and unexercised options, including for
any shares as to which such options would not otherwise have been exercisable on
such date.

                (iii) All adjustments and determinations under this Paragraph 8
shall be made by the Board, whose decisions as to what adjustments or
determinations shall be made, and the extent thereof, shall be final, binding
and conclusive.

9.       EFFECTIVE DATE AND DURATION OF THE PLAN

         The effective date of the Plan shall be the date of its adoption by the
Board of Directors of the Company; provided, however, that in the event that
shareholder approval of the Plan is not secured on or before the first
anniversary of such adoption, the Plan shall thereupon terminate. Any options
granted prior to the aforesaid shareholder approval being secured shall be
subject to such approval being secured. The Plan shall terminate ten (10) years
after the effective date of the Plan (the "Automatic Termination Date") unless
earlier terminated due to a lack of shareholder approval or discontinuance by
the Board.


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No option may be granted during any suspension or termination of the Plan. The
rights of the holders of any options outstanding on the date of termination of
the Plan shall not be affected thereby.

10.      USE OF PROCEEDS

         The proceeds received by the Company from the sale of the Common Stock
pursuant to the exercise of options granted under the Plan shall be added to the
Company's general funds and used for general corporate purposes.

11.      COMPLIANCE WITH LAW, ETC.

         Notwithstanding any other provision of this Plan or agreements made
pursuant hereto, the Company shall not be required to issue or deliver any
certificate or certificates for shares of Common Stock under this Plan prior to
fulfillment of the following conditions:

                (i) The satisfaction of withholding tax or other withholding
liabilities;

                (ii) Any registration or other qualification of such shares of
the Company under any state or federal law or regulation, or the maintaining in
effect of any such registration or other qualification which the Board shall, in
its absolute discretion upon the advice of counsel, deem necessary or advisable;
and

                (iii) The satisfaction of any conditions imposed by any stock
exchange on which the Common Stock is listed or any quotation system which
quotes the price of the Common Stock;

                (iv) The obtaining of any other consent, approval, or permit
from any state or federal governmental agency which the Board shall, in its
absolute discretion after receiving the advice of counsel, determine to be
necessary or advisable.

12.      NOTICE

         Any written notice to the Company required by any of the provisions of
this Plan shall be addressed to the Secretary of the Company and shall become
effective when it is received.

13.      GOVERNING LAW

         This Plan and all determinations made and actions taken pursuant hereto
shall be governed by the law of the State of Delaware and construed accordingly.






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