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                                                                   EXHIBIT 10.1


                               PERCEPTRONICS, INC.

                             1992 STOCK OPTION PLAN
                     (As amended through February 22, 1994)

1.   PURPOSE

     The purpose of the Perceptronics, Inc. 1992 Stock Option Plan (the
"Plan") is to further the interests of Perceptronics, Inc. (the "Company")
and its Subsidiaries by encouraging and enabling selected officers,
directors, employees, consultants and advisers, upon whose judgment,
initiative and effort the Company is largely dependent for the successful
conduct of its business, to acquire and retain a proprietary interest in the
Company by ownership of its stock through the exercise of stock options to be
granted hereunder. Options granted under the Plan are either options
intending to qualify as "incentive stock options" within the meaning of
Section 422 of the Code or non-qualified stock options.

2.   DEFINITIONS

     Whenever used herein the following terms shall have the following
meanings, respectively:

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

     (b)  "Code" shall mean the Internal Revenue Code of 1986, as amended.

     (c)  "Committee" shall mean the Stock Option or Compensation Committee
appointed by the Board of Directors of the Company, or if no committee has
been appointed reference to "Committee" shall be deemed to refer to the Board
of Directors of the Company.

     (d)  "Common Stock" shall mean the Company's Common Stock.

     (e)  "Company" shall mean Perceptronics, Inc., a Delaware corporation.

     (f)  "Disinterested Person" shall have the meaning set forth in Rule
16b-3(c)(2)(i) promulgated by the Securities and Exchange Commission pursuant
to the Securities Exchange Act of 1934, as amended, or any successor rule.

     (g)  "Employee" shall mean, in connection with Incentive Options under
this Plan, only employees of the Company or any Subsidiary or Parent
Corporation of the Company.

     (h)  "Fair Market Value Per Share" of the Company's Common Stock shall
mean if the Company's Common Stock is publicly traded the mean between the
highest and lowest quoted selling prices of the Common Stock on the date of
the grant of the Option or, if not available, the mean between the bona fide
bid and asked prices of the Common Stock on the date of the grant of the
Option. In any situation not covered above or if there were no sales on the
date

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of the grant of an Option, the Fair Market Value Per Share shall be
determined by the Committee in accordance with Section 20.2031-2 of the
Federal Estate Tax Regulations.

     (i)  "Incentive Option" shall mean an Option granted under the Plan
which is designated as and qualified as an incentive stock option within the
meaning of Section 422 of the Code.

     (j)  "Non-Qualified Option" shall mean an Option granted under the Plan
which is designated as a non-qualified stock option.

     (k)  "Option" shall mean an Incentive Option, as defined in Section 2(i)
hereof, or a Non-Qualified Option, as defined in Section 2(j) hereof.

     (l)  "Optionee" shall mean any person who has been granted an Option to
purchase shares of Common Stock under the Plan.

     (m)  "Parent Corporation" shall have the meaning set forth in Section
424(e) of the Code.

     (n)  "Permanent Disability" shall mean termination of employment with
the Company or any Subsidiary or Parent Corporation of the Company with the
consent of the Company or such Subsidiary or Parent by reason of permanent
and total disability within the meaning of Section 22(e)(3) of the Code.

     (o)  "Plan" shall mean the Perceptronics, Inc. 1992 Stock Option Plan,
as amended from time to time.

     (p)  "Relationship" shall mean that the Optionee is or has agreed to
become an officer, director, employee or consultant of the Company or any
Subsidiary or Parent Corporation of the Company.

     (q)  "Subsidiary" shall have the meaning set forth in Section 424(f) of
the Code.

3.   ADMINISTRATION

     (a)  The Plan shall be administered either (i) by the Board, or (ii) in
the discretion of the Board, by a Committee of at least two directors
appointed by the Board; provided, however, that in the case of Options
granted to officers, directors or 10% stockholders of the Company who are
subject to the reporting requirements of Section 16(a) under the Securities
Exchange Act of 1934, as amended, the selection of the Optionee and all
decisions concerning the timing, pricing and amount of the grant and the
administration of the Option shall be made solely by a Committee consisting
of at least two directors, each member of which Committee is a Disinterested
Person. The Board may from time to time appoint members of the Committee in
substitution for or in addition to members previously appointed and may fill
vacancies.

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     (b) Any action of the Committee with respect to the administration of
the Plan shall be taken by majority vote or by written consent of a majority
of its members.

     (c) Subject to the provisions of the Plan, the Committee shall have the
authority to construe and interpret the Plan, to define the terms used
therein, to determine the time or times an Option may be exercised and the
number of shares which may be exercised at any one time, to amend the terms
of outstanding options, including the exercisability thereof, to prescribe,
amend and rescind rules and regulations relating to the Plan, to approve and
determine the duration of leaves of absence which may be granted to
participants without constituting a termination of their employment for
purposes of the Plan, and to make all other determinations necessary or
advisable for the administration of the Plan. All determinations and
interpretations made by the Committee shall be conclusive and binding on all
Employees and on their guardians, legal representatives and beneficiaries.

     (d) The Company will indemnify and hold harmless the members of the
Board and the Committee from and against any and all liabilities, costs and
expenses incurred by such persons as a result of any act, or omission to act,
in connection with the performance of such persons' duties, responsibilities,
and obligations under the Plan, other than such liabilities, costs and
expenses as may result from the negligence, gross negligence, bad faith,
willful misconduct and/pr criminal acts of such persons.

4.   NUMBER OF SHARES SUBJECT TO PLAN

     The stock to be offered under the Plan shall consist of up to 300,000
shares of the Company's Common Stock. If any Option granted hereunder shall
expire or terminate for any reason without having been exercised in full, the
unpurchased shares subject thereto shall again be available for purposes of
this Plan.

5.   ELIGIBILITY AND PARTICIPATION

     (a) Non-Qualified Options may be granted to any person who has a
Relationship with the Company, any of its Subsidiaries, or its Parent
Corporation. Incentive Options may be granted only to Employees. The
Committee shall determine the persons to whom Options shall be granted, the
time or times at which such Options shall be granted, the number of shares to
be subject to each Option and other terms of the Options. An Optionee who has
been granted an Option may, if he is otherwise eligible, be granted an
additional Option or Options if the Committee shall so determine. An Employee
may be granted Incentive Options or Non-Qualified Options or both under the
Plan; provided, however, that the grant of Incentive Options and
Non-Qualified Options to an Employee shall be the grant of separate Options
and each Incentive Option and each Non-Qualified Option shall be specifically
designated as such.

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     (b) In no event shall the aggregate fair market value (determined as of
the time the Option is granted) of the shares with respect to which Incentive
Options (granted under the Plan or any other plans of the Company and any
Subsidiary of Parent Corporation of the Company) are exercisable for the
first time by an Optionee in any calendar year exceed $100,000.

6.   PURCHASE PRICE

     The purchase price of each share covered by each Incentive Option shall
not be less than 100% of the Fair Market Value Per Share of the Common Stock
of the Company on the date the Incentive Option is granted; provided,
however, that if at the time an Incentive Option is granted the Optionee owns
or would be considered to own by reason of Section 424(d) of the Code more
than 10% of the total combined voting power of all classes of stock of the
Company or any Subsidiary of Parent Corporation of the Company, the purchase
price of the shares covered by such Incentive Option shall not be less than
110% of the Fair Market Value Per Share of the Common Stock on the date the
Incentive Option is granted. The purchase price of each share covered by
each Non-Qualified Option shall not be less than 85% of the Fair Market Value
Per Share of the Common Stock on the date the Option is granted,

7.   DURATION OF OPTIONS

     The expiration date of the Option (which may not exceed ten years from
the date of grant) and all other rights thereunder shall be determined by the
Committee. In the event the Committee does not specify the expiration date of
the Option, the expiration date shall be 10 years from the date on which the
option was granted, and shall be subject to earlier termination as provided
herein; provided, however, that if at the time an Incentive Option is granted
the Optionee owns or would be considered to own by reason of Section 424(d)
of the Code more than 10% of the total combined voting power of all classes
of stock of the Company, or any Subsidiary or Parent Corporation of the
Company, such Incentive Option shall expire not more than 5 years from the
date the Incentive Option is granted unless the Committee selects an earlier
date.

8.   EXERCISE OF OPTIONS

     An Option shall be exercisable in installments or otherwise upon such
terms as the Committee shall in its discretion determine at the time the
Option is granted or upon subsequent amendment of the Option; provided,
however, that each Option shall be exercisable in installments of at least 20%
per year beginning one year after the date the Option is granted. An Optionee
may purchase less than the total number of shares for which the Option is
exercisable, provided that a partial exercise of an Option may not be for
less than 50 shares, unless the exercise is during the the final year of the
Option, and shall not include any fractional shares. As a condition to the
exercise, in whole or in part, of any Option, the Committee may in its sole
discretion require the

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Optionee to pay, in addition to the purchase price of the shares covered by
the Option, an amount equal to any federal, state and local taxes that the
Committee has determined are required to be paid in connection with the
exercise of such Option in order to enable the Company to claim a deduction
or otherwise. Furthermore, if any Optionee disposes of any shares of stock
acquired by exercise of an Incentive Option prior to the expiration of either
of the holding periods specified in Section 422(a)(1) of the Code, the
Optionee shall pay to the Company, or the Company shall have to right to
withhold from any payments to be made to the Optionee, an amount equal to any
Federal, state and local taxes that the Committee has determined are required
to be paid in connection with the exercise of such Option in order to enable
the Company to claim a deduction or otherwise.

9.  METHOD OF EXERCISE

     (a)  To the extent that the right to purchase shares has accrued,
Options may be exercised from time to time by giving written notice to the
Company stating the number of shares with respect to which the option is
being exercised. Payment of the purchase price for the number of shares being
purchased shall be made to the Company in such manner permitted by law as
determined by the Committee, which may include cash, check or delivery of
shares of Common Stock, or a combination thereof and, if applicable, any
federal, state or local taxes required to be paid in accordance with the
provisions of Section 8 hereof. The Company shall issue a separate
certificate or certificates with respect to each option exercised by an
Optionee.

     (b)  If payment is made with shares of Common Stock, the Optionee, or
other person entitled to exercise the Option shall deliver to the Company
certificates representing the number of shares of Common Stock in payment for
the shares being purchased, duly endorsed for transfer to the Company. If
requested by the Committee, prior to the acceptance of such certificates in
payment for such shares, the Optionee, or any other person entitled to
exercise the Option, shall supply the Committee with a representation and
warranty in writing that he has good and marketable title to the shares
represented by the certificate(s), free and clear of all liens and
encumbrances. The value of the shares of Common Stock tendered in payment for
the shares being purchased shall be their Fair Market Value Per Share on the
date of the Optionee's exercise.

     (c)  Notwithstanding the foregoing, the Company shall have the right to
postpone the time of delivery of the shares for such period as may be
required for it to comply, with reasonable diligence, with any applicable
listing requirements of any national securities exchange or any federal,
state or local law. If an Optionee, or other person entitled to exercise an
Option, fails to accept delivery of or fails to pay for all or any portion
of the shares requested in the notice of exercise, upon tender of delivery
thereof, the Committee shall have the right to terminate his Option with
respect to the shares not accepted or paid for.

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10.  NON-TRANSFERABILITY OF OPTIONS

     No Option granted under the Plan shall be assignable or transferable by
the Optionee, either voluntarily or by operation of law, otherwise than by
will or the laws of descent and distribution, and shall be exercisable during
his lifetime only by the Optionee.

11.  CONTINUANCE OF RELATIONSHIP

     Nothing contained in the Plan or in any Option granted under the Plan
shall confer upon any Optionee any rights with respect to the continuation of
his Relationship with the Company or any Subsidiary or Parent Corporation of
the Company or interfere in any way with the right of the Company or any
Subsidiary or Parent Corporation of the Company at any time to terminate such
Relationship or to increase or decrease the compensation of the Optionee from
the rate in existence at the time of the grant of an Option.

12.  TERMINATION OF EMPLOYMENT OTHER THAN BY DEATH OR PERMANENT DISABILITY

     Except as the Committee may determine otherwise with respect to any
particular Non-Qualified Option granted hereunder:

     (a)  If an Optionee ceases to have a Relationship for any reason other
than his death or Permanent Disability, any Options granted to him under the
Plan shall terminate three months from the date on which such Optionee
terminates his Relationship unless such Optionee has resumed or initiated a
Relationship and has a Relationship on such date. During such three-month
period, the Optionee may exercise any Option granted to him but only to the
extent such Option was exercisable on the date of termination of his
Relationship and provided that such Option has not expired or otherwise
terminated as provided herein. A leave of absence approved in writing by the
Committee shall not be deemed a termination of Relationship for purposes of
this Section, but no Option may be exercised during such leave of absence,
except during the first three months thereof.

     (b)  For purposes hereof, termination of an Optionee's Relationship
other than by death or Permanent Disability shall be deemed to take place
upon the earliest to occur of the following: (i) the date of the Optionee's
retirement under the normal retirement policies of the Company, and
Subsidiary of the Company or Parent Corporation of the Company; (ii) the date
of the Optionee's retirement with the approval of the Committee because of
disability other than Permanent Disability; (iii) the date an Optionee
receives notice or advice that his employment or other Relationship is
terminated; or (iv) in the case of an Optionee who is an employee, the date
the Optionee terminates his employment with the Company or any Subsidiary or
Parent Corporation of the Company; (v) in the case of an Optionee who is a
non-employee director, the date he ceases to be a director; or (vi) in the
case

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of an Optionee who is a consultant, the date the Optionee ceases to render
the services for which he was engaged or retained (in the case of clauses
(iv), (v) and (vi) hereof, absences for temporary illness, emergencies and
vacation or leave of absence approved in writing by the Committee excepted).

13. DEATH OR PERMANENT DISABILITY OF OPTIONEE

     Except as the Committee may determine otherwise with respect to any
Non-Qualified Options granted hereunder, if an Optionee shall die at a time
when he is in a Relationship or if the Optionee shall cease to have a
Relationship by reason of Permanent Disability, any Options granted to him
under this Plan shall terminate one year after the date of his death or
termination of Relationship due to Permanent Disability unless by its terms
it shall expire before such date or otherwise terminate as provided herein,
and shall only be exercisable to the extent that it would have been
exercisable on the date of his death or his termination due to Permanent
Disability. In the case of death, the Option may be exercised by the person
or persons to whom the Optionee's rights under the Option shall pass by will
or by the laws of descent and distribution.

14. STOCK PURCHASE NOT FOR DISTRIBUTION

     Each Optionee shall, by accepting the grant of an Option under the Plan,
represent and agree, for himself and his transferees by will or the laws of
descent and distribution, that all shares of stock purchased upon exercise of
the Option will be received and held without a view to distribution except as
may be permitted by the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder. After each notice of exercise of any
portion of an Option, if requested by the Committee, the person entitled to
exercise the Option must agree in writing that the shares of stock are being
acquired in good faith without a view to distribution.

15. PRIVILEGES OF STOCK OWNERSHIP

     The Company shall deliver to each Optionee annual financial statements,
quarterly reports containing financial information and other documents
delivered to shareholders generally. No person entitled to exercise any
Option granted under the Plan, however, shall have any of the rights or
privileges of a stockholder of the Company with respect to any shares of
Common Stock issuable upon exercise of such Option until such person has
become the holder of record of such shares. No adjustment shall be made for
dividends or distributions of rights in respect of such shares if the record
date is prior to the date on which such person becomes the holder of record,
except as provided in Section 16 hereof.

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16. ADJUSTMENTS

     (a) If the number of outstanding shares of Common Stock of the Company
are increased or decreased, or if such shares are exchanged for a different
number or kind of shares or securities of the Company through reorganization,
merger, recapitalization, reclassification, stock dividend, stock split,
combination of shares, or other similar transaction, the aggregate number of
shares of Common Stock subject to the Plan as provided in Section 4 hereof
and the shares of Common Stock subject to issued and outstanding Options
under the Plan shall be appropriately and proportionately adjusted by the
Committee. Any such adjustment in the outstanding Options shall be made
without change in the aggregate purchase price applicable to the unexercised
portion of the Option but with an appropriate adjustment in the price for
each share or other unit of any security covered by the Option.

     (b) Notwithstanding the provisions of subsection (a) of this Section,
upon the dissolution or liquidation of the Company or upon any
reorganization, merger or consolidation with one or more corporations as a
result of which the Company is not the surviving corporation, or upon a sale
of substantially all the assets of the Company or of more than 80% of the
then outstanding stock of the Company to another corporation or entity, the
Plan and each outstanding Option shall terminate; provided, however, that:
(i) each Option for which no option has been tendered by the surviving
corporation in accordance with all of the terms of provision (ii) immediately
below shall become fully exercisable subject to the provisions of Section 12
hereof, thirty days before the effective date of such dissolution,
liquidation, merger, consolidation or sale of stock or assets in which the
Company is not the surviving corporation; or (ii) in its sole and absolute
discretion, the surviving corporation may, but shall not be obligated to,
tender to any Optionee holding an Option, an option or options to purchase
shares of the surviving corporation or acquiring corporation, and such new
option or options shall contain such terms and provisions as shall be
required substantially to preserve the rights and benefits of any Option then
outstanding under this Plan.

     (c) Adjustments under this Section shall be made by the Committee, whose
determination as to what adjustments shall be made, and the extent thereof,
shall be final, binding and conclusive. No fractional shares of stock shall
be issued under the Plan or in connection with any such adjustment.

17. AMENDMENT AND TERMINATION OF PLAN

     (a) The Board of Directors of the Company may from time to time, with
respect to any shares at the time not subject to Options, suspend or
terminate, the Plan or amend or revise the terms of the Plan; provided that
any amendment to the Plan shall be approved by the shareholders of the
Company if the amendment would increase the number of shares of Common Stock
which may be issued under the Plan, except as permitted under the provisions
of Section 16 hereof, or change the description of persons eligible to receive

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Incentive Options under the Plan.

     (b) No amendment, suspension or termination of the Plan shall, without
the consent of the Optionee, alter or impair any rights or obligations under
any Option theretofore granted to such Optionee under the Plan.

     (c) The terms and conditions of any Option granted to an Optionee under
the Plan may be modified or amended only by a written agreement executed by
the Optionee and the Company; provided, however, that if any amendment or
modification of an Incentive Option would constitute a "modification,
extension or renewal" within the meaning of Section 425(h) of the Code, such
amendment shall be null and void unless the amendment contains an
acknowledgment by the parties substantially in the following form: "The
parties hereto recognize and agree that this amendment constitutes a
modification, renewal or extension within the meaning of Section 425(h) of
the Code, of the option granted on _______________________."

18. EFFECTIVE DATE OF PLAN

     This Plan shall become effective upon adoption by the Board of Directors
of the Company and approval by the Company's shareholders; provided,
however, that prior to approval of the Plan by the Company's shareholders,
but after adoption by the Board of Directors, Options may be granted under
the Plan subject to obtaining the shareholders' approval of the adoption of
the Plan. Notwithstanding the foregoing, shareholders' approval must occur no
later than 12 months after the date of adoption of the Plan by the Board of
Directors.

19. TERM OF PLAN

     No Option shall be granted pursuant to the Plan after 10 years from the
earlier of the date of adoption of the Plan by the Board of Directors of the
Company or the date of approval of the Plan by the Company's shareholders.

     The date of the initial adoption of the Plan by the Board was July 8,
1992. The date of the approval of the Plan by the Shareholders was September
23, 1992.

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