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EXHIBIT 10.1

                         2001 IRVINE SENSORS CORPORATION

                         NON-QUALIFIED STOCK OPTION PLAN

                                   ARTICLE ONE

                                     GENERAL

         I.       PURPOSE OF PLAN

                  This Plan is intended to promote the interests of Irvine
Sensors Corporation, a Delaware corporation, by authorizing the issuance of the
Corporation's common stock to individuals in the employ or service of the
Corporation (or any Parent or Subsidiary), including members of the Board.

                  Capitalized terms shall have the meanings assigned to such
terms in the attached Appendix.

         II.      ADMINISTRATION OF THE PLAN

                  A. The Primary Committee shall have the primary authority to
administer the Plan with respect to all eligible persons, but either the Board
or the Primary Committee may at any time appoint a Secondary Committee to have
separate but concurrent jurisdiction to administer the Plan with respect to one
or more class of persons eligible to participate in the Plan. Each Plan
Administrator shall, within the scope of its administrative functions under the
Plan, have full power and discretion (subject to the express provisions of the
Plan) to establish such rules and procedures as it may deem appropriate for the
proper administration of the Plan and to make such determinations under, and
issue such interpretations of, the provisions of the Plan and any outstanding
option grants thereunder as it may deem necessary or advisable. Decisions of the
Plan Administrator within the scope of its administrative functions under the
Plan, shall be binding on all parties who have an interest in the Plan or any
outstanding stock option granted thereunder.

                  B. Members of the Primary Committee or any Secondary Committee
shall serve for such period of time as the Board may determine and may be
removed by the Board at any time.

                  C. Service on the Primary Committee or the Secondary Committee
shall constitute service as a Board member, and members of each such committee
shall accordingly be entitled to full indemnification and reimbursement as a
Board member for such service. No member of the Primary Committee or the
Secondary Committee shall be liable for any act or omission made in good faith
with respect to the Plan or any option grant made under the Plan.

         III.     ELIGIBILITY

                  A. The persons eligible to participate in the Plan shall be
limited to (i) Employees of the Corporation (including officers), (ii) members
of the Board, and (ii) independent consultants in the service of the Corporation
(or any Parent or Subsidiary).

                  B. At least 50 percent of all Employees must be eligible to
receive grants under the Plan and less than 50 percent of the shares made
subject to grants issued under the Plan

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can be awarded to officers (within the meaning of Section 16 of the 1934 Act)
and members of the Board. These limitations will be applied on the basis of a
three-year phase in period, commencing on the establishment of the Plan.

                  C. Each Plan Administrator shall, within the scope of its
administrative jurisdiction under the Plan, have full authority to determine
which eligible Employees, members of the Board, and consultants are to receive
option grants under the Plan, the time or times when the grants are to be made,
the number of shares subject to each such grant, the time or times when each
granted option is to become exercisable, and the maximum term for which the
option may remain outstanding. All options granted under the Plan shall be
Non-Statutory Options.

         IV.      STOCK SUBJECT TO THE PLAN

                  A. Shares of Common Stock shall be available for issuance
under the Plan and shall be drawn from either the Corporation's authorized but
unissued shares of Common Stock or from reacquired shares of Common Stock,
including shares repurchased by the Corporation on the open market. The maximum
number of shares of Common Stock reserved for issuance over the term of the Plan
shall be limited to 1,000,000 shares, subject to adjustment from time to time in
accordance with the provisions of Section IV.C.

                    B. Should one or more outstanding options under this Plan
expire or terminate for any reason prior to exercise in full, then the shares
subject to the portion of each option not so exercised shall be available for
subsequent issuance under the Plan. Should the exercise price of an outstanding
option under the Plan be paid with shares of Common Stock, then the number of
shares of Common Stock available for issuance under the Plan shall be reduced by
the gross number of shares for which the option is exercised, and not by the net
number of shares of Common Stock actually issued to the holder of such option.

                  C. Should any change be made to the Common Stock issuable
under the Plan by reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class without the Corporation's receipt of
consideration, then appropriate adjustments shall be made to (i) the maximum
number and/or class of securities issuable under the Plan, and (ii) the number
and/or class of securities and price per share in effect under each option
outstanding under the Plan. Such adjustments to the outstanding securities are
to be effected in a manner which shall preclude the enlargement or dilution of
rights and benefits under such options. The adjustments determined by the Plan
Administrator shall be final, binding and conclusive.

                                   ARTICLE TWO

                                  OPTION GRANTS

         I.       OPTION TERMS

                  Options granted under the Plan shall be authorized by action
of the Plan Administrator and shall be evidenced by one or more instruments in
the form approved by the Plan Administrator; provided, however, that each such
instrument shall comply with the terms and conditions specified below. All such
granted options shall be Non-Statutory Options.

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     A. Exercise Price.
        --------------

        1. The exercise price per share shall be fixed by the Plan Administrator
but shall not be less than one hundred percent (100%) of the Fair Market Value
per share of Common Stock on the grant date.

        2. The exercise price shall become immediately due upon exercise of the
option and shall be payable in one or more of the forms specified below:

           (i) cash or check made payable to the Corporation,

           (ii) shares of Common Stock held for the requisite period necessary
     to avoid a charge to the Corporation's earnings for financial reporting
     purposes and valued at Fair Market Value on the Exercise Date, or

           (iii) through a special sale and remittance procedure pursuant to
     which the Optionee shall concurrently provide irrevocable instructions (a)
     to a Corporation-designated brokerage firm to effect the immediate sale of
     the purchased shares and remit to the Corporation, out of the sale proceeds
     available on the settlement date, sufficient funds to cover the aggregate
     exercise price payable for the purchased shares plus all applicable income
     and employment taxes required to be withheld by the Corporation in
     connection with such purchase and (b) to the Corporation to deliver the
     certificates for the purchased shares directly to such brokerage firm in
     order to complete the sale transaction.

        Except to the extent such sale and remittance procedure is utilized,
payment of the exercise price for the purchased shares must be made on the
Exercise Date.

        B. Exercise and Term of Options. Each option shall be exercisable
           ----------------------------
at such time or times, during such period and for such number of shares as shall
be determined by the Plan Administrator and set forth in the documents
evidencing such option. No option shall have a maximum term in excess of ten
(10) years measured from the option grant date.

        C. Limited Transferability. Each option granted under the Plan shall,
           -----------------------
during the Optionee's lifetime, be exercisable only by the Optionee and shall
not be assignable or transferable other than by will or the laws of inheritance
following the Optionee's death. However, the option may, in connection with the
Optionee's estate plan, be assigned in whole or in part during the Optionee's
lifetime to one or more members of the Optionee's immediate family or to a trust
established exclusively for one or more such family members. The assigned
portion may only be exercised by the person or persons who acquire a proprietary
interest in the option pursuant to the assignment. The terms applicable to the
assigned portion shall be the same as those in effect for the option immediately
prior to such assignment and shall be set forth in such documents issued to the
assignee as the Plan Administrator may deem appropriate. The Optionee may also
designate one or more persons as the beneficiary or beneficiaries of his or her
outstanding options under the Plan, and those options shall, in accordance with
such designation, automatically be transferred to such beneficiary or
beneficiaries upon the Optionee's death while holding those options. Such
beneficiary or beneficiaries shall take the transferred options subject to all
the terms and conditions of the applicable agreement evidencing each such
transferred option, including (without limitation) the limited time period
during which the option may be exercised following the Optionee's death.

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     D. Effect of Termination of Service.
        --------------------------------

        1. The following provisions shall govern the exercise of any options
held by the Optionee at the time of cessation of Service or death:

           (i) Any option outstanding at the time of the Optionee's cessation of
     Service for any reason shall remain exercisable for such period of time
     thereafter as shall be determined by the Plan Administrator and set forth
     in the documents evidencing the option, but no such option shall be
     exercisable after the expiration of the option term.

           (ii) Any option exercisable in whole or in part by the Optionee at
     the time of death may be subsequently exercised by the personal
     representative of the Optionee's estate or by the person or persons to whom
     the option is transferred pursuant to the Optionee's will or the laws of
     inheritance or by the Optionee's designated beneficiary or beneficiaries of
     that option.

           (iii) Should the Optionee's Service be terminated for Misconduct or
     should Optionee otherwise engage in any Misconduct while holding one or
     more options under the Plan, then those options shall terminate immediately
     and cease to be outstanding.

           (iv) During the applicable post-Service exercise period, the option
     may not be exercised in the aggregate for more than the number of shares
     for which the option is exercisable on the date of Optionee's cessation of
     Service. Upon the expiration of such post-Service exercise period or (if
     earlier) upon the expiration of the option term, the option shall terminate
     and cease to be outstanding for any otherwise exercisable shares for which
     the option has not been exercised. However, the option shall, immediately
     upon Optionee's cessation of Service for any reason, terminate and cease to
     be outstanding with respect to any and all option shares for which the
     option is not otherwise at the time vested and exercisable.

        2. The Plan Administrator shall have the discretion, exercisable either
at the time an option is granted or at any time while the option remains
outstanding, to:

           (i) extend the period of time for which the option is to remain
     exercisable following Optionee's cessation of Service or death from the
     limited period otherwise in effect for that option to such greater period
     of time as the Plan Administrator shall deem appropriate, but in no event
     beyond the expiration of the option term, and/or

           (ii) permit the option to be exercised, during the applicable
     post-Service exercise period, not only with respect to the number of shares
     of Common Stock for which such option is exercisable at the time of the
     Optionee's cessation of Service but also with respect to one or more
     additional installments for which the option would have become exercisable
     had the Optionee continued in Service.

     E. Stockholder Rights. No Optionee shall have any stockholder rights with
        -------------------

respect to any option shares until such person shall have exercised the option
and paid the exercise price for the purchased shares.

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     II. CHANGE IN CONTROL

     A. In the event of a Change in Control, each outstanding option under the
Plan shall automatically accelerate so that each such option shall, immediately
prior to the specified effective date of that Change in Control, become
exercisable for all of the shares of Common Stock at the time subject to that
option and may be exercised for any or all of those shares as fully-vested
shares. However, an outstanding option shall not become exercisable on such an
accelerated basis if and to the extent: (i) such option is to be assumed by the
successor corporation (or parent thereof) or is otherwise to continue in full
force and effect pursuant to the terms of the Change in Control transaction or
(ii) such option is to be replaced with a cash incentive program of the
successor corporation which preserves the spread existing at the time of the
Change in Control on any shares for which the option is not otherwise at that
time exercisable and provides for subsequent payout of that spread no later than
the same exercise/vesting schedule applicable to those option shares or (iii)
the acceleration of such option is subject to other limitations imposed by the
Plan Administrator at the time of the option grant.

     B. Immediately following the consummation of the Change in Control, all
outstanding options shall terminate and cease to be outstanding, except to the
extent assumed by the successor corporation (or parent thereof) or otherwise
continued in full force and effect pursuant to the terms of the Change in
Control transaction.

     C. Each option which is assumed in connection with a Change in Control or
otherwise continued in effect shall be appropriately adjusted, immediately after
such Change in Control, to apply to the number and class of securities which
would have been issuable to the Optionee in consummation of such Change in
Control had the option been exercised immediately prior to such Change in
Control. Appropriate adjustments to reflect such Change in Control shall also be
made to (i) the exercise price payable per share under each outstanding option,
provided the aggregate exercise price payable for such securities shall remain
the same, and (ii) the maximum number and/or class of securities available for
issuance over the remaining term of the option. To the extent the actual holders
of the Corporation's outstanding Common Stock receive cash consideration for
their Common Stock in consummation of the Change in Control, the successor
corporation may, in connection with the assumption of the outstanding options
under this Plan, substitute one or more shares of its own common stock with a
fair market value equivalent to the cash consideration paid per share of Common
Stock in such Change in Control transaction.

     D. The Plan Administrator shall have the discretionary authority to
structure one or more outstanding options under the Plan so that those options
shall, immediately prior to the effective date of such Change in Control, become
exercisable for all the shares of Common Stock at the time subject to those
options and may be exercised for any or all of those shares as fully vested
shares of Common Stock, whether or not those options are to be assumed in the
Change in Control transaction or otherwise continued in effect.

     E. The Plan Administrator shall have full power and authority to structure
one or more outstanding options under the Plan so that those options shall
become exercisable for all the shares of Common Stock at the time subject to
those options in the event the Optionee's Service is subsequently terminated by
reason of an Involuntary Termination within a designated period (not to exceed
eighteen (18) months) following the effective date of any Change in Control
transaction in which those options are assumed and do not otherwise accelerate.
Any options so accelerated shall remain exercisable for fully vested shares
until the expiration or sooner termination of the option term.

     F. The Plan Administrator shall have the discretionary authority to
structure one or more outstanding options under the Plan so that those options
shall, immediately prior to the effective date of a Change in Control, become
exercisable for all the

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shares of Common Stock at the time subject to those options and may be exercised
for any or all of those shares as fully vested shares of Common Stock.
Alternatively, the Plan Administrator may condition the automatic acceleration
of one or more outstanding options and the termination of one or more of the
Corporation's outstanding repurchase rights under such program upon the
subsequent termination of the Optionee's Service by reason of an Involuntary
Termination within a designated period (not to exceed eighteen (18) months)
following the effective date of such Change in Control. Each option so
accelerated shall remain exercisable for fully vested shares until the
expiration or sooner termination of the option term. Similar rules shall apply
in the case of cash payments described in Section II.A.ii.

     G. The outstanding options shall in no way affect the right of the
Corporation to adjust, reclassify, reorganize or otherwise change its capital or
business structure or to merge, consolidate, dissolve, liquidate or sell or
transfer all or any part of its business or assets.

                                  ARTICLE THREE

                              MISCELLANEOUS MATTERS

     I.   EFFECTIVE DATE AND TERM OF PLAN

          A. This Plan became effective immediately upon approval by the Board
and shall not be subject to stockholder approval.

          B. The Plan shall terminate upon the earliest to occur of (i) October
17, 2011 (ii) the date on which all shares available for issuance under the Plan
shall have been issued as fully-vested shares under the Plan or (iii) the
termination of all outstanding options in connection with a Change in Control.
If the date of termination is determined under clause (i) above, then all option
grants outstanding on such date shall thereafter continue to have force and
effect in accordance with the provisions of the instruments evidencing those
grants or issuances.

     II.  AMENDMENT OF THE PLAN

          The Board has complete and exclusive power and authority to amend or
modify the Plan and any options granted hereunder in any or all respects
whatsoever. However, no such amendment or modification shall adversely affect
the rights and obligations of the holders of the stock options at the time
outstanding under the Plan, unless the affected individuals consent to such
amendment.

     III. USE OF PROCEEDS

         Any cash proceeds received by the Corporation from the sale of shares
pursuant to option grants under the Plan shall be used for any corporate
purpose.

     IV.  REGULATORY APPROVALS

          A. The implementation of the Plan, the granting of any stock option
under the Plan, and the issuance of any shares of Common Stock upon the exercise
of those stock options shall be subject to the Corporation's procurement of all
approvals and permits required by regulatory authorities having jurisdiction
over the Plan, the stock options granted under it and the shares of Common Stock
issued pursuant to it.

          B. No shares of Common Stock or other assets shall be issued or
delivered under the Plan unless and until there shall have been compliance with
all applicable requirements of applicable securities laws, including the filing
and effectiveness of the Form S-8 registration

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statement for the shares of Common Stock issuable under the Plan, and all
applicable listing requirements of any stock exchange (or Nasdaq, if applicable)
on which the Common Stock is then listed for trading.

     V. TAX WITHHOLDING

        The Corporation's obligation to deliver shares of Common Stock upon the
exercise of outstanding stock options under the Plan shall be subject to the
satisfaction of all applicable income and employment tax withholding
requirements.

     VI. NO EMPLOYMENT/SERVICE RIGHTS

         Nothing in the Plan shall confer upon the Optionee any right to
continue in Service for any period of specific duration or interfere with or
otherwise restrict in any way the rights of the Corporation (or any Parent or
Subsidiary employing or retaining such person) or of the Optionee, which rights
are hereby expressly reserved by each, to terminate such person's Service at any
time for any reason, with or without cause.

     VII. MISCELLANEOUS PROVISIONS

          A. The right to acquire Common Stock or other assets under the Plan
may not be assigned, encumbered or otherwise transferred by any Optionee, except
as expressly provided herein.

          B. The provisions of the Plan relating to the exercise of options and
the vesting of shares shall be governed by the laws of the State of California,
as such laws are applied to contracts entered into and performed in such state.

          C. The provisions of the Plan shall insure to the benefit of, and
shall be binding upon, the Corporation and its successors and assigns, whether
by a Change in Control or otherwise, and the Optionees and the legal
representatives, heirs or legatees of their respective estates.

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                                    APPENDIX
                                    --------

     The following definitions shall be in effect under the Plan:

     A.   Board shall mean the Corporation's Board of Directors.
          -----

     B.   Change in Control shall mean a change in ownership or control of the
          -----------------
Corporation effected through any of the following transactions:

          (i) a merger, consolidation or other reorganization approved by the
     Corporation's stockholders, unless securities representing more than fifty
                                 ------
     percent (50%) of the total combined voting power of the voting securities
     of the successor corporation are immediately thereafter beneficially owned,
     directly or indirectly and in substantially the same proportion, by the
     persons who beneficially owned the Corporation's outstanding voting
     securities immediately prior to such transaction, or

          (ii) the sale, transfer or other disposition of all or substantially
     all of the Corporation's assets in complete liquidation or dissolution of
     the Corporation, or

          (iii) the acquisition, directly or indirectly by any person or related
     group of persons (other than the Corporation or a person that directly or
     indirectly controls, is controlled by, or is under common control with, the
     Corporation), of beneficial ownership (within the meaning of Rule 13d-3 of
     the 1934 Act) of securities possessing more than fifty percent (50%) of the
     total combined voting power of the Corporation's outstanding securities
     pursuant to a tender or exchange offer made directly to the Corporation's
     stockholders.

     C. Code shall mean the Internal Revenue Code of 1986, as amended.
        ----

     D. Common Stock shall mean the Corporation's common stock.
        ------------

     E. Corporation shall mean Irvine Sensors Corporation, a Delaware
        -----------
corporation, and any corporate successor to all or substantially all of the
assets or voting stock of Irvine Sensors Corporation which shall by appropriate
action adopt the Plan.

     F. Employee shall mean an individual who is in the employ of the
        --------
Corporation (or any Parent or Subsidiary), subject to the control and direction
of the employer entity as to both the work to be performed and the manner and
method of performance.

     G. Exercise Date shall mean the date on which the Corporation shall have
        -------------
received written notice of the option exercise.

     H. Fair Market Value per share of Common Stock on any relevant date shall
        -----------------
be determined in accordance with the following provisions:

          (i) If the Common Stock is at the time traded on the Nasdaq National
     Market, then the Fair Market Value shall be the closing selling price per
     share of Common Stock on the date in question, as such price is reported by
     the National Association of Securities Dealers on the Nasdaq National
     Market and published in The Wall Street Journal. If there is no closing
                             -----------------------
     selling price for the Common Stock on the date in question, then the Fair
     Market Value shall be the closing selling price on the last preceding date
     for which such quotation exists.

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          (ii) If the Common Stock is not at the time traded on the Nasdaq
     National Market, the closing selling price on that day as furnished by any
     member of the National Association of Securities Dealers, Inc. selected by
     the Corporation for that purpose. If there is no closing selling price for
     the Common Stock on the date in question, then the Fair Market Value shall
     be the closing selling price on the last preceding date for which such
     quotation exists.

          (iii) If the Common Stock is at the time listed on any Stock Exchange,
     then the Fair Market Value shall be the closing selling price per share of
     Common Stock on the date in question on the Stock Exchange determined by
     the Plan Administrator to be the primary market for the Common Stock, as
     such price is officially quoted in the composite tape of transactions on
     such exchange and published in The Wall Street Journal. If there is no
                                    -----------------------
     closing selling price for the Common Stock on the date in question, then
     the Fair Market Value shall be the closing selling price on the last
     preceding date for which such quotation exists.

     I. Involuntary Termination shall mean the termination of the Service
        -----------------------
of any individual which occurs by reason of:

          (i) such individual's involuntary dismissal or discharge by the
     Corporation for reasons other than Misconduct, or

          (ii) such individual's voluntary resignation following (A) a change in
     his or her position with the Corporation which materially reduces his or
     her duties and responsibilities or the level of management to which he or
     she reports, (B) a reduction in his or her level of compensation (including
     base salary, fringe benefits and target bonus under any corporate-
     performance based bonus or incentive programs) by more than fifteen percent
     (15%) or (C) a relocation of such individual's place of employment by more
     than fifty (50) miles, provided and only if such change, reduction or
     relocation is effected by the Corporation without the individual's consent.

     J. Misconduct shall mean the commission of any act of fraud, embezzlement
        ----------
or dishonesty by the Optionee, any unauthorized use or disclosure by such person
of confidential information or trade secrets of the Corporation (or any Parent
or Subsidiary), or any other intentional misconduct by such person adversely
affecting the business or affairs of the Corporation (or any Parent or
Subsidiary) in a material manner. The foregoing definition shall not be deemed
to be inclusive of all the acts or omissions which the Corporation (or any
Parent or Subsidiary) may consider as grounds for the dismissal or discharge of
any Optionee or other person in the Service of the Corporation (or any Parent or
Subsidiary).

     K. 1934 Act shall mean the Securities Exchange Act of 1934, as amended.
       --------

     L. Non-Statutory Option shall mean an option not intended to satisfy the
        --------------------
requirements of Code Section 422.

     M. Optionee shall mean any person to whom an option is granted under the
        --------
Plan.

     N. Parent shall mean any corporation (other than the Corporation) in an
        ------
unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the time
of the determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.

     O. Plan shall mean the 2001 Irvine Sensors Corporation Stock Option Plan,
        ----
as set forth in this document.


     P. Plan Administrator shall mean both the Primary Committee and the
        ------------------
Secondary Committee in the performance of their administrative functions under
Plan.

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     Q. Primary Committee shall mean the committee of two (2) or more
        -----------------
non-employee Board members appointed by the Board to serve as the primary
administrator of the Plan.

     R. Secondary Committee shall mean a committee of one or more Board members
        -------------------
appointed by the Board to have separate but concurrent jurisdiction with the
Primary Committee to administer the Plan with respect to one or more classes of
individuals designated by the Board or by the Primary Committee.

     S. Service shall mean the performance of services for the Corporation (or
        -------
any Parent or Subsidiary) by a person in the capacity of an Employee or a
consultant or other independent advisor, except to the extent otherwise
specifically provided in the documents evidencing the option grant. In the case
of a former director, Service will be deemed to continue as long as the former
director is available for consultation with the Corporation.

     T. Stock Exchange shall mean either the American Stock Exchange or the New
        --------------
York Stock Exchange.

     U. Subsidiary shall mean any corporation (other than the Corporation) in an
        ----------
unbroken chain of corporations beginning with the Corporation, provided each
corporation (other than the last corporation) in the unbroken chain owns, at the
time of the determination, stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.