CONTRACT FOR EMPLOYMENT

         TELEGEN CORPORATION,  a California corporation,  located at 353 Vintage
Park  Drive,  Suite H,  Foster  City,  California,  hereinafter  referred  to as
Employer, and JESSICA LYNN STEVENS,  hereinafter referred to as the Employee, in
consideration  of the mutual  promises made herein,  agree as of May 3, 1990, as
follows:

                              ARTICLE 1. EMPLOYMENT

         SECTION 1.01.  Employer  hereby  employs  Employee and Employee  hereby
accepts  employment with Employer until  terminated as provided herein beginning
on May 3, 1990.

         SECTION 1.02.  This agreement may be terminated  earlier as hereinafter
provided [notwithstanding the provisions of SECTION 1.01, above].

                          ARTICLE 2. DUTIES OF EMPLOYEE

         SECTION  2.01.  The   Employer   desires  to  retain  the  Employee  to
undertake  a  variety  of  technical  and/or  administrative  duties  as  may be
determined by Employer from time to time.

         SECTION  2.02.  It is hereby  agreed that the Employer  does retain and
employ  the said  Employee  subject  to the  following  terms,  conditions,  and
stipulations:

         a. The  Employee  agrees  that to the best of  Employee's  ability  and
experience  will at all times  loyally  and  conscientiously  perform all of the
duties and obligations  either  expressly or implicitly  required of Employee by
the terms and conditions of this agreement;

         b. The Employee's  performance of the duties  hereunder  shall,  at all
times, be rendered to Employees reasonable satisfaction.  The Employee expressly
agrees  that  Employer  shall be the sole judge as to whether  the  services  of
Employee are satisfactory.

                             ARTICLE 3. COMPENSATION

         SECTION  3.01.  Employer  shall  pay  Employee  such  compensation  for
services as may be rendered  under this  contract,  as may be  determined in the
sole discretion of the President of the  corporation,  or the Employee's  direct
supervisor.

                            ARTICLE 4. NONCOMPETITION

         SECTION  4.01.  During the term of this  contract  Employee  shall not,
directly or  indirectly,  either as an employee,  employer,  consultant,  agent,
principal,  partner,  stockholder,  corporate officer, director, or in any other
individual or  representative  capacity,  engage or  participate in any business
that is in competition in any manner whatsoever with the business of Employer.


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         SECTION  4.02.  Employee  acknowledges  and  agrees  that  the  sale or
unauthorized  use or  disclosure of any of Employees  trade secrets  obtained by
Employee  during  employment  with Employer,  including  information  concerning
Employees current products and any future or proposed products or services,  the
facts that those products or services are planned,  under  consideration,  or in
production,  as well as any  descriptions  of/the  features of those products or
services  constitute  unfair  competition.  Employee  promises and agrees not to
engage in any unfair  competition  with Employer  either during the term of this
agreement or within five (5) years thereafter.

         SECTION  4.03.  In the  event  that  Employee  breaches  the  foregoing
obligation  not to compete,  the Employee shall be enjoined from engaging in any
further competitive  activity and shall be liable to Employer for any reasonable
damages for any such breach occurring prior to the issuance of an injunction.

                      ARTICLE 5. OWNERSHIP OF WORK PRODUCT

         SECTION  5.01.  Notwithstanding  any  statutory,   regulatory,   and/or
public policy  considerations to the contrary,  Employee agrees that any and all
intellectual  properties,  including  but not  limited to all  ideas,  concepts,
themes, inventions,  designs, improvements and discoveries conceived,  developed
or written by Employee,  either  individually or jointly in  collaboration  with
others, during the term of Employee's employment with Employer shall be the sole
and separate property of Employer.

         SECTION  5.02.  Employee  further  agrees  that the  understanding  set
forth in  subparagraph  5.01 above  constitutes a complete and express waiver by
Employee of any and all rights to the intellectual property described therein.

         SECTION  5.03.  Employee will,  upon reasonable  request,  execute such
documents as are requested to effectuate the terms of this Contract.

                           ARTICLE 6. INDEMNIFICATION

         SECTION  6.01.  Employee  shall  indemnify and save  Employer  harmless
from all liability from loss, damage, or injury to persons or property resulting
from the negligence or misconduct of the Employee.

                             ARTICLE 7. TERMINATION

         SECTION  7.01.  If Employee willfully  breaches or habitually  neglects
the  duties  that  Employee  is  required  to  perform  under  the terms of this
agreement,  or  demonstrates  continued  incapacity  to  perform  those  duties,
Employer may at its option  terminate this agreement by giving written notice of
termination to Employee without  prejudice to any other remedy to which Employer
may be entitled either at law, in equity, or under this agreement.

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         SECTION  7.02.  This  agreement  shall  terminate  immediately  on  the
occurrence of any one of the following events:

         (1)  The  occurrence  of  circumstances  that  make  it  impossible  or
impracticable for the business of Employer to be continued.

         (2)  The death of the Employee.

         (3)  The loss by the Employee of legal capacity.

         (4)  The loss by Employer of legal capacity to contract.

         (5)  The death or dissolution of Employer.

         SECTION  7.03.  The  employment of Employee shall continue only as long
as the services rendered by Employee are satisfactory to Employer, regardless of
any other  provision  contained in this  agreement.  Employer  shall be the sole
judge as to whether the services of Employee are satisfactory provided, however,
that Employees  determination With respect to Employee's  services are exercised
reasonably and in good faith.

         SECTION  7.04.  In the event that this agreement is terminated prior to
the  completion  of the term of  employment  specified  herein,  Employee  shall
automatically  and completely  forfeit any rights that Employee may have for the
fiscal year during which termination of this agreement occurs.

                             ARTICLE 8. ARBITRATION

         SECTION  8.01.  Any  controversy or claim arising out of or relating to
this  agreement,  or the  breach  thereof  shall be settled  by  arbitration  in
accordance with the rules of the American Arbitration Association,  and judgment
on the award rendered may be entered in any court having jurisdiction.

         SECTION  8.02.  Arbitration  shall  comply  with and be governed by the
provisions of the California  Arbitration  Act,  Sections 1280 through 1294.2 of
the  California  Code of  Civil  Procedure,  which  is  incorporated  herein  by
reference.

         SECTION  8.03.  Employer and Employee  shall each appoint one person to
hear and determine the dispute and, if the two persons so selected are unable to
agree,  those  two  persons  shall  select a third  impartial  arbitrator  whose
decision shall be final and conclusive

         SECTION  8.04.  The cost of  arbitration  shall be borne by the  losing
party or in such proportions as the arbitrator decides.

         SECTION  8.05.  The result of  arbitration  hereunder  shall be binding
upon the parties

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                          ARTICLE 9. CORPORATE POLICIES

         SECTION 9.01. From time to time Employer shall  institute  company-wide
policies affecting all of its employees.  Employee shall abide by and conform to
those policies.

         SECTION 9.02. Employee  shall be enrolled in the Employees medical plan
with the costs thereof for Employee  paid by Employer,  and the cost thereof for
any dependents of Employee enrolled in the plan paid by the Employee.

         SECTION 9.03. Employee shall be granted up to 10 days of sick leave per
year,  accruing  ratably  over the  term of  employment,  and two  weeks of paid
vacation per year,  accruing  ratable during the year, and available to be taken
only after completion of the first six months of employment.

                      ARTICLE 10. RULES GOVERNING AGREEMENT

         SECTION 10.01. Except as expressly provided for herein, nothing in this
agreement shall  constitute or be deemed  construed to be a waiver or release by
the parties of any rights, claims, causes of action, defenses or offsets against
any other person or entity not a party of this agreement.

         SECTION 10.02. The parties  agree not to communicate  the terms of this
agreement  to any  person or  entity  not a party to this  agreement,  except as
provided in this paragraph. The parties may disclose the terms of this agreement
to their next of kin,  attorneys,  accountants (to the extent required to comply
with any law or regulation),  auditors,  law enforcement agencies,  governmental
bodies or regulators or tax authorities.

         SECTION 10.03. This agreement shall  be interpreted and governed by the
laws of the State of California.  Venue and jurisdiction for any dispute arising
out of this agreement  shall be in the Superior Court of the State of California
for the County of San Mateo.

         SECTION 10.04. In the execution of this agreement and the  negotiations
leading  thereto,  each party was offered the  opportunity  to be represented by
counsel of its own selection during such negotiations. Prior to the execution of
this agreement by each party, the party's  attorney,  if any retained,  reviewed
this  agreement  and made all  desirable  changes,  and  advised  the party with
respect to the  advisability of executing this agreement.  According y, e normal
rule of construction  providing that any ambiguities are to be resolved  against
the drafting party shall not be employed in the  interpretation  or construction
of this agreement.

         SECTION 10.05. This  agreement,  and  the  language  herein,  shall  be
construed  as a whole  according  to its fair  meaning,  and not strictly for or
against any of the parties.

         SECTION 10.06. This  agreement may be executed in  counterparts  which,
taken  together,  shall  constitute  one and the  same  agreement  and  shall be
effective as of the date first written above.

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         SECTION 10.07. This agreement is the sole, only,  entire,  and complete
Agreement of the parties  relating in any way to the subject matter  hereof.  No
statements,  promises, or representations have been made by any party to another
or are relied  upon,  and no  consideration  has been or is  offered,  promised,
expected,  or held out  other  than  that  constituted  by this  agreement.  The
conditions  precedent to the effectiveness of this agreement exist other than as
may be expressly  provided herein.  All prior  discussions and negotiations have
been and are merged and integrated  into and are  superseded by this  agreement.
This agreement may not be altered, amended or modified except by a writing which
expressly refers to this agreement and is signed  subsequent to the execution of
this agreement by the party or parties to any such  authorization,  amendment or
modification.

         SECTION 10.08. This  agreement,  and each and  every  portion  thereof,
shall be binding on the  successors and assigns of the parties  hereto,  but the
same  shall not be  assigned  by the  Employee  without  written  consent of the
Employer.

         The parties hereto having first read and understood the foregoing terms
and  conditions  of this  Contract for  Employment,  executed the same at Foster
City, California.


DATED:
        ---------------------                    ------------------------------
                                                 JESSICA LYNN STEVENS, EMPLOYEE


DATED:
        ---------------------                    ------------------------------
                                                 WARREN M. DILLARD
                                                 Chief Financial Officer
                                                 TELEGEN CORPORATION


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