EXHIBIT 10.1


                           IONIC FUEL TECHNOLOGY, INC.

                           INCENTIVE STOCK OPTION PLAN

                                       AND

                         NONSTATUTORY STOCK OPTION PLAN


         1.  Name, Effective Date and Purpose.

         (a) This Plan document is intended to implement and govern two separate
         stock option plans of IONIC FUEL TECHNOLOGY,  INC. (The "Company"): the
         Incentive  Stock  Option  Plan  ("Plan A") and the  Nonstatutory  Stock
         Option  Plan ("Plan B").  Plan A provides  for the  granting of options
         that are intended to qualify as  incentive  stock  options  ("Incentive
         Stock  Options")  within the meaning of Section 422A(b) of the Internal
         Revenue Code of 1986, as amended (the "Code").  Plan B provides for the
         granting  of  options  that  are not  intended  to so  qualify.  Unless
         otherwise specified,  all the provisions of this plan relate equally to
         both  Plan A and  Plan B and are  condensed  for  convenience  into one
         document.

         2.  Administration.

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

         (b) The Board shall have sole authority, in its absolute discretion, to
         determine  which  of the  eligible  persons  of  the  Company  and  its
         affiliated companies shall receive Options ("Optionees"),  and, subject
         to the express  provisions and  restrictions of this Plan, to determine
         the time when Options shall be granted,  the terms and conditions of an
         Option other than the terms and  conditions  fixed under this Plan, the
         number of shares which may be issued upon exercise of an Option and the
         means of payment for such shares,  and shall be issued upon exercise of
         an Option  and the means of  payment  for such  shares,  and shall have
         authority to do everything  necessary or appropriate to administer this
         Plan. All decisions,  determinations  and  interpretations of the Board
         shall be final and binding on all Optionees.

         (c) The Board shall have the  authority to delegate  some or all of the
         powers granted to it pursuant to Section 2 to a committee  appointed by
         the Board and  consisting  of not less than  three (3)  members  of the
         Board (the "Committee").

 (d)  Aggregate limitations with respect to the participation of directors and
         officers in the plan:

      (i)  No more than 25,000 shares of Common Stock may be optioned
         and sold to directors of the Company under the Plans in the

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         aggregate.

                  (ii) No more than 200,000 shares of Common Stock may be 
         optioned
         and sold to non-director officers and employees of the Company
         under the Plans in the aggregate.

         3.  Eligibility.

         (a) Plan A: The Board of the Committee,  if so authorized by the Board,
         may in its  discretion,  grant one or more options  under Plan A to any
         key  management  employee  of the  Company  or  any  of its  affiliated
         companies,  including  any employee who is a director of the Company or
         any  of  its  affiliated  companies  presently  existing  or  hereafter
         organized or acquired.  Such options may be granted to one or more such
         employees  without being granted to other  eligible  employees,  as the
         Board may deem fit.

         (b) Plan B: The Board of the  Committee if so  authorized by the Board,
         may in its discretion grant one or more Options under Plan B to any key
         management employee, any non-employee director of the Company or any of
         its affiliated  companies,  including any employee who is a director of
         the Company or any of its affiliated  companies  presently  existing or
         hereinafter  organized or any person who performs  consulting  services
         for the Company or any of its affiliated companies and is designated by
         the Board as eligible  to  participate  in Plan B. Such  options may be
         granted  to one or more such  persons  without  being  granted to other
         eligible persons, as the Board may deem it.

         4.  Stock to be Optioned.

         (a) The maximum  aggregate  number of shares  which may be optioned and
         sold under Plan A and Plan B is 225,000  (Two  Hundred and  Twenty-Five
         Thousand) shares of authorized Common Stock of the Company.

         (b) Shares of Common  Stock  that (i) are  repurchased  by the  Company
         after issuance hereunder pursuant to the exercise of an Option, or (ii)
         are  not  purchased  by  the  Optionee   prior  to  the  expiration  or
         termination of the applicable  Option,  shall again become available to
         be covered by Options to be issued  hereunder  and shall not, as of the
         effective date of such repurchase or expiration,  be counted as counted
         as covered by an outstanding Option for purposes of the above-described
         number of shares which may be optioned hereunder.

         5.  Option Price.

                  The  option  price for shares of Common  Stock to be  optioned
         either under Plan A or Plan B shall be 100% of the fair market value of
         such  shares on the date on which the Option  covering  such  shares is
         granted by the Board or the Committee if so authorized,  except where a
         higher  price is required by the Code.  The fair market value of shares
         of Common  Stock for all purposes of this Plan is to be  determined  by
         the Board or the  committee is so  authorized  in its sole  discretion,
         exercised in good faith.


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         6.  Terms of Plan.

                  The Plans shall become effective on December 1, 1992 and shall
         continue in effect until November 30, 2002 unless terminated earlier by
         the Board. No Option may be granted hereunder after November 30, 2002.

         7.  Exercise of Options.

                  The Board,  or the Committee if so  authorized,  may determine
         the time or times at which any  option  granted  under the Plans may be
         exercised,  and may  accelerate  the  time at  which  all or part of an
         Option may be  exercised.  No Option shall have a term of more than ten
         (10) years.

         8.  Effect of Death or Other Termination of Employment.

         (a) If an option  holder dies while  employed by the  corporation  or a
         subsidiary and without having fully exercised any then existing option,
         his  estate or the  legatees  or  distributees  of his estate or of the
         option,  as the case may be, shall have the right to purchase under the
         option  the  number of  shares,  if any,  which the  option  holder was
         entitled  to  purchase  as of the date of death at any time  within  12
         months  following the date of death, but not beyond that time and in no
         event later than the expiration date of the option.

         (b) If an  option  holder's  employment  with the  corporation  and its
         subsidiaries  is  terminated  by reason of his  complete on or after he
         reaches  the age of 60 years in such  manner as would  entitled  him to
         receive full Social Security  benefits if he were then 65 years of age,
         without his having  fully  exercised  any existing  option,  the option
         holder shall have the right to purchase  under the option the number of
         shares,  if any,  which he is  entitled to purchase at the time of such
         retirement at any time within 3 months  following such retirement date,
         but not beyond that time and in no event any later than the  expiration
         date of the option.

         (c) If any option  holder's  employment  with the  corporation  and its
         subsidiaries as the case may be, is terminated for any cause designated
         by the Executive  Committee as an "approved  termination"  by reason of
         his illness,  disability or other incapacity,  without his having fully
         exercised any existing  option,  the option holder shall have the right
         to purchase under the option the number of shares,  if any, which he is
         entitled to purchase at the time of such approved  termination any time
         within 3 months  following the effective  date of such  termination  of
         employment,  but not  beyond  that time and in no event  later than the
         expiration date of the option.

         (d) If an  option  holder's  employment  with the  corporation  and its
         subsidiaries,  as the case may be, is  terminated  for any reason other
         than set forth in  paragraph  (a),  (b),  or (c)  above,  whether  such
         termination  be  voluntary  or  involuntary,  without his having  fully
         exercised  any existing  option,  the option shall be cancelled  and he
         shall have no further  rights to  exercise  any such option and all his
         rights  thereunder  shall  terminate as of the  effective  date of such
         termination of employment.


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         9.  Exercise of Options.

                  An option shall be deemed  exercised  when  written  notice of
         such exercise has been given to the Company at its  principal  business
         office by the person  entitled to exercise  the Option and full payment
         in cash (or shares of Common  Stock in  accordance  with this Plan) for
         the shares  with  respect to which the Option has been  received by the
         Company.

         10.  Shareholder Approval.

                  The grant of Options under this Plan shall be conditioned upon
         approval of the Plan by the  holders of a majority  of the  outstanding
         shares of Common Stock.

         11.  Limit on Value of Optioned Shares.

                  The aggregate fair market value  (determined as of the date of
         grant of an Option) of the shares of Common  Stock for which  Incentive
         Stock Options are exercisable for the first time by any employee of the
         Company during any calendar year under all incentive stock option plans
         of the Company and its parent and subsidiary  corporations  (as defined
         under the Code) shall not exceed  $100,000.  The  limitation  shall not
         apply with respect to Options granted under Plan B.

         12.  Exercise with Company Stock.

                  The Board of the Committee if so authorized  may provide that,
         upon  exercise of an Option,  the Optionee may elect to pay for some or
         all of the shares of Common Stock  underlying the option with shares of
         Common Stock of the Company  previously  acquired and owned at the time
         of  exercise  by  the  Optionee,   subject  to  the   restrictions  and
         limitations  of  applicable  laws,  including  the  Code,  and to  such
         conditions as the Board may impose.  The equivalent dollar value of the
         shares used to effect the  purchase  shall be the fair market  value of
         the shares on the date of  purchase as  determined  by the Board of the
         Committee if so authorized, exercised in good faith.

         13.  Stock Option Agreement.

                  The terms and  conditions  of Options  granted  under the Plan
         shall be evidenced by a Stock Option Agreement  executed by the Company
         and the  person to whom the Option is  granted.  Such  agreement  shall
         contain such terms and  conditions not  inconsistent  with this Plan as
         the Board or the Committee if so authorized, shall determine.

         14.  Taxes, Fees and Expenses.

                  The Company  shall pay all original  issue and transfer  taxes
         but not  income  taxes,  if any,  with  respect to the grant of Options
         and/or the issue and  transfer of shares  pursuant  to the  exercise of
         such Options,  and all other fees and expenses  necessarily incurred in
         connection therewith.



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         15.  Withholding of Taxes.

                  The grant of  Options  hereunder  and the  issuance  of Common
         Stock pursuant to the exercise of such Options is conditioned  upon the
         Company's  reservation of the right to withhold, in accordance with the
         applicable law, from any compensation payable to the Optionee any taxes
         required to be  withheld by federal,  state or local law as a result of
         the grant or exercise of any such Option.

         16.  Amendment or Termination of the Plan.

         (a) The Board may amend this Plan from time to time in such respects as
         the Board may deem advisable, provided, however, that no such amendment
         shall operate to (i) affect  adversely an Optionee's  rights under this
         Plan with respect to any Option granted hereunder prior to the adoption
         of such  amendment,  except  as may be  necessary  in the  judgment  of
         counsel  to the  Company,  to  comply  with any  applicable  law,  (ii)
         increase the maximum  aggregate  number of shares which may be optioned
         and sold under the Plan,  (iii)  change the manner of  determining  the
         option exercise price,  (iv) change the classes of persons  eligible to
         receive  Options under the Plan, or (v) extend the maximum  duration of
         an Option or the Plan.

         (b) The Board may at any time terminate this Plan. Any such termination
         of the Plan shall not,  without  the written  consent of the  Optionee,
         alter the terms of  Options  already  granted  and such  Options  shall
         remain  in  full  force  and  effect  as if  this  Plan  had  not  been
         terminated.

         17.  Options Not Transferable.

                  Options  granted  under  this  Plan may not be sold,  pledged,
         hypothecated,  assigned, encumbered, gifted or otherwise transferred or
         alienated  in  any  manner,  either  voluntarily  or  involuntarily  by
         operation  of law,  otherwise  than by will or the laws of descent  and
         distribution,  and may be exercised during the lifetime of the Optionee
         only by the Optionee.

         18.  Reservation of Shares.

                  The  Company  will  during  the term of this Plan at all times
         receive and keep available such number of shares of its Common Stock as
         shall be sufficient to satisfy the requirements of the Plan.


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         19.  Notices.

                  Any  notice  to be  given  to  the  Company  pursuant  to  the
         provisions  of this Plan shall be  addressed  to the Company in care of
         its President at its principal  executive office,  and any notice to be
         given to an Optionee  shall be  addressed  to him at the address  given
         beneath his  signature  on his Stock  Option  Agreement,  or such other
         address  as such  person  may  hereafter  designate  in  writing to the
         Company.  Any such notice shall be deemed duly given when enclosed in a
         properly sealed envelope or wrapper addressed as aforesaid,  registered
         or certified, and deposited, postage and fees prepaid, in a post office
         or branch post office regularly  maintained by the Untied States Postal
         Service.

         20.  Adjustments Upon Changes in Capitalization.

                  If the  outstanding  shares of Common Stock of the Company are
         increased,  decreased, changed into or exchanged for a different number
         or   kind   of   shares   of  the   Company   through   reorganization,
         recapitalization,  reclassification,  stock  dividend,  stock  split or
         reverse  stock split,  then upon proper  authorization  by the Board an
         appropriate and proportionate adjustment shall be made in the number or
         kind of shares  which may be issued upon  exercise  of Options  granted
         under the plan; provided, however, that no such adjustment need be made
         if,  upon the  advice  of  counsel,  the  Board  determines  that  such
         adjustment  may result in the receipt of  federally  taxable  income to
         holders of Options granted  hereunder or the holders of Common Stock or
         other classes of the Company's securities.

         21.  Representations and Warranties.

                  As a  condition  to the  exercise of any portion of an Option,
         the Company may require the person  exercising  such Option to make any
         representation  and/or  warranty  to the Company as may, in judgment of
         counsel  to the  Company,  be  required  under  any  applicable  law or
         regulation,  including but not limited to a representation and warranty
         that the shares are being  acquired only for investment and without any
         recent  intention to sell or distribute  such shares if, in the opinion
         of counsel for the Company,  such  representation is required under the
         Securities  Act of 1933,  as  amended,  or any  other  applicable  law,
         regulation or rule of any governmental agency.

         22.  No Enlargement of Employee Rights.

                  This Plan is purely voluntary on the part of the Company,  and
         while the Company hopes to continue it indefinitely, the continuance of
         the Plan  shall not be deemed to  constitute  a  contract  between  the
         Company and any employee. Nothing contained in the Plan shall be deemed
         to give any  employee  the right to be  retained  in the  employ of the
         Company or one of its  affiliated  companies,  or to interfere with the
         right of the Company or any  affiliated  company to discharge or retire
         any employee  thereof at any time. No employee  shall have any right to
         or interest in Options authorized  hereunder prior to the grant of such
         an Option to such employee, and upon such grant he shall have only such
         rights  and  interests  as  are  expressly  provided  herein,  subject,
         however, to all applicable

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         provisions of the Company's Certificate of Incorporation, as the
 same may
         be amended from time to time.

         23.  Successors and Assigns.

                  This Plan shall be binding on and inure to the  benefit of the
         Company and the  employees to whom Options are granted  hereunder,  and
         such employees' heirs, executors,  administrators,  legatees,  personal
         representatives, assignees and transferees.



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