Exhibit 10.1

                    HQ Sustainable Maritime Industries, Inc.
                             2004 STOCK OPTION PLAN

                            STOCK OPTION GRANT NOTICE


HQ Sustainable Maritime Industries,  Inc. (the "Company"),  pursuant to its 2004
Stock Option Plan (the "Plan"),  hereby grants to the Participant named below an
option ("Option") to purchase the number of shares of Stock ("Shares") set forth
below.  The terms and  conditions of this Option are subject to all of the terms
and conditions as set forth herein and in the  Participant's  Option  Agreement,
the Plan and the  Exercise  Agreement,  all of which  are  attached  hereto  and
incorporated  herein in their entirety.  Defined terms not explicitly defined in
this Grant Notice but defined in the Plan shall have the same  definitions as in
the Plan.

Participant:                                    ___________________

Date of Grant:                                  ___________________

Vesting Commencement Date:                      ___________________

Number of Shares Subject to the Option:         ___________________

Exercise Price (Per Share):                     ___________________

Type of Grant:    |_|  Incentive Stock Option(1)       |_|  Non-Qualified Option


Vesting Schedule:  Your Option shall vest in the following manner: [ ]; provided
you are in Continuous  Service (as that term is defined in the Option Agreement)
with the Company from the Date of Grant through the  applicable  date upon which
vesting is scheduled to occur. Unless your Option has earlier  terminated,  upon
termination of your Continuous Service with the Company because of your death or
disability, your Option will be fully vested.

Expiration  Date:  Unless  sooner  terminated  in  accordance  with your  Option
Agreement  or the terms of the Plan,  the  Option  will  terminate  on the tenth
anniversary of the Date of Grant.

Payment:  By one or a  combination  of the  following  methods as described  and
permitted in the Option Agreement:

         o        By cash, check or wire transfer; and/or

         o        Pursuant to a  Regulation T Program if the Shares are publicly
                  traded.

Cause:  The  termination  of your  Continuous  Service  for  "cause"  shall mean
termination due to any of the following, as determined by the Board, in its sole
discretion:

         (a)      your material breach of any  non-competition  agreement by and
                  between the Company and you;

         (b)      your committing any act of malfeasance or wrongdoing affecting
                  the Company;

         (c)      your  commission of an any act contrary to the best  interests
                  of the Company;

         (d)      your engaging in conduct that would warrant your discharge for
                  cause (excluding general  dissatisfaction with the performance
                  of your duties,  but  including  any act of  disloyalty or any
                  conduct clearly tending to bring discredit upon the Company).
__________________
(1) If this is an  Incentive  Stock  Option,  it (plus  your  other  outstanding
Incentive Stock Options)  cannot be first  exercisable for more than $100,000 in
value of shares (measured at the time of grant) in any calendar year. Any excess
over $100,000 is a Non-Qualified Option.


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Consent to Transfer  Personal  Collection:  By signing  below,  you  voluntarily
acknowledge  and consent to the  collection,  use,  processing  and  transfer of
personal data as described in this paragraph.  You are not obliged to consent to
such collection, use, processing and transfer of personal data. However, failure
to provide the consent may affect your ability to  participate  in the Plan. The
Company hold certain personal  information about you,  including your name, home
address and telephone  number,  date of birth,  social  security number or other
employee  identification number, salary,  nationality,  job title, any shares of
stock or directorships held in the Company,  details of all Options or any other
entitlement  to  Shares  awarded,  canceled,   purchased,  vested,  unvested  or
outstanding  in your favor,  for the purpose of managing and  administering  the
Plan  ("Data").  The Company will transfer Data amongst  themselves as necessary
for  the  purpose  of  implementation,  administration  and  management  of your
participation in the Plan, and the Company may each further transfer Data to any
third parties assisting the Company in the  implementation,  administration  and
management of the Plan. These recipients may be located in the European Economic
Area,  or  elsewhere  throughout  the  world,  such as the  United  States.  You
authorize  them to receive,  possess,  use,  retain and  transfer  the Data,  in
electronic or other form, for the purposes of  implementing,  administering  and
managing your  participation  in the Plan,  including any requisite  transfer of
such Data as may be  required  for the  administration  of the Plan  and/or  the
subsequent  holding of Shares on your  behalf to a broker or other  third  party
with whom you may elect to deposit any Shares acquired pursuant to the Plan. You
may,  at any time,  review  Data,  require  any  necessary  amendments  to it or
withdraw  the consents  herein in writing by  contacting  the Company;  however,
withdrawing your consent may affect your ability to participate in the Plan.

Acknowledgement  of Discretionary  Nature of the Plan: You acknowledge and agree
that the Plan is  discretionary  in nature and limited in  duration,  and may be
amended, cancelled, or terminated by the Company, in its sole discretion, at any
time. The grant of any Option under the Plan is a one-time  benefit and does not
create any  contractual or other right to receive a grant of Options or benefits
in lieu of Options in the future.  Future  grants,  if any,  will be at the sole
discretion  of the  Company,  including,  but not  limited to, the timing of any
grant,  the number and type of Options,  vesting  provisions,  and the  Exercise
Price.  Any Options or benefits granted under the Plan will not be considered to
be part of your  salary  for any  reason,  including,  but not  limited  to, the
determination of any severance, redundancy or resignation payments or benefits.

Additional  Terms/Acknowledgements:  The  undersigned  Participant  acknowledges
receipt  of,  and  understands  and agrees to,  this  Grant  Notice,  the Option
Agreement and the Plan.  Participant further acknowledges that as of the Date of
Grant, this Grant Notice, the Option Agreement and the Plan set forth the entire
understanding  between  Participant and the Company regarding the acquisition of
Shares and supersede all prior oral and written agreements on that subject, with
the  exception  of  (i)  stock  options  previously  granted  and  delivered  to
Participant under the Plan, and (ii) the following agreements only:





HQ Sustainable Maritime Industries, Inc.      Participant:


By:__________________________________         __________________________________
   Name:
   Title:


Date:                                         Date:_____________________________


Attachment I:     Option Agreement
Attachment II:    2004 Stock Option Plan
Attachment III:   Exercise Agreement