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                                                                 Exhibit 10.1

                                PERCEPTRONICS, INC.
                               1999 STOCK OPTION PLAN



I.     .  PURPOSE

     The purpose of the Perceptronics, Inc. 1999 Stock Option Plan (the
"Plan") is to further the interests of Perceptronics, Inc. (the "Company")
and its Subsidiaries by strengthening the desire of Employees to continue
their relationship with the Company and its Subsidiaries and by inducing
individuals to become Employees of the Company and its Subsidiaries through
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.

I.     .  DEFINITIONS

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

A.             "Board" shall mean the Board of Directors of the Company.

A.             "Code" shall mean the Internal Revenue Code of 1986, as amended.

A.             "Committee" shall mean a Committee of at least two directors
appointed by the Board, or if no such committee has been appointed reference to
"Committee" shall be deemed to refer to the Board.

A.             "Common Stock" shall mean the Company's Common Stock as
described in the Company's Certificate of Incorporation, as amended from time
to time.

A.             "Company" shall mean Perceptronics, Inc., a Delaware
corporation.

A.             "Employee" shall mean in connection with Non-Qualified Options,
any officer, employee, consultant or advisor of the Company or any Subsidiary
or Parent Corporation of the Company, and any director of the Company who is
not an employee of the Company or any Subsidiary or Parent Corporation of the
Company and which director is not otherwise eligible to participate in any
Company stock options plan available only to non-employee directors of the
Company, it being understood that the Committee may in its


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discretion also grant Options to induce individuals to become and remain as
Employees and that such persons, for purposes of receiving Non-Qualified
Options hereunder, shall be deemed "Employees."  In connection with Incentive
Options under this Plan, the term Employee shall mean any individual who is
employed, within the meaning of Section 3401 of the Code, by the Company or any
Subsidiary or Parent Corporation of the Company.

B.             "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 of the grant of an Option, the Fair Market Value Per Share shall be
determined by the Committee in good faith based on uniform principles
consistently applied.

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

A.             "Non-Qualified Option" shall mean an Option granted under the
Plan which is designated as a non-qualified stock option or which does not
qualify as an incentive stock option within the meaning of Section 422 of the
Code.

A.             "Option" shall mean an Incentive Option or a Non-Qualified
Option.  Each Option shall be evidenced by a written agreement executed by the
Company which shall set forth the terms and conditions of such Option.

A.             "Optionee" shall mean any Employee who has been granted an
Option under the Plan.

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

A.             "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 by reason of permanent and total
disability within the meaning of Section 22(e)(3) of the Code.

A.             "Plan" shall mean the Perceptronics, Inc. 1999 Stock Option
Plan, as from time to time amended.

A.             "Subsidiary", in the case of Incentive Options, shall have the
meaning set forth in Section 424(f) of the Code (generally, 50% or more owned
subsidiaries), and in the case of Non-Qualified Options, shall have the meaning
of "subsidiary" in Rule 405 of Regulation C under the Securities Act of 1933,
as amended (generally, a controlled affiliate).


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I.    .   ADMINISTRATION

A.             The Plan shall be administered either by the Board or, in the
discretion of the Board, by a Committee; provided, however, that if a Committee
has been appointed by the Board, the Board may in its discretion, take any
action permitted to be taken by the Committee with respect to grants or other
actions under the Plan.  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.

A.             Any action of the Committee with respect to the administration
of the Plan shall be taken by majority vote or by unanimous written consent of
its members.

A.             Subject to the provisions of the Plan, the Committee shall have
the authority to construe and interpret the Plan, to define the terms used
herein, to determine the Optionees, the time or times an Option may be
exercised and the number of shares which may be exercised at any one time, to
determine the other terms and conditions of Options granted hereunder, 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.  The Committee's authority shall
include, without limitation, the right, in its discretion, to accelerate the
exercisability of Options or reprice or exchange Options with the consent of
the Optionee.  All determinations and interpretations made by the Committee
shall be conclusive and binding on all Employees and on their guardians, legal
representatives and beneficiaries.

A.             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 gross negligence, bad faith, willful misconduct and/or
criminal acts of such persons.

I.    .   NUMBER OF SHARES SUBJECT TO PLAN

     The stock to be offered under the Plan shall consist of up to 500,000
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.


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I.    .   ELIGIBILITY AND PARTICIPATION

A.             The Committee shall determine the Employees to whom Options
shall be granted, the time or times at which such Options shall be granted
and the number of shares to be subject to each Option.  An Employee 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.

A.             In no event shall the aggregate fair market value (determined as
of the time an Incentive Option is granted) of shares subject to Incentive
Options held by an Optionee (granted under the Plan or under any other plan of
the Company) that first become exercisable in any calendar year exceed
$100,000. The portion of any purported Incentive Option which exceeds such
limitation shall be deemed to be a Non-Qualified Option.

I.    .   PURCHASE PRICE

     The purchase price of each share covered by an Option shall be determined
by the Committee on the date of grant; provided, however, that (i) the purchase
price of each share covered by a Non-Qualified Option shall not be less than
85% of the Fair Market Value of the Common Stock on the date of grant and (ii)
the purchase price of each share covered by an Incentive Option shall not be
less than 100% of the Fair Market Value Per Share of the Common Stock on the
date of grant; and provided, further, 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, 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.

I.    .   DURATION OF OPTIONS

     The expiration date of an Option shall not exceed 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.


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I.    .   EXERCISE OF OPTIONS

     An Option shall be exercisable in installments or otherwise upon such
terms as the Committee shall in its discretion determine; provided, however,
that each Option shall be exercisable in installments of at least 20% per
year beginning one year after the grant date.  An Optionee may purchase less
than the total number of shares for which the Option is exercisable, provided
that the exercise of an Option 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 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 the 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.

I.    .   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, accompanied by payment in full of the purchase price for the number
of shares being purchased and, if applicable, any federal, state or local taxes
required to be paid in accordance with the provisions of Section hereof.

A.             Payment of the purchase price for any shares pursuant to the
exercise of an Option may be made in cash or by check or, in connection with
subparagraphs (i) through (iv) where expressly approved by the Committee in
advance, in its discretion, and where permitted by law:

1.           by cancellation of indebtedness of the Company to the Optionee;

1.          by surrender of shares of Common Stock that have been owned by the
Optionee for at least six months;

1.          by tender of a full recourse promissory note, which note shall be
secured by the shares being purchased, contain such terms as may be approved by
the Committee and bear interest at a rate sufficient to avoid imputation of
income under Sections 483 and 1274 of the Code;


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1.          by waiver of compensation due or accrued to the Optionee for
services rendered;

1.           provided that a public market for the Company's Common Stock
exists:

a)             through a "same day sale" commitment from the Optionee and a
broker-dealer that is a member of the National Association of Securities
Dealers (an "NASD Dealer") whereby the Optionee irrevocably elects to exercise
the Option and to sell a portion of the shares so purchased to pay for the
purchase price, and whereby the NASD Dealer irrevocably commits to forward the
purchase price directly to the Company; or

a)             through a "margin" commitment from the Optionee and a NASD
Dealer whereby the Optionee irrevocably elects to exercise the Option and to
pledge the shares so purchased to the NASD Dealer in a margin account as
security for a loan from the NASD Dealer in the amount of the purchase price,
and whereby the NASD Dealer irrevocably commits to forward the purchase price
directly to the Company; or


1.          by any combination of the foregoing.

     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 and, if
requested by the Committee, 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.

A.             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 such
shares.


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I.   .    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.

I.   .    CONTINUANCE OF EMPLOYMENT

     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 status as an Employee of 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.

I.   .    TERMINATION OF EMPLOYEE STATUS OTHER THAN BY DEATH OR PERMANENT
DISABILITY

     If an Optionee ceases to be an Employee for any reason other than his
death or Permanent Disability, any Option granted to him under the Plan shall
terminate three months from the date on which such Optionee ceases to be an
Employee unless such Optionee has been rehired by the Company and is an
Employee on such date.  Until the termination of the Option, the Optionee may
exercise any Option granted to him but only to the extent such Option was
exercisable on the date he ceased to be an Employee 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
for purposes of this Section, but no Option may be exercised during any such
leave of absence, except during the first 90 days thereof.  The fact that the
Optionee may receive payment from the Company or any Subsidiary of the Company
after termination of Employee status for vacation pay, for services rendered
prior to termination, for salary in lieu of notice, or for other benefits shall
not affect the termination date.


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I.   .    DEATH OR PERMANENT DISABILITY OF OPTIONEE

     If an Optionee shall die at a time when he is an Employee or if the
Optionee shall cease to be an Employee by reason of Permanent Disability, any
Option granted to him under this Plan shall terminate one year after the date
of his death or termination of Employee status due to Permanent Disability
unless by its terms the Option expires before such date or otherwise
terminates as provided herein, and such Option shall only be exercisable to
the extent that it would have been exercisable on the date of the Optionee's
death or 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.

I.   .    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.

I.   .    NO PRIVILEGES OF STOCK OWNERSHIP; REPORTS

     The Company shall deliver annual financial statements to each Optionee.
No person entitled to exercise any Option granted under the Plan shall have
any of the rights or privileges of a shareholder 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 hereof.


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I.   .    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 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.

A.             Notwithstanding the provisions of subsection (a) of this
Section, each outstanding Option shall terminate on the effective date of the
dissolution or liquidation of the Company or any reorganization, merger or
consolidation with one or more corporations or entities as a result of which
the Company is not the surviving corporation, or any sale of all or
substantially all the assets of the Company, or the sale (by merger or
otherwise) of more than 80% of the then outstanding Common Stock; provided,
however, that unless the surviving or acquiring corporation or other entity
agrees to assume, or substitute equivalent awards for, all outstanding
Options, each Option shall become fully exercisable subject to the provisions
of Sections 12 and 13 during the 30-day period immediately preceding the
effective date of such event.

A.             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.

I.   .    AMENDMENT AND TERMINATION OF PLAN

1.             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 of 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 hereof, or  materially modify the requirements as to eligibility
for participation in the Plan.

A.             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.


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A.             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.

I.   .    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 shareholder approval must occur no later than 12 months after the date
of adoption of the Plan by the Board of Directors.

I.   .    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 Plan was adopted by the Board on June 29, 1999.  The Plan was approved
by the shareholders on September 14, 1999.