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                                                                   Exhibit 10.1

                                  H POWER CORP.

                         JUNE 6, 1989 STOCK OPTION PLAN

1. PURPOSE

      The purpose of the H Power Corp. June 6, 1989 Stock Option Plan ("The
Plan") is to advance the interests of H Power Corp. ("The Corporation"), its
shareholders and its subsidiaries by encouraging and enabling selected officers,
directors, key employees and consultants upon whose judgment, initiative and
effort the Corporation is largely dependent upon for the successful conduct of
its business, to acquire and retain proprietary interests in the Corporation by
ownership of its stock. Options granted under the Plan are intended to be
non-qualified stock options.

2. DEFINITIONS

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

      (a) "Board" shall mean the Board of Directors of the Corporation.

      (b) "Committee" shall mean the Stock Option Committee appointed by the
Board of Directors of the Corporation or, if no committee has been appointed,
reference to "Committee" shall be deemed to refer to the Board of Directors of
the Corporation.

      (c) "Common Stock" shall mean the Corporation's Common Stock, par value
$.001 per share, as described in the Corporation's Certificate of Incorporation.

      (d) "Corporation" shall mean H Power Corp.

      (e) "Employee" shall mean any director, officer, employee or consultant of
the Corporation or any Subsidiary of the Corporation, it being understood that
the Committee may, in its discretion, also grant Options to induce individuals
to become and remain as Employees and that such persons, for purposes of
receiving options hereunder, shall be deemed "Employees."

      (f) "Date of Grant" means the date on which an option is granted under the
Plan.

      (g) "Option" means an option granted under the Plan.


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      (h) "Optionee" means a person to whom an option, which has not expired,
has been granted under the Plan.

      (i) "Subsidiary" shall mean any corporation, the majority of the
outstanding capital of which is owned, directly or indirectly, by the
Corporation.

3. ADMINISTRATION

      (a) The Plan shall be administered either by the Board or, in the
discretion of the Board, by a Committee of at least three persons appointed by
the Board. 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.

      (b) Any action of the Committee with respect to the administration of the
Plan shall be taken by majority vote or by written consent of a majority of its
members.

      (c) Subject to the provisions of the Plan, the Committee or the Board
shall have the authority to construe and interpret the Plan, to define the terms
used therein, to determine the time or times an Option may be exercised and the
number of shares which may be exercised at any one time to prescribe, amend and
rescind rules and regulations relating to the Plan, and to make all other
determinations necessary or advisable for the administration of the Plan. All
determinations and interpretations made by the Committee shall be conclusive and
binding on all Employees and on their guardians, legal representatives and
beneficiaries.

      (d) The Corporation will indemnify and hold harmless the members of the
Board of Directors 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 negligence, gross negligence, bad
faith, willful misconduct and/or criminal acts of such persons.

4. NUMBERS OF SHARES SUBJECT TO PLAN

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

5. ELIGIBILITY AND PARTICIPATION


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      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 or she is otherwise eligible, be granted an additional Option
or Options if the Committee shall so determine.

6. OPTION GRANT AND AGREEMENT

      Each Option granted hereunder shall be evidenced by an agreement executed
by the Corporation and the Optionee and shall contain such terms and conditions
as may be determined by the Committee consistent with the Plan.

7. OPTION PRICE

      The option price per share with respect to each option shall be determined
by the Committee but shall in no instance be less than 80% of the fair market
value of a share of the Common Stock on the Date of Grant. For the purposes
hereof, fair market value shall be as determined by the Committee and such
determination shall be binding upon the Corporation and upon the Optionee. In
the event the Common Stock of the Corporation is publicly traded, the Committee
may, but shall not be required to, make such determination (i) in case the
Common Stock shall not then be listed and traded upon a recognized securities
exchange, upon the basis of the mean between the bid and asked quotations for
such stock on the Date of Grant (as reported by a recognized stock quotation
service) or, in the event that there shall be no bid or asked quotations on the
Date of Grant, then upon the basis of the mean between the bid and asked
quotations on the date nearest preceding the Date of Grant or (ii) in case the
Common Stock shall then be listed and traded upon a recognized securities
exchange, upon the basis of the mean between the highest and lowest selling
prices at which shares of the Common Stock were traded on such recognized
securities exchange on the Date of Grant or, if the Common Stock was not traded
on said Date, upon the basis of the mean of such prices on the date nearest
preceding the Date of Grant, and upon any other factors which the Committee
shall deem appropriate.

8. PERIOD OF OPTION

      The expiration date of such option shall be fixed by the Committee, but,
notwithstanding any provision of the Plan to the contrary, such expiration date
shall not be more than five years from the Date of Grant.

9. VESTING OF SHAREHOLDER RIGHTS


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      Neither any Optionee nor his or her successor shall have any of the rights
of a shareholder of the Corporation until the certificates evidencing the shares
purchased are properly delivered to such Optionee or his or her successor.

10. EXERCISE OF OPTIONS

      Options may be exercised in whole or in part at any time within the period
permitted for the exercise thereof, and shall be exercised by written notice of
intent to exercise the Option with respect to a specified number of shares,
delivered to the Corporation at its principal office and payment in full to the
Corporation at said office of the amount of the option price for the number of
shares with respect to which is the option is then being exercised. The exercise
of an Option shall not include any fractional shares. In addition to and at the
time of payment of the Option price, Optionee shall pay to the Corporation in
cash the full amount of all federal and state withholding or other employment
taxes applicable to the taxable income of such Optionee resulting from such
exercise, if any be due.

11. NONTRANSFERABILITY OF OPTION

      No option shall be transferable or assignable by an Optionee, otherwise
than by will or the laws of descent and distribution and each option shall be
exercisable, during the Optionee's lifetime, only by him or her. No option shall
be pledged or hypothecated in any way and no option shall be subject to
execution, attachment or similar process except with the express consent of the
Committee.

12. TERMINATION OF EMPLOYMENT OTHER THAN BY DEATH

      If any Optionee ceases to be an Employee for any reason other than his or
her death, any Options granted to him or her under the Plan shall terminate 90
days from the date on which the Optionee ceases to be an Employee. During such
90-day period, the Optionee may exercise any Option granted to him or her but
only to the extent such Option was exercisable on the date he or she ceases to
be an Employee and provided that such Option has not expired or otherwise
terminated as provided herein.

13. DEATH OF OPTIONEE

      If any Optionee shall die at a time when he or she is an Employee of the
Corporation or any Subsidiary of the Corporation, any Options granted to him or
her under his Plan shall terminate one year after the date of his or her death
unless by its terms it shall expire before such date or otherwise terminate as
provided herein, and shall only be exercisable to the extent that it would have
been exercisable on the date of his or her death. In the event of death, the
Option may be exercised by the person or persons to whom the Optionee's right
under the Option shall pass by will or by the laws of descent and distribution.

14. STOCK PURCHASE NOT FOR DISTRIBUTION


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      Each Optionee shall, by accepting the grant of an Option under the Plan,
represent and agree, for himself or herself and his or her 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.

15. ADJUSTMENTS

      (a) In the event that the outstanding shares of Common Stock hereafter are
changed into or exchanged for a different number or kind of shares or other
securities of the Corporation or of another corporation by reason of merger,
consolidation, other reorganization, recapitalization, reclassification,
combination of shares, stock split up or stock dividend:

      (i) The aggregate number and kind of shares subject to Options which may
      be granted hereunder shall be adjusted appropriately;

      (ii) Rights under outstanding Options granted hereunder, both as to the
      number of subject shares and the Option price, shall be adjusted
      appropriately;

      (iii) Where any merger or combination in which the Corporation is not a
      surviving corporation is involved, each outstanding Option granted
      hereunder shall terminate, but the Optionee shall have the right,
      immediately prior to such merger or consolidation, to exercise his or her
      Option, in whole or in part, to the extent that it shall not have been
      exercised previously.

      (b) In the event of the dissolution or liquidation of the Corporation, any
option granted under the Plan shall terminate as of a date to be fixed by the
Committee, provided that not less than 30 days written notice of the date so
fixed shall be given to each Optionee and each such Optionee shall have the
right during such period to exercise his or her option as to all or any part of
the shares covered hereby including shares as to which such Option would not
otherwise be exercisable by reason of an insufficient lapse of time.

      (c) Adjustments under this Section shall be made by the Committee, whose
determination as to what adjustment 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.

16. AMENDMENT AND TERMINATION OF PLAN


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      (a) The Board of Directors of the Corporation 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
to the Plan shall be approved by a majority of the shareholders of the
Corporation if the amendment would (i) materially increase the benefits accruing
to participants under the Plan; (ii) increase the number of shares of Common
Stock which may be issued under the Plan, except as permitted under the
provisions of Section 15 hereof; or (iii) materially modify the requirements as
to eligibility for participation in the Plan.

      (b) 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 options under the Plan.

      (c) 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 Corporation.

17. EFFECTIVE DATE OF PLAN

      The Plan shall become effective immediately.

18. TERM OF PLAN

      No Option shall be granted pursuant to the Plan after June 6, 1994.

Adopted by the Stockholders
on June 6, 1989


/s/ Frederick Entman
-----------------------------------
             Secretary


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