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                                  EXHIBIT 10.4

                             STOCK OPTION AGREEMENT

         THIS STOCK OPTION AGREEMENT (this "Agreement") is dated as of ______
and entered into by and between AMERICAN TECHNOLOGIES GROUP INC., a Nevada
corporation ("ATG"), and ______ ("Optionee") pursuant to an Employment Agreement
(the "Employment Agreement") dated as of ________ between the parties hereto.

     1. GRANT OF OPTION: (a) ATG hereby grants to Optionee the right and
option (the "Option") to purchase, on the terms and conditions hereinafter set
forth, an aggregate of ______ (_____) shares of the common stock of ATG (the
"Option Shares"). The exercise price (the "Exercise Price") of the Option Shares
is $___ per share.

         (b) If at any time or from time to time there shall be (i) a capital
reorganization of the Common Stock (other than a change in par value or a
stock dividend, sub-division, combination or reclassification of such share),
(ii) a consolidation or merger of ATG with or into another entity or a share
exchange in which ATG is the continuing entity and which does not result in
any change in the Common Stock), or (iii) a transfer or other disposition of
all or substantially all of the assets of ATG to any other person or entity,
then upon such capital reorganization, consolidation, merger, share exchange
or transfer or other disposition, (x) all Options not then vested shall
become immediately vested and exercisable in full by Optionee as of the
effective date of any such capital reorganization, consolidation, merger,
share exchange or transfer or other disposition; and (y) lawful and adequate
provision shall be made whereby Optionee upon exercise of Options shall
thereafter acquire and receive the kind and the number of shares of stock or
other securities or properties or cash as may be issuable or payable with
respect to or in exchange for the number of outstanding shares of Common
Stock to which Optionee would have been entitled if such Optionee had
exercised such Options immediately prior to such capital reorganization,
consolidation, merger, share exchange or transfer or other disposition.

         (c) In the event that (i) there occurs an event or series of events
that would be required to be described as a change in control of ATG in a
proxy or information statement distributed by ATG pursuant to Section 14 of
the Securities Exchange Act of 1934 in response to Item 6(e) of Schedule 14A
promulgated thereunder, (ii) ATG concludes the sale of substantially all of
its assets other than in a transaction which is intended primarily to effect
a corporate reorganization without material change in beneficial ownership of
the material business of Employer or (iii) Optionee commits an act or omits
to take action to the detriment of ATG, then all Options not then vested
shall become immediately vested and exercisable in full by Optionee, and all
Options shall remain exercisable for their respective terms.

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     2. TIME AND MANNER OF EXERCISE: Optionee shall have the right to
purchase from ATG the Option Shares at any time and from time to time until
_________. The purchase shall be made by delivery to ATG of a notice of
exercise specifying the number of shares (the "Shares") to be purchased
accompanied by a check in the amount of the aggregate Exercise Price or in
lieu of a cash payment Optionee may execute such cashless exercise of the
Option as may then be permitted by the Securities and Exchange Commission
such that the period following the exercise of such Option for purposes of
determining the holding period under Rule 144 promulgated pursuant to the
Securities Act of 1933, including, without limitation, to make payment
therefore in shares of common stock of ATG having a fair market value on the
date the notice is deemed duly given pursuant to Section 6 hereof (the
"Notice Date") equal to the option price of such shares multiplied by the
number of shares as to which the Option is being exercised. For purposes
hereof, the fair market value of a share of common stock of ATG shall mean
the average of the closing bid and asked price per share over the five
trading days immediately preceding the Notice Date. Promptly upon receipt of
such material, ATG shall cause the delivery to Optionee of an ATG stock
certificate representing the Option Shares so purchased.

     3.  OPTIONEE'S REPRESENTATIONS:

         Optionee hereby warrants and represents to ATG as follows,
each of which representation and warranty is material and is being relied upon
by ATG and each of which is true at and as of the date hereof and upon exercise
of the Option:

         3.1  INVESTMENT INTENT. that Optionee is acquiring the Option,
and if Optionee exercises the Option will acquire the Option Shares, for
Optionee's own account and not with a view to their resale or distribution and
that Optionee is prepared to hold the Option and the Option Shares, if acquired,
for an indefinite period and has no present intention to sell, distribute or
grant any participating interests in the Option or the Option Shares, if
acquired. Optionee hereby acknowledges the fact that the Option Shares may not
be registered under the Securities Act of 1933, as amended (the "1933 Act") or
the California Corporations Code.

         3.2  RESTRICTED SECURITIES. that Optionee has been informed
that the Option and the Option Shares may not be resold or transferred unless
first registered under the Federal and California securities laws or unless an
exemption from such registration is available. Accordingly, Optionee hereby
acknowledges that Optionee is prepared to hold the Option and the Option Shares
for an indefinite period of time.

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         3.3  OPTIONEE KNOWLEDGE. that Optionee has a preexisting business or
personal relationship with ATG, that he is aware of the business affairs and
financial condition of ATG and that Optionee has such knowledge and
experience in business and financial matters with respect to companies in
businesses similar to ATG to enable Optionee to evaluate the risks of the
prospective investment and to make an informed investment decision with
respect thereto. Optionee further acknowledges that ATG has made available to
Optionee the opportunity to ask questions and receive answers from ATG
concerning the terms and conditions of the issuance of the Option and the
Option Shares and that Optionee could be reasonably assumed to have the
capacity to protect his own interests in connection with such investment.

         3.4  SPECULATIVE INVESTMENT. that Optionee realizes that his
acquisition of the Option and his purchase of the Option Shares, if at all, will
be a speculative investment and that Optionee is able, without impairing his
financial condition, to hold the Option and the Option Shares for an indefinite
period of time and to suffer a complete loss of his investment.

     4. NO TRANSFER: Optionee shall not transfer, encumber, alienate or
dispose, by gift or otherwise, all or any part of the Option Shares, except as
may be permitted by law.

     5. RESTRICTIVE LEGEND: In order to reflect the restrictions on
disposition of the Option Shares, if any, the stock certificates for such shares
may be endorsed with a legend substantially as follows:

     THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
     PURSUANT TO THE SECURITIES ACT OF 1933 OR APPLICABLE STATE LAW, AND MAY
     NOT BE SOLD, ASSIGNED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN
     EFFECTIVE REGISTRATION THEREUNDER OR AN OPINION OF COUNSEL SATISFACTORY
     TO THE ISSUER TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED.

     6. NOTICES: All notices, requests, demands and other communications
called for or contemplated hereunder shall be in writing, and shall be addressed
to the Parties, their successors in interests or their assignees at the
following addresses or such other addresses as the Parties may designate:

     If to ATG:         1017 South Mountain Avenue
                        Monrovia, California 91016

     If to Optionee:

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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 registry or certification fees prepaid, in a post
office or branch post office regularly maintained by the United States Postal
Service or with Federal Express, United Parcel Service or Airborne Express.

     7. INVALID PROVISIONS: In the event that any provisions of this
Agreement is found to be invalid or otherwise unenforceable under any
applicable law, such invalidity or unenforceability shall not be construed as
rendering any other provisions contained herein invalid or unenforceable, and
all such other provisions shall be given full force and effect to the same
extent as though the invalid or unenforceable provision were not contained
herein.

     8. APPLICABLE LAW: This Agreement shall be governed by and construed in
accordance with the laws of the State of California.

     9. ENTIRE AGREEMENT: This Agreement constitutes the entire agreement and
supersedes all prior agreements and understandings, oral and written, between
the Parties with respect to the subject matter hereof.

     10. HEADINGS: The section and other headings contained in this Agreement
are for reference purposes only and shall not be deemed to be part of this
Agreement or to affect the meaning or interpretation of this Agreement.

     11. AMENDMENTS: This Agreement may not be modified or changed except by
an instrument or instruments in writing signed by the Party or Parties
against whom enforcement of any such modification or amendment is sought.

     12. SUCCESSORS: This Agreement and the rights, powers and duties set
forth herein shall, except as otherwise set forth herein, bind and inure to
the benefit of the heirs, executors,  administrators,  legal representatives,
successors of the Parties.

     IN WITNESS WHEREOF, this Option is executed on behalf of ATG by its duly
authorized officer and by Optionee as of the date first set forth above.

"Optionee"               "ATG"

Name                     AMERICAN TECHNOLOGIES GROUP, INC.,
                         a Nevada corporation


_____________________    By:_______________________

                         Chief Executive Officer

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