Document:

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EXHIBIT 10.24

                              EMPLOYMENT AGREEMENT

         EMPLOYMENT AGREEMENT (the "Agreement") is dated November 7, 2002 to be
effective as of the 12th day of August, 2002 between POWER EFFICIENCY
CORPORATION, a Delaware corporation (the "Corporation"), with principal
executive offices located at 4220 Varsity Drive, Suite E, Ann Arbor, MI 48108;
and RAYMOND J. SKIPTUNIS, residing at 2432 Tour Edition Drive, Henderson,
Nevada, 89014 (the "Executive").

                               W I T N E S E T H:

         WHEREAS, the Corporation desires to employ Executive as the
Corporation's Chief Executive Officer and President and Chief Financial Officer
to engage in such activities and to render such services under the terms and
conditions hereof and has authorized and approved the execution of this
Agreement; and

         WHEREAS, Executive desires to be employed by the Corporation under the
terms and conditions hereinafter provided;

         NOW, THEREFORE, in consideration of the mutual covenants and
undertakings herein contained, the parties agree as follows:

         1.       Employment, Duties and Acceptance.

                  1.1 Services. The Corporation hereby employs Executive, for
the Term (as hereinafter defined in Section 2 hereof), to render services to the
business and affairs of the Corporation in the office referenced in the recitals
hereof and, in connection therewith, shall perform such duties as directed by
the Board of Directors of the Corporation from time to time, in its reasonable
discretion, and shall perform such other duties as shall be consistent with the
responsibilities of such office (collectively the "Services"). Executive shall
perform activities related to such office as he shall reasonably be directed or
requested to so perform by the Corporation's Board of Directors, to whom he
shall report. Executive shall use his best efforts, skill and abilities to
promote the interests of the Corporation and its subsidiaries.

                  1.2 Acceptance. Executive hereby accepts such employment and
agrees to render the Services.

                  1.3 Representations of the Executive. The Executive represents
and warrants to the Corporation that his execution and delivery of this
Agreement, his performance of the Services hereunder and the observance of his
other obligations contemplated hereby will not (i) violate any provisions of or
require the consent or approval of any party to any agreement, letter of intent
or other document to which he is a party or (ii) violate or conflict with any
arbitration award, judgment or decree or other restriction of any kind to or by
which he is subject or bound.

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         2.       Term of Employment.

         The term of Executive's employment under this Agreement (the "Term")
shall commence on August 12, 2002 (the "Commencement Date") and shall terminate
on November 7, 2005, unless sooner terminated pursuant to Sections 9 or 5.2 of
this Agreement; provided, however, if the Corporation shall fail to give
Executive notice of nonrenewal not less than 90 days prior to the scheduled
expiration of the Term or any extension thereof, the Term shall automatically be
extended for an additional one (1) year period. Notwithstanding anything to the
contrary contained herein, the provisions of this Agreement governing Protection
of Confidential Information shall continue in effect as specified in Section 10
hereof.

         3.       Base Salary and Expense Reimbursement.

                  3.1 Base Salary. During the Term, as full compensation for the
Services, the Corporation agrees to pay Executive a minimum base salary ("Base
Salary") at the annual rate of $240,000 for the period from August 12, 2002 to
August 11, 2003 (the "First Year"), increasing annually thereafter in $18,000
increments ("Salary Increments"). During the First Year, an amount equal to
$80,000 of the Base Salary shall be accrued and paid to the Executive at such
time as the net cash provided by the operating activities of the Corporation is
greater than zero for a period of three (3) consecutive months. Upon satisfying
this requirement, the Executive shall be paid his accrued salary in monthly
installments of $10,000 until such time as all of the Executive's accrued salary
has been paid. In the event the Corporation is unable to pay a Salary Increment,
the Board of Directors of the Corporation may elect to defer such payment. In
the event of deferment, the Salary Increment shall continue to be accrued until
such time as the Corporation is financially able to make such payments. Base
Salary is subject to withholding and other applicable taxes, payable during the
term of this Agreement in accordance with the Corporation's customary payment
practices, but not less frequently than monthly.

                  3.2 Stock Options. The parties hereby agree that the 500,000
stock options previously granted to the Executive pursuant to the employment
agreement between the Corporation and the Executive effective as of July 1, 2002
(the "Previous Employment Agreement") are hereby cancelled. In connection with
this cancellation, the Corporation shall on the date hereof grant the Executive:
(i) incentive stock options (the "ISO Options") to purchase up to 370,368 shares
of the Corporation's common stock, $.001 par value per share (the "Common
Stock"), at a per share purchase price of $1.08; and (ii) nonqualified stock
options (the "NQSO Options") to purchase up to 329,632 shares of the
Corporation's Common Stock, at a per share exercise price of $.92. The Options
shall be exercisable for a period of ten (10) years commencing on the date
hereof and shall vest as follows:

                 Date           Number of ISO Options    Number of NQSO Options
              Immediately              92,592                    164,816
           November 7, 2003            92,592                    54,939
           November 7, 2004            92,592                    54,939
           November 7, 2005            92,592                    54,939

The grant of the Options is conditioned upon and subject to the Executive
executing the nonqualified stock option agreement, attached hereto as Exhibit A,
the terms of which are hereby incorporated by reference.

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                  3.3 Business Expense Reimbursement. Upon submission to, and
approval by an officer of the Corporation designated by the Board of Directors
of the Corporation of a statement of expenses, reports, vouchers or other
supporting information, which approval shall be granted or withheld based on the
Corporation's policies in effect at such time, the Corporation shall promptly
reimburse the Executive for all reasonable business expenses actually incurred
or paid by him during the Term or renewals thereof in the performance of the
Services, including, but not limited to, expenses for entertainment, travel
(including travel between the Corporation's offices and Nevada) and similar
items.

         4.       Bonuses.

                  4.1 Bonus. The Executive shall be eligible to receive bonuses
in such amount(s) as the Corporation's Compensation Committee shall determine in
its absolute discretion. If there is no Compensation Committee, such
determinations shall be made by the entire Board of Directors.

                  4.2 Nothing in this Section 4 shall be construed as conferring
upon the Executive any right (i) normally associated with the ownership of
capital stock; (ii) to continue in the employ of the Corporation or any
affiliate of the Corporation; or (iii) to interfere in any way with the right of
the Corporation to terminate this Agreement in accordance with the provisions
hereof. Nothing in this Agreement shall be construed to imply that any specific
assets of the Corporation have been set aside to provide for payments under this
Agreement. Any payments under this Agreement shall be made solely from general
assets of the Corporation existing at the time such payments are due.

                  4.3 Change in Control Bonus. Upon the occurrence of either of
the following events ("Triggering Events"): (i) the purchase, either directly
from the Corporation and/or from existing stockholders of the Corporation, by an
Outside Party (as defined below), of the Corporation's Common Stock, which
results in the Outside Party acquiring more than 50% of the issued and
outstanding shares of Common Stock of the Corporation (assuming the full
exercise of the Stock Purchase Warrant issued to Summit Energy Ventures, LLC
("Summit") on June 14, 2002 (the "Summit Warrant")); or (ii) the sale/transfer
by Summit of over 50% of the shares of Common Stock held by Summit, as
calculated on a fully converted basis (assuming full exercise of the Summit
Warrant), to an Outside Party who is not a Summit Affiliate (as defined below);
the Executive shall be entitled to receive a bonus in an amount equal to the
Applicable Percentage (as defined below) of the Enterprise Value (as defined
below) of the Corporation. For purposes of hereof, the Applicable Percentage
shall equal (a) 2% of the Enterprise Value of the Corporation which is in excess
of $35,000,000 but less than $70,000,000; plus (b) 2.5% of the Enterprise Value
of the Corporation which is in excess of $70,000,000 but less than $105,000,00;
plus (c) 3.0% of the Enterprise Value of the Corporation which is in excess of
$105,000,000.

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         For purposes of this Section 4.3:

                   (i) "Outside Party" shall mean any third party that purchases
the securities of PEC;

                  (ii) "Summit Affiliate" shall mean: (a) the limited partners
of or other investors in Summit, (b) Northwest Power Management or other funds
affiliated with Northwest Power Management, or (c) Steven Strasser or funds
affiliated with or managed by Mr. Strasser;

                  (iii) "Enterprise Value" shall refer to the value of the
Corporation on the date of the Triggering Event. The Enterprise Value shall be
calculated as follows: (a) if the shares are purchased by a third party in the
open market, the Enterprise Value shall be calculated by taking the average of
the closing price of the Corporation's Common Stock for each of the thirty (30)
trading days (the "Average Trading Price") immediately prior to the date of the
Triggering Event, multiplied by the number of shares of Common Stock outstanding
on date of the Triggering Event (assuming (1) the exercise of the Summit Warrant
(2) the conversion of all shares of preferred stock of the Corporation into
Common Stock, and (3) the exercise of all warrants and vested options issued by
the Corporation which have a per share exercise price that is less than the
Average Trading Price (i.e. options/warrants which are "in the money")); or (b)
if the shares of Common Stock are purchased by the third party in either a
private sale transaction or via a tender offer, the Enterprise Value shall be
calculated by taking the per share price of Common Stock in either the private
transaction or tender offer, as applicable, multiplied by the number of shares
of Common Stock outstanding on the date of the Triggering Event (assuming (1)
the exercise of the Summit Warrant; (2) the conversion of all the shares of
preferred stock of the Corporation into Common Stock; and (3) the exercise of
all warrants and vested options issued by the Corporation which have a per share
exercise price that is less than the Average Trading Price (i.e. option/warrants
which are "in the money")).

         5.       Severance.

                  5.1 Termination Without Cause or for Good Reason. In the event
that Executive's employment hereunder shall be terminated by the Corporation
without Cause (as defined in Section 9.4 hereof) or terminated by the Executive
for Good Reason (as defined in Section 9.5 hereof) at any time prior to the end
of the Term, the Executive shall be entitled to receive from the Corporation, in
addition to any Base Salary earned to the date of termination, a severance
payment in an amount equal to the greater of (i) the Executive's Base Salary for
the preceding fiscal year of the Corporation; or (ii) $240,000; either of which,
as the case may be, shall be paid in biweekly increments during the year
following such termination. In the event of such termination, the amounts due
hereunder shall be payable without offset or defense or any obligation of the
Executive to mitigate damages.

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         6.       Additional Benefits.

                  6.1 In General. In addition to the compensation, bonuses,
expenses and other benefits to be paid under Sections 3, 4 and 5 hereof,
Executive will be entitled to all rights and benefits for which he shall be
eligible under any insurance, health and medical, incentive, bonus,
profit-sharing, pension or other extra compensation or "fringe" benefit plan of
the Corporation or any of its subsidiaries now existing or hereafter adopted for
the benefit of the executives or employees generally of the Corporation. The
provisions of this Agreement which incorporate employee benefit packages shall
change as and when such employee benefit packages change.

                  6.2 Automobile. The Corporation shall provide the Executive an
automobile allowance at a monthly rate not to exceed $800 for the term of this
Agreement.

                  6.3 Living Expenses. In the event the Corporation requires the
Executive's physical presence in any location outside Nevada, the Corporation
shall provide the Executive $2,500 per month for living accommodations for
long-term stay for a period of 12 months. In the event the Executive is required
at the request of the Board of Directors to relocate for a period of at least
six (6) consecutive months, the Corporation shall pay for Executive's moving
expenses in amount not to exceed $25,000.

         7.       Vacation.

         The Executive shall be entitled each year during the Term of this
Agreement to a vacation period of four (4) weeks, during which all salary,
compensation, benefits and other rights to which the Executive is entitled to
hereunder shall be provided in full. Such vacation may be taken in the
Executive's discretion, and such time or times as are not inconsistent with the
reasonable business needs of the Corporation.

         8. Insurability; Right to Insure. Executive agrees that the Corporation
shall have the right during the Term to insure the life of Executive by a policy
or policies of insurance in such amount or amounts as it may deem necessary or
desirable, and the Corporation shall be the beneficiary of any such policy or
policies and shall pay the premiums or other costs thereof. The Corporation
shall have the right, from time to time, to modify any such policy or policies
of insurance or to take out new insurance on the life of Executive. Executive
agrees, upon request, at any time or times prior to the commencement of or
during the Term to sign and deliver any and all documents and to submit to any
physical or other reasonable examinations which may be required in connection
with any such policy or policies of insurance or modifications thereof.

         9.       Termination.

                  9.1 Death. If Executive dies during the Term of this
Agreement, Executive's employment hereunder shall terminate upon his death and
all obligations of the Corporation hereunder shall terminate on such date,
except that Executive's estate or his designated beneficiary shall be entitled
to payment of any unpaid accrued Base Salary through the date of his death. In
addition, any accrued and unpaid Bonus shall be paid in accordance with Section
4 hereof.

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                  9.2 Disability. Subject to the provisions of Section 6.1, if
Executive shall be unable to perform a significant part of his duties and
responsibilities in connection with the conduct of the business and affairs of
the Corporation and such inability lasts for (i) a period of at least one
hundred twenty (120) consecutive days, or (ii) periods aggregating at least one
hundred eighty (180) days during any three hundred sixty-five (365) consecutive
days, by reason of Executive's physical or mental disability, whether by reason
of injury, illness or similar cause, Executive shall be deemed disabled, and the
Corporation any time thereafter may terminate Executive's employment hereunder
by reason of the disability. Upon delivery to Executive of such notice, all
obligations of the Corporation hereunder shall terminate, except that Executive
shall be entitled to payment of any unpaid accrued Base Salary through the date
of termination. In addition, any accrued and unpaid Bonus shall be paid in
accordance with Section 4 hereof. The obligations of Executive under Section 10
hereof shall continue notwithstanding termination of Executive's employment
pursuant to this Section 9.2.

                  9.3 Termination For Cause. The Corporation may at any time
during the Term, without any prior notice, terminate this Agreement and
discharge Executive for Cause, whereupon the Corporation's obligation to pay
compensation or other amounts payable hereunder to or for the benefit of
Executive shall terminate on the date of such discharge. Furthermore, the
Executive shall be entitled to all options which have vested as of the
termination date and all options which have not vested shall be cancelled. As
used herein the term "Cause" shall mean: (i) a willful and material breach by
Executive of the terms of this Agreement; (ii) willful violation of specific and
lawful written direction from the Board of Directors of the Corporation;
provided such direction is not inconsistent with the Executive's duties and
responsibilities under the office the Executive is holding at the time of the
directive; (iii) conviction of the Executive of a felony by a federal or state
court of competent jurisdiction; or (iv) failure of the Executive to faithfully
and effectively perform the Services. The obligations of the Executive under
Section 10 shall continue notwithstanding termination of the Executive's
employment pursuant to this Section 9.3.

                  9.4 Termination Without Cause. The Corporation shall have the
option to terminate this Agreement Without Cause without any prior notice to the
Executive. In the event the Corporation terminates this Agreement without Cause
as defined above, the Corporation shall pay the Executive upon termination, the
amount required pursuant to Section 5.1. In addition, all options granted to the
Executive shall immediately vest and be exercisable by the Executive. The
obligations of the Executive under Section 10 hereof shall continue
notwithstanding termination of the Executive's employment pursuant to this
Section 9.4.

                  9.5 Termination by Executive. The Executive shall have the
right to terminate this Agreement for Good Reason, as hereinafter defined. Good
Reason shall mean any of the following: (i) the assignment to the Executive of
duties inconsistent with the Executive's position, duties, responsibilities,
titles or offices as described herein; (ii) any material reduction by the
Corporation of the Executive's duties and responsibilities as Chief Executive
Officer and not as President and Chief Financial Officer; or (iii) any reduction
by the Corporation of the Executive's compensation or benefits payable hereunder
(it being understood that a reduction of benefits applicable to all executives
of the Corporation, including the Executive, shall not be deemed a reduction of
the Executive's compensation package for purposes of this definition). In the
event the Executive terminates this Agreement for Good Reason as defined above,
the Corporation shall pay the Executive upon termination, the amount required
pursuant to Section 5.1. In addition, all options granted to the Executive shall
immediately vest and be exercisable by the Executive. The obligations of the
Executive under Section 10 hereof shall continue notwithstanding termination of
the Executive's employment pursuant to this Section 9.5. In the event the
Executive terminates this Agreement without good reason the Executive shall be
entitled to accrued base salary through the date of termination but shall
otherwise be treated as if this Agreement had been terminated pursuant to
Section 9.3.

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         10.      Protection of Confidential Information.

         In view of the fact that Executive's work for the Corporation will
bring him into close contact with confidential information and plans for future
developments, Executive agrees to the following:

                  10.1 Secrecy. To keep secret and retain in the strictest
confidence all confidential matters of the Corporation, including, without
limitation, trade "know how" and trade secrets, customer lists, pricing
policies, marketing plans, technical processes, formulae, inventions and
research projects, and other business affairs of the Corporation, learned by him
heretofore or hereafter, and not to disclose them to anyone inside or outside of
the Corporation, except in the course of performing the Services hereunder or
with the express written consent of the Chief Executive Officer or Board of
Directors of the Corporation and except to the extent such information is
already known to the general public.

                  10.2 Return Memoranda, etc. To deliver promptly to the
Corporation on termination of his employment, or at any other time as the Chief
Executive Officer or the Board of Directors of the Corporation may so request,
all memoranda, notes, records, reports, manuals, drawings, blueprints and other
documents (and all copies thereof) relating to the Corporation's business and
all property associated therewith, which he may then possess or have under his
control.

                  10.3     Covenants.

                           10.3.1 Non-competition. Executive agrees that at all
times while he is employed by the Corporation and, regardless of the reason for
termination of his employment or this Agreement, for a period of one (1) year
thereafter, he will not, as a principal, agent, employee, employer, consultant,
stockholder, investor, director or co-partner of any person, firm, corporation
or business entity other than the Corporation, or in any individual or
representative capacity whatsoever, directly or indirectly, without the express
prior written consent of the Corporation:

                           (i) engage or participate in any business whose
                           products or services are competitive with that of the
                           Corporation, which business is the manufacture and
                           sale of safety related work clothing, and which
                           conducts or solicits business, or transacts with
                           supplier or customers located within the United
                           States or Puerto Rico;

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                           (ii) aid or counsel any other person, firm,
                           corporation or business entity to do any of the
                           above;

                           (iii) become employed by a firm, corporation,
                           partnership or joint venture which competes with the
                           business of the Corporation within the United States
                           or Puerto Rico; or

                           (iv) approach, solicit business from, or otherwise do
                           business or deal with any customer of the Corporation
                           in connection with any product or service competitive
                           to any provided by the Corporation.

                           10.3.2 Anti-Raiding. Executive agrees that during the
term of his employment hereunder, and, thereafter for a period of one (1) year,
he will not, as a principal, agent, employee, employer, consultant, director or
partner of any person, firm, corporation or business entity other than the
Corporation, or in any individual or representative capacity whatsoever,
directly or indirectly, without the prior express written consent of the
Corporation approach, counsel or attempt to induce any person who is then in the
employ of the Corporation to leave the employ of the Corporation or employ or
attempt to employ any such person or persons who at any time during the
preceding six months was in the employ of the Corporation.

                           10.3.3 Executive's Acknowledgements. Executive
acknowledges (i) that his position with the Corporation requires the performance
of services which are special, unique, and extraordinary in character and places
him in a position of confidence and trust with the customers and employees of
the Corporation, through which, among other things, he shall obtain knowledge of
the Corporation's "technical information" and "know-how" and become acquainted
with its customers, in which matters the Corporation has substantial proprietary
interests; (ii) that the restrictive covenants set forth above are necessary in
order to protect and maintain such proprietary interests and the other
legitimate business interests of the Corporation; and (iii) that the Corporation
would not have entered into this Agreement unless such covenants were included
herein.

                           Executive also acknowledges that the business of the
Corporation presently will extend throughout the United States and Puerto Rico,
and that he will personally supervise and engage in such business on behalf of
Corporation and, accordingly, it is reasonable that the restrictive covenants
set forth above are not more limited as to geographic area then is set forth
therein. Executive also represents to the Corporation that the enforcement of
such covenants will not prevent Executive from earning a livelihood or impose an
undue hardship on the Executive.

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                  10.4     Severability. If any of the provisions of this
Section 10, or any part thereof, is hereinafter construed to be invalid or
unenforceable, the same shall not affect the remainder of such provision or
provisions, which shall be given full effect, without regard to the invalid
portions. If any of the provisions of this Section 10, or any part thereof, is
held to be unenforceable because of the duration of such provision, the area
covered thereby or the type of conduct restricted therein, the parties agree
that the court making such determination shall have the power to modify the
duration, geographic area and/or other terms of such provision and, as so
modified, said provision(s) shall then be enforceable. In the event that the
courts of any one or more jurisdictions shall hold such provisions wholly or
partially unenforceable by reason of the scope thereof or otherwise, it is the
intention of the parties hereto that such determination not bar or in any way
affect the Corporation's right to the relief provided for herein in the courts
of any other jurisdictions as to breaches or threatened breaches of such
provisions in such other jurisdictions, the above provisions as they relate to
each jurisdiction being, for this purpose, severable into diverse and
independent covenants.

                  10.5     Injunctive Relief. Executive acknowledges and agrees
that, because of the unique and extraordinary nature of his services, any breach
or threatened breach of the provisions of Sections 10.1, 10.2, or 10.3 hereof
will cause irreparable injury and incalculable harm to the Corporation, and the
Corporation shall, accordingly, be entitled to injunctive and other equitable
relief for such breach or threatened breach and that resort by the Corporation
to such injunctive or other equitable relief shall not be deemed to waive or to
limit in any respect any right or remedy which the Corporation may have with
respect to such breach or threatened breach. The Corporation and Executive agree
that any such action for injunctive or equitable relief shall be heard in a
state or federal court situate in Rhode Island and each of the parties hereto,
hereby agrees to accept service of process by registered mail and to otherwise
consent to the jurisdiction of such courts.

                  10.6     Expenses of Enforcement of Covenants. In the event
that any action, suit or proceeding at law or in equity is brought to enforce
the covenants contained in Sections 10.1, 10.2, or 10.3 hereof or to obtain
money damages for the breach thereof, the party prevailing in any such action,
suit or other proceeding shall be entitled upon demand, to reimbursement from
the other party for all expenses (including, without limitation, reasonable
attorneys' fees and disbursements) incurred in connection therewith.

                  10.7     Separate Agreement. The provisions of this Section 10
shall be construed as an agreement on the part of the Executive independent of
any other part of this Agreement or any other agreement, and the existence of
any claim or cause of action of the Executive against the Corporation, whether
predicated on this Agreement or otherwise, shall not constitute a defense to the
enforcement by the Corporation of the provisions of this Section 10.

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         11.      Indemnification.

         The Corporation shall provide the Executive (including his heirs,
executors and administrators) with coverage under a standard directors and
officers liability insurance policy at the Corporation's expense to the same
extent as provided for any other director, officer or trustee of the
Corporation. In addition, the Corporation shall indemnify the Executive (and his
heirs, executors and administrators) to the fullest extent permitted under the
law of its state of incorporation against all expenses and liabilities
reasonably incurred by him in connection with or arising out of any action, suit
or proceeding in which the Executive may be involved by reason of his having
been a director or officer of the Corporation or any subsidiary thereof. Such
expenses and liabilities shall include, but not be limited to, judgments, court
costs and attorneys' fees and the cost of reasonable settlements, such
settlements to be approved by the Board if such action is brought against the
Executive in his capacity as a director or officer of the Corporation or any
subsidiary thereof. The Corporation shall, upon the request of the Executive,
advance to the Executive such amounts as necessary to cover expenses, including
without limitation legal fees and expenses, incurred by the Executive in
connection with any suit or proceeding in which the Executive may be involved by
reason of his being or having been a director or officer of the Corporation or
of any subsidiary thereof. Such indemnity and advance of expenses, however,
shall not extend to matters as to which the Executive is finally adjudged to be
liable for willful misconduct in the performance of his duties.

         12.      Arbitration.

         Except with respect to any proceeding brought under Section 10 hereof,
any controversy, claim, or dispute between the parties, directly or indirectly,
concerning this Employment Agreement or the breach hereof, or the subject matter
hereof, including questions concerning the scope and applicability of this
arbitration clause, shall be finally settled by arbitration in New York County,
New York pursuant to the rules then applying of the American Arbitration
Association. The arbitrators shall consist of one representative selected by the
Corporation, one representative selected by the Executive and one representative
selected by the first two arbitrators. The parties agree to expedite the
arbitration proceeding in every way, so that the arbitration proceeding shall be
commenced within thirty (30) days after request therefore is made, and shall
continue thereafter, without interruption, and that the decision of the
arbitrators shall be handed down within thirty (30) days after the hearings in
the arbitration proceedings are closed. The arbitrators shall have the right and
authority to assess the cost of the arbitration proceedings and to determine how
their decision or determination as to each issue or matter in dispute may be
implemented or enforced. The decision in writing of any two of the arbitrators
shall be binding and conclusive on all of the parties to this Agreement. Should
either the Corporation or the Executive fail to appoint an arbitrator as
required by this Section 12 within thirty (30) days after receiving written
notice from the other party to do so, the arbitrator appointed by the other
party shall act for all of the parties and his decision in writing shall be
binding and conclusive on all of the parties to this Employment Agreement. Any
decision or award of the arbitrators shall be final and conclusive on the
parties to this Agreement; judgment upon such decision or award may be entered
in any competent Federal or state court located in the United States of America;
and the application may be made to such court for confirmation of such decision
or award for any order of enforcement and for any other legal remedies that may
be necessary to effectuate such decision or award.

         13.      Notices.

         All notices, requests, consents and other communications required or
permitted to be given hereunder, shall be in writing and shall be deemed to have
been duly given if delivered personally or sent by prepaid telegram, telecopy or
mailed first-class, postage prepaid, by registered or certified mail (notices
sent by telegram or mailed shall be deemed to have been given on the date sent),
to the parties at their respective addresses hereinabove set forth or to such
other address as either party shall designate by notice in writing to the other
in accordance herewith.

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         14.      General.

                  14.1 Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the local laws of the State of
Delaware.

                  14.2 Captions. The section headings contained herein are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.

                  14.3 Entire Agreement. This Agreement sets forth the entire
agreement and understanding of the parties relating to the subject matter
hereof, and supersedes in their entirety all prior agreements, arrangements and
understandings, written or oral, relating to the subject matter hereof
including, but not limited to, the Previous Employment Agreement. No
representation, promise or inducement has been made by either party that is not
embodied in this Agreement, and neither party shall be bound by or liable for
any alleged representation, promise or inducement not so set forth.

                  14.4 Appointment of Additional Officers. The appointment by
the Corporation of a new President and/or Chief Financial Officer shall not
affect the validity of this Agreement.

                  14.5 Severability. If any of the provisions of this Agreement
shall be unlawful, void, or for any reason, unenforceable, such provision shall
be deemed severable from, and shall in no way affect the validity or
enforceability of, the remaining portions of this Agreement.

                  14.6 Waiver. The waiver by any party hereto of a breach of any
provision of this Agreement by any other party shall not operate or be construed
as a waiver of any subsequent breach of the same provision or any other
provision hereof.

                  14.7 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
taken together shall constitute one and the same Agreement.

                  14.8 Assignability. This Agreement, and Executive's rights and
obligations hereunder, may not be assigned by Executive. The Corporation may
assign its rights, together with its obligations, hereunder in connection with
any sale, transfer or other disposition of all or substantially all of its
business or assets; in any event the rights and obligations of the Corporation
hereunder shall be binding on its successors or assigns, whether by merger,
consolidation or acquisition of all or substantially all of its business or
assets. This Agreement shall inure to the benefit of, and be binding upon, the
Executive and his executors, administrators, heirs and legal representatives.

                                      -11-
<PAGE>

                  14.9 Amendment. This Agreement may be amended, modified,
superseded, cancelled, renewed or extended and the terms or covenants hereof may
be waived, only by a written instrument executed by both of the parties hereto,
or in the case of a waiver, by the party waiving compliance. No superseding
instrument, amendment, modification, cancellation, renewal or extension hereof
shall require the consent or approval of any person other than the parties
hereto. The failure of either party at any time or times to require performance
of any provision hereof shall in no matter affect the right at a later time to
enforce the same. No waiver by either party of the breach of any term or
covenant contained in this Agreement, whether by conduct or otherwise, in any
one or more instances, shall be deemed to be, or construed as, a further or
continuing waiver of any such breach, or a waiver of the breach of any other
term or covenant contained in this Agreement.

                                    [* * * *]

                                      -12-
<PAGE>

         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.

ATTEST:                                POWER EFFICIENCY CORPORATION

By:                                    By:
   ---------------------------            --------------------------------------
   Name:                                  Steven Strasser, Chairman of the Board
   Title:

WITNESS:

------------------------------         -----------------------------------------
                                       Raymond J. Skiptunis, individually

                                      -13-<PAGE>

EXHIBIT 10.27

                          POWER EFFICIENCY CORPORATION

        Amended and Restated 2000 Stock Option and Restricted Stock Plan
                         (Adopted as of September, 2000
                                       and
                             Amended in June, 2002)

                                    RECITALS

         WHEREAS, Power Efficiency Corporation (the "Company") adopted the 2000
Stock Option and Restricted Stock Plan in September 2000 (the "2000 Plan");

         WHEREAS, the Company wishes to amend and restate the 2000 Plan (the
"Amended and Restated 2000 Plan") in order to increase the total number of
shares of Common Stock (as defined below) reserved and available under the plan
from 2,000,000 shares of Common Stock to 4,000,000 shares of Common Stock;

         WHEREAS, the Amended and Restated 2000 Plan shall supercede the 2000
Plan; and

         WHEREAS, all grants under the 2000 Plan shall be covered and subject to
the provisions of the Amended and Restated 2000 Plan.

Section 1.   Purpose; Definitions.

         1.1 Purpose. The purpose of the Company's Amended and Restated 2000
Stock Option and Restricted Stock Plan (the "Plan") is to enable the Company to
offer to its key employees, officers, directors and consultants whose past,
present and/or potential contributions to the Company and its Subsidiaries have
been, are or will be important to the success of the Company, an opportunity to
acquire a proprietary interest in the Company. The various types of long-term
incentive awards which may be provided under the Plan will enable the Company to
respond to changes in compensation practices, tax laws, accounting regulations
and the size and diversity of its businesses.

         1.2 Definitions. For purposes of the Plan, the following terms shall
be defined as set forth below:

             (a) "Agreement" means the agreement between the Company and
the Holder setting forth the terms and conditions of an award under the Plan.

             (b) "Board" means the Board of Directors of the Company.

             (c) "Code" means the Internal Revenue Code of 1986, as amended
from time to time, and any successor thereto and the regulations promulgated
thereunder.

             (d) "Committee" means the Compensation Committee of the Board
or such persons as shall be designated by the President of the company, or any
other committee of the Board, which the Board may designate to administer the
Plan or any portion thereof. The Committee shall consist of disinterested
persons appointed by the Board who, during the one year period prior to
commencement of service on the Committee, shall not have participated in, and
while serving and for one year after serving on the Committee, shall not be
eligible for selection as persons to whom awards of Stock may be allocated, or
to whom Stock Options may be granted under the Plan or any other discretionary
plan of the Company, under which participants are entitled to acquire Stock or
Stock Options of the Company. If no Committee is so designated, then all
references in this Plan to "Committee" shall mean the Board.

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                          Power Efficiency Corporation
        AMENDED AND RESTATED 2000 STOCK OPTION AND RESTRICTED STOCK PLAN
================================================================================

<PAGE>

             (e) "Common Stock" means the Common Stock of the Company, no par
value per share.

             (f) "Company" means Power Efficiency Corporation, a corporation
organized under the laws of the State of Delaware.

             (g) "Continuous Status as an Employee" means the absence of any
interruption or termination of service as an Employee. Continuous Status as an
Employee shall not be considered interrupted in the case of sick leave, military
leave, or any other leave of absence approved by the Board.

             (h) "Employee" shall mean any person, including officers and
directors, employed by the Company or any Parent or Subsidiary of the Company
and for whom a withholding obligation exists under Section 3401 of the Code by
the employing corporation, as applicable. The payment of a director's fee by the
Company shall not be sufficient to constitute "employment" by the Company.

             (i) "Disability" means disability as determined under procedures
established by the Committee for purposes of the Plan.

             (j) "Effective Date" means the date set forth in Section 15

             (k) "Fair Market Value", unless otherwise required by any
applicable provision of the Code or any regulations issued thereunder, means, as
of any given date: (i) if the Common Stock is listed on a national securities
exchange or quoted on the NASDAQ National Market or NASDAQ SmallCap Market, the
last sale price of the Common Stock in the principal trading market for the
Common Stock on the last trading day preceding the date of grant of an award
hereunder, as reported by the exchange or NASDAQ, as the case may be; (ii) if
the Common Stock is not listed on a national securities exchange or quoted on
the NASDAQ National Market or NASDAQ SmallCap Market, but is traded in the
over-the-counter market, the closing bid price for the Common Stock on the last
trading day preceding the date of grant of an award hereunder for which such
quotations are reported by the National Quotation Bureau, Incorporated or
similar publisher of such quotations; and (iii) if the fair market value of the
Common Stock cannot be determined pursuant to clause (i) or (ii) above, such
price as the Committee shall determine, in good faith.

             (l) "Holder" means a person who has received an award under the
Plan.

             (m) "Incentive Stock Option" means any Stock Option intended to be
and designated as an "incentive stock option" within the meaning of Section 422
of the Code.

             (n) "Non-Qualified Stock Option" means any Stock Option that is not
an Incentive Stock Option.

             (o) "Normal Retirement" means retirement from active employment
with the Company or any Subsidiary on or after age 65.

             (p) "Parent" means any present or future parent corporation of the
Company, as such term is defined in Section 424(e) of the Code.

             (q) "Plan" means the Power Efficiency Corporation, Amended and
Restated 2000 Stock Option and Restricted Stock Plan, as hereinafter amended
from time to time.

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                          Power Efficiency Corporation
        AMENDED AND RESTATED 2000 STOCK OPTION AND RESTRICTED STOCK PLAN
================================================================================

                                       2
<PAGE>

             (r) "Restricted Stock" means Stock, received under an award made
pursuant to Section 7 below, that is subject to restrictions under said Sections
8-11.

             (s) "Stock" means the Common Stock of the Company, no par value per
share.

             (t) "Stock Option" or "Option" means any option to purchase shares
of Stock which is granted pursuant to the Plan.

             (u) "Subsidiary" means any present or future subsidiary corporation
of the Company, as such term is defined in Section 424(f) of the Code.

Section  2.  Administration.

         2.1 Committee Membership. The Plan shall be administered by the Board
or a Committee or such persons as shall be designated by the President of the
Company. Committee members shall serve for such term as the Board may in each
case determine, and shall be subject to removal at any time by the Board.

         2.2 Powers of Committee. The Committee shall have full authority,
subject to Section 2.3 hereof, to award, pursuant to the terms of the Plan: (i)
Stock Options and (ii) Restricted Stock grants. For purposes of illustration and
not of limitation, the Committee shall have the authority (subject to the
express provisions of this Plan):

             (a) to select the officers, key employees, directors and
consultants of the Company or any Subsidiary to whom Stock Options and/or
Restricted Stock, may from time to time be awarded hereunder.

             (b) to determine the terms and conditions, not inconsistent with
the terms of the Plan, of any award granted hereunder (including, but not
limited to, number of shares, share price, any restrictions or limitations, and
any vesting, exchange, surrender, cancellation, acceleration, termination,
exercise or forfeiture provisions, as the Committee shall determine);

             (c) to determine any specified performance goals or such other
factors or criteria which need to be attained for the vesting of an award
granted hereunder;

             (d) to determine the terms and conditions under which awards
granted hereunder are to operate on a tandem basis and/or in conjunction with or
apart from other equity awarded under this Plan and cash awards made by the
Company or any Subsidiary outside of this Plan;

             (e) to determine the extent and circumstances under which Stock and
other amounts payable with respect to an award hereunder shall be deferred which
may be either automatic or at the election of the Holder; and

             (f) to substitute (i) new Stock Options for previously granted
Stock Options, which previously granted Stock Options have higher option
exercise prices and/or contain other less favorable terms, and (ii) new awards
of any other type for previously granted awards of the same type, which
previously granted awards are upon less favorable terms.

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                          Power Efficiency Corporation
        AMENDED AND RESTATED 2000 STOCK OPTION AND RESTRICTED STOCK PLAN
================================================================================

                                       3
<PAGE>

         2.3 Interpretation of Plan.

             (a) Committee Authority. Subject to Section 15 hereof, the
Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall,
from time to time, deem advisable, to interpret the terms and provisions of the
Plan and any award issued under the Plan (and to determine the form and
substance of all Agreements relating thereto), and to otherwise supervise the
administration of the Plan. Subject to Section 15 hereof, all decisions made by
the Committee pursuant to the provisions of the Plan shall be made in the
Committee's sole discretion and shall be final and binding upon all persons,
including the Company, its Subsidiaries and Holders.

             (b) Incentive Stock Options. Anything in the Plan to the contrary
notwithstanding, no term or provision of the Plan relating to Incentive Stock
Options or any Agreement providing for Incentive Stock Options shall be
interpreted, amended or altered, nor shall any discretion or authority granted
under the Plan be so exercised, so as to disqualify the Plan under Section 422
of the Code, or, without the consent of the Holder(s) affected, to disqualify
any Incentive Stock Option under such Section 422.

Section 3.   Stock Subject to Plan.

         The total number of shares of Common Stock reserved and available for
distribution under the Plan shall be 4,000,000 shares. Shares of Stock under the
Plan may consist, in whole or in part, of authorized and unissued shares or
treasury shares. If any shares of Stock that have been optioned cease to be
subject to a Stock Option, or any shares of Stock that are subject to any
Restricted Stock granted hereunder are forfeited or any such award otherwise
terminates without a payment being made to the Holder in the form of Stock, such
shares shall again be available for distribution in connection with future
grants and awards under the Plan. Only net shares issued upon a stock-for-stock
exercise (including stock used for withholding taxes) shall be counted against
the number of shares available under the Plan.

Section 4.   Eligibility.

         4.1 General. Awards may be made or granted to key employees, officers,
directors and consultants who are deemed to have rendered or to be able to
render significant services to the Company or its Subsidiaries and who are
deemed to have contributed or to have the potential to contribute to the success
of the Company. No Incentive Stock Option shall be granted to any person who is
not an employee of the Company or a Subsidiary at the time of grant.

                                I. STOCK OPTIONS

Section 5.   Stock Options.

         5.1 Grant and Exercise. Stock Options granted under the Plan may be of
two types: (i) Incentive Stock Options and (ii) Non-Qualified Stock Options. Any
Stock Option granted under the Plan shall contain such terms, not inconsistent
with this Plan, or with respect to Incentive Stock Options, the Code, as the
Committee may from time to time approve. The Committee shall have the authority
to grant Incentive Stock Options, Non-Qualified Stock Options, or both types of
Stock Options and may be granted alone or in addition to other awards granted
under the Plan. To the extent that any Stock Option intended to qualify as an
Incentive Stock Option does not so qualify, it shall constitute a separate
Non-Qualified Stock Option. An Incentive Stock Option granted under this Plan
may only be exercised within ten years of the date of grant (or five years in
the case of an Incentive Stock Option granted to optionee ("10% Stockholder")
who, at the time of grant, owns Stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company or a Parent or
Subsidiary.)

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                          Power Efficiency Corporation
        AMENDED AND RESTATED 2000 STOCK OPTION AND RESTRICTED STOCK PLAN
================================================================================

                                       4
<PAGE>

         5.2 Terms and Conditions. Stock Options granted under the Plan shall be
subject to the following terms and conditions:

             (a) Exercise Price. The exercise price per share of Stock
purchasable under a Stock Option shall be determined by the Committee at the
time of grant and may be less than 100% of the Fair Market Value of the Stock as
defined above; provided, however, that (i) the exercise price of an Incentive
Stock Option shall not be less than 100% of the Fair Market Value of the Stock
(110%, in the case of 10% Stockholder); and (ii) the exercise price of a
Non-Qualified Stock Option shall not be less than 85% of the Fair Market Value
of the Stock as defined above.

             (b) Option Term. Subject to the limitations in Section 5.1, the
term of each Stock Option shall be fixed by the Committee.

             (c) Exercisability. Stock Options shall be exercisable at such time
or times and subject to such terms and conditions as shall be determined by the
Committee. If the Committee provides, in its discretion, that any Stock Option
is exercisable only in installments, i.e., that it vests over time, the
Committee may waive such installment exercise provisions at any time at or after
the time of grant in whole or in part, based upon such factors as the Committee
shall determine.

             (d) Method of Exercise. Subject to whatever installment, exercise
and waiting period provisions are applicable in a particular case, Stock Options
may be exercised in whole or in part at any time during the term of the Option,
by giving written notice of exercise to the Company specifying the number of
shares of Stock to be purchased. Such notice shall be accompanied by payment in
full of the purchase price, which shall be in cash or, unless otherwise provided
in the Agreement, in shares of Stock (including Restricted Stock) or, partly in
cash and partly in such Stock, or such other means which the Committee
determines are consistent with the Plan's purpose and applicable law. Cash
payments shall be made by wire transfer, certified or bank check or personal
check, in each case payable to the order of the Company; provided, however, that
the Company shall not be required to deliver certificates for shares of Stock
with respect to which an Option is exercised until the Company has confirmed the
receipt of good and available funds in payment of the purchase price thereof.
Payments in the form of Stock shall be valued at the Fair Market Value of a
share of Stock on the date prior to the date of exercise. Such payments shall be
made by delivery of stock certificates in negotiable form which are effective to
transfer good and valid title thereto to the Company, free of any liens or
encumbrances. A Holder shall have none of the rights of a stockholder with
respect to the shares subject to the Option until such shares shall be
transferred to the Holder upon the exercise of the Option.

             (e) Transferability. No Stock Option shall be transferable by the
Holder otherwise than by will or by the laws of descent and distribution, and
all Stock Options shall be exercisable, during the Holder's lifetime, only by
the Holder.

             (f) Termination by Reason of Death. If a Holder's employment by the
Company or a Subsidiary terminates by reason of death, any Stock Option held by
such Holder that has not fully vested shall be forfeited, unless otherwise
determined by the Committee at the time of grant and set forth in the Agreement.
Any fully vested option may thereafter be exercised by the legal representative
of the estate or by the legatee of the Holder under the will of the Holder, for
a period of one year (or such other greater or lesser period as the Committee
may specify at grant) from the date of such death or until the expiration of the
stated term of such Stock Option, whichever period is the shorter.

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                          Power Efficiency Corporation
        AMENDED AND RESTATED 2000 STOCK OPTION AND RESTRICTED STOCK PLAN
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                                       5
<PAGE>

             (g) Termination by Reason of Disability. If a Holder's employment
by the Company or any Subsidiary terminates by reason of Disability, any Stock
Option held by such Holder that has not fully vested shall be forfeited, unless
otherwise determined by the Committee at the time of grant and set forth in the
Agreement. Any fully vested option may thereafter be exercised by the Holder for
a period of one year (or such other greater or lesser period as the Committee
may specify at the time of grant) from the date of such termination of
employment or until the expiration of the stated term of such Stock Option,
whichever period is the shorter.

             (h) Other Termination. Subject to the provisions of Section 16.3
below and unless otherwise determined by the Committee at the time of grant and
set forth in the Agreement, if a Holder is an employee of the Company or a
Subsidiary at the time of grant and if such Holder's employment by the Company
or any Subsidiary terminates for any reason other than death or Disability, the
Stock Option shall thereupon automatically terminate, except that if the
Holder's employment is terminated by the Company or a Subsidiary without cause
or due to Normal Retirement, then the portion of such Stock Option which has
vested on the date of termination of employment may be exercised for the lesser
of three months after termination of employment or the balance of such Stock
Option's term.

             (i) Additional Incentive Stock Option Limitation. In the case of an
Incentive Stock Option, the amount of aggregate Fair Market Value of Stock
(determined at the time of grant of the Option) with respect to which Incentive
Stock Options are exercisable for the first time by a Holder during any calendar
year (under all such plans of the Company and its Parent and any Subsidiary)
shall not exceed $100,000.

             (j) Buyout and Settlement Provisions. The Committee may at any time
offer to buy out a Stock Option previously granted, based upon such terms and
conditions as the Committee shall establish and communicate to the Holder at the
time that such offer is made.

             (k) Stock Option Agreement. Each grant of a Stock Option shall be
confirmed by, and shall be subject to the terms of an agreement (a "Stock Option
Agreement"), or an amendment thereto, executed by the company and the Holder.
Each Stock Option Agreement shall set forth (1) the number of shares underlying
the Stock Options awarded to the Holder, (2) the vesting conditions applicable
to the award and (3) such other terms and conditions, not inconsistent with the
Plan, as determined in its discretion by the Committee.
......

Section 6.   [Intentionally omitted.]

                           II. RESTRICTED STOCK GRANTS

Section 7.   Grant of Restricted Stock Awards

         Subject to the provisions of the Plan, the Committee shall have full
and final authority, in its discretion, (1) to determine the eligibility of any
individual to receive an award of Restricted Stock under the Plan, (2) to select
from among the eligible individuals the persons who are to receive such awards
and (3) to determine the number of shares of Restricted Stock to be awarded to
any eligible person selected by the Committee and the terms and conditions of
the award. In determining the number of shares of Restricted Stock to be granted
to any Holder and the terms and conditions of such award, the Committee shall
consider the position and responsibilities of the individual being considered,
the nature and value to the Company of his or her services, his or her present
and/or potential contribution to the success of the Company, and such other
factors as the Committee may deem relevant.

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                          Power Efficiency Corporation
        AMENDED AND RESTATED 2000 STOCK OPTION AND RESTRICTED STOCK PLAN
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                                       6
<PAGE>

Section 8.   Terms and Conditions of Restricted Stock Awards

         Awards of Restricted Stock granted under the Plan shall be subject to
the following terms and conditions:

         8.1 Date of Awards. Awards of Restricted Stock shall be made
only as of a Valuation Date, as defined in Section 8.9.

         8.2 Vesting Conditions. Awards under the Plan shall consist of a
specified number of shares of Stock ("Restricted Stock") awarded to a Holder
subject to the satisfaction of one or more vesting conditions determined and
specified by the Committee at the time of the award. Such vesting conditions may
include:

             (i) Service Conditions. A requirement that the Holder remain in
         the service of the Company as an employee, director, member of an
         Advisory Board, consultant, advisor and/or in such other capacity or
         capacities as the Committee may specify (hereinafter referred to as the
         Holder's "Service") from the date of the award through the Valuation
         Date or Valuation Dates specified by the Committee at the time of the
         award;

             (ii) Performance Conditions. Satisfaction of such requirements
         relating to the performance of the Company, any department, unit or
         other portion thereof or the Holder individually as the Committee may
         determine and specify at the time of the award; and/or

             (iii) Other Conditions. Such other conditions to the vesting of the
         shares of Restricted Stock as the Committee may, in its discretion,
         determine and specify at the time of the award.

         The vesting conditions to which an award of Restricted Stock is
subject may be stated in the alternative, such that satisfaction of one or more
of such conditions will be sufficient to cause the vesting of the shares of
Restricted Stock, or cumulatively such that vesting will not occur unless and
until all of such conditions is satisfied, or in any combination of the two.
Vesting conditions may also be stated in such a manner that vesting of a
designated portion of the shares awarded will occur on satisfaction of one or
more specified conditions, whereas satisfaction of additional or different
conditions is required for the vesting of another specified portion or portions
of the shares. For example, an award may provide for the vesting of an award in
stages upon satisfaction of conditions relating to specified numbers of years of
Service and/or levels of performance.

         Unless otherwise specifically determined by the Committee, the vesting
conditions applicable to an award of Restricted Stock shall be stated in such a
manner that vesting of any shares of Restricted Stock shall occur, if at all, as
of one or more Valuation Dates.

         8.3 Restricted Stock Agreements. All awards of Restricted Stock shall
be confirmed by and subject to the terms of an agreement (a "Restricted Stock
Agreement"), executed by the Company and the Holder. Each Restricted Stock
Agreement shall set forth (1) the number of shares of Restricted Stock awarded
to the Holder, (2) the vesting conditions applicable to the award and (3) such
other terms and conditions, not inconsistent with the Plan, as determined in its
discretion by the Committee.

         No Holder shall sell, exchange, assign, alienate, pledge, hypothecate,
encumber, charge, give, devise, or otherwise dispose of, either voluntarily or
by operation of law (hereinafter referred to as "transfer"), any shares of Stock
acquired pursuant to the Plan or any rights or interests appertaining thereto,
except as permitted by the Plan.

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                          Power Efficiency Corporation
        AMENDED AND RESTATED 2000 STOCK OPTION AND RESTRICTED STOCK PLAN
================================================================================

                                       7
<PAGE>

         8.4 Transfer Restrictions; Escrow of Restricted Stock. Unless and until
the vesting conditions prescribed by the Committee for such shares have been
satisfied, a Holder may not sell, exchange, assign, alienate, pledge,
hypothecate, encumber, charge, give, or otherwise dispose of, either voluntarily
or by operation of law (any such action being hereinafter referred to as a
"transfer") any shares of Restricted Stock, or any interest therein, other than
by Will or the laws of descent and distribution on death of the Holder, and any
attempt to make such a transfer shall be null and void. Pending satisfaction of
the vesting conditions with respect thereto, the certificates representing
shares of Restricted Stock awarded under the Plan shall be held in escrow by the
Company, and as a condition of any award of Restricted Stock, the Holder shall
deliver to the Company one or more undated stock powers with respect thereto to
be used by the Company in the event any such shares are forfeited to the Company
pursuant to the terms of the Plan or the Restricted Stock Agreement. As soon as
practicable following satisfaction of the vesting conditions with respect to any
shares of Restricted Stock and payment to the Company of any amount required for
withholding taxes as provided in Section 16.6, the Company will cause a
certificate or certificates for such shares to be delivered to the Holder or in
the event of death to the Holder's personal representative. Following
satisfaction of the vesting conditions and delivery of stock certificates to the
Holder, shares of Stock acquired pursuant to the Plan will remain subject to the
transfer restrictions provided in Section 10.

         8.5 Custody and Payment of Distributions on Restricted Stock. Unless
and until the vesting conditions with respect to such shares have been
satisfied, any dividends or other distributions paid with respect to shares of
Restricted Stock, whether in cash, securities or other property, and any cash,
securities or other property into which shares of Restricted Stock may be
converted or exchanged by reason of any reorganization, reclassification,
recapitalization, stock split or combination of shares, merger, consolidation or
other change affecting the Company or such shares (collectively
"Distributions"), shall be paid to and held in escrow by the Company subject to
the same vesting conditions as the shares of Restricted Stock to which they
relate. As soon as practicable following satisfaction of the vesting conditions
with respect to any shares of Restricted Stock and payment to the Company of any
amount required for withholding taxes as provided in Section 16.6, the Company
will cause any Distributions held by the Company with respect to such shares to
be paid or delivered to the Holder or in the event of death to the Holder's
personal representative. Notwithstanding the foregoing, if and to the extent
that the Committee shall so determine and specifically provide in the Restricted
Stock Agreement, cash dividends payable from the earnings of the Company may be
paid directly to the Holder, without restrictions, prior to the satisfaction of
the vesting conditions.

         8.6 Shareholder Status of Holders Of Restricted Stock. As of the date
of any award of Restricted Stock, and unless and until the shares of Restricted
Stock awarded are forfeited to the Company pursuant to the provisions of the
Plan or the Restricted Stock Agreement, the Holder shall be considered for all
purposes to be the beneficial and record owner of the shares of Restricted Stock
awarded to the Holder and to have all rights of a shareholder with respect to
such shares, subject only to the restrictions and other terms and conditions of
the award as specified in the Plan or in the Restricted Stock Agreement.

         8.7 Termination of Service of Holders of Restricted Stock. Unless the
Committee, in its discretion, shall otherwise determine and the Restricted Stock
Agreement shall so provide:

             (i) If the Service of a Holder who is disabled within the meaning
         of Section 422(c)(6) of the Code (a "Disabled Holder") is voluntarily
         terminated with the consent of the Company, the vesting conditions
         applicable to any outstanding Restricted Stock award held by such
         Holder and not previously forfeited to the Company shall be deemed to
         have been satisfied as of the date of such termination of Service;

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                          Power Efficiency Corporation
        AMENDED AND RESTATED 2000 STOCK OPTION AND RESTRICTED STOCK PLAN
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                                       8
<PAGE>

             (ii) Upon death of a Holder during Service to the Company, the
         vesting conditions applicable to any outstanding Restricted Stock award
         held by such Holder and not previously forfeited to the Company shall
         be deemed to have been satisfied as of the date of death of the Holder;
         and

             (iii) If the Service of a Holder terminates for any reason other
         than voluntary termination of a Disabled Holder with the consent of the
         Company or death, all shares of Restricted Stock held by the Holder as
         to which the vesting conditions have not been satisfied as of the time
         of such termination of employment shall be automatically be deemed
         forfeited to the Company, without consideration or further action being
         required of the Company.

         Whether a Holder is a Disabled Holder shall be determined in each case,
in its discretion, by the Committee, and any such determination by the Committee
shall be final, binding and conclusive.

         8.8 Forfeiture of Restricted Stock; Determinations by the Committee.
Except as otherwise specifically provided in the Plan or the Restricted Stock
Agreement, in the event that any of the vesting conditions applicable to shares
of Restricted Stock shall not be satisfied, the shares of Restricted Stock to
which such conditions relates, and any Distributions held by the Company with
respect thereto, shall automatically be deemed to have been forfeited to the
Company, without consideration or further action being required of the Company.
In the event that the nature of a vesting condition is such that the
determination as to its satisfaction or nonsatisfaction cannot be made until a
later date, such as in the case of an earnings test for a specified accounting
period, the shares subject to such condition shall continue to be held in escrow
by the Company pending final determination as to the satisfaction of the
condition, but the earning or forfeiture of the shares and related Distributions
shall be deemed to have occurred as of the date of satisfaction or
nonsatisfaction of the final vesting condition related to such shares. Any
question or dispute which may arise as to the satisfaction or nonsatisfaction of
any vesting condition shall be determined, in its discretion, by the Committee,
and any such determination by the Committee shall be final, binding and
conclusive upon the Company, the Holder and all persons claiming through the
Holder.

         8.9 Valuation of the Restricted Stock

     (a) As used for this Section 8 of the Plan, the following terms shall
have the following definitions:

         (i) "Current Value" as of any date shall mean the Fair Market Value of
a share of Stock as of the most recent Valuation Date for which a determination
of Fair Market Value pursuant to 1.2(k) has been made by the Committee on or
before such date, as adjusted for any stock splits, stock dividends,
recapitalizations, reclassifications or other changes in the Stock occurring
since such Valuation Date.

         (ii) "Valuation Date" shall mean (1) the date of the first award of
Restricted Stock under the Plan, (2) thereafter, for so long as any shares of
Stock shall remain subject to restrictions under Section 8 or Section 10 hereof,
the last day of each fiscal year of the Company and (3) such other date or
dates, if any, as the Committee may, in its discretion, determine.

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             (b) On or before the first Valuation Date, and for each
Valuation Date thereafter (1) if such Valuation Date is the last day of the
Company's fiscal year, not later than 30 days after the date the report of the
Company's independent accountants with respect to the Company's financial
statements for such fiscal year (the "Audit Report") is furnished to the Board,
or (2) in the case of any other Valuation Date, not later than 30 days such
Valuation Date, the Committee shall determine the Fair Market Value of the Stock
as of such Valuation Date. Within 10 days following its determination of Fair
Market Value as of any Valuation Date, the Committee call cause notice thereof
to be furnished to each Holder. In the absence of manifest error, any
determination of Fair Market Value made pursuant to this Section 8.9 shall, for
all purposes of the Plan, be final, binding and conclusive on the Company, on
each Holder, and on any heirs, legatees, personal representatives or any other
person claiming through any Holder.

Section 9    [Intentionally Omitted]

                            III. GENERAL RESTRICTIONS

Section 10.  General Restrictions Applicable to Grants Under The Plan

             10.1 Securities Law Restrictions. No shares of Stock shall be
issued under the Plan, and no certificates for such shares shall be delivered to
any Holder, unless the Company shall be satisfied (and if requested by the
Company, unless it has received an opinion of counsel selected by the Company to
such effect) that the issuance or delivery of the shares will not cause the
Company to violate the Securities Act, any applicable state or foreign
securities law or any applicable rules or regulations under the Securities Act
or under any such state or foreign securities law. The Company is under no
obligation to register any shares of Stock issuable under the Plan, or take any
other action, under the Securities Act or under any state or foreign securities
law in connection with any award of Stock Options or Restricted Stock or to
prepare any disclosure document for distribution to Holders under the Securities
Act or any state or foreign securities law in connection with any such award. As
a condition precedent to the issuance or delivery of shares upon an award of
Stock Options or Restricted Stock or upon satisfaction of the vesting conditions
with respect thereto, the person entitled to such shares may be required to
represent, warrant and agree (i) that the shares are being acquired for the
account of such person for investment and not with a view to the resale or other
distribution thereof and (ii) that such person will not, directly or indirectly,
transfer, sell, assign, pledge, hypothecate or otherwise dispose of any such
shares unless the transfer, sale, assignment, pledge, hypothecation or other
disposition of the shares is pursuant to effective registrations under the
Securities Act and any applicable state or foreign securities laws or pursuant
to appropriate exemptions from any such registrations. The certificate or
certificates representing the shares to be issued or delivered upon an award of
Stock Options or Restricted Stock or the satisfaction of the vesting conditions
with respect thereto may bear a legend to this effect and other legends required
by any applicable securities laws, and if the Company should at some time engage
the services of a stock transfer agent, appropriate stop-transfer instructions
may be issued to the stock transfer agent with respect to such shares. In
addition, also as a condition precedent to the issuance or delivery of shares
upon an award of Stock Options or Restricted Stock or the satisfaction of the
vesting conditions with respect thereto, the person entitled to the shares may
be required to make certain other representations and warranties and to provide
certain other information to enable counsel for the Company to render an opinion
under the first sentence of this Section 10.1.

         Subject to the foregoing provisions of this Section 8 and the other
provisions of the Plan, any award of Stock Options or Restricted Stock granted
under the Plan may be made subject to such other restrictions and such other
terms and conditions, if any, as shall be determined, in its discretion, by the
Committee and set forth in the Stock Option or Restricted Stock Agreement or an
amendment thereto

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             10.2 Continuing Transfer Restrictions After the satisfaction of the
vesting conditions with respect thereto, all shares of Stock acquired pursuant
to an award of Stock Options or Restricted Stock under the Plan shall remain
subject to the following continuing restrictions on transfer:

             (a) No Holder shall sell, exchange, assign, alienate, pledge,
hypothecate, encumber, charge, give, devise, or otherwise dispose of, either
voluntarily or by operation of law (hereinafter referred to as "transfer"), any
shares of Stock acquired pursuant to the Plan or any rights or interests
appertaining thereto, except as permitted by the Plan.

             (b) A Holder shall not transfer any shares of Stock acquired
pursuant to the Plan without first offering to sell such shares to the Company
at a price equal to the Current Value of the shares, determined as provided in
Section 8.9, as of the date of the offer under the following procedure (and, in
the case of a proposed transfer upon the death of the Holder, the procedure
specified in Section 10.2(c) hereof):

                 (i) Each Holder who desires to transfer any shares of Stock
             acquired pursuant to the Plan shall make the offer required by this
             Section 10.2(b) by giving written notice by certified mail to the
             Company to the attention of its President at its principal
             executive offices. Such written notice shall specify the number of
             shares of Stock offered, the person or persons to whom the Holder
             will transfer the shares of Stock offered if the Company does not
             accept the Holder's offer and the price and form of consideration
             for which such shares will be transferred. For purposes of this
             Section 10.2(b) the date of an offer shall be the date on which the
             written notice pursuant to this paragraph (i) is postmarked;

                 (ii) The offer of a Holder pursuant to paragraph (i) may be
             accepted by the Company as to all or any portion of the shares
             offered by written notice of acceptance given to the Holder by
             certified mail within 30 days after the date of the offer. The date
             such notice is postmarked shall be deemed the date of acceptance
             hereunder. All purchases of Stock pursuant to this Section 10.2(b)
             shall be consummated, and payment in full for the shares purchased
             shall be made, at the principal executive offices of the Company on
             such date and at such time as may be reasonably designated by the
             Company in such written notice delivered to the Holder, but not
             later than 30 days following the date of such written notice. At
             such date, time and place, and upon receipt of the purchase price,
             the Holder shall assign, transfer and deliver the certificates for
             the purchased Stock to the Company, duly endorsed, with all
             necessary stock transfer tax stamps duly affixed, together with any
             and all documents required to effectively transfer the Stock to the
             Company; and

                 (iii) If the Company does not accept the Holder's offer as to
             any shares within the required period or if the Company accepts the
             offer and, through the fault of the Company alone, the Company
             fails to consummate the purchase of any shares as required by
             paragraph (ii), the Holder may thereafter transfer the shares not
             accepted or purchased by the Company to the person or persons
             specified in the written notice given to the Company pursuant to
             paragraph (i) at the price and on the terms specified in such
             notice, but only to such persons and only at such price and on such
             terms and only if the Holder transfers such shares within 90 days
             after (a) the expiration of the 30 day period during which the
             Company may accept the Holder's offer or (b) the expiration of the
             30-day period during which the Company may consummate the purchase
             of the shares, as the case may be. The Holder may not thereafter
             transfer any shares of Stock acquired under the Plan without again
             complying with the provisions of this Section 10. The Holder may
             not transfer any shares of the Stock to any person or persons
             pursuant to this paragraph (iii) unless the Holder delivers to the
             Company a legal opinion in form and substance reasonably
             satisfactory to the Company that such transfer will not constitute
             a violation of any applicable Federal or state securities laws. The
             restrictions of this Section 10 also shall apply to any transferee
             of the Holder who acquires shares of Stock pursuant to this Section
             10.2(b), and the transferee shall execute a written agreement with
             the Company agreeing to such restrictions.

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             (c) If the Service of a Holder with the Company terminates for any
reason other than death, retirement under any retirement plan of the Company or
because the Holder becomes a Disabled Holder (including without limitation the
resignation of the Holder or the termination of the Holder's employment by the
Company with or without cause) or if a Holder dies subsequent to any such
termination of Service, all shares of Stock held by the Holder which were
acquired pursuant to the Plan shall be deemed to have been offered for sale to
the Company as of the date of such termination of Service or the date of death,
as the case may be, at a price equal to the Current Value of the shares,
determined as provided in Section 8.9, as of such date. If the Company elects to
purchase any or all of the shares of Stock deemed offered, the Company shall
notify the Holder (or his or her personal representative) by certified mail
within 30 days of the date of termination of the Holder's Service with the
Company or the date the chief executive officer of the Company learns of the
Holder's death, as the case may be, that the Company accepts the deemed offer
and the number of such shares that the Company elects to purchase. If the
Company accepts the deemed offer in whole or in part, the purchase of the shares
of Stock pursuant to this Section 10.2(c) shall be consummated, and payment in
full for the shares purchased shall be made, at the principal executive offices
of the Company on such date and at such time as may be reasonably designated by
the Company in such written notice delivered to the Holder (or his or her
personal representative), but not later than 30 days following the date of such
written notice. Upon receipt of the purchase price of the Stock, the Holder (or
his or her personal representative) shall assign, transfer and deliver to the
Company the certificates for the shares purchased, duly endorsed, with all
necessary stock transfer tax stamps duly affixed, together with any and all
documents required to effectively transfer the shares to the Company. If the
Company decides not to accept the deemed offer in whole or in part, the Company
shall so notify the Holder (or the personal representative of the Holder).
Section 10.2(a), 10.2(b) and 10.2(c) shall continue to apply to the Holder (or
the Holder's personal representative, subject to Section 10.2(e)).

             (d) If the Service of a Holder with the Company terminates by
reason of retirement under any retirement plan of the Company or because the
Holder becomes a Disabled Holder, the Holder may, within 30 days following such
termination, by written notice to the Company by certified mail, offer to sell
to the Company all, but not less than all, of the shares of Stock held by the
Holder which were acquired pursuant to the Plan at a price equal to the Current
Value of such shares, determined as provided in Section 8.9, on the date of such
termination of employment. If the Service of a Holder with the Company
terminates by reason of death or the Holder dies following a termination of
Service described in the preceding sentence, the Holder's personal
representative may, within one year following the date of the Holder's death, by
written notice to the Company by certified mail, offer to sell to the Company
all, but not less than all, of the shares of Stock held by the Holder which were
acquired pursuant to the Plan at a price equal to the Current Value of such
shares, determined as provided in Section 8.9, on the date of death of the
Holder. The Company shall accept any offer made under this Section 10.2(d) to
the extent Company is legally permitted to acquire the shares of its Stock
offered for purchase, except that if offer is made by a Holder (or his or her
personal representative) who owns more than five percent (5%) of the total
number of shares of the Common Stock of the Company (a "Five Percent Holder"),
the Company shall have the right, but shall not be required, to accept the
offer. If the Company will acquire the shares of the Stock offered, the Company
shall notify the Holder (or his or her personal representative) by certified
mail within 30 days of the date of termination of the Holder's Service with the
Company or the date the chief executive officer of the Company learns of the
Holder's death, as the case may be, that the Company accepts the offer. If the
Company accepts the offer, the purchase of the shares of Stock pursuant to this
Section 10.2(d) shall be consummated, and payment in full for the shares
purchased shall be made, at the principal executive offices of the Company on
such date and at such time as may be reasonably designated by the Company in
such written notice delivered to the Holder (or his or her personal
representative), but not later than 30 days following the date of such written
notice. Upon receipt of the purchase price of the Stock, the Holder (or his or
her personal representative) shall assign, transfer and deliver to the Company
the certificates for the shares purchased, duly endorsed, with all necessary
stock transfer tax stamps duly affixed, together with any and all documents
required to effectively transfer the shares to the Company. If the Company is
not legally permitted to acquire all of the shares offered or the Company
decides not to accept the offer from a Five Percent Holder, the Company shall so
notify the Holder (or the personal representative of the Holder). Section
10.2(a), 10.2(b) and 10.2(d) shall continue to apply to the Holder (or the
Holder's personal representative, subject to Section 10.2(e)).

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             (e) In the event of (1) the death of any Holder and the
non-exercise by the Company of the purchase rights granted in Section 10.2(c) or
10.2(d), (2) the death of a Holder described in Section 10.2(d) and the failure
of the Holder's personal representative to offer the Holder's shares to the
Company or (c) the Company's failure following exercise of such purchase rights,
through the fault of the Company alone, to consummate the purchase of its Stock,
any devisee, legatee or heir of such Holder (including any trustee) shall be
entitled to receive the Stock of the Holder subject to the Plan, but any such
recipient shall be subject to the transfer restrictions of Sections 10.2(a) and
10.2(b) and, in the event of such recipient's death, Section 10.2(c) and this
Section 10.2(e), as if such recipient were the "Holder" (with any reference to
Service of the Holder meaning Service of the original Holder hereunder). The
devisee, legatee or heir of such Holder (including any trustee) who receives the
Stock shall execute a written agreement with the Company agreeing to such
restrictions.

             (f) Each certificate representing shares of Stock issued pursuant
to the Plan shall have noted on the face of such certificate legends in
substantially the following forms and such other legends as the Company may deem
necessary or appropriate to assure compliance with the requirements of
applicable federal or state securities laws:

                 Notice is hereby given that the shares of stock represented by
             this certificate are held subject to, and may not be sold,
             transferred, assigned, pledged, gifted or otherwise disposed of
             except in accordance with, the terms, conditions and restrictions
             set forth in the 2000 Stock Option Plan of Power Efficiency
             Corporation (the "Plan"), a copy of which is on file at the office
             of Power Efficiency Corporation No such transaction shall be
             recognized as valid or effective unless there shall have been
             compliance with the terms and conditions of the Plan. By acceptance
             of this certificate, the holder (i) represents and warrants that
             the shares of stock represented hereby are being acquired for
             investment for the account of the holder and not with a view to the
             resale or other distribution thereof and (ii) acknowledges that
             violation of the provisions of the Plan is not adequately
             compensable by monetary damages and that, in addition to other
             relief, the terms thereof may be specifically enforced in an action
             for injunctive relief.

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                 In addition, the shares of stock represented by this
             certificate have not been registered under the Securities Act of
             1933, as amended, or any state or foreign securities law (the
             "Acts") and may not be transferred by the holder except (1)
             pursuant to a Registration Statement or other appropriate
             registration effective under the Acts, or (2) pursuant to an
             exemption from the registration requirements of the Acts and the
             delivery of a legal opinion satisfactory to counsel for Power
             Efficiency Corporation that registration is not required.

      The restrictions on transfer contained in this Section 10, and the
rights and obligations of the Company to purchase shares of Stock under this
Section 10, shall expire on such date, if any, as the Company shall become
subject to the reporting requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, provided, however, that such expiration shall
not affect the rights or obligations of the Company with respect to any offer to
purchase accepted by the Company prior to such date. The expiration of the
restrictions contained in this Section 10 shall not affect the restrictions to
which a holder of shares of Stock acquired under the Plan may be subject under
the Securities Act, any state or foreign securities law or other applicable law
or the right of the Company to require, as a condition to any transfer of its
Stock, an opinion of legal counsel satisfactory to the Company as to whether any
proposed transfer is in compliance with the registration or other requirements
of such laws.

IV. MISCELLANEOUS

Section 11.  Adjustment and Substitution of Shares

         If a dividend or other distribution shall be declared upon the Stock,
payable in shares of the Stock, the number of shares of Stock remaining
available for the issuance of Stock Options or Restricted Stock awards under the
Plan shall be adjusted by adding thereto the number of shares of Stock which
would have been distributable thereon if such shares had been outstanding on the
date fixed for determining the shareholders entitled to receive such stock
dividend or distribution.

         If the outstanding shares of the Stock shall be converted into or
exchangeable for a different number or kind of shares of stock or other
securities of the Company or another corporation or entity, whether through
reorganization, reclassification, recapitalization, stock split, combination of
shares, merger or consolidation, then there shall be substituted for each share
of Stock remaining available for the issuance of Stock Options or Restricted
Stock awards under the Plan, the number and kind of shares of stock or other
securities into which each outstanding share of the Stock shall be so converted
or for which each such share shall be exchangeable.

In the event of any such stock dividend or distribution, conversion or exchange
affecting the Stock (1) shares of Stock previously issued under the Plan shall
be treated in the same manner as other outstanding shares of Stock and, in the
case of shares of Stock Options or Restricted Stock which remain subject to
vesting conditions, shall continue to be subject to the provisions of Section
8(i) of the Plan for Restricted Stock and the provisions of the vesting
schedules for Stock Options and (2) unless otherwise determined by the
Committee, any securities of the Company or of another corporation or entity
distributed with respect to shares of Stock acquired under the Plan, or into
which shares of Stock acquired under the Plan shall be converted or for which
such shares of Stock shall be exchanged shall be subject to the provisions of
Section 10 of the Plan in the same manner as the shares of Stock with respect to
which they were distributed or received.

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Section 12.  [Intentionally Omitted]

Section 13.  [Intentionally Omitted]

Section 14.  Amendment and Termination.

     The Board may at any time, and from time to time, amend, alter, suspend
or discontinue any of the provisions of the Plan, but no amendment, alteration,
suspension or discontinuance shall be made which would impair the rights of a
Holder under any Agreement theretofore entered into hereunder, without his
consent.

Section 15.  Term of Plan.

        15.1 Effective Date. The Plan shall be effective as of September 2000
("Effective Date"). Any awards granted under the Plan prior to such approval
shall be effective when made (unless otherwise specified by the Committee at the
time of grant), but shall be conditioned upon, and subject to, such approval of
the Plan by the Company's stockholders and no awards shall vest or otherwise
become free of restrictions prior to such approval.

        15.2 Termination Date. Unless terminated by the Board, this Plan shall
continue to remain effective until such time no further awards may be granted
and all awards granted under the Plan are no longer outstanding. Notwithstanding
the foregoing, grants of Incentive Stock Options may only be made during the ten
year period following the Effective Date.

Section 16.  General Provisions.

        16.1 Written Agreements. Each award granted under the Plan shall be
confirmed by, and shall be subject to the terms of the Agreement executed by the
Company and the Holder. The Committee may terminate any award made under the
Plan if the Agreement relating thereto is not executed and returned to the
Company within sixty (60) days after the Agreement has been delivered to the
Holder for his or her execution.

        16.2 Unfunded Status of Plan. The Plan is intended to constitute an
"unfunded" plan for incentive and deferred compensation. With respect to any
payments not yet made to a Holder by the Company, nothing contained herein shall
give any such Holder any rights that are greater than those of a general
creditor of the Company.

        16.3 Employees.

             (a) Engaging in Competition With the Company. In the event an
employee Holder violates a Policy or Agreement of the Company or a subsidiary
pertaining to non-competition, solicitation and/or confidentiality, the
Committee, in its sole discretion may require such Holder to return to the
Company the economic value of any award which was realized or obtained (measured
at the date of exercise, vesting or payment) by such Holder at any time during
the period beginning on that date which is six months prior to the date of such
Holder's violation of the Company's Policy or Agreements.

             (b) Termination for Cause. The Committee may, in the event an
employee is terminated for cause, annul any award granted under this Plan to
such employee and, in such event, the Committee, in its sole discretion, may
require such Holder to return to the Company the economic value of any award
which was realized or obtained (measured at the date of exercise, vesting or
payment) by such Holder at any time during the period beginning on that date
which is six months prior to the date of such Holder's termination of employment
with the Company.

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             (c) No Right of Employment. Nothing contained in the Plan or in any
award hereunder shall be deemed to confer upon any employee of the Company or
any Subsidiary any right to continued employment with the Company or any
Subsidiary, nor shall it interfere in any way with the right of the Company or
any Subsidiary to terminate the employment of any of its employees at any time.

        16.4 Investment Representations. The Committee may require each person
acquiring shares of Stock pursuant to a Stock Option or other award under the
Plan to represent to and agree with the Company in writing that the Holder is
acquiring the shares for investment without a view to distribution thereof.

        16.5 Additional Incentive Arrangements. Nothing contained in the Plan
shall prevent the Board from adopting such other or additional incentive
arrangements as it may deem desirable, including, but not limited to, the
granting of stock options and the awarding of stock and cash otherwise than
under the Plan; and such arrangements may be either generally applicable or
applicable only in specific cases.

        16.6 Withholding Taxes. Not later than the date as of which an amount
first becomes includable in the gross income of the Holder for Federal income
tax purposes with respect to any Option or award of Restricted Stock under the
Plan, the Holder shall pay to the Company, or make arrangements satisfactory to
the Committee regarding the payment of, any Federal, state and local taxes of
any kind required by law to be withheld or paid with respect to such amount. If
permitted by the Committee, tax withholding or payment obligations may be
settled with Common Stock, including Common Stock that is part of the award that
gives rise to the withholding requirement. The obligations of the Company under
the Plan shall be conditional upon such payment or arrangements satisfactory to
the Company and the Company or the Holder's employer (if not the Company) shall,
to the extent permitted by law, have the right to deduct any such taxes from any
payment of any kind otherwise due to the Holder from the Company or any
Subsidiary.

        16.7 Governing Law. The Plan and all awards made and actions taken
thereunder shall be governed by and construed in accordance with the laws of the
State of New Jersey (without regard to choice of law provisions).

        16.8 Other Benefit Plans. Any award granted under the Plan shall not be
deemed compensation for purposes of computing benefits under any retirement plan
of the Company or any Subsidiary and shall not affect any benefits under any
other benefit plan no or subsequently in effect under which the availability or
amount of benefits is related to the level of compensation (unless required by
specific reference in any such other plan to awards under this Plan).

        16.9 Non-Transferability. Except as otherwise expressly provided in the
Plan, no right or benefit under the Plan may be alienated, sold, assigned,
hypothecated, pledged, exchanged, transferred, encumbranced or charged, and any
attempt to alienate, sell, assign, hypothecate, pledge, exchange, transfer,
encumber or charge the same shall be void.

        16.10 Applicable Laws. The obligations of the Company with respect to
all Stock Options and awards under the Plan shall be subject to (i) all
applicable laws, rules and regulations and such approvals by any governmental
agencies as may be required, including, without limitation, the effectiveness of
a registration statement under the Securities Act of 1933, as amended, and (ii)
the rules and regulations of any securities exchange on which the Stock may be
listed.

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        16.11 Conflicts. If any of the terms or provisions of the Plan conflict
with the requirements of (with respect to Incentive Stock Options), Section 422
of the Code, then such terms or provisions shall be deemed inoperative to the
extent they so conflict with the requirements of said Section 422 of the Code.
Additionally, if this Plan does not contain any provision required to be
included herein under Section 422 of the Code, such provision shall be deemed to
be incorporated herein with the same force and effect as if such provision had
been set out at length herein.

        16.12 Non-Registered Stock. The shares of Stock being distributed under
this Plan have not been registered under the Securities Act of 1933, as amended,
or any applicable state or foreign securities laws and the Company has no
obligation to any Holder to register the Stock or to assist Holder in obtaining
an exemption from the various registration requirements, or to list the Stock on
a national securities exchange or inter-dealer quotation system.

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