STOCK OPTION AGREEMENT

EXHIBIT 10.6

Option No.

PACIFIC FUEL CELL CORP.
STOCK OPTION AGREEMENT

Type of Option (check one):       o Incentive       o Nonqualified

This Stock Option Agreement (the “Agreement”) is entered into as of                 , by and between Pacific Fuel Cell Corp., a Nevada corporation (the “Company”) and                      (the “Optionee”) pursuant to the Company’s 2008 Stock Incentive Plan (the “Plan”).

The Company hereby grants to Optionee an option (the “Option”) to purchase all or any portion of a total of                 (         ) shares (the “Shares”) of the Common Stock of the Company at a purchase price of                 ($         ) per share (the “Exercise Price”), subject to the terms and conditions set forth herein and the provisions of the Plan. If the box marked “Incentive” above is checked, then this Option is intended to qualify as an “incentive stock option” as defined in Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”). If this Option fails in whole or in part to qualify as an incentive stock option, or if the box marked “Nonqualified” is checked, then this Option shall to that extent constitute a nonqualified stock option.

2.1 Vesting Schedule.

The right to exercise this Option shall vest in installments, and this Option shall be exercisable from time to time in whole or in part as to any vested installment. Vesting will be measured from the date of this Agreement (the “Vesting Measurement Date”). No additional Shares shall vest after the date of termination of Optionee’s “Continuous Service” (the “Service Termination Date”). As used herein, the term “Continuous Service” has the meaning given in the Plan. Except as may otherwise be provided in this Agreement, the vesting schedule is as follows:

On or After:		Option Exercisable As To:
First anniversary of Vesting Measurement Date:		50 % of the Shares
Last day of each calendar month after such first anniversary		4.17 % of the Shares

The vesting schedule of this Option would result, assuming the Service Termination Date shall not have theretofore occurred, in this Option being exercisable as to One Hundred Percent (100%) of the Shares covered by this Option at the end of the calendar month in which the second anniversary of the Vesting Measurement Date falls.

2.2 Change in Control.

In the event of a Change in Control (as defined in the Plan), the Administrator in its discretion may take one or more of the following actions with respect to this Option (whether or not then exercisable or vested):

(i)

provide for the purchase or exchange of this Option for an amount of cash or other property having a value equal to the difference, or spread, between

	(x)		the value of the cash or other property that the Optionee would have received pursuant to such Change in Control transaction in exchange for any shares issuable upon exercise of this Option, in the amount that the Optionee would have received had the then exercisable portion, if any, of this Option been exercised immediately prior to such Change in Control transaction, and
	(y)		the Exercise Price,

(ii)

adjust the terms of this Option in a manner determined by the Administrator to reflect the Change in Control,

	(iii)		cause this Option to be assumed, or new rights substituted therefor, by another entity, through the continuance of the Plan and the assumption of this Option, or the substitution for this Option of a new option of comparable value covering shares of a successor or parent corporation, with appropriate adjustments as to the number and kind of shares and Exercise Price, in which event the Plan and this Option, or the new option substituted therefor, shall continue in the manner and under the terms so provided,
	(iv)		cancel this Option if this Option is deemed to have no net value on the basis described in paragraph 2.2(i) above or if the Option is not then exercisable by virtue of this Agreement, as then in effect, or
	(v)		make such other provision as the Administrator may consider equitable.

If the Administrator does not take any of the forgoing actions, this Option shall terminate upon the consummation of the Change in Control and the Administrator shall cause written notice of the proposed transaction to be given to the Optionee not less than fifteen (15) days prior to the anticipated effective date of the proposed transaction.

Optionee’s right to exercise any vested portion of this Option shall terminate upon the first to occur of the following:

3.1 Maximum Term.

the expiration of five (5) years from the date of this Agreement;

3.2 Involuntary Termination without Cause.

the expiration of three (3) months from the Service Termination Date if such termination occurs for any reason other than permanent disability, death, voluntary resignation; or for “cause;” provided, however, that if Optionee dies during such three-month period the provisions of subsection 3.5 below shall apply;

3.3 Voluntary Resignation.

the expiration of one (1) month from the Service Termination Date if such termination occurs due to voluntary resignation; provided, however, that if Optionee dies during such one-month period the provisions of subsection 3.5 below shall apply;

3.4 Permanent Disability.

the expiration of one (1) year from the Service Termination Date if such termination is due to permanent disability of the Optionee (as defined in Section 22(e)(3) of the Code);

3.5 Death.

the expiration of one (1) year from the Service Termination Date if such termination is due to Optionee’s death or if death occurs during either the three-month or one-month period following the Service Termination Date pursuant to subsection 3.2 or subsection 3.3 above, as the case may be;

3.6 Change in Control.

upon the consummation of a “Change in Control” (as defined in the Plan), unless otherwise provided by the Administrator pursuant to Section 2.2 above; and

3.7 Termination for Cause.

upon termination of Optionee’s Continuous Service by the Company for “cause,” defined herein to mean any willful breach of duty by the Optionee in the course of his or her employment or provision of services to the Company, or the Optionee’s habitual neglect of his or her duty or continued incapacity to perform it; at which time this Option, whether or not exercisable on the Service Termination Date, shall terminate immediately and become void and of no effect.

3.8 Breach and Non-Competition.

Notwithstanding the foregoing, the Administrator may cancel, rescind, suspend, withhold or otherwise limit or restrict any Options or Common Stock, or the exercise or purchase of any Options or Common Stock, at any time if the Optionee engages in any “Adverse Activity.” For purposes of this Section 3.8, “Adverse Activity” shall include: (i) the rendering of services for any organization or engaging directly or indirectly in any business which is or becomes competitive with the Company, or which organization or business, or the rendering of services to such organization or business, is or becomes otherwise prejudicial to or in conflict with the interests of the Company; (ii) the disclosure to anyone outside the Company, or the use in other than the Company’s business, without prior written authorization from the Company, of any confidential information or material relating to the business of the Company, acquired by Optionee either during or after employment with the Company; (iii) the failure or refusal to disclose promptly and to assign to the Company, all right, title and interest in any invention or idea, patentable or not, made or conceived by Optionee during employment by the Company, relating in any manner to the actual or anticipated business, research or development work of the Company; (iv) activity that results in termination of Optionee’s Continuous Service for “cause” as defined in Section 3.7 of this Agreement; (v) any material violation of any terms or provisions of this Agreement; or (vi) any attempt directly or indirectly to induce any employee of the Company to be employed or perform services elsewhere or any attempt directly or indirectly to solicit the trade or business of any current or prospective customer, supplier or partner of the Company. In the event Optionee engages in Adverse Activity prior to, or during the six (6) months after, any exercise, payment or delivery pursuant to an Option Agreement, such exercise, payment or delivery may be rescinded at the sole election of the Company within two years thereafter. In the event of any such rescission, the Optionee shall pay to the Company the amount of any gain realized or payment received as a result of the disposition of Shares or Options, in such manner and on such terms and conditions as may be required, and the Company shall be entitled to set-off against the amount of any such gain any amount owed to the Optionee by the Company.

4.1 Persons Permitted to Exercise Option.

This Option may be exercised in whole or in part only by the Optionee or by a Successor designated in Section 5 below.

4.2 Exercise as to Vested Portion of Option.

This Option may be exercised only on or after the vesting of any portion of this Option in accordance with Section 2 above, and only as to the cumulative amount vested at the date of exercise, except pursuant to provisions made, if any, by the Administrator pursuant to subsection 4.5 below.

4.3 No Exercise after Termination.

This Option may not be exercised at the time of, or any time after, termination of this Option in accordance with Section 3 above.

4.4 Mechanics of Exercise.

Exercise of this Option shall be made by delivery of the following to the Company at its principal executive offices:

	(a)		a written notice of exercise which identifies this Agreement and states the number of Shares then being purchased (but no fractional Shares may be purchased);
	(b)		a check or cash in the amount of the Exercise Price (or payment of the Exercise Price in such other form of lawful consideration as the Administrator may approve from time to time under the provisions of the Plan);
	(c)		a check or cash in the amount reasonably requested by the Company to satisfy the Company’s withholding obligations under federal, state or other applicable tax laws with respect to the taxable income, if any, recognized by the Optionee in connection with the exercise of this Option (unless the Company and Optionee shall have made other arrangements for deductions or withholding from Optionee’s wages, bonus or other compensation payable to Optionee, or by the withholding of Shares issuable upon exercise of this Option or the delivery of Shares owned by the Optionee in accordance with the provisions of the Plan, provided such arrangements satisfy the requirements of applicable tax laws); and
	(d)		a letter, if requested by the Company, in such form and substance as the Company may require, setting forth the investment intent of the Optionee, or of a Successor designated in Section 5, as the case may be.

A check shall be considered payment only when honored by the bank against which it is drawn upon first presentment.

4.5 Exercise Prior to Vesting; Purchase of Restricted Stock.

The Administrator also has discretion, but not the obligation, to permit this Option to be exer