MILLENNIUM CELL INC
10-Q, EX-10.1, 2000-11-01
MISCELLANEOUS ELECTRICAL MACHINERY, EQUIPMENT & SUPPLIES
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                                                                    EXHIBIT 10.1

                                   AGREEMENT

This agreement dated September 6, 2000 between Norman R. "Chip" Harpster, Jr.
(Executive) and Millennium Cell Inc. (Company). The following are the terms of
this agreement.

1.  Title - The Executive shall be the Vice President, Finance and
    Administration & Chief Financial Officer of the Company reporting directly
    to the President and Chief Executive Officer.

2.  Base Salary - Base salary shall be at $200,000 (payable on a semi-monthly
    basis) per annum, beginning October 9, 2000. The Executive will be eligible
    for salary adjustments as approved by the Compensation Committee of the
    Board of Directors.

3.  Bonus - The Executive will be eligible for a target bonus of 50% of base
    salary. Executive will be eligible for bonus adjustments as approved by the
    Compensation Committee of the Board of Directors.

4.  Equity/Stock Options - Upon joining the company, the Executive shall
    receive 212,500 stock options at a strike price of $2.90/share. The Options
    will have a term of a minimum of 5 years and a maximum of 10 years. The
    exact term shall be determined by the Company and shall apply to all other
    employees as well according to the Omnibus Stock Option Plan to be
    approved by the Board of Directors. In addition, the Company anticipates
    that the Executive would be a participant in future options granted by this
    Plan.

    The Vesting Schedule of the 212,500 stock options is based on the
    anniversary date of the Executive's first day of employment, October 9,
    2000, in accordance with the following schedule:

    Year 1 - 1/3 (33.33%)
    Year 2 - 1/3 (33.33%)
    Year 3 - 1/3 (33.34%)

5.  Termination - If the Executive is terminated by the Company other than for
    "Cause" (Cause is defined as fraud, embezzlement, or conviction of a crime
    involving moral turpitude), then the Executive's Options shall vest in
    accordance with the terms of the Company's Stock Option Plan.

    There shall be Severance of one times the then base salary plus one year
    bonus (bonus of greater of 50% of then base salary or the actual bonus paid
    for the full year preceding the year of termination. The severance shall be
    paid in four (4) quarterly/equal increments with no duty to mitigate; nor
    shall this be a right of set-off.

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    In the event of a "Change of Control," (40% or more in the change of stock
    ownership in the company or the sale of substantially all of the company's
    assets), all stock options and other equity will vest immediately and the
    Executive shall be entitled to the Severance stated above.

6.  Tax Gross-Up - The Executive shall be grossed-up for any excise taxes under
    Section 280(g) - Parachute Payments of any successor provision. The intent
    of this gross-up is to put the Executive in the same after tax position as
    if the excise tax was not imposed. The Company's accounting firm shall
    compute the Excise Tax. If the Company's accountant's determination of the
    Excise Taxes turns out to be inconsistent with the IRS, then the Executive
    shall notify the Company on the IRS's position. The Company shall defend
    its position and increase the gross-up amount to the extent the IRS
    prevails in its position; plus reimburse the Executive for any interest
    and penalties associated with the accountant's computations.

7.  Death or Disability - All the Executive's Stock Options shall vest
    immediately in the event of death or disability and the Executive or his
    personal representative shall have 12 months from termination of employment
    to exercise his Stock Options. Disability shall be determined by an
    independent physician selected jointly by the Company and the Executive's
    personal representative, to determine that by reason of mental or physical
    illness the Executive would be able to resume his duties in the
    foreseeable future.

8.  Non-Compete/Non-Solicition - During the employment and for a period of 12
    months following termination of employment, the Executive is not permitted
    to engage directly or indirectly in any business that generates hydrogen
    energy for the use in conventional engines, fuel cells, or batteries; nor
    shall the Executive for the same period, directly or indirectly endeavor
    to entice away any employees of the Company.

Agreed and Accepted:               Company: /s/ Stephen S. Tang
                                            ------------------------
                                                Stephen S. Tang

                                            /s/ Norman R. Harpster
                                            ------------------------
                                                Norman R. Harpster


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