Exhibit 10.1.23


                              EMPLOYMENT AGREEMENT


     This Employment  Agreement (the "Agreement") entered into as of December 1,
2001,  by and between  Beacon Power  Corporation,  a Delaware  corporation  (the
"Company"), and F. William Capp (the "Executive")

     WHEREAS,  the Company  desires to retain the services of the  Executive and
the Executive wishes to be employed by the Company;

     NOW,  THEREFORE,  for good and  valuable  consideration,  the  receipt  and
sufficiency of which are hereby acknowledged, the parties agree as follows:

     Section  1.  Term.  The  Company  shall  employ  the  Executive  for a term
commencing  on December 1, 2001 and  continuing  for two years until  terminated
pursuant to Section 9. The period of the  Executive's  employment  hereunder  is
referred to as the "Employment Period."

     Section 2. Duties.  The Executive  shall serve the Company as President and
Chief Executive  Officer and shall have duties and  responsibilities  consistent
with such position.  Such duties and responsibilities  shall include, but not be
limited to, overall management of corporation.  The Executive will report to the
Board of Directors of the Company (the  "Board").  The Executive  will generally
perform his services at the  Company's  principal  offices,  which are currently
located in Wilmington, Massachusetts;  provided, however, that the Executive may
be required to travel from time to time in connection with Company business.

     Section 3. Full  Time;  Best  Efforts.  During  the  Employment  Period the
Executive shall use his best efforts to promote the interests of the Company and
shall devote his full business time and efforts to its business and affairs. The
Executive  shall not engage in any business  activity which could  reasonably be
expected to interfere with the performance of the Executive's  duties,  services
and responsibilities hereunder.

     Section 4. Compensation. The Executive shall be entitled to compensation as
follows:

     (a) Base Salary. During the Employment Period, the Executive will receive a
salary at an annual  gross rate of $220,000  (as the same may be  adjusted  from
time to time, the "Base Salary"),  which shall be payable in accordance with the
Company's regular payroll practices applicable to senior executive officers. The
Executive's Base Salary shall be reviewed by the Board at least annually and may
be increased (but not decreased) in the Board's  discretion,  depending upon the
performance of the Executive and of the Company.

     (b) Annual  Bonus.  The  Executive  shall be  eligible to receive an annual
bonus based on the achievement of individual and Company performance  objectives
determined  annually by the Compensation  Committee of the Board in consultation
with the Executive.  The amount of the annual bonus will be targeted at $180,000
per year.  The  Executive and the  Compensation  Committee of the Board will set
performance goals and targets for the Annual Bonus prior to January 1, 2002.

     (c) Withholding.  The Company may withhold from compensation payable to the
Executive all applicable federal, state, and local withholding taxes as required
by law.

     (d) Signing Bonus.  The Executive shall receive a one time signing bonus of
$90,000 for the  execution  and  delivery of this  Agreement to the Company (the
"Signing  Bonus").  Such Signing  Bonus shall be paid to the Executive as of the
first regular  payroll  payment date after the Executive  begins his  employment
with the Company.

     (e)  Relocation  Expense  Reimbursement.  In addition  to the  compensation
described  above,  the Company  shall  reimburse  Executive  for all  reasonable
out-of-pocket  relocation  expenses incurred by Executive to move from Minnesota
to Massachusetts including the standard realtor broker fee incurred by Executive
in selling  Executive's  primary residence in Minnesota.  The Company shall also
reimburse Executive for all reasonable  out-of-pocket  moving costs and expenses
incurred by Executive in moving his residence from  Minnesota to  Massachusetts.
In addition,  the Company shall  reimburse the  Executive for  reasonable  coach
class  travel  expenses  incurred  by  Executive  (or by the two  members of his
nuclear  family  members  if they  travel  to meet  him) for  traveling  between
Minnesota and  Massachusetts  from the start of the Executive's  employment with
the Company  through  June 1, 2002.  To the extent that any amounts  paid to you
that are intended to be reimbursement  for relocation  expenses  provided for in
this section are treated by the Internal  Revenue  Service or applicable  law as
income to you,  the Company  will pay you  additional  compensation  to make you
whole for all such related tax liabilities (i.e. a gross up).

     (f) Apartment  Rental.  The Company  shall  reimburse the Executive for the
reasonable  cost  of  an  apartment  within  a 25  mile  radius  of  Wilmington,
Massachusetts  to be used by the Executive  from the beginning of his employment
with the Company until the earlier of June 1, 2002 and the date Executive  moves
to a permanent residence in a monthly amount not to exceed $3,500.

         Section 5.  Benefits.

     (a) Generally.  The Executive  will be entitled to such fringe  benefits as
are generally  available to the Company's  executive  officers,  including group
health and dental  insurance  coverage,  group  long and  short-term  disability
insurance coverage,  and 401(k) plan and stock plan participation.  In the event
that any insurance policy is paying disability benefits to Executive, and if the
amount of the Executive's  monthly base salary that would be paid in the absence
of such  disability  is higher than the  monthly  insurance  payments,  then the
Company  shall pay  Executive an amount per month equal to such  excess,  for so
long as the Executive is employed with the Company.  No such difference shall be
payable after the Executive's employment is terminated.

     (b) Paid Vacation.  In addition to U.S. statutory  holidays,  the Executive
will be entitled to 20 business days of paid vacation per year,  accruing at the
rate of 1.66 days per month.  A maximum of ten unused  vacation days in any year
may be carried over and used in the next year,  subject to such  policies as the
Company may adopt from time to time with  respect  thereto.  If by December  31,
each year, the Executive has accrued in excess of ten unused  vacation days, the
Company shall pay (consistent with existing Company policy) the Executive a cash
amount (based on the Executive's  then current year's base salary) equal to such
excess up to a maximum not to exceed ten vacation days.

     (c) Life Insurance.  The Company will provide the Executive with group term
life insurance in an amount equal to no less than two times his Base Salary plus
$1,000,000  provided that the Executive  satisfies any evidence of  insurability
requirements  imposed by the applicable  insurance company underwriting the life
insurance policy.

     Section  6.  Expense  Reimbursement.  The  Executive  will be  entitled  to
reimbursement of all reasonable and necessary  business expenses incurred by the
Executive in the ordinary  course of business on behalf of the Company,  subject
to  presentation  of  appropriate  documentation  and  compliance  with policies
established by the Board.

     Section  7.   Non-Disclosure   and   Assignment  of  Invention   Agreement;
Indemnification  Agreement.  The  Executive  shall  execute  and  deliver to the
Company the Company's standard form of Invention and  Non-Disclosure  Agreement.
The Company and the Executive shall execute and deliver  simultaneously with the
execution of this Agreement an  Indemnification  Agreement in form and substance
satisfactory to both parties (the "Indemnification Agreement").

         Section 8.  Non-Competition and Non-Solicitation Covenants.

     (a) Non-competition. The Executive agrees that during the Employment Period
and for the longer of 18 months  thereafter and the period for which the Company
is providing  payment to the Executive under Section 9(b)(ii) of this Agreement,
he will not own, manage,  operate,  control, be employed by, provide services as
an independent contractor or consultant to, own any stock or other investment in
or debt of,  or  otherwise  be  connected  in any  manner  with  the  ownership,
management, operation or control of, any business or enterprise that at the time
of  termination,  competes  with the Company or conducts  business in a field in
respect of which the Board is making plans to enter.

     (b)  Non-solicitation.  The  Executive  agrees that  during the  Employment
Period and for two years  thereafter,  he will not attempt to persuade or induce
any employee of the Company to terminate his or her employment  with the Company
for any reason.

     (c)  Acknowledgments  by  Executive.  The Executive  acknowledges  that the
covenants set forth in this Section 8 are reasonable in scope and are no greater
than is necessary to protect the Company's  legitimate business  interests.  The
Executive further acknowledges that any breach by him of the covenants set forth
in this Section 8 would irreparably  injure the Company,  and that money damages
would not  adequately  compensate  the  Company for the  injuries  that it would
suffer.  The  parties  accordingly  agree  that in the  event of any  breach  or
threatened  breach by the  Executive of any of the  covenants  set forth in this
Section 8, the  Company may obtain,  from any court of  competent  jurisdiction,
both  preliminary  and  permanent  injunctive  relief  in order to  prevent  the
occurrence or  continuation  of such  injuries,  without being required to prove
actual  damages or post any bond or other  security.  Nothing in this  Agreement
shall  prohibit  the Company from  pursuing any other legal or equitable  remedy
that may be available to it in the event of the Executive's breach of any of the
covenants set forth in this Agreement.

         Section 9.  Termination.

     (a) Employment  Termination.  The  employment of the Executive  pursuant to
         this Agreement shall terminate upon the occurrence of any of the
         following:

         (i) At the election of the Company, for Cause, immediately upon written
         notice by the Company to the Executive. For purposes of this Agreement,
         "Cause" shall  be deemed to exist upon a  reasonable good faith finding
         by the Board that the Executive has:

            (1) committed an act constituting fraud, embezzlement or other
         felony, determined in the reasonable opinion of the Board acting in its
         sole discretion, or

            (2) materially breached his obligations under this  Agreement or the
         Inventions and Nondisclosure Agreement, and failed to  cure same within
         30 days after written notice thereof is given to him by the Company, or

            (3) materially breached the Company's material policies,  including
         but not limited  to  the  Company's policies regarding  insider trading
        and sexual harassment, or

            (4) engaged in willful misconduct, so long as the Board of Directors
         provided  Executive  with  a reasonable  opportunity for  Executive  to
         personally present his point of view to the Board.

               (ii) At the election of the Company, without Cause, upon at least
            90 days written notice by the Company to the Executive.

               (iii) The death of the Executive, or (in the discretion of the
            Company) the Disability of the Executive. For purposes of this
            Agreement, "Disability" shall be considered to exist:

                  (1) if the Executive fails to perform his normal duties for at
                 least 120 days, whether or not consecutive, during any 360-day
                 period, or

                  (2) if the Executive's insurance company has confirmed that
                 any disability insurance benefits are going to be paid by
                 reason of Executive's incapacitation, or

                 (3) if the Board, acting in its sole discretion but after
                 reasonable consultation with Executive, concludes that the
                 Executive suffers from a degree of physical or mental
                 incapacitation as a result of illness or accident which makes
                 it reasonably unlikely that the Executive will be able to
                 perform his normal duties for a period of 120 days. In reaching
                 this conclusion, the Board may consult third parties,including,
                 but not limited to, other employees, physicians, psychiatrists,
                 and counselors.

               (iv) At the election of the Executive,  for any reason,  upon at
            least 90 days prior written notice to the Company.

               (v) At the election of the Executive for Good Reason, provided
            that the Executive shall have given written notice to the Company
            within 30 days after he becomes aware of the occurrence of any event
            of Good Reason specifying such event, and such event shall be
            continued for a period of 30 days following such notice. For
            purposes of this Agreement, "Good Reason" means any of the
            following events:

                    (1) a material  diminution in the duties,  responsibilities,
               position or job title of the  Executive  without the  Executive's
               written consent, or

                    (2) a  material  breach by the  Company  of its  obligations
               under this Agreement or the Indemnification Agreement, or

                    (3) a change in the primary  location where the Executive is
               expected to perform his services  hereunder to a location that is
               more than 50 miles away from Wilmington, Massachusetts, or

                    (4) a Sale of the Business  (as defined  below) For purposes
               of  this  Agreement,  a  "Sale  of the  Business"  means  (A) the
               acquisition  by a person,  group,  or party of 50% or more of the
               outstanding  capital  stock of the  Company,  (B) a  change  of a
               majority  of the  members  of the  Board  when the  change of the
               various directors occurs at substantially the same time,  without
               the  approval or consent of the members of the Board  before such
               change,  (C)  the  acquisition  of  the  Company  by  means  of a
               reorganization, merger, consolidation, recapitalization, or asset
               sale,  unless  the  owners of the  capital  stock of the  Company
               before  such  transaction  continue  to own more  than 50% of the
               capital  stock  of  the   acquiring  or   succeeding   entity  in
               substantially  the same  proportions,  or (D) the  approval  of a
               liquidation or dissolution of the Company.

                    (5) the failure of the  Executive to be elected or appointed
               to the Board, or his removal from the Board without cause.

         (b)  Effect of Termination.

     (i)  Termination  Pursuant to Section  9(a)(i)  relating to termination for
cause or Section  9(a)(iv)  relating to termination at the election of Executive
for any reason. In the event the Executive's  employment is terminated  pursuant
to Section  9(a)(i) or Section  9(a)iv),  the Company shall pay to the Executive
his accrued Base Salary through the last date of his  employment  hereunder (the
"Termination  Date") and shall continue to provide to the Executive the benefits
described in Section 5 (the "Benefits")  through the Termination Date, but shall
have no further responsibility for any compensation or benefits to the Executive
for any time period subsequent to the Termination Date.

     (ii)  Termination  pursuant to Section  9(a)(ii)  relating  to  termination
without cause. In the event the Executive's employment is terminated pursuant to
Section 9(a)(ii), the Company shall:

                           (1) Within five business days after the Termination
         Date pay to the Executive a cash amount equal to his then monthly Base
         Salary multiplied by the number of months remaining in the Employment
         Period, but in no event less than 12, payable in equal monthly
         installments in accordance with the Company's regular payroll
         practices.

                           (2) Continue to provide the benefits described in
         Sections 5(a) and 5(c) to the Executive until the first anniversary of
         the Termination Date.

                           (3) Within five business days after the Termination
         Date, pay the Executive an amount equal to his bonus for the prior year
         (including the Signing Bonus for terminations prior to the end of the
         first year) multiplied by a fraction, the numerator of which is the
         number of full calendar months that have elapsed in the then current
         calendar year prior to the Termination Date, and the denominator of
         which is 12. In no event, shall payment under this Section 9(b)(ii)(3)
         exceed 80% of the Executive's base salary for the prior year.

                           (4) Amend the vesting provisions of any stock option
         agreement with the Executive so that in the event of a termination
         covered by this paragraph, the Executive's then unvested options
         (Executive's vested options remained vested and subject to the
         provisions of the applicable option agreements and plans) would vest as
         of the Termination Date according to the following schedule:

     If Termination occurs:                    Number of unvested option
                                                   shares accelerated
   o Within first 12 months of employment                  150,000
   o After 12 full months of employment                    200,000

               (iii)  Termination   pursuant  to  Section  9(a)(v)  relating  to
          termination at the election of Executive for Good Reason. In the event
          the Executive's  employment is terminated pursuant to Section 9(a)(v),
          the Company shall:

                    (1) Within five business days after the Termination Date pay
               to the  Executive a cash amount  equal to his then  monthly  Base
               Salary  multiplied  by the  number  of  months  remaining  in the
               Employment Period, but in no event less than 12, payable in equal
               monthly  installments  in accordance  with the Company's  regular
               payroll practices.

                    (2) Continue to provide the  benefits  described in Sections
               5(a) and 5(c) to the Executive until the first anniversary of the
               Termination Date.

                    (3) Within five  business days after the  Termination  Date,
               pay the Executive an amount equal to his bonus for the prior year
               (including the Signing Bonus for terminations prior to the end of
               the first year) multiplied by a fraction,  the numerator of which
               is the number of full  calendar  months that have  elapsed in the
               then current calendar year prior to the Termination Date, and the
               denominator of which is 12. In no event, shall payment under this
               Section 9(b)(ii)(3) exceed 80% of the Executive's base salary for
               the prior year.

                    (4)  Amend  the  vesting  provisions  of  any  stock  option
               agreement   with  the  Executive  so  that  in  the  event  of  a
               termination  covered  by this  paragraph,  the  Executive's  then
               unvested options  (Executive's vested options remained vested and
               subject to the provisions of the applicable option agreements and
               plans)  would vest as of the  Termination  Date  according to the
               following schedule:

 If Termination occurs:                                Percentage acceleration
                                                         of unvested options
  o Within first six months of employment                          0%
  o Within seven and 12 months of employment                      33%
  o After 12 full months of employment                            66%


                  (iv) Termination pursuant to Section 9(a)(iii) relating to the
death or disability of the Executive. In the event the Executive's employment is
terminated pursuant to Section 9(a)(iii), the Company shall:

                           (1) Continue to pay to Executive or his estate, as
         the case may be, an amount equal to his then current Base Salary for
         the three-month period following the Termination Date.

                           (2) Continue for the 12-month period following the
         Termination Date all health and dental insurance benefits the Executive
         was entitled to at the Termination Date.

                           (3) Amend the vesting provisions of any stock option
         agreement with the Executive so that in the event of a termination
         covered by this paragraph, the Executive's then unvested options
         (Executive's vested options remained vested and subject to the
         provisions of the applicable option agreements and plans) would vest as
         of the Termination Date according to the following schedule:

 If Termination occurs:                              Number of unvested option
                                                         shares accelerated
  o Within first 12 months of employment                        150,000
  o After 12 full months of employment                          200,000

     (v) Golden Parachute  Payment Excise Tax Protection.  In the event that the
excise tax imposed by Section  4999 of the  Internal  Revenue  Code of 1986,  as
amended  (the  "Code"),  (or any  successor  penalty or excise tax  subsequently
imposed by law) applies to any payments or benefits paid or conferred under this
Agreement,  an  additional  amount shall be paid by the Company to the Executive
such that the  aggregate  after-tax  amount  that he shall  receive  under  this
Agreement, including this Section 9(iv), shall have a present value equal to the
aggregate  after-tax  amount that he would have  received  and retained had such
excise tax not applied to him. For this purpose,  the Executive shall be assumed
to be subject to tax in each year related to the computation at the then maximum
applicable  combined  Federal  and  Massachusetts   income  tax  rate,  and  the
determination of the present value payments to him shall be made consistent with
the principles of Section 280G of the Code.

     (vi)   Survival.   The  provisions  of  Sections  6-19  shall  survive  the
termination of the Executive's employment in accordance with their terms.

     (c)  Continuation/Nonrenewal.  Unless  this  Agreement  has been  otherwise
terminated  before the end of its initial  duration  described in Section 1, the
Company and the Executive will discuss possible  continuation of his employment,
commencing  six months  before the end of its initial  duration.  If the Company
informs  the  Executive  in  writing  that it does  not  wish  to  continue  his
employment, and if in fact the Executive ceases to be an employee of the Company
at the end of such initial  duration,  then for twelve months after such initial
duration,  the  Company  shall pay  Executive  a monthly  amount (on its regular
payroll date) equal to his last prevailing monthly base salary (plus one/twelfth
of his  cash  bonus  for the  most  recent  fiscal  year of the  Company),  less
applicable withholding taxes.

     Section  10.  No  Conflicting  Agreements.  The  Executive  represents  and
warrants  to  the  Company   that  he  is  not  a  party  to  or  bound  by  any
confidentiality,   non-competition,   non-solicitation  or  other  agreement  or
restriction  that could  conflict with or be violated by the  performance of his
duties for the Company.

     Section 11. No Disparagement. Each party agrees that at all times following
the termination of the Executive's  employment  hereunder,  such party shall not
make or cause to be made,  directly or  indirectly,  any statements to any third
party  that  disparage  or  denigrate  the  other  party  or, in the case of the
Company, any of its current or former directors,  officers or employees,  unless
required by law.

     Section 12.  Enforceability,  etc. This  Agreement  shall be interpreted in
such a manner as to be  effective  and valid under  applicable  law,  but if any
provision  hereof  shall be  prohibited  or  invalid  under any such  law,  such
provision shall be ineffective to the extent of such  prohibition or invalidity,
without  invalidating or nullifying the remainder of such provision or any other
provisions of this Agreement.  If any one or more of the provisions contained in
this  Agreement  shall  for any  reason  be held to be  excessively  broad as to
duration,  geographical scope,  activity,  or subject,  such provisions shall be
construed  by limiting and  reducing it so as to be  enforceable  to the maximum
extent permitted by applicable law.

     Section 13. Notices.  Any notice or other  communication  given pursuant to
this Agreement  shall be in writing and shall be personally  delivered,  sent by
nationally  recognized  overnight  courier or express  mail,  or mailed by first
class certified or registered mail, postage prepaid, return receipt requested as
follows:

      (a) If to the Executive:                (b) If to the Company:
      F. William Capp                          Beacon Power Corporation
      5908 Lee Valley Road                     234 Ballardvale Street
      Edina, Minn  55439                       Wilmington, MA  01887
      billcapp@aol.com                         Attn:  Compensation Committee

or to such other address as a party shall have designated by notice to the other
party.

     Section  14.  Governing  Law.  This  Agreement  shall  be  governed  by and
construed  in  accordance  with  the  internal  laws  of  the   Commonwealth  of
Massachusetts  without giving effect to any choice or conflict of laws provision
or rule that would cause the application of the domestic substantive laws of any
other jurisdiction.

     Section  15.  Amendments  and  Waivers.  No  amendment  or  waiver  of this
Agreement or any  provision  hereof shall be binding upon the party against whom
enforcement  of such  amendment or waiver is sought unless it is made in writing
and signed by or on behalf of such party. The waiver by either party of a breach
of any  provision of this  Agreement by the other party shall not operate and be
construed  as a waiver or a  continuing  waiver by that party of the same or any
subsequent breach of any provision of this Agreement by the other party.

     Section 16. Binding Effect. This Agreement shall be binding on and inure to
the benefit of the parties  hereto and their  respective  heirs,  executors  and
administrators,  successors  and assigns,  except that it may not be assigned by
the  Company  without the  Executive's  consent,  provided  that the Company may
assign  this  Agreement  to an entity  that  acquires  substantially  all of the
Company's  assets  by means of an asset  sale,  merger  or  otherwise,  provided
further  that such entity  shall agree in writing to assume and be bound by this
Agreement.  This Agreement is personal to the Executive and is not assignable by
him.

     Section 17. Entire  Agreement.  This  Agreement  constitutes  the final and
entire  agreement of the parties with respect to the matters  covered hereby and
replaces and supersedes all other agreements and understandings relating hereto.

     Section 18. Pronouns.  Whenever the context may require,  any pronouns used
in this Agreement shall include the corresponding masculine,  feminine or neuter
forms, and the singular form of nouns and pronouns shall include the plural, and
vice versa.

     Section 19.  Counterparts.  This Agreement may be executed in any number of
counterparts,  and with  counterpart  signature  pages,  each of which  shall be
deemed an original,  but all of which together shall constitute one and the same
instrument.

     IN WITNESS WHEREOF, this Agreement has been executed as a sealed instrument
as of the date first above written.

EXECUTIVE                                     BEACON POWER CORPORATION

_______________________                      By: _____________________________
F. William Capp                                  Signature
                                                 Print name, title