<PAGE>
                                                                  EXHIBIT 10.108

                         ENVIRONMENTAL POWER CORPORATION
                                 RETIREMENT PLAN

                               ------------------

                                EGTRRA AMENDMENT

                               -------------------

         Pursuant to a resolution of its board of directors, Environmental Power
Corporation, a Delaware corporation, hereby adopts this EGTRRA Amendment to the
Environmental Power Corporation Retirement Plan, effective January 1, 2002,
except as otherwise provided herein:

         1.   Article 2 is hereby amended by deleting Section 2.1 and
substituting therefor the following, effective January 1, 2003:

         "2.1(a) (i) `Accrued Benefit' as of any date before January 1, 2003,
means the benefit to which a Participant would be entitled at Normal Retirement
Date under Section 4.1, based on the Participant's Average Monthly Compensation
as of the date when the determination is being made and the total years of
Credited Service that the Participant would have at Normal Retirement Date,
multiplied by a fraction not greater than 1, the numerator of which is the
Participant's years of Credited Service as of the date of determination and the
denominator of which is the greater of 25 or the total years of Credited Service
the Participant would have at Normal Retirement Date, treating all years after
the date as of which the determination is made as years of Credited Service.

              (ii) Accrued Benefit as of any date after December 31, 2002, means
the sum of (A) the benefit determined under paragraph (i) as of December 31,
2002, and (B) the product of 1.5% of the Participant's Average Monthly
Compensation and the Participant's years of Credited Service completed after
December 31, 2002."

         2.   Article 2 is hereby amended by deleting Section 2.7 and
substituting therefor the following, effective December 31, 2002:

         "2.7 `Applicable Mortality Table' means the 1983 Group Annuity
Mortality Table, with margin, blended 50% male and 50% female, or such other
mortality table as may be prescribed by the Commissioner of Internal Revenue.
For any distribution with an Annuity Starting Date on or after December 31,
2002, Applicable Mortality Table means the table prescribed in Revenue Ruling
2001-62."

<PAGE>

         3.    Article 2 is hereby amended by deleting Section 2.15(c) and
substituting therefor the following:

               "(c) The Compensation of a Participant taken into account under
the Plan shall not exceed $200,000, as adjusted under Section 401(a)(17) of the
Code. In the case of a Plan Year of less than 12 months, the dollar limitation
under this subsection shall be the amount determined by multiplying the
applicable amount by a fraction, the numerator of which is the number of months
in the Plan Year and the denominator of which is 12. In the case of a
Participant who commences or ceases participation in the Plan on a date other
than the first or last day of the Plan Year, no adjustment shall be made to the
applicable dollar limitation.

               (d) If Compensation for any prior year is taken into account in
determining a Participant's benefit accrual for a Plan Year, such Compensation
shall be subject to the limit on Compensation in effect for such prior year,
except that benefit accruals in Plan Years beginning after 2001 may take into
account Compensation received by a Participant in a Plan Year beginning after
1999 and before 2002 that does not exceed $200,000."

         4.    Article 2 is hereby amended by adding thereto the following new
Section 2.17 and renumbering the subsequent sections of Article 2, effective
January 1, 2003:

         "2.17 `Early Retirement Date' means the first day of any month before
Normal Retirement Age, as specified by the Participant, on which a Participant
has completed 20 Years of Service, attained age 62 and separated from service
with the Affiliated Employers."

         5.    Article 2 is hereby amended by deleting Section 2.20 (as
renumbered) and substituting therefor the following, effective January 1, 2003:

         "2.20 `Employer' means Environmental Power Corporation, a Delaware
corporation, and any sole proprietorship, partnership or corporation that
succeeds to the business of and assumes the obligations of the Employer. When
used in relation to an Employee of a Participating Employer, such term includes
the Participating Employer."

         6.    Article 2 is hereby amended by deleting Section 2.29 (as
renumbered) and substituting therefor the following, effective January 1, 2003:

         "2.29 `Normal Retirement Age' means, with respect to the portion of a
Participant's retirement benefit payable under Section 4.1(a)(i), the later of
the Participant's 62nd birthday or the fifth anniversary of the date on which he
became a Participant; and, with respect to the portion of a Participant's
retirement benefit payable under Section 4.1(a)(ii), the later of the
Participant's 65th birthday or the fifth anniversary of the date on which he
became a Participant."

                                       2

<PAGE>

         7.    Article 2 is hereby amended by deleting Section 2.45 (as
renumbered) and substituting therefor the following, effective January 1, 2003:

         "2.45 `Year of Eligibility Service' means the 12-month period
commencing on an Employee's Employment Commencement Date during which the
Employee is credited with at least 1,000 Hours of Service and thereafter a Plan
Year beginning after the Employee's Employment Commencement Date during which
the Employee is credited with at least 1,000 Hours of Service."

         8.    Article 3 is hereby amended by deleting Section 3.1 and
substituting therefor the following, effective January 1, 2003:

         "3.1  Requirements to Become a Participant.

               (a)  Subject to Section 3.3, each Eligible Employee whose
Employment Commencement Date occurs before 2002 shall become a Participant on
the January 1 or July 1 coinciding with or next following the date on which he
has completed one year of Eligibility Service and attained age 21.

               (b)  Subject to Section 3.3, each Eligible Employee whose
Employment Commencement Date occurs after 2002 shall become a Participant on the
January 1 or July 1 coinciding with or next following the date on which he has
completed two Years of Eligibility Service and attained age 21.

               (c)  An Employee who incurs a Break in Service prior to becoming
eligible to participate shall be considered a new Employee for purposes of this
section."

         9.    Article 4 is hereby amended by deleting Section 4.1 and
substituting therefor the following, effective January 1, 2003:

         "4.1  Normal Retirement. (a) Upon attaining Normal Retirement Age, a
Participant shall be 100% vested in his Accrued Benefit. A Participant who
retires on his Normal Retirement Date shall be entitled to receive a monthly
retirement benefit, commencing as of his Normal Retirement Date and continuing
for his remaining lifetime, equal to the sum of:

                    (i)  55% of his Average Monthly Compensation as of December
31, 2002, multiplied by a fraction, the numerator of which is the number of
years of Credited Service, not in excess of 20, that the Participant has
performed as of such date and the denominator of which is 20; and

                    (ii) 1.5% of his Average Monthly Compensation multiplied by
the Participant's years of Credited Service completed after December 31, 2002.

               (b)  In no event shall a Participant's Accrued Benefit as of
his Normal Retirement Date be less than his Accrued Benefit as of December 31,
2002."

                                        3

<PAGE>

         10.   Article 4 is hereby amended by adding a new Section 4.2 and
renumbering the subsequent sections of Article 4, effective January 1, 2003:

         "4.2  Early Retirement. (a) Upon attaining his or her Early Retirement
Date, a Participant or Former Participant may elect to receive early retirement
benefits commencing as of his or her Early Retirement Date. An election under
this section shall be filed with the Administrator in writing not more than 90
days before the commencement of benefit payments.

               (b) The benefit payable under this section at an individual's
Annuity Starting Date shall be a monthly retirement benefit, commencing as of
his Early Retirement Date and continuing for his remaining lifetime, equal to
the individual's Accrued Benefit, reduced by 5/9% for each month by which the
individual's Early Retirement Date precedes his Normal Retirement Date."

         11.   Article 4 is hereby amended by deleting Section 4.4 (as
renumbered) and substituting therefor the following, effective January 1, 2003:

         "4.4  Deferred Retirement Benefit. (a) Except as provided in Section
6.1(b), if a Participant continues in the service of the Employer after
attaining Normal Retirement Date, payment of retirement benefits shall not
commence until the Participant becomes a Retired Participant.

               (b) The retirement benefit payable to a Participant described in
subsection (a) as of his Late Retirement Date shall be the greater of (i) the
Participant's Accrued Benefit as of the date on which the Participant actually
retired based on his Average Monthly Compensation and Credited Service as of
such date, or (ii) the Actuarial Equivalent, reflecting the deferred payment, of
the Participant's Accrued Benefit determined as of Normal Retirement Date."

         12.   Article 5 is hereby amended by deleting subsections (a), (d) and
(e) of Section 5.2 and substituting therefor the following:

               "(a) (i)  The maximum annual retirement benefit payable to any
Participant for any limitation year, under this Plan and any other qualified
defined benefit retirement plan maintained by the Affiliated Employers, shall
not exceed the lesser of:

                         (A)  100% of the Participant's average earnings for the
               three consecutive highest paid years, or

                         (B)  $160,000, adjusted in accordance with Section 5.4.

                    (ii) The limitations set forth in paragraph (i) apply to an
annual retirement benefit expressed as a single life annuity. For purposes of
determining whether a benefit not subject to Section 417(e)(3) of the Code
complies with paragraph (i), such benefit shall be converted into a single life
annuity that is the greater of the Actuarial Equivalent of such benefit computed
under Section 2.2(a) and the Actuarial Equivalent computed using an interest
rate of 5% and the mortality table described in Section 2.2(b). For purposes of


                                       4

<PAGE>

determining whether a benefit subject to Section 417(e)(3) of the Code complies
with paragraph (i), such benefit shall be converted into a single life annuity
that is the greater of the Actuarial Equivalent of such benefit computed under
Section 2.2(a) and the Actuarial Equivalent computed using the interest rate and
mortality table described in Section 2.2(b).

                (d) If payment of an annual retirement benefit begins before a
Participant attains age 62, the dollar limitation set forth in subsection
(a)(i)(B) shall be reduced to the Actuarial Equivalent of such dollar limitation
at age 62. Actuarial equivalence shall be determined in accordance with
subsection (f).

                (e) If payment of an annual retirement benefit begins after a
Participant attains age 65, the dollar limitation set forth in subsection
(a)(i)(B) shall be increased to the Actuarial Equivalent of an annual benefit
commencing at age 65 equal to such dollar limitation. Actuarial equivalence
shall be determined in accordance with subsection (f)."

          13.   Article 6 is hereby amended by deleting Section 6.1(b)(iv) and
substituting therefor the following:

          "(iv) For purposes of this subsection, `5-percent owner' means an
individual who, at any time during the Plan Year ending in the calendar year in
which the individual attains age 70-1/2, is described in Section 16.1(e)(i)(B)."

          14.   Article 6 is hereby amended by deleting Section 6.6 and
substituting therefor the following, effective January 1, 2003:

          "6.6      Code Section 401(a)(9) Requirements. (a) Notwithstanding any
other provision of the Plan, distributions under the Plan shall be made in
accordance with this section and Section 401(a)(9) of the Code and Regulations
thereunder. With respect to distributions under the Plan made for the calendar
years 2001 and 2002, the Plan shall apply the minimum distribution requirements
of Section 401(a)(9) of the Code in accordance with the Regulations under said
section proposed on January 17, 2001.

               (b)  A Participant's Accrued Benefit shall be distributed, or
distribution thereof shall commence, no later than the Participant's required
beginning date.

               (c)  If a Participant dies before distribution of his Accrued
Benefit begins, distribution thereof shall be made as follows:

                    (i)  If the Participant's surviving spouse is the
Participant's sole designated beneficiary, distributions to the surviving spouse
shall commence by the later of December 31 of the calendar year following the
calendar year in which the Participant dies or December 31 of the calendar year
in which the Participant would have attained age 70-1/2.

                    (ii) If the Participant's surviving spouse is not the
Participant's sole designated beneficiary, distributions shall commence by
December 31 of the calendar year following the calendar year in which the
Participant dies.

                                       5

<PAGE>

                    (iii) If there is no designated beneficiary as of September
30 of the calendar year following the calendar year in which the Participant
dies, the Participant's Accrued Benefit shall be distributed in its entirety by
the end of the calendar year in which occurs the fifth anniversary of the
Participant's death.

                    (iv)  If the Participant's surviving spouse is the
Participant's sole designated beneficiary and the surviving spouse dies after
the Participant but before the commencement of distributions, paragraphs (ii)
and (iii) shall apply as if the surviving spouse were the Participant.

                    (v)   For purposes of this subsection and subsection (f),
distributions are considered to begin on a Participant's required beginning
date, unless paragraph (iv) applies in which event distributions are considered
to begin on the date on which distributions are required to begin to the
surviving spouse under paragraph (i). If annuity payments irrevocably commence
before a Participant's required beginning date (or the date by which
distributions are required to commence under paragraph (i)), distributions are
considered to begin on the date of actual commencement.

               (d) Unless a Participant's Accrued Benefit is distributed in the
form of an annuity contract purchased from an insurance company or in a single
sum no later than the Participant's required beginning date, distributions shall
be made in accordance with subsections (e), (f) and (g). Distributions under an
annuity contract purchased from an insurance company shall be made in accordance
with Section 401(a)(9) of the Code and Regulations thereunder.

               (e) Annuity payments shall be nonincreasing except as permitted
under Section 1.401(a)(9)-6 of the Regulations, and shall be made on an annual
or more frequent basis. Annuity payments shall be made over a life or lives, or
over a period certain not longer than the period permitted under subsection (g).
Once payments have begun over a period certain, such period certain may not be
extended.

               (f) The amount that must be distributed by a Participant's
required beginning date, or the date by which distributions are required to
commence under subsection (c)(i) or (ii), is the payment required for one
payment interval, and the next required payment shall be made by the end of the
next payment interval. Any additional benefit accruals occurring after a
Participant's first distribution calendar year shall be distributed commencing
with the first payment interval ending in the calendar year immediately
following the calendar year in which such additional benefit accruals occur.

               (g) In the case of a joint and survivor annuity for the joint
lives of the Participant and a nonspouse beneficiary, the survivor annuity
percentage after the Participant's required beginning date shall not exceed the
percentage set forth in Q & A - 2 of Section 1.401(a)(9)-6 of the Regulations.
In the case of a period certain annuity distribution commencing during the
Participant's lifetime, the period certain shall not exceed the period set forth
in Q & A - 2 of Section 1.401(a)(9)-9 of the Regulations, unless the
Participant's spouse is the sole designated beneficiary and the form of
distribution is a period certain with no life contingency. If the Participant's

                                        6

<PAGE>

spouse is the sole designated beneficiary and the form of distribution is a
period certain with no life contingency, the period certain may not exceed the
longer of the period determined under the preceding sentence or the joint and
last survivor life expectancy of the Participant and his spouse, as set forth in
Q & A - 3 of Section 401(a)(9)-9 of the Regulations.

          (h) (i)     If a Participant dies before distribution of his Accrued
Benefit begins and there is a designated beneficiary, distribution of the
Participant's Accrued Benefit shall commence no later than the date required by
subsection (c)(i) or (ii) and shall be made over the life of the designated
beneficiary or over a period certain not extending beyond the life expectancy of
the designated beneficiary.

              (ii)    If a Participant dies before the date on which
distributions commence and there is no designated beneficiary as of September 30
of the year following the year of the Participant's death, distribution of the
Participant's Accrued Benefit shall be completed by the end of the calendar year
in which occurs the fifth anniversary of the Participant's death.

              (iii)   If a Participant dies before the commencement of
distributions and the surviving spouse of the Participant is the sole designated
beneficiary, upon the death of the surviving spouse before distributions to the
surviving spouse are required to commence under subsection (c)(i), this
subsection shall apply as if the surviving spouse were the Participant, except
that the time by which distributions must begin shall be determined without
regard to subsection (c)(i).

          (i) The following definitions apply for purposes of this section:

              (i)     `Designated beneficiary' means the Beneficiary described
in Section 1.401(a)(9)-4 of the Regulations.

              (ii)    `Distribution calendar year' means a calendar year for
which this section requires that a minimum distribution be made. The first
distribution calendar year is the earlier of the calendar year preceding the
calendar year in which a Participant's required beginning date occurs or the
calendar year in which distributions are required by subsection (c) to commence
following a Participant's death. For lifetime distributions, the last
distribution calendar year is the year in which a Participant dies.

              (iii)   `Life expectancy' means an individual's life expectancy
as determined under the Single Life Table set forth in Section 1.401(a)(9)-9 of
the Regulations.

              (iv)    `Required beginning date' means the applicable date
described in Section 6.1(b)."

     15.  Article 8 is hereby amended by deleting Section 8.3 and substituting
therefor the following, effective January 1, 2003:

                                        7

<PAGE>

     "8.3         At least two Years of Service; Full Vesting.

          (a)     (i)   A Former Participant who became eligible to participate
in the Plan upon completing one Year of Eligibility Service and separates from
service with the Affiliated Employers before 2005 and after completing at least
two Years of Service shall be entitled to receive a percentage of his Accrued
Benefit, based upon the Participant's Years of Service, as follows:

                  Years of Service                   Vested Percentage
                  ----------------                   -----------------

                  Less than 2                                  0%
                  2 but less than 3                           20%
                  3 but less than 4                           40%
                  4 but less than 5                           60%
                  5 but less than 6                           80%
                  6 or more                                  100%

                  (ii)  A Former Participant who became eligible to participate
in the Plan upon completing one Year of Eligibility Service and separates from
service with the Affiliated Employers after 2004 and after completing at least
two Years of Service shall be entitled to receive 100% of his Accrued Benefit.

          (b)     A Former Participant who became eligible to participate in the
Plan upon completing two Years of Eligibility Service and separates from service
with the Affiliated Employers after completing at least two Years of Service
shall be entitled to receive 100% of his Accrued Benefit.

          (c)     Unless a forfeiture has previously occurred under Section
8.2(a), the nonvested portion of the Accrued Benefit of a Participant who
separates from service with the Affiliated Employers before Normal Retirement
Age and is not 100% vested shall be forfeited upon the earlier of the occurrence
of five consecutive Breaks in Service or the date on which the Participant
receives or commences receiving a distribution of the vested portion of his
Accrued Benefit."

     16.  Article 9 is hereby amended by deleting Section 9.11(a)(iii) and
substituting therefor the following:

          "(iii)  `Eligible retirement plan' means an individual retirement
account or annuity described in Section 408(a) or (b) of the Code, an annuity
plan or contract described in Section 403(a) or (b) of the Code, an eligible
plan under Section 457(b) of the Code maintained by a state, political
subdivision of a state, or any agency or instrumentality of a state or political
subdivision of a state, or a qualified trust described in Section 401(a) of the
Code that will accept a distributee's eligible rollover distribution."

     17.  Article 10 is hereby amended by deleting Section 10.6 and substituting
therefor the following:

                                        8

<PAGE>

     "10.6  Claims Procedure. (a) If a Participant, Former Participant or
Beneficiary asserts a right to any benefit under the Plan that he has not
received, he or his authorized representative shall file a written claim for
such benefit with the Administrator. If the Administrator wholly or partially
denies such claim, it shall provide written or electronic notice to the claimant
within a reasonable period of time, but not later than 90 days after receipt by
the Administrator of the claim, unless the Administrator determines that special
circumstances require an extension of time, not to exceed 90 days, for
processing the claim. If the Administrator determines that an extension of time
is required, it shall provide the claimant with written notice of the extension
before the end of the initial 90-day period. Such notice shall describe the
special circumstances requiring the extension of time and specify the date by
which the Administrator expects to render a benefit determination. If the
Administrator wholly or partially denies a claim, it shall set forth in its
benefit determination, which shall be written in a manner calculated to be
understood by the claimant:

                  (i)    the specific reasons for the denial of the claim;

                  (ii)   specific reference(s) to pertinent provisions of the
Plan on which the adverse benefit determination is based;

                  (iii)  a description of any additional material or information
necessary to perfect the claim and an explanation of why such material or
information is necessary;

                  (iv)   an explanation of the Plan's claims review procedure,
including the time limits applicable under such procedure; and

                  (v)    a statement that the claimant has the right to bring a
civil action under Section 502(a) of ERISA following an adverse benefit
determination on review.

              (b) A Participant, Former Participant or Beneficiary whose claim
for benefits is denied may request a full and fair review of the adverse benefit
determination within 60 days after notification of the adverse benefit
determination by the Administrator. The Participant, Former Participant or
Beneficiary:

                  (i)    shall be provided a review that takes into account all
comments, documents, records and other information submitted by the claimant
relating to the claim, without regard to whether such information was submitted
or considered in the initial determination;

                  (ii)   shall be provided, upon request and free of charge,
reasonable access to, and copies of, all documents, records and other
information relevant to the claim; and

                  (iii)  may submit written comments, documents, records and
other information relating to the claim to the Administrator for review.

                                        9

<PAGE>

              (c) Subject to Section 2560.503-1(i)(1)(ii) of the Department of
Labor regulations, a decision on review by the Administrator shall be made
within a reasonable period of time, but not later than 60 days after receipt by
the Administrator of a request for review, unless special circumstances (such as
the need to hold a hearing) require an extension of time for processing, in
which case the claimant shall be provided with written notice of the extension
before the end of the initial 60-day period. Such notice shall describe the
special circumstances requiring the extension and specify the date by which the
Administrator expects to render its decision. In no event shall the decision be
rendered later than 120 days after receipt of the request for review.

              (d) The Administrator's decision on review shall be made in
writing and shall be written in a manner calculated to be understood by the
claimant. If there is an adverse benefit determination on review, the
Administrator's decision shall include:

                  (i)    the specific reasons for the adverse benefit
determination;

                  (ii)   specific reference(s) to pertinent provisions of the
Plan on which the adverse benefit determination is based;

                  (iii)  a statement that the claimant is entitled to receive,
upon request and free of charge, reasonable access to, and copies of, all
documents or records and other information relevant to the claim;

                  (iv)   a statement describing any voluntary appeal procedures
offered by the Plan and the claimant's right to receive information about any
such procedures; and

                  (v)    a statement that the claimant has the right to bring a
civil action under Section 502(a) of ERISA following the adverse benefit
determination on review."

     18.    Article 16 is hereby amended by deleting Section 16.1 and
substituting  therefor the following:

     "16.1  Definitions.  For purposes of this Article:

            (a)   (i)    `Top-heavy plan' means this Plan for any Plan Year in
which, as of the determination date:

                         (A) it is not included in an aggregation group and the
            sum of the present value of the accrued benefits of key employees
            exceeds 60% of the sum of the present value of all accrued benefits
            under the Plan, or

                         (B) it is required to be included in a top-heavy group.

                  (ii)   Except as otherwise provided in paragraph (iii),
paragraph (i)(A) shall be applied by taking into account distributions made to
any employee or beneficiary during the one-year period ending on the
determination date and any amount distributed under a terminated plan which

                                       10

<PAGE>

would have been required to be included in the aggregation group. In the case of
a distribution made for a reason other than separation from service, death or
disability, the preceding sentence shall be applied by substituting `five-year
period' for `one-year period'.

                  (iii)  Paragraph (i)(A) shall be applied by disregarding:

                         (A)   deductible voluntary contributions;

                         (B)   the accrued benefit of a former key employee (or
              the beneficiary of a former key employee) for all Plan Years after
              ceasing to be a key employee;

                         (C)   the accrued benefit of an individual who has not
              performed services for an Affiliated Employer at any time during
              the Plan Year ending on the determination date;

                         (D)   any accrued benefit attributable to employer
              contributions rolled over or transferred on behalf of an
              individual which contributions were originally made to a
              qualified retirement plan maintained by an employer other than an
              Affiliated Employer or were otherwise rolled over or transferred
              into the Trust Fund at the direction of the individual; and

                         (E)   benefits paid on account of death, to the extent
              such benefits exceed the individual's accrued benefit immediately
              before death.

The accrued benefit of an individual that has been disregarded under
subparagraph (C) shall be taken into account on the determination date next
following the date on which such individual again performs services for an
Affiliated Employer.

              (b) `Top-heavy group' means the aggregation group which, if viewed
as a single plan, would be a top-heavy plan. For purposes of the preceding
sentence, the determination of the present value of an accrued benefit shall be
based only on the interest rate and mortality tables used by the defined benefit
retirement plan under which such benefit accrued. In determining whether the
aggregation group is top-heavy, the accrued benefits or the account balances of
all plans shall be valued as of the determination dates for such plans that fall
within the same calendar year. The accrued benefit of any non-key employee shall
be determined under the method, if any, that uniformly applies for accrual
purposes under all defined benefit plans maintained by the aggregation group or,
if there is no such method, as if such benefit accrued not more rapidly than
under the slowest accrual rate permitted under the fractional accrual rule of
Section 411(b)(1)(C) of the Code.

              (c) `Determination date' means, for this Plan and any other plan
included in the aggregation group, the last day of such plan's preceding plan
year, or in the case of the first plan year of the plan, the last day of such
plan year.

              (d) (i)    `Aggregation group' means:

                                       11

<PAGE>

                         (A) Each qualified defined benefit and defined
              contribution retirement plan of the Affiliated Employers in which
              a key employee is or was a participant during the Plan Year ending
              on the determination date;

                         (B) Each other qualified defined benefit and defined
              contribution retirement plan of the Affiliated Employers that
              enables any plan described in subparagraph (A) to meet the
              requirements of Sections 401(a)(4) and 410 of the Code; and

                         (C) All other qualified defined benefit or defined
              contribution retirement plans of the Affiliated Employers elected
              by the Administrator that do not cause the aggregation group to
              fail to satisfy the requirements of Sections 401(a)(4) and 410 of
              the Code.

                   (ii)  For purposes of this subsection, a qualified retirement
plan shall include any frozen or terminated plan maintained during the Plan Year
ending on the determination date.

              (e)  (i)   `Key employee' means an employee who, at any time
during the Plan Year containing the determination date, is:

                         (A) An officer of an Affiliated Employer whose earnings
              exceed $130,000, as adjusted under Section 416(i)(1) of the Code
              for Plan Years beginning after 2002;

                         (B) An owner of more than a 5% interest in an
              Affiliated Employer; or

                         (C) An owner of more than a 1% interest in an
              Affiliated Employer whose earnings from the Affiliated Employers
              exceed $150,000 for the Plan Year.

                   (ii)  For purposes of this subsection, the term `employee'
includes a terminated, retired, disabled, deceased or part-time employee, and a
Leased Employee. A Beneficiary of an individual described in this subsection
shall be considered a key employee.

                   (iii) For purposes of paragraph (i)(A), if there are more
than three officers of the Affiliated Employers, no more than 10% of all
employees of the Affiliated Employers, based on the highest number of employees
during the Plan Year ending on the determination date, to a maximum of 50, shall
be treated as officers. Individuals performing executive functions for a sole
proprietorship, partnership, association or trust that is an Affiliated Employer
shall be treated as officers.

                   (iv)  In determining ownership for purposes of this
subsection, the constructive ownership provisions of Section 318 of the Code
shall apply utilizing a 5% test in lieu of the 50% test set forth in

                                       12

<PAGE>

subsection (a)(2)(C) thereof, but the aggregation rules of Section 414(b), (c),
(m) and (o) of the Code shall not apply.

          (f)  `Non-key employee' means an employee who is not a key employee.

          (g)  `Earnings' means earnings as defined in Section 5.1(b). Except
for purposes of determining status as a key employee under subsection (e), an
individual's earnings for any year shall be deemed not to exceed $200,000, as
adjusted under Section 401(a)(17) of the Code.

          (h)  `Average earnings' means the average of a Participant's earnings
for the five consecutive years of service which produce the highest average. In
determining average earnings, any year in the five consecutive year period in
which a year of service was not earned shall not be counted. If a Participant
has completed less than five years of service, the average of the earnings for
all years of service shall be used. Earnings received for years of service
beginning after the close of the last Plan Year in which the Plan is top-heavy
shall be disregarded.

          (i)  `Year(s) of service' means the period of service used to
determine the vested percentage of a Participant's benefits under a defined
benefit or defined contribution retirement plan of an Affiliated Employer."

     19.  Article 16 is hereby amended by deleting Section 16.3(b) and
substituting therefor the following:

          "(b) If a non-key employee participates in two or more top-heavy
defined benefit retirement plans of the Affiliated Employers, the minimum
benefit requirements of subsection (a) may be met by combining the benefits
provided under such plans. If during any Plan Year a non-key employee
participates in one or more top-heavy defined benefit retirement plans and one
or more top-heavy defined contribution retirement plans of the Affiliated
Employers, such non-key employee shall receive a benefit accrued for the year
under the defined benefit retirement plan or plans at least equal to the benefit
required by subsection (a). For purposes of satisfying the requirements of this
section, employer contributions on behalf of non-key employees attributable to
amounts deferred under an arrangement described in Section 401(k) of the Code
shall not be taken into account."

                                       13

<PAGE>

     20.  The Plan is hereby amended by adding thereto the following new
Schedule A, effective January 1, 2003:

                                   "SCHEDULE A

                    _________________________________________

                             PARTICIPATING EMPLOYERS

                    _________________________________________


Microgy Cogeneration Systems, Inc."

     IN WITNESS WHEREOF, Environmental Power Corporation has caused this
instrument to be duly executed in its name and on its behalf this 19th day of
December, 2002.


                                   ENVIRONMENTAL POWER CORPORATION





                                   By: /s/ Joseph E. Cresci
                                       -----------------------------------------
                                       Joseph E. Cresci, Chief Executive Officer


ATTEST:




________________________________

                                       14