Exhibit
        10.3

    

     

    RETENTION
      AGREEMENT

     

    This
      Retention Agreement (this "Agreement") is dated this 28th day of September,
      2007
      by Millennium Cell Inc., a Delaware corporation (the "Company") and John D.
      Giolli (the "Executive").

     

    WHEREAS,
      the Executive is the Chief Financial Officer of the Company, which is a position
      of substantial authority and responsibility;

     

    WHEREAS,
      the Executive has demonstrated extensive knowledge, skill and expertise in
      the
      operation of the Company's business and possesses a great deal of information
      in
      connection therewith;

     

    WHEREAS,
      the Company desires that Executive remain an employee of the Company;
      and

     

    WHEREAS,
      the Company is willing to compensate the Executive, in addition to his normal
      salary and benefits, for his agreement to remain an employee of the Company
      upon
      the terms and conditions hereinafter set forth.

     

    NOW,
      THEREFORE, in consideration of the compensation paid hereunder, the mutual
      covenants, agreements and promises hereinafter set forth, and for other good
      and
      valuable consideration, the receipt and sufficiency of which are hereby agreed
      and acknowledged, the parties hereto agree as follows:

     

    1.    Retention.
      The
      Executive hereby agrees to continue to perform his duties and responsibilities
      as Chief Financial Officer of the Company in good faith and in compliance with
      all applicable laws, rules and regulations. 

     

    2.    Compensation.
      (a) In
      exchange for his agreement under paragraph 1 above, the Company will pay the
      Executive a lump sum cash payment in the amount of $163,400 (the "Retention
      Payment"), which shall be payable in full on the date hereof. Notwithstanding
      the Retention Payment, the Executive shall continue to be entitled to any other
      compensation or benefits that were previously available to him in connection
      with his employment with the Company and shall be included in any future Company
      executive retention programs; provided, however, that any payments hereunder
      shall be credited against any future payments under any such executive retention
      programs.

     

    (b)    If
      at any
      time on or prior to January 31, 2008: (i) the Executive voluntarily terminates
      his employment with the Company other than for Good Reason (as hereinafter
      defined); or (ii) the Company terminates the Executive's employment for Cause
      (as hereinafter defined), the Executive shall immediately refund the entire
      amount of the Retention Payment to the Company.

     

    (c)    If
      at any
      time on or after February 1, 2008 and on or before May 31, 2008: (i) the
      Executive voluntarily terminates his employment with the Company other than
      for
      Good Reason; or (ii) the Company terminates the Executive's employment for
      Cause, the Executive shall immediately refund fifty percent (50%) of the
      Retention Payment to the Company.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (d)    If
      at any
      time prior to June 1, 2008: (i) the Company terminates the Executive's
      employment without Cause; or (ii) the Executive terminates his employment with
      the Company for Good Reason, the Company will pay the Executive a lump sum
      cash
      payment in the amount of $80,500. The Executive's right to any payment under
      this Section 2(d) shall be conditioned upon his execution of a general release
      of known and unknown claims (the “Release”), in such form as shall be prescribed
      by the Company, and which shall be provided to the Executive within ten (10)
      business days after the date of any such termination of employment. The Release
      shall also contain a release by the Company of any known claims against the
      Executive. Subject to the provisions of Section 4 below, payment to the
      Executive pursuant to this Section 2(d) shall be made within ten (10) business
      days after the execution of the Release by the Executive. Nothing in this
      Agreement shall limit the scope or time of applicability of the Release once
      it
      is executed and not timely revoked.

     

    (e)    For
      purposes of this Agreement, "Good Reason" shall mean, without the Executive's
      prior written consent or that is not cured by the Company within thirty (30)
      days after its receipt of written notice of the Executive's objection to the
      occurrence: (i)
      assignment to the Executive of
      any
      title,
      position, duties or responsibilities that are significantly diminished when
      compared with the title,
      position,
      duties or responsibilities of
      the
      Executive on the date of this Agreement; (ii)
      reduction in the
      Executive's
      then
      current annual salary;
      (iii)
      the
      Company's failure to pay the Executive any material amounts otherwise vested
      and
      due him hereunder or under any plan, program or policy of the
      Company;
      or
      (iv) the
      Executive being forced to relocate to a principal place of employment that
      is
      more than fifty (50) miles from the current address of the Company (i.e., One
      Industrial Way West, Eatontown, New Jersey).

     

    (f)    For
      purposes of this Agreement, "Cause" shall mean any one of the
      following (all
      as
      reasonably determined by the Company): (i)
      a
      final
      judgment of conviction of the Executive
      for
      a
      felony entered by a trial court regardless of whether the Executive appeals
      the
      judgment; provided,
      however,
      that
      such felony is the type of felony that causes or threatens to cause material
      harm to the Company; (ii)
      the
      issuance of a final award, judgment or order by an administrative agency,
      arbitrator, governmental body, governmentally-owned corporation, mediator,
      self-regulatory organization or trial court that the Executive is prohibited
      from performing any material duty as an employee of the Company or an affiliate
      thereof for more than three (3) months, regardless of whether the Executive
      appeals the award, judgment or order;
      (iii) a
      final judgment determining that the Executive committed, or a final conviction
      of the Executive for, a
      violation of any federal, state or local law or regulation that adversely
      affects the Company or an affiliate thereof; provided,
      however,
      that
      this provision shall not apply to a violation subject only to a monetary fine
      or
      penalty of Three Thousand Dollars
      ($3,000)
      or
      less;
      (iv) the
neglect
      by
      the
      Executive
      on a
      regular basis,
      other
      than by reason of his disability or legal incompetency, of
      his
      material
duties
      as an
      employee of the Company or an affiliate thereof; (v)
      the
      failure of the Executive, other than by reason of his disability or legal
      incompetency, to carry out the lawful
      business
      directions of the Company or any officer of the Company who customarily gives
      business directions to the Executive, and the failure continues for more than
      thirty (30) days after the Company or officer gives written notice to the
      Executive specifying the nature of the failure and requesting the Executive
      to
      cure it; (vi)
      any act
      or failure to act that
      (A)
      the
      Executive intends to cause or to threaten to cause a material loss to the
      business of the Company or an affiliate
      thereof
      or (B)
      constitutes gross negligence and causes or threatens to cause a material loss
      to
      the business of the Company or an affiliate thereof; (vii)
      appropriation of the business opportunities of the Company or an affiliate
      thereof for the personal benefit of the Executive or any person or entity in
      which
      the
      Executive has an interest; (viii)
      intentional
      interference with the business of the Company or an affiliate thereof that
      is a
      violation of any law or provision of this Agreement, and that causes or
      threatens to cause a material loss to the business of the Company or an
      affiliate thereof; (ix) falsification
      of any information given to any director or officer of the Company or an
      affiliate thereof; or (x)
      any act
      by
      the
      Executive directed against the Company or an affiliate thereof of bribery,
      embezzlement, fraud, misappropriation of assets or the receipt of
      kickbacks.

     

    
      
         

      

      
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    3.    Executive's
      Acknowledgement.
      The
      Executive acknowledges that the duties and obligations of the Company to the
      Executive under this Agreement are in consideration of the Executive's past
      services to the Company, the Executive's continued employment with the Company,
      and the Executive's execution of the release described in Section 2(d).


     

    4.    Withholding
      and Special Terms Relating to Payments and Benefits Subject to IRC Section
      409A.
      The
      Company shall be entitled to withhold from the payments due hereunder any
      required federal, state or local withholding or other taxes. To the extent
      that
      any amounts payable to the Executive under Section 2(d) hereof are subject
      to
      Section 409A(a)(2)(B) of the Internal Revenue Code of 1986, as amended, any
      requirement under Section 2(d) that such amounts be paid within ten (10)
      business days after the execution by the Executive of the Release shall not
      apply and instead such amounts shall be paid in a lump sum as of the date that
      is six (6) months after the date of a termination described in Section
      2(d).

     

    5.    Employment
      Status.
      This
      Agreement does not constitute a contract of employment or impose on the
      Executive any obligation to remain as an employee, or impose on the Company
      any
      obligation to: (a) retain the Executive as an employee; (b) change the status
      of
      the Executive as an at-will employee; or (c) change the Company's policies
      regarding termination of employment.

     

    6.    Invalid
      or Unenforceable Provisions.
      In the
      event that any part of this Agreement shall be held to be unenforceable or
      invalid, the remaining parts hereof shall nevertheless continue to be valid
      and
      enforceable as though the invalid portions were not a part hereof. 

     

    7.    Notices.
      Any
      notices provided hereunder must be in writing and such notices or any other
      written communication shall be deemed effective upon the earlier of personal
      delivery (including personal delivery by facsimile) or the third day after
      mailing by first class mail, to the Company at its primary office location and
      to the Executive at the Executive's address as listed in the Company's payroll
      records. Any payments made by the Company to the Executive under the terms
      of
      this Agreement shall be delivered to the Executive either in person or at such
      address as listed in the Company's payroll records.

     

    8.    Miscellaneous.
      (a) No
      change or modification of this Agreement shall be valid unless the same is
      in
      writing and signed by each of the parties hereto. 

     

    (b)    No
      waiver
      of any provision of this Agreement shall be valid unless in writing and signed
      by the party against whom it is sought to be enforced. The failure of any party
      at any time to insist upon strict performance of any condition, promise,
      agreement or understanding set forth herein shall not be construed as a waiver
      or relinquishment of the right to insist upon strict performance of the same
      or
      other conditions, promises, agreements or understandings at a future
      time.

     

    
      
         

      

      
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    (c)    This
      Agreement is intended to bind and inure to the benefit of and be enforceable
      by
      the Executive and the Company, and their respective successors, assigns, heirs,
      executors and administrators, except that the Executive may not delegate any
      of
      the Executive's duties hereunder and may not assign any of the Executive's
      rights hereunder without the written consent of the Company. Any successor
      to
      the Company (whether direct or indirect and whether by purchase, merger,
      consolidation, liquidation or otherwise) to all or substantially all of the
      Company's business and/or assets shall assume the Company's obligations under
      this Agreement in the same manner and to the same extent as the Company would
      be
      required to perform such obligations in the absence of a succession. For all
      purposes under this Agreement, the term "Company" shall include any successor
      to
      the Company's business and/or assets, whether or not such successor executes
      and
      delivers an assumption agreement referred to in the preceding sentence or
      becomes bound by the terms of this Agreement by operation of law or
      otherwise.

     

    (d)    This
      Agreement shall be construed and enforced in accordance with the laws of the
      State of New Jersey, without regard to such its conflict of laws
      principles.

     

    (e)    The
      headings and other captions in this Agreement are for convenience and reference
      only and shall not be used in interpreting, construing or enforcing any of
      the
      provisions of this Agreement.

     

    (f)    This
      Agreement contains all of the promises, agreements, conditions, understandings,
      warranties and representations among the parties hereto with respect to the
      subject matter hereof, and there are no promises, agreements, conditions,
      understandings, warranties or representations, oral or written, express or
      implied, between them with respect to such matters other than as set forth
      herein. Any and all prior agreements among the parties hereto with respect
      to
      such matters are hereby revoked and are deemed null and void. This Agreement
      is,
      and is intended by the parties to be, an integration of any and all prior
      agreements or understandings, oral or written, with respect to the subject
      matter hereof.

     

    (g)    This
      Agreement may be executed in counterparts, each of which shall be deemed an
      original and all of which, taken together, shall constitute one and the same
      instrument. Any such counterpart may be executed by facsimile signature with
      only verbal confirmation.

     

     

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    IN
      WITNESS WHEREOF, the parties have executed this Retention Agreement as of the
      day and year first written above.

     

    
      	 	 	 
	 	MILLENNIUM
              CELL
              INC.
	 
 	 
 	 
 
	 	By:  	/s/ George
              C.
              Zalepa
	 	
              
Name:
              George C. Zalepa
	 	Title:
              Vice Precedent of Administration


    

    
       

      
        	 	 	 
	 
 	 
 	 
 
	 	       
                	/s/ John
                D.
                Giolli
	 	
                
John
                D. Giolli


      

    

    


    
      
         

      

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