Document:

<PAGE>
                         FIRST WASHINGTON FINANCIALCORP
                             1999 STOCK OPTION PLAN

Section 1.  Purpose

         The First Washington FinancialCorp 1999 Stock Option Plan (the "Plan")
is hereby established to foster and promote the long-term success of First
Washington FinancialCorp., its subsidiaries (collectively, the "Corporation")
and its shareholders by providing non-employee directors of the Corporation and
its subsidiaries with an equity interest in the Corporation. The Plan will
assist the Corporation in attracting and retaining the highest quality of
experienced persons as directors and in aligning the interests of such persons
more closely with the interests of the Corporation's shareholders by encouraging
such parties to maintain an equity interest in the Corporation.

Section 2.  Definitions

         Capitalized terms not specifically defined elsewhere herein shall have
the following meaning:

         "Board" means the Board of Directors of the Corporation.

         "Code" means the Internal Revenue Code of 1986, as amended from time to
time, and the regulations promulgated thereunder.

         "Common Stock" or "Stock" means the Common Stock, no par value, of the
Corporation.

         "Corporation" means First Washington FinancialCorp and any present or
future subsidiary corporations of First Washington FinancialCorp (as defined in
Section 424 of the Code) or any successor to such corporations.

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<PAGE>

         "Disability" shall mean permanent and total disability which if the
Director were an employee of the Corporation would be treated as a total
disability under the terms of the Corporation's long-term disability plan for
employees as in effect from time to time.

         "Fair Market Value" shall be the average of the bid and asked price
last quoted by Ryan, Beck & Co. or any other recognized brokerage company or
market maker in the stock or any combination of such quotes, on such Grant Date
or other relevant date. If no such bid prices are available on the Grant Date or
other relevant date, the Fair Market Value of a share of Stock on the Grant Date
or such other relevant date shall be determined by the Board of Directors in the
exercise of their good faith, considering such factors as they may deem
appropriate.

         "Option" means an option to purchase shares of common stock of the
Corporation granted hereunder.

         "Participant" means a member of the Board of Directors of the
Corporation selected by the Board to receive an Option under the Plan.

         "Plan" means the First Washington FinancialCorp 1999 Stock Option Plan.

         "Termination for Cause" means termination because of Participant's
intentional failure to perform stated duties, personal dishonesty, willful
violation of any law, rule, regulation (other than traffic violations or similar
offenses) or final cease and desist order issued by any regulatory agency having
jurisdiction over the Participant or the Corporation.

Section 3.  Administration

         (a) The Plan shall be administered by the Board of Directors. Among
other things, the Board of Directors shall have authority, subject to the terms
of the Plan, to grant Options, to determine the individuals to whom and the time
or times at which Options may be granted to determine the terms and conditions
of any Option granted hereunder, including whether to impose any vesting period,
and the exercise price thereof, subject to the requirements of this Plan.

                                       2
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         (b) Subject to the other provisions of the Plan, the Board of Directors
shall have authority to adopt, amend, alter and repeal such administrative
rules, guidelines and practices governing the operation of the Plan as it shall
from time to time consider advisable, to interpret the provisions of the Plan
and any Option and to decide all disputes arising in connection with the Plan.
The Board may correct any defect or supply any omission or reconcile any
inconsistency in the Plan or in any option agreement in the manner and to the
extent it shall deem appropriate to carry the Plan into effect, in its sole and
absolute discretion. The Board's decision and interpretations shall be final and
binding. Any action of the Board with respect to the administration of the Plan
shall be taken pursuant to a majority vote or by the unanimous written consent
of its members.

         (c) The Board of Directors may employ such legal counsel, consultants
and agents as it may deem desirable for the administration of the Plan and may
rely upon any opinion received from any such counsel or consultant and any
computation received from any such consultant or agent.

Section 4.  Eligibility and Participation

         Members of the Board of Directors of the Corporation shall be eligible
to participate in the Plan. The Participants under the Plan shall be selected
from time to time by the Board of Directors, in its sole discretion, from among
those eligible, and the Board shall determine in its sole discretion the numbers
of shares to be covered by the Option or Options granted to each Participant.

                                       3
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Section 5.  Shares of Stock Available for Options

         (a) The maximum number of shares of Common Stock which may be issued
and purchased pursuant to Options granted under the Plan is 50,000, subject to
the adjustments as provided in this Section and Section 9, to the extent
applicable. If an Option granted under this Plan expires or terminates before
exercise or is forfeited for any reason, without a payment in the form of Common
Stock being granted to the Participant, the shares of Common Stock subject to
such Option, to the extent of such expiration, termination or forfeiture, shall
again be available for subsequent Option grant under Plan. Shares of Common
Stock issued under the Plan may consist in whole or in part of authorized but
unissued shares or treasury shares.

          (b) In the event that the Board of Directors determines, in its sole
discretion, that any stock dividend, stock split, reverse stock split or
combination, extraordinary cash dividend, creation of a class of equity
securities, recapitalization, reclassification, reorganization, merger,
consolidation, split-up, spin-off, combination, exchange of shares, warrants or
rights offering to purchase Common Stock at a price substantially below Fair
Market Value, or other similar transaction affects the Common Stock such that an
adjustment is required in order to preserve the benefits or potential benefits
intended to be granted or made available under the Plan to Participants, the
Board shall proportionately and appropriately adjust equitably any or all of (i)
the maximum number and kind of shares of Common Stock in respect of which
Options may be granted under the Plan to Participants, (ii) the number and kind
of shares of Common Stock subject to outstanding Options held by Participants,

                                       4
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and (iii) the exercise price with respect to any Options held by Participants,
without changing the aggregate purchase price as to which such Options remain
exercisable, and if considered appropriate, the Board may make provision for a
cash payment with respect to any outstanding Options held by a Participant. No
fractional Shares shall be issued on account of any such adjustment.

         (c) Any adjustments under this Section will be made by the Board of
Directors, whose determination as to what adjustments, if any, will be made and
the extent thereof will be final, binding and conclusive.

Section 6.   Options

         6.1      Grant of Options.

         The Board of Directors may, from time to time, grant Options to
Participants upon such terms and conditions as the Board of Directors may
determine, and may grant Options in exchange for and upon surrender of
previously granted Stock Options under this Plan. Options granted under this
Plan are subject to the following terms and conditions:

         (a) Price. The purchase price per share of Common Stock deliverable
upon the exercise of each Option shall be determined by the Board of Directors
on the date the option is granted. Such purchase price shall not be less than
one hundred percent (100%) of the Fair Market Value of the Common Stock on the
date of grant. Shares may be purchased only upon full payment of the purchase
price. Payment of the purchase price may be made, in whole or in part, through
the surrender of shares of the Common Stock at the Fair Market Value of such
shares on the date of surrender.

                                       5
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         (b) Terms of Options. The term during which each Option may be
exercised shall be determined by the Board of Directors, but in no event shall
an Option be exercisable in whole or in part more than ten (10) years from the
date of grant, except as provided for below. Options granted hereunder are
generally non-transferable, provided, however, that any Option granted hereunder
may be transferred by a Participant to members of the Participant's immediate
family, or to any trust or benefit plan established for the benefit of such
Participant or immediate family member, or pursuant to the laws of descent and
distribution.

         (c) Termination of Service. Except as provided in Sections 6.1(d) and
(e) hereof, unless otherwise determined by the Board of Directors, upon the
termination of a Participant's service as a member of the Board of Directors for
any reason other than Disability, death or Termination for Cause, the
Participant's Options shall be exercisable only for a period of three months
following termination. Notwithstanding any provision set forth herein nor
contained in any Agreement relating to the award of an Option, in the event of
Termination for Cause, all rights under the Participant's Options shall expire
upon termination. In the event of death or termination of service as a result of
Disability of any Participant, all Non-Qualified Stock Options held by the
Participant, whether or not exercisable at such time, shall be exercisable by
the Participant or his legal representatives or beneficiaries for one year or
such longer period as determined by the Board following the date of the
Participant's death or termination of service due to Disability, provided that
in no event shall the period extend beyond the expiration of the option term of
the Option.

         (d) [INTENTIONALLY DELETED]

         (e) Termination of Service Upon a Change In Control

         Upon the termination of a Participant's service as a member of the
Board of Directors in connection with a change in control of the corporation (as
defined below), the Participant's Options shall be exercisable, regardless of
their then remaining term, for the greater of (i) a period of 12-months after

                                       6
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the change in control or (ii) their then remaining term. For purposes of this
provision, the term "change in control of the Corporation" shall mean a
reorganization, merger, consolidation or sale of all or substantially all of the
assets of the Corporation, the acquisition of more than 50% of the voting power
of the capital stock of the Corporation by any person or group, or any similar
transaction in which the Corporation is not the surviving entity.

Section 7. Extension

         The Board of Directors may, in its sole discretion, extend the dates
during which all or any particular Option or Options granted under the Plan may
be exercised.

Section 8. General Provisions Applicable to Options

         (a) Each Option under the Plan shall be evidenced by a writing
delivered to the Participant specifying the terms and conditions thereof and
containing such other terms and conditions not inconsistent with the provisions
of the Plan as the Board of Directors considers necessary or advisable to
achieve the purposes of the Plan or comply with applicable tax and regulatory
laws and accounting principles.

          (b) Each Option may be granted alone, in addition to or in relation to
any other Option. The terms of each Option need not be identical, and the Board
of Directors need not treat Participants uniformly. Except as otherwise provided
by the Plan or a particular Option, any determination with respect to an Option
may be made by the Board at the time of grant or at any time thereafter.

                                       7
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         (c) In the event of a consolidation, reorganization, merger or sale of
all or substantially all of the assets of the Corporation, in each case in which
outstanding shares of Common Stock are exchanged for securities, cash or other
property of any other corporation or business entity or in the event of a
liquidation of the Corporation, the Board of Directors shall provide for any one
or more of the following actions, as to outstanding Options: (i) provide that
such Options shall be assumed, or equivalent options shall be substituted, by
the acquiring or succeeding corporation (or an affiliate thereof), (ii) upon
written notice to the Participants, provide that all unexercised Options will
terminate immediately prior to the consummation of such transaction unless
exercised (to the extent then exercisable) by the Participant within a specified
period following the date of such notice, (iii) in the event of a merger under
the terms of which holders of the Common Stock of the Corporation will receive
upon consummation thereof a cash payment for each share surrendered in the
merger (the "Merger Price"), make or provide for a cash payment to the
Participants equal to the difference between (A) the Merger Price times the
number of shares of Common Stock subject to such outstanding Options (to the
extent then exercisable at prices not in excess of the Merger Price) and (B) the
aggregate exercise price of all such outstanding Options in exchange for the
termination of such Options, and (iv) provide that all or any outstanding
Options shall become exercisable in full immediately prior to such event.

          (d) The Participant shall pay to the Corporation, or make provision
satisfactory to the Board of Directors for payment of, any taxes required by law
to be withheld in respect of Options under the Plan no later than the date of
the event creating the tax liability. In the Board's sole discretion, a
Participant (other than a Participant subject to Section 16 of the Securities
and Exchange Act of 1934 (a "Section 16 Participant"), who shall be subject to
the following sentence) may elect to have such tax obligations paid, in whole or
in part, in shares of Common Stock, including shares retained from the Option
creating the tax obligation. With respect to Section 16 Participants, upon the

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<PAGE>

issuance of shares of Common Stock in respect of an Option, such number of
shares issuable shall be reduced by the number of shares necessary to satisfy
such Section 16 Participant's federal, and where applicable, state withholding
tax obligations. For withholding tax purposes, the value of the shares of Common
Stock shall be the Fair Market Value on the date the withholding obligation is
incurred. The Corporation may, to the extent permitted by law, deduct any such
tax obligations from any payment of any kind otherwise due to the Participant.

         (e) The Board of Directors may at any time, and from time to time,
amend, modify or terminate the Plan or any outstanding Option held by a
Participant, including substituting therefor another Option of the same or a
different type or changing the date of exercise or realization, provided that
the Participant's consent to each action shall be required unless the Board of
Directors determines that the action, taking into account any related action,
would not materially and adversely affect the Participant.

Section 9.  Miscellaneous

         (a) No person shall have any claim or right to be granted an Option,
and the grant of an Option shall not be construed as giving a Participant the
right to continued service on the Corporation's Board of Directors. The
Corporation expressly reserves the right at any time to dismiss a Participant
free from any liability or claim under the Plan, except as expressly provided in
the applicable Option.

         (b) Nothing contained in the Plan shall prevent the Corporation from
adopting other or additional compensation arrangements.

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         (c) Subject to the provisions of the applicable Option, no Participant
shall have any rights as a shareholder (including, without limitation, any
rights to receive dividends, or non cash distributions with respect to such
shares) with respect to any shares of Common Stock to be distributed under the
Plan until he or she becomes the holder thereof.

         (d) Notwithstanding anything to the contrary expressed in this Plan,
any provisions hereof that vary from or conflict with any applicable Federal or
State securities laws (including any regulations promulgated thereunder) shall
be deemed to be modified to conform to and comply with such laws.

         (e) No member of the Board of Directors shall be liable for any action
or determination taken or granted in good faith with respect to this Plan nor
shall any member of the Board of Directors be liable for any agreement issued
pursuant to this Plan or any grants under it. Each member of the Board of
Directors shall be indemnified by the Corporation against any losses incurred in
such administration of the Plan, unless his action constitutes serious and
willful misconduct.

         (f) The Plan shall be effective on November 17, 1999.

         (g) The Board may amend, suspend or terminate the Plan or any portion
thereof at any time.

         (h) Options may not be granted under the Plan after November 16, 2009,
but then outstanding Options may extend beyond such date.

         (i) To the extent that State laws shall not have been preempted by any
laws of the United States, the Plan shall be construed, regulated, interpreted
and administered according to the laws of the State of New Jersey.

                                       10<PAGE>   1
                                                                    EXHIBIT 10.1

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                              MILLENNIUM CELL INC.

                              401(k) PLAN AND TRUST

                            SUMMARY PLAN DESCRIPTION

               --------------------------------------------------
<PAGE>   2
                            SUMMARY PLAN DESCRIPTION

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>

   ARTICLE                            DESCRIPTION                                                   PAGE

   <S>                 <C>                                                                          <C>
   I                   INTRODUCTION                                                                   1

   II                  GENERAL INFORMATION ABOUT THE PLAN                                             2

   III                 PARTICIPATION IN YOUR PLAN                                                     3

   IV                  EMPLOYEE CONTRIBUTIONS                                                         5

   V                   EMPLOYERS CONTRIBUTIONS                                                        7

   VI                  VESTING                                                                        9

   VII                 SERVICE RULES                                                                 10

   VIII                COMPENSATION                                                                  11

   IX                  PARTICIPANTS' ACCOUNTS                                                        12

   X                   DISTRIBUTIONS AND BENEFITS UNDER YOUR PLAN                                    13

   XI                  BENEFIT PAYMENT OPTIONS                                                       16

   XII                 TOP-HEAVY RULES                                                               17

   XIII                PARTICIPANT LOAN PROGRAM                                                      18

   XIV                 MISCELLANEOUS                                                                 22

   XV                  STATEMENT OF ERISA RIGHTS                                                     24

</TABLE>
<PAGE>   3
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                                    ARTICLE I

                                  INTRODUCTION
               --------------------------------------------------

In order to recognize the hard work and good efforts of its employees, your
Employer, Millennium Cell Inc., (the "Employer") has established the Millennium
Cell Inc. 401(k) Plan and Trust (the "Plan"), effective January 1, 2001, for the
exclusive benefit of all eligible employees and their beneficiaries. The Plan
allows eligible employees to defer part of their income on a tax-favored basis
into the Plan. The contributions which you make to the Plan as 401(k) salary
deferrals are also called "salary reduction" contributions because your current
taxable income is reduced for every dollar you deposit into the Plan.

Also, the money in the Plan grows tax free until your retirement. However, you
must pay taxes when the money is paid out, unless it is transferred to another
retirement plan or an IRA. You may also be eligible for benefits in the event of
your death, total disability or other termination of your employment with the
Employer. This Plan is subject to the provisions of the Employee Retirement
Income Security Act of 1974 (ERISA).

This Summary Plan Description is a brief description of your Plan and your
rights and benefits under the Plan. This Summary Plan Description is not meant
to interpret or change the provisions of your Plan. A copy of your Plan is on
file at your Employer's office and may be read by you, your beneficiaries, or
your legal representatives at any reasonable time. If you have any questions
regarding either your Plan or this Summary Plan Description, you should ask your
Plan Administrator. If any discrepancies exist between this Summary Plan
Description and the actual provisions of the Plan, the Plan shall govern.
<PAGE>   4
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                                   ARTICLE II

                       GENERAL INFORMATION ABOUT YOUR PLAN
               --------------------------------------------------

PLAN NAME: Millennium Cell Inc. 401(k) Plan and Trust

EMPLOYER: Millennium Cell Inc. 1 Industrial Way West Eatontown, NJ 07724
         732-542-4000

EMPLOYER I.D. NO: 22-3726792

PLAN NUMBER:  001

TYPE OF PLAN:  Cash or Deferred Arrangement (401(k) Plan)

ADMINISTRATION TYPE:  Self-Administered

PLAN ADMINISTRATOR: Millennium Cell Inc. 1 Industrial Way West Eatontown, NJ
                    07724 732-542-4000

LEGAL AGENT: Millennium Cell Inc. 1 Industrial Way West Eatontown, NJ 07724
             732-542-4000 (Legal Process may also be served on the Trustee
             or Plan Administrator.)

TRUSTEES:  Norman R. Harpster, Jr.

TRUSTEES ADDRESS:  1 Industrial Way West Eatontown, NJ  07724 732-542-4000

FUNDING ARRANGEMENT:  Trust

PLAN YEAR:  January 1st to December 31st

LIMITATION YEAR:  January 1st to December 31st

ANNIVERSARY DATE:  December 31st

                                       2
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                                   ARTICLE III

                           PARTICIPATION IN YOUR PLAN
               --------------------------------------------------

Before you become a Participant in the Plan, there are certain eligibility and
participation requirements which you must meet. These requirements are explained
in this section.

ELIGIBLE EMPLOYEES:

All of your Employer's employees are considered Eligible Employees and may
participate in the Plan, once they meet the Eligibility and Participation
Requirements, except members of a collective bargaining unit whose retirement
benefits were the subject of a collective bargaining agreement that is in full
force and effect, and non-resident aliens with no U.S. source of income.

ELIGIBILITY REQUIREMENTS:

In order to be eligible for discretionary Employer contributions, you must have
attained age 21 and have completed 1,000 Hours of Service.

If you were employed on January 1st, 2001, you are eligible for discretionary
contributions whether or not you meet the other requirements.

To be eligible to enroll in the salary reduction portion of the Plan you must
have attained age 21 and be credited with 1,000 Hours of Service.

However, if you were employed on January 1st, 2001, you are eligible to make
salary reduction contributions to the Plan whether or not you meet the other
requirements.

In order to be eligible for matching contributions, you must be making 401(k)
contributions to the Plan. You must also have attained age 21 and be credited
with 1,000 Hours of Service.

However, if you were employed on January 1st, 2001 and are making 401(k)
contributions, you are eligible for matching contributions whether or not you
meet the other requirements.

The "eligibility computation period" is the 12 month period that begins with the
date you were hired. If you don't meet the service requirements during the first
year following your date of hire, the eligibility computation period becomes the
Plan Year. You may then meet the requirements during any Plan Year.

ENTRY DATES:

Participation in the Plan can begin only on an Entry Date. Your first Entry Date
will be the first day of the month coincident with or following the satisfaction
of the Eligibility requirements.

                                       3
<PAGE>   6
REHIRED EMPLOYEES:

If you had satisfied the Eligibility requirements before you terminated
employment, you will become a Participant immediately on the date you are
rehired, if your rehire date is on or after your first Entry Date, as defined
above. Otherwise, you will be eligible to participate on the next Entry Date. If
you had not yet satisfied the Eligibility requirements at the time you
terminated employment, you must meet the Eligibility requirements as if you were
a new employee.

                                       4
<PAGE>   7
               --------------------------------------------------

                                   ARTICLE IV

                             EMPLOYEE CONTRIBUTIONS
               --------------------------------------------------

Your 401(k) Salary Deferral Plan offers you special tax advantages and
incentives to participate. First, every dollar you put into the Plan reduces
your income currently subject to Federal Income Tax. Thus, your deposits into
the 401(k) Plan are often called "salary reductions." (However, you must still
pay Social Security Taxes on your gross wages.)

Although you will have to pay income tax when you withdraw money from the Plan,
you may be able to defer taxes on a withdrawal by depositing the funds into
another Plan or an Individual Retirement Account (IRA). Because you defer paying
taxes until you receive payments from the Plan, 401(k) contributions are
sometimes called "salary deferrals."

The following chart illustrates the advantage of making deposits into the 401(k)
Plan (saving on a tax-deferred basis) rather than saving on an after-tax basis
such as a bank passbook savings account or a money market fund.

<TABLE>
<CAPTION>

                                                                401(k) Plan                                    Passbook
                                                            Tax-deferred Savings                           After tax Savings
                                                            --------------------                           -----------------
<S>                                                                 <C>                                           <C>
Gross Wages...............................                          $20,000                                       $20,000
401(k) Deposit............................                            1,000                                           N/A

Taxable Wages.............................                           19,000                                        20,000
Estimated Taxes (25%).....................                            4,750                                         5,000
Passbook Deposit..........................                              N/A                                         1,000

Net Take-home Pay.........................                          $14,250                                       $14,000
</TABLE>

In our example, net take-home pay (after paying taxes and after saving $1,000)
is $250 greater when the savings are deposited into the 401(k) Plan, rather than
an after-tax savings program like a money market or bank passbook account.
Saving $1,000 in the 401(k) Plan only "cost" our example person $750 in
take-home pay.

This is only a rough illustration of the advantages of tax-deferred savings.
Please discuss your situation with your tax advisor.

TAX FREE ACCUMULATION:

Another big advantage your Plan offers is tax-deferred accumulation of the
earnings on your investments. All the earnings on the money you contribute to
your account compounds tax free. You pay taxes on this money only when you
retire or take distributions for some other reason, such as death or becoming
totally disabled. If you put your money into a savings account you are required
to pay income taxes on the interest each year. Thus, by contributing to your
401(k) Savings Plan, you'll have more money available at retirement.

SALARY REDUCTION AGREEMENT:

In order to enroll (or to refuse enrollment), your Employer will ask you to
complete a Salary Reduction Agreement. It is here that you tell your Employer
how much of your income you wish to defer to your Plan.

                                       5
<PAGE>   8
There are limits placed on the amount you can defer into this Plan. Your salary
deferrals cannot exceed a maximum dollar amount determined by the Federal
Government each year. For 2000, that amount is $10,500. Generally, if your total
deferrals from all cash or deferred arrangements for a calendar year exceed the
dollar amount set by the government, the excess must be included in your income
for the year. The IRS also requires that the combined contribution by you and
your Employer to your accounts not exceed the lesser of $30,000 or 25% of your
pay. Your Employer may also place restrictions on the amount you may defer in
order to meet IRS requirements.

Your Employer will deduct the amount you've elected from your paycheck in
accordance with procedures established by your Employer.

RESTRICTIONS:

In order to provide tax-advantaged savings, the Plan must place restrictions on
withdrawals from the Plan. Article X describes the circumstances under which you
may withdraw 401(k) deposits from the Plan.

ELECTION NOT TO DEFER:

You may decide that you do not wish to make salary reduction contributions on
your first Entry Date. The Plan Administrator will explain the procedures for
delayed enrollment in the salary reduction portion of the Plan, if you decide to
enroll at a later date.

EXCESS DEFERRALS:

If you participate in two or more deferred compensation plans (which include
401(k), Simplified Employee Pensions and 403(b) plans), your total deferrals to
all plans could exceed IRS limits for the year. To avoid paying additional
excise taxes if excess contributions have to be returned, you may want to
designate which plan is to return any excess contributions to you.

If you elect to have this Plan return any excess, you should notify the Plan
Administrator so that the excess can be returned to you, along with any
earnings, before April 15.

                                       6
<PAGE>   9
               --------------------------------------------------

                                    ARTICLE V

                             EMPLOYER CONTRIBUTIONS
               --------------------------------------------------

Your Employer may make contributions to the Plan, in addition to your salary
deferral 401(k) contributions. Your Employer may make matching contributions,
non-elective or discretionary contributions and required minimum contributions,
under the Top-Heavy rules (see Article XII) or other legal requirements.

MATCHING CONTRIBUTIONS:

If you are eligible for matching contributions, you will receive an allocation
of the matching contribution, if any, in each year you are a participant in the
Plan. The exception to this is, if you terminate employment during the Plan Year
with less than 500 Hours of Service you will not receive an allocation.

If you do not meet the hours requirement because you have retired, become
disabled, or died, you will still receive matching contributions.

The amount of the match depends on your 401(k) contributions. Each year, your
Employer may set a matching percentage, contributing that percentage of every
dollar you invest.

Your employer will make matching contributions, if any, only on the first 6% of
compensation deposited as elective contributions. Amounts deferred over 6% are
not matched. Matching contributions will be allocated to your accounts as of the
Anniversary Date.

NON-ELECTIVE OR DISCRETIONARY CONTRIBUTIONS:

If you are eligible for discretionary Employer contributions, you will receive
an allocation of the Employer contribution, if any, in each year you are a
participant in the Plan. The exception to this is, if you terminate employment
during the Plan Year with less than 500 Hours of Service you will not receive an
allocation.

If you do not meet the hours requirement because you have retired, become
disabled, or died, you will still receive an allocation of the discretionary
Employer contribution.

You do not have to make 401(k) contributions in order to receive a discretionary
contribution.

The amount of the discretionary contribution is set by the Employer each year.

Your share of the non-elective/discretionary contribution is based on your
compensation and a fixed compensation level. The fixed compensation level is
defined as the Social Security Wage Base in effect on the first day of the Plan
Year.

You will receive a share of the discretionary contribution based on your total
compensation plus another amount based on your compensation in excess of the
fixed level. The percentage of pay which will be your share will vary each year
and will depend upon the amount of the discretionary contribution, your
compensation, the fixed level amount, the total compensation for all
Participants, and the total of all Participants pay in excess of the level
amount.

                                       7
<PAGE>   10
For example, you might receive 2% of your total pay plus another 2% of pay in
excess of the fixed level. If your pay was $20,000 and the level amount was
$10,000, your share would be:

          $20,000 x .02 plus ($20,000 - $10,000) x .02 = $600

If the level amount was $10,000 and your compensation was $9,000, your share
would be:

          $9,000 x .02 = $180

OTHER REQUIRED CONTRIBUTIONS:

In certain situations, your Employer may be required to make additional
contributions to the Plan. If the Plan is Top-Heavy (see Article XII) or if
highly paid participants contribute a higher percentage of pay to the Plan than
other participants, your Employer may have to take corrective action. This
action could result in either a reduction in the contributions for the highly
compensated participants or an additional Employer contribution, in the form of
Non-Elective or Qualified Non-Elective contributions.

                                       8
<PAGE>   11
               --------------------------------------------------

                                   ARTICLE VI

                                     VESTING
               --------------------------------------------------

The term "vesting" refers to the percentage of your Employer contribution
account(s) (if any) other than your Qualified Non-Elective contributions
account, that you are entitled to receive in the event of your termination of
employment. You are always 100% vested in your Qualified Non-Elective account.

If you terminate employment before you meet the requirements for retirement (see
Article X), the distribution from the Employer matching and discretionary
accounts will be limited to the vested portion. Your vesting percentage grows
with your Years of Service. Article VII explains how Years of Service are
credited.

The same vesting schedule applies to the matching and discretionary Employer
contributions.

Vesting schedule for matching and discretionary Employer accounts:

          Years of Service                     Percent Vested
          ----------------                     --------------
          Less than 1                                  0%
          1 but less than 2                        33.33%
          2 but less than 3                        66.66%
          3 or more                                  100%

You will also become 100% vested at Normal Retirement, if you become disabled or
if you die. Refer to Article X for information on retirement, disability or
death.

In the event the Plan should become 'top-heavy', a faster vesting schedule will
apply. See Article XII for an explanation of the top-heavy rules.

Top-Heavy vesting schedule for matching and discretionary Employer accounts:

          Years of Service                    Percent Vested
          ----------------                    --------------
          Less than 1                               0%
          1 but 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%

                                       9
<PAGE>   12
               --------------------------------------------------

                                   ARTICLE VII

                                  SERVICE RULES
               --------------------------------------------------

YEAR OF SERVICE:

You will earn a Year of Service for vesting if you are credited with 1,000 Hours
of Service during a Plan Year. However, if you are credited with 1,000 hours
during your first year of employment, you'll earn a Year of Service. You cannot
earn more than one Year of Service credit during any Plan Year, though.

If you terminate employment and are later rehired by the Employer, your Years of
Service after reemployment may be added to the Years of Service you had
accumulated when you left. In order for the two periods of service to be added
together, you must return to work within 5 years of your termination date.

HOURS OF SERVICE:

You are credited with the actual number of hours you work and for hours for
which you are paid, but are not at work such as paid vacation or paid sick
leave.

BREAK IN SERVICE RULES:

When you fail to complete at least 501 hours during the Plan Year, you incur a
break in service. Thus, in any year in which you work less than 501 hours
(approximately 3 months), you will incur a break in service.

However, in certain circumstances, your Plan is required to credit you with 501
hours, even though you didn't actually work 501 hours. This is primarily if you
take time off to have, adopt or care for a child for a period immediately
following the birth or adoption. You will receive this credit only for the
purpose of determining whether you have incurred a break in service and not for
receiving additional credit for a contribution or for vesting.

                                       10
<PAGE>   13
               --------------------------------------------------

                                  ARTICLE VIII

                                  COMPENSATION
               --------------------------------------------------

Throughout this Summary Plan Description, the words "compensation" and "pay" are
used to define contribution amounts. "Pay" or "Compensation" means the total
wages paid to you by your Employer for the Plan Year.

Compensation includes deferred compensation which is not includable in your
gross taxable income such as a Cafeteria plan, 401(k) deferrals, Tax Deferred
Annuities, or Governmental Deferred Compensation Plans.

In no event shall compensation in excess of $170,000 (as adjusted for changes in
the Consumer Price Index: $170,000 for 2000) be taken into account for any
Participant in this Plan.

Your compensation for the first Plan Year in which you participate shall be your
compensation from the Employer for the full Plan Year.

                                       11
<PAGE>   14
               --------------------------------------------------

                                   ARTICLE IX

                             PARTICIPANTS' ACCOUNTS
                -------------------------------------------------

Under the 401(k) Savings Plan, the money you deposit and any Employer
contributions are placed into investment accounts, which are credited with gains
and losses at each Valuation Date. The Valuation Date for your 401(k) Plan
occurs on the Anniversary Date (see Article II).

Separate accounts are set up for each different type of money: 401(k) deposits,
matching, discretionary, rollover and Qualified Non-Elective contributions
because there are different Plan and IRS rules for each type of contribution.

ROLLOVER ACCOUNTS:

Your Plan allows employees who had retirement accounts with a previous Employer
to directly transfer or rollover the previous account balance to your Plan even
if you are not a Participant in this plan. This is a segregated "Rollover"
account and it is always 100% vested. If you are making a rollover instead of a
direct transfer, in order to avoid taxes on your "Rollover" money, you must
complete the rollover from your old plan to this Plan within 60 days after
receiving the money.

INVESTMENTS:

Your Plan offers several investment options and you may instruct the Trustees
how you would like to invest the funds in your Rollover, 401(k) and Non-Elective
accounts.

If you choose not to select how your accounts are invested, the Trustee will
invest them for you. The Trustees are fiduciaries of the Plan, which means that
they have a responsibility to you to invest the Plan assets prudently.

Contact your Plan Administrator for information concerning the investment
options which are currently available.

CREDITING YOUR ACCOUNTS WITH GAIN OR LOSS:

Each investment account is credited with investment gain or loss as of each
Valuation Date. Earnings or losses are allocated on the basis of the ratio your
account balance bears to the total account balances of all participants in the
same investment. You are then credited with that percentage of earnings or
losses.

When you receive a distribution from the Plan, the Plan Administrator must first
establish the value of your account. The date of this special valuation is the
Distribution Determination Date. If the Distribution Determination Date is any
date other than a Valuation Date, the value of your account will be adjusted for
the actual gain or loss from the prior Valuation Date to the date of
distribution.

                                       12
<PAGE>   15
               --------------------------------------------------

                                    ARTICLE X

                   DISTRIBUTIONS AND BENEFITS UNDER YOUR PLAN
               --------------------------------------------------

IN-SERVICE DISTRIBUTIONS:

An In-Service Distribution is one that you receive while you are actively
employed. The primary purpose of the Plan is to provide benefits to you upon
your retirement, but you may request an In-Service Distribution of all or a
portion of your accounts, provided that you are fully vested and have reached
age 59 1/2, and the amount to be withdrawn has been allocated to your account
for 2 years or you must have been a participant in the Plan for 5 years.

In addition, you may request an In-Service Distribution of the full value of all
of your accounts, on or after the date you reach Normal Retirement Age (defined
below), or a distribution of the value of your Rollover Account, at any time.

Also, you may request an In-Service Distribution in the event of financial
hardship. Financial hardship might result from your own, your spouse's or your
dependents' medical expenses, expenses in purchasing your primary residence or
in preventing eviction or foreclosure, or tuition for the next 12 months of
post-secondary education for you, your spouse or dependents. In addition, a
financial hardship only occurs when you have no other resources available to
you. For example, you may need to prove that you have been turned down for loans
or that you have sold other assets before you can receive a Hardship
Distribution.

The amount of your Hardship Distribution cannot exceed the amount needed to meet
the immediate financial hardship. In addition, the distribution will be limited
to the amount of your 401(k) contributions (no investment income) plus the
vested portion of your employer and matching accounts, and the value of your
other accounts.

If you receive a Hardship Distribution, the Plan must impose restrictions on the
amount of your 401(k) salary deferrals in the future. First, you cannot make any
401(k) contributions for the 12-month period following the date of your Hardship
Distribution. Secondly, the maximum amount of 401(k) contributions that you can
make for the calendar year that begins after the date of distribution is reduced
by the amount of your elective deferrals in the year you took the hardship
withdrawal.

For example, let's say that you took a hardship withdrawal on July 1, 2001, and
during 2001, you deposited $5,000 in elective deferrals. You can't make any
401(k) contributions until July 1, 2002. And, the maximum amount that you can
contribute for 2002 would be the legal limit minus $5,000. If the legal maximum
was $10,000 for 2002, you would be limited to $5,000.

Plan benefits are also paid when you retire, or become permanently disabled.
Benefit payments may also be made to your beneficiary(ies) upon your death.
Each of these events is discussed below.

NORMAL RETIREMENT BENEFITS:

The Normal Retirement Age for the Plan is age 65.

Your Normal Retirement Date is the date you reach Normal Retirement Age.

At your Normal Retirement Date, you will be entitled to 100% of your account
balance. Payment of your benefits will begin as soon as practicable following
your retirement. (See Article XI, Benefit Payment Options.)

                                       13
<PAGE>   16
LATE RETIREMENT BENEFITS:

If you decide to work past your Normal Retirement Date, you can defer payment of
your benefits until your Retirement Date. Payment of your Retirement benefits
will commence as soon as practicable following your late retirement date.

DEATH BENEFITS:

Should you die before termination of your employment by retirement or
disability, your spouse or beneficiary will be entitled to 100% of your account
balance.

If you are married at the time of your death, your spouse will be the
beneficiary of your death benefits, unless you otherwise elect in writing on a
form to be furnished to you by the Plan Administrator. IF YOU WISH TO DESIGNATE
A BENEFICIARY OTHER THAN YOUR SPOUSE AS YOUR BENEFICIARY, YOUR SPOUSE MUST
CONSENT TO WAIVE HIS/HER RIGHT TO RECEIVE DEATH BENEFITS UNDER THE PLAN. YOUR
SPOUSE'S CONSENT MUST BE IN WRITING AND WITNESSED BY A NOTARY OR A PLAN
REPRESENTATIVE.

If your spouse has consented to a valid waiver of any rights to the death
benefit; or your spouse cannot be located; or you are single at the time of your
death, then your death benefit will be paid to any beneficiary you may choose.
The Plan Administrator will supply you with a beneficiary designation form.

Since your spouse has certain rights under your Plan, you should immediately
inform the Plan Administrator of any changes in your marital status.

DISABILITY BENEFITS:

Should you become permanently disabled while a Participant under this Plan, you
will receive 100% of your account balance. "Disability" means a medically
determinable physical or mental impairment which may be expected to result in
death or to last at least a year and which renders you incapable of performing
your duties with your Employer. A determination of disability will be made by
the Plan Administrator in a uniform, nondiscriminatory manner on the basis of
medical evidence.

If it is determined you are disabled, your payments will begin as soon as
practicable following the date you were determined to be disabled.

BENEFITS UPON TERMINATION:

If your employment is terminated for any reason other than those set out above,
you will only be entitled to that portion of your Employer accounts in which you
are vested.

"Vesting" refers to the percentage of your account balance you are entitled to
at any point in time. For each year you remain a Participant in the Plan, you
become vested with a higher percentage of your Employer account balance. (See
Vesting, Article VI.)

If you terminate employment before you meet the requirements for retirement,
payment of your benefits will be postponed until your retirement date.

                                       14
<PAGE>   17
DISTRIBUTIONS DUE TO A DOMESTIC RELATIONS ORDER:

In general, contributions made by you or your Employer for your retirement are
not subject to alienation. This means they cannot be sold, used as collateral
for a loan, given away or otherwise transferred. They are not subject to the
claims of your creditors. However, they may be subject to claims under a
Qualified Domestic Relations Order (QDRO).

The Administrator may be required by law to recognize obligations you incur as a
result of court ordered child support or alimony payments. The Administrator
must honor a "Qualified Domestic Relations Order" which is defined as a decree
or order issued by a court that obligates you to pay child support or alimony,
or otherwise allocates a portion of your assets in the Plan to your spouse,
child or other dependent. If a QDRO is received by the Administrator, all or
portions of your benefits may be used to satisfy the obligation. It is the Plan
Administrator's responsibility to determine the validity of a QDRO.

TAXATION OF DISTRIBUTIONS:

The benefits you receive from the Plan will be subject to ordinary income tax in
the year in which you receive the payment, unless you defer taxation by a
"rollover" of your distribution into another qualified plan or an IRA. Also, in
certain situations, your tax may be reduced by special tax treatment such as
"5-year forward averaging."

VERY IMPORTANT NOTE: Under most circumstances, if you receive a distribution
from this Plan on or after January 1, 1993, twenty percent (20%) of your
distribution will be withheld for federal income tax purposes, unless you
instruct the trustees of this Plan to DIRECTLY transfer your distribution into
another qualified plan or an IRA. You must give these instructions to the
trustees no more than 90 days before the date you receive the payment. Also,
unless you sign a waiver form, the trustees must wait at least 30 days after
receiving your instructions before making the payment, to allow you time to
change your decision.

In addition to ordinary income tax, you may be subject to a 10% tax penalty if
you receive a "premature" distribution. If you receive a distribution upon
terminating employment before age 55 and you don't receive the payment as a life
annuity, you will be subject to the 10% penalty, unless you "rollover" your
payment. If you take a hardship withdrawal before age 59-1/2, the withdrawal
will usually be subject to the 10% penalty. But, there is no penalty for
payments due to your death or disability.

As the rules concerning "rollovers" and the taxation of benefits are complex,
please consult your tax advisor before making a withdrawal or requesting a
distribution from the Plan. As required by law the Plan Administrator will
provide you with a brief explanation of the rules concerning "rollovers".

                                       15
<PAGE>   18
               --------------------------------------------------

                                   ARTICLE XI

                             BENEFIT PAYMENT OPTIONS
               --------------------------------------------------

There is one form of payment under your Plan. Your distribution will be in the
form of a lump-sum distribution of your total account balances, or you may
select an alternate form of payment, if permitted under your Plan, at the time
of your distribution.

The Plan Administrator may delay payment to you for a reasonable time for
administrative convenience. However, unless you choose to defer receipt of your
distribution, the Plan must begin your payments within 60 days after the close
of the Plan Year following the latest of:

    (a) the date on which you reached your Normal Retirement Age;

    (b) the 10th anniversary of the year in which you became a Participant in
        the Plan; or

    (c) the date you terminated employment with the Employer.

Under certain circumstances, the law requires that your distributions begin no
later than April 1 of the year following the date you reach age 70-1/2 (the date
six months after your 70th birthday). Your Plan Administrator will contact you
if you are affected by this requirement.

                                       16
<PAGE>   19
               --------------------------------------------------

                                   ARTICLE XII

                                 TOP-HEAVY RULES
               --------------------------------------------------

A Plan becomes Top-Heavy when the total of the Key Employees' account balances
make up more than 60% of the total of all account balances in the Plan. Key
Employees are certain highly compensated officers or owners/shareholders.

If your Plan is Top-Heavy, Plan participants who are not "key" must receive a
minimum contribution. This minimum contribution is the smaller of the percentage
of pay contributed by the Employer to Key Employees, or 3% of your compensation.
If the Employer contribution allocated to your account for the Top-Heavy year is
equal to or more than this minimum contribution, no additional Employer
contribution would be needed to meet the Top-Heavy rules.

Also, the vesting schedules which apply to the Discretionary Employer and
Matching contributions change if your Plan becomes Top-Heavy. Vesting is
discussed in Article VI.

                                       17
<PAGE>   20
               --------------------------------------------------

                                  ARTICLE XIII

                            PARTICIPANT LOAN PROGRAM
               --------------------------------------------------

Pursuant to the terms of Millennium Cell Inc. 401(k) Plan and Trust, the Trustee
has adopted a participant loan program as part of such Plan and Trust. The
program is intended to comply with Labor Regulation 2550.408b-1, and Proposed
Internal Revenue Regulation sec 1.72(p)-1. Loans will be made pursuant to the
terms of the Plan and Trust and the following provisions of this Participant
Loan Program.

A. ADMINISTRATION OF PROGRAM

        The following person ("the Loan Administrator") is responsible for the
        administration of the loan program. All loan requests and other
        inquiries should be delivered to:

        Millennium Cell Inc.
        1 Industrial Way West
        Eatontown, NJ  07724
        732-542-4000

B. APPLICATION PROCEDURE

        1. Obtain and complete a loan application on forms provided by the Loan
           Administrator.

        2. Submit the completed loan application to the Loan Administrator at
           least 30 days before the date the loan is to be made.

        3. Loan applications will be reviewed by the Loan Administrator for
           completeness. Incomplete applications will be returned to the
           applicant for completion.

        4. Approved loans will be processed on an ongoing, timely basis not more
           than 30 days after application.

  C. BASIS FOR APPROVALS

        Loans are available to all actively employed participants without regard
        to any individual's race, color, religion, sex, age or national origin.
        Each application will be reviewed on a nondiscriminatory basis but will
        be assessed on the applicant's credit worthiness, financial need, and
        the purpose and terms of the loan. An individual may be denied future
        loans if he or she defaulted on any previous loan. A loan will not be
        made to a five (5%) percent or greater shareholder-employee of an S
        corporation, an owner of more than ten (10%) percent of either the
        capital interest or the profits interest of an unincorporated Employer,
        or a family member (as defined in Section 267(c)(4) of the Code) of such
        persons, unless an exemption for the loan is obtained pursuant to
        Section 408 of the Act.

                                       18
<PAGE>   21
  D. LIMITATIONS

        1. Limitations on Types of Loans

         Subject to the limitations on the amount of any loan, loans will be
         approved if the loan proceeds are to be used for any purpose.

        2. Limitations on Amounts of Loans

              - The minimum amount of any loan is $1,000.

              - The maximum amount of any loan is the lesser of $50,000 or 50%
              of the vested interest of the participant in the Plan. The $50,000
              maximum amount will be reduced by the participant's highest
              outstanding loan balance in the previous twelve months, even if
              amounts have been repaid.

              - A participant may have no more than 1 loan outstanding at any
              one time.

        3. Prior to funding a Participant Loan

              The Loan Administrator shall select the fund or funds from which
              the amount necessary to fund the Participant Loan shall be taken
              in a nondiscriminatory manner.

              The loan shall be transferred to a segregated account. During the
              term of the Participant Loan, this segregated account shall be
              maintained, and repayment of principal and interest shall be made
              to this segregated account. This segregated account shall not
              share in any gains or losses credited to the Plan that do not
              directly relate to the Participant Loan.

  E. INTEREST

              The interest rate will be determined from time to time by the
              Trustee with the intention of providing the Plan with a return
              commensurate with the interest rates charged by persons in the
              business of lending money for loans which would be made under
              similar circumstances.

              Until otherwise determined by the Trustee, the interest rate will
              be the prime rate of interest charged by Prevailing prime rate
              charged by the local banks as of the date of the loan, plus 1
              percent.

              The rate of interest will be constant throughout the term of the
              loan.

              To cover the added administrative costs associated with a
              Participant Loan under the Plan, you will be charged a $50 loan
              origination fee and a $50 annual loan processing fee every year
              after the first, including the year the loan is paid in full or
              declared in default.

                                       19
<PAGE>   22
  F. COLLATERAL OR OTHER SECURITY

              All loans must be adequately secured. No more than 50 percent of
              the present value of a participant's vested interest in the Plan
              may be considered by the Plan as security for the outstanding
              balance of all Plan loans made to the participant.

  G. REPAYMENT TERMS

              All loans are required to be repaid within 5 years of the date of
              the loan. All loans will be due on the termination of service of
              the Participant. If the Participant notifies the Loan
              Administrator in writing that the entire proceeds of the loan will
              be used to acquire a dwelling unit that will, within a reasonable
              time, be used as the principal residence of the Participant the
              loan will be required to be repaid within 25 years of the original
              date of the loan.

              Loans are to be repaid on the basis of substantially level
              amortization over the term of the loan with payments made through
              salary reduction each pay period.

              Loan payments shall be suspended during a leave of absence of up
              to one year, if the Participant's pay from the Employer is
              insufficient to service the loan. But the loan must none the less
              be repaid within 5 years as provided by Internal Revenue Code
              section 72(p)(2)(B), or by the due date of the loan if the purpose
              of the loan was for the acquisition of the primary residence of
              the Participant.

              If the leave of absence is on account of the Participant
              performing service in the uniformed services (as defined in
              chapter 43 of title 38 United State Code), whether or not
              qualified military service, such suspension shall not be taken
              into account for purposes of meeting requirements of sections
              72(p), 401(a) or 4975(d)(1) of the Internal Revenue Code, and the
              Participant is entitled to reemployment rights under such chapter
              with respect to such service. For example, if the loan was due in
              5 years, the 5 year period would be calculated by extending the
              period by the length of the leave of absence.

  H. DEFAULT

              A loan is in default when a scheduled installment payment has not
              been received by the last day of the calendar quarter following
              the calendar quarter in which the last scheduled installment
              payment was due. If payment has not been made within 30 days of
              the installment due date, the Loan Administrator will notify the
              participant in writing that the loan will be in default at the end
              of the applicable calendar quarter following the calendar quarter
              in which it was due. If payment is not received within such
              stipulated time period, the following will take place:

              1. The entire unpaid balance on a defaulted loan will be
              considered to be in default as of the date the last payment was
              due.

              2. At the discretion of the Trustee exercised in a uniform and
              nondiscriminatory manner, the loan will be renegotiated and
              payments will be made through payroll withholding. If the loan is
              not renegotiated in a manner acceptable to the Trustee, if
              permitted in the Plan, the loan will be deemed an in-service
              withdrawal.

              Such withdrawal will be subject to personal income and possible
              penalty taxes. Form 1099R will be timely issued to the participant
              and the IRS showing such withdrawal.

                                       20
<PAGE>   23
              3. If the participant fails to make provisions for repayment
              reasonably acceptable to the Trustee, at the election of the
              Trustee, exercised in a uniform and nondiscriminatory manner, the
              remaining principal on the loan shall be declared due and payable
              as of the date the last payment was due.

              4. The amount of any uncured default will be considered as having
              been received in a taxable event, subject to personal income and
              penalty taxes. Such tax consequences do not affect the
              participant's obligation to repay the loan. Form 1099R will be
              timely issued to the Participant and the IRS; however, the loan
              will not be charged against the Participant's vested account
              balance until he or she terminates service, retires, dies, becomes
              disabled, or reaches the earliest date distribution is permitted
              under the Plan.

              5. To the extent necessary, any other collateral pledged as
              additional security will be foreclosed upon.

                                       21
<PAGE>   24
               --------------------------------------------------

                                   ARTICLE XIV

                                  MISCELLANEOUS
               --------------------------------------------------

PROTECTION OF BENEFITS:

Except for the requirements of a Qualified Domestic Relations Order, your Plan
benefits are not subject to claims, indebtedness, execution, garnishment or
other similar legal or equitable process. Also, you cannot voluntarily (or
involuntarily) assign your benefits under this Plan. See Distributions due to a
Domestic Relations Order in Article X.

AMENDMENT AND TERMINATION:

The Employer has reserved the right to amend or terminate your Plan. However, no
amendment can take away any benefits you have already earned. If your Plan is
terminated, you will be entitled to the full amount in your account as of the
date of termination, regardless of the percent you are vested at the time of
termination.

PENSION BENEFIT GUARANTY CORPORATION:

The Pension Benefit Guaranty Corporation (PBGC) provides plan termination
insurance for defined benefit pension plans. In your 401(k) Plan (a defined
contribution plan), all of the contributions and investment earnings are
allocated to Participants' accounts. PBGC insurance is not needed and does not
apply.

CLAIMS:

When you request a distribution of all or any part of your account, you will
contact the Plan Administrator who will provide you with the proper forms to
make your claim for benefits.

Your claim for benefits will be given a full and fair review. However, if your
claim is denied, in whole or in part, the Plan Administrator will notify you of
the denial within 90 days of date your claim for benefits was received, unless
special circumstances delay the notification. If a delay occurs, you will be
given a written notice of the reason for the delay and a date by which a final
decision will be given (not more than 180 days after the receipt of your claim.)

Notification of a denial of claims will include:

    (a) the specific reason(s) for the denial,

    (b) reference(s) to the Plan provision(s) on which the denial is based,

    (c) a description of any additional material necessary to correct your claim
        and an explanation of why the material is necessary, and

    (d) an explanation of the steps to follow to appeal the denial, including
        notification that you (or your beneficiary) must file your appeal within
        60 days of the date you receive the denial notice.

If you or your beneficiary do not file an appeal within the 60-day period, the
denial will stand. If you do file an appeal within the 60 days, your Employer
will review the facts and hold hearings, if necessary, in order to reach a final
decision. Your Employer's decision will be made within 60 days of receipt of the
notice of your appeal, unless an extension is needed due to special
circumstances. In any event, your Employer will make a decision within 120 days
of the receipt of your appeal.

                                       22
<PAGE>   25
Article XV, STATEMENT OF ERISA RIGHTS, describes the protection you have under
ERISA and the steps you can take to enforce these rights.

                                       23
<PAGE>   26
               --------------------------------------------------

                                   ARTICLE XV

                            STATEMENT OF ERISA RIGHTS
               --------------------------------------------------

As a participant in Millennium Cell Inc. 401(k) Plan and Trust you are entitled
to certain rights and protections under the Employee Retirement Income Security
Act of 1974 (ERISA). ERISA provides that all Plan participants shall be entitled
to:

    (a) examine, without charge, at the Plan Administrator's office copies of
    all documents filed by the Plan with the U.S. Department of Labor, such as
    detailed annual reports and Plan descriptions,

    (b) obtain copies of all Plan documents and other Plan information upon
    written request to the Plan Administrator (the Administrator may make a
    reasonable charge for the copies),

    (c) receive a summary of the Plan's annual financial report. The Plan
    Administrator is required by law to furnish each participant with a copy
    of this summary annual report.

    (d) obtain a statement telling you whether you have a right to receive a
    retirement benefit at Normal Retirement Age and if so, what your benefits
    would be at Normal Retirement Age if you stop working under the Plan now. If
    you do not have a right to a benefit, the statement will tell you how many
    more years you have to work to get a right to a benefit. This statement must
    be requested in writing and is not required to be given more than once a
    year. The Plan must provide the statement free of charge.

In addition to creating rights for Plan participants, ERISA imposes duties upon
the people who are responsible for the operation of the employee benefit plan.
The people who operate your Plan, called "fiduciaries" of the Plan, have a duty
to do so prudently and in the interest of you and other Plan participants and
beneficiaries. No one, including your Employer may fire you or otherwise
discriminate against you in any way to prevent you from obtaining a retirement
benefit or exercising your rights under ERISA.

If your claim for a retirement benefit is denied in whole or in part you must
receive a written explanation of the reason for the denial. You have the right
to have the Plan review and reconsider your claim.

Under ERISA, there are steps you can take to enforce the above rights. For
instance, if you request materials from the Plan and do not receive them within
30 days, you may file suit in a federal court. In such a case, the court may
require the Plan Administrator to provide the materials and pay you up to $100 a
day until you receive the materials, unless the materials were not sent because
of reasons beyond the control of the administrator.

If you have a claim for benefits which is denied or ignored, in whole or in
part, you may file suit in a state or federal court.

If it should happen that Plan fiduciaries misuse the Plan's money, or if you are
discriminated against for asserting your rights, you may seek assistance from
the U.S. Department of Labor, or you may file suit in a federal court. The court
will decide who should pay court costs and legal fees. If you are successful,
the court may order the person you have sued to pay these costs and fees. If you
lose, the court may order you to pay these costs and fees, for example, if it
finds your claim is frivolous.

If you have questions about your Plan, you should contact the Plan
Administrator. If you have any questions about this statement or your rights
under ERISA, you should contact the nearest office of the Pension and Welfare
Benefits Administration, U.S. Department of Labor, listed in your telephone
directory or the Division of Technical Assistance and Inquiries, Pension and
Welfare Benefits Administration, U.S. Department of Labor, 200 Constitution
Avenue N.W., Washington, D.C. 20210.

                                       24

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