Document:

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                                                                    Exhibit 10.1
                                                                    ------------

                                   AGREEMENT

          This Agreement ("Agreement"), effective as of September 14, 2001 (the
"Termination Date"), is made between David D. Marshall ("Employee") and DQE,
Inc. (the "Company").  Employee has served as an employee of the Company
pursuant to the terms of an Employment Agreement, dated as of January 1, 2000
(the "Employment Agreement").  The Company and Employee also previously entered
into a Severance Agreement, dated as of April 4, 1997 (the "Severance
Agreement"), and a Non-Competition and Confidentiality Agreement, dated as of
October 3, 1996 (the "Non-Competition and Confidentiality Agreement").  The
parties, intending to be legally bound hereby, enter into this Agreement as
follows:

          1.  Employee hereby voluntarily retires and resigns, effective as of
the Termination Date, as Chairman of the Board, President and Chief Executive
Officer of the Company, and from all other positions as an employee, officer and
director of (a) the Affiliated Companies (as defined below), (b) any company of
which any of the Affiliated Companies is a shareholder or investor, and (c) any
company with respect to which Employee serves as an officer or director or in
any other capacity at the request of an Affiliated Company. Employee covenants
and agrees that he will execute any agreements or documents necessary to
formally effect such resignations and retirements. For purposes of this
Agreement, "Affiliated Companies" shall mean the Company and any direct or
indirect subsidiary or affiliate of the Company.

          2.  Subject to Paragraph 12 and the other terms and conditions of this
Agreement, the Company, on its behalf, and on behalf of the Released Parties as
<PAGE>

defined in Paragraph 4 below, has agreed to provide to Employee, and Employee
has expressly agreed to accept, the following, in full settlement, release and
discharge of all possible claims, known or unknown, which Employee might have or
might have claimed for any reason, as further delineated in Paragraph 4 below,
and as consideration for the other covenants and agreements of Employee set
forth in this Agreement:

               a.  Promptly following the Termination Date, the Company shall
          pay to Employee a lump sum payment of $19,232.00, minus all applicable
          withholding taxes, representing the sum of (i) Employee's base salary
          through the Termination Date to the extent not theretofore paid, (ii)
          the amount of any bonus, incentive compensation, deferred compensation
          and other cash compensation accrued by Employee as of the Termination
          Date to the extent not theretofore paid, and (iii) any vacation pay,
          expense reimbursements and other cash entitlements accrued by Employee
          as of the Termination Date to the extent not theretofore paid.

               b.  Employee shall be entitled to receive all benefits accrued by
          him as of the Termination Date under the Retirement Plan for Employees
          of Duquesne Light Company (the "Retirement Plan"), the Supplemental
          Retirement Plan for Non-Represented Employees of Duquesne Light
          Company (the "Supplemental Plan"), the Pension Service Supplement Plan
          (the "PSSP") (but only to the extent not previously paid or
          distributed to Employee through the purchase of annuity contracts or
          otherwise) and all other qualified and nonqualified retirement,
          pension, profit sharing and similar plans of the Company in such
          manner and at such time as are provided under the terms of such plans
          and arrangements.

                                       2
<PAGE>

               c.  Promptly following the Termination Date, the Company shall
          pay to Employee a lump sum payment of $526,508.00, minus all
          applicable withholding taxes, representing an amount equal to the
          actuarial equivalent of the additional benefit Employee would have
          accrued under the Retirement Plan, the Supplemental Plan and the PSSP
          if Employee's actual service with the Company had ended December 31,
          2003 and had his covered compensation for each calendar year during
          such additional period equaled his highest covered compensation for
          any of the three most recent calendar years ended prior to the
          Termination Date.

               d.  For the period from the Termination Date through December 31,
          2003, Employee shall be entitled to continuation of his base salary,
          at the rate of $41,666.69 per month.  This salary continuation shall
          be payable in accordance with the Company's regular payroll practices
          and shall be subject to all applicable withholding taxes.
          Notwithstanding the foregoing, the obligation of the Company to make
          these salary continuation payments to Employee shall terminate
          forthwith if Employee shall have breached any of his obligations under
          this Agreement.

               e.  For each month commencing October 2001 and ending December
          2003, the Company shall pay to Employee a payment of $20,833.33, minus
          all applicable withholding taxes, each such payment representing one-
          twelfth (1/12) of Employee's target annual bonus for the 2001 fiscal
          year. Notwithstanding the foregoing, the obligation of the Company to
          make these monthly payments to Employee shall terminate

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          forthwith if Employee shall have breached any of his obligations under
          this Agreement .

               f.  Promptly following the Termination Date, the Company shall
          pay to Employee a lump sum payment of $31,116.25, minus all applicable
          withholding taxes, representing an amount equal to two (2) times the
          projected cost to the Company of providing Employee, for the period
          from the Termination Date through December 31, 2003, life and
          disability insurance coverage substantially similar to the coverage
          which Employee was receiving immediately prior to the Termination
          Date.

               g.  Employee shall be entitled to receive a pro rata cash bonus
                                                           --------
          for the 2001 fiscal year. Such cash bonus, if any, shall be equal to
          the cash bonus Employee would have been entitled to receive under his
          annual incentive arrangement had his employment with the Company
          continued, as determined by the Compensation Committee of the Board of
          Directors of the Company, times a fraction, the numerator of which is
          257 and the denominator of which is 365 (i.e. 257/365). Any such cash
          bonus shall be paid to Employee, minus all applicable withholding
          taxes, at the same time and in the same manner as active executives of
          the Company receive their cash bonuses for fiscal year 2001.

               h.  Promptly following the Termination Date, the Company shall
          pay to Employee a lump sum payment of $256,160, which amount is equal
          to two times the estimated cost to the Company to have provided to
          Employee, until Employee attained Medicare benefit eligibility, the
          health

                                       4
<PAGE>

          benefits that he was being provided as of the Termination Date. Such
          amount was calculated by Hewitt & Associates.

               i.  All stock options held by Employee that were not awarded as
          of the Termination Date shall be deemed to have expired as of the
          Termination Date. All stock options held by Employee that were awarded
          as of the Termination Date shall be fully vested and exercisable and
          shall remain in effect in accordance with their respective terms until
          September 14, 2004 or earlier expiration of their ten-year terms.
          Exhibit A to this Agreement, which is incorporated by reference as if
          set forth fully in this Agreement, sets forth a description of all of
          Employee's stock options that were awarded as of the Termination Date.
          Except as may be otherwise expressly provided in this Agreement, such
          stock options shall be subject to all of the applicable terms and
          conditions of the Long-Term Incentive Plan and the applicable stock
          option agreements.

               j.  For one year following the Termination Date, Employee shall
          have the right, at the Company's expense, to continue to use the
          financial planning and counseling services offered to Company
          executives by AYCO in accordance with the guidelines established by
          the Company for such services.

               k.  In the event it is determined that any payment under this
          Agreement is a parachute payment subject to the excise tax set forth
          in Section 4999 of the Internal Revenue Code, then the provisions of
          Section 8(c) of the Employment Agreement shall be deemed in effect and
          applicable to Employee and the Company.

                                       5
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          Except as expressly provided above, Employee waives any compensation,
benefits or rights that may have accrued in his capacity as an employee or
otherwise prior to the date of this Agreement and shall not be entitled to
receive any salary, fees or benefits or participate in any compensation plans,
programs or arrangements of the Company and its affiliates after the Termination
Date.

          3.  The Company may withhold from any payments made under this
Agreement all federal, state or other taxes as shall be required pursuant to any
law or governmental regulation or ruling.

          4.  In consideration for the payments and benefits that Employee shall
be provided under this Agreement, and for other good and valuable consideration,
the receipt and legal sufficiency of which are hereby acknowledged, Employee on
behalf of himself and his dependents, heirs, administrators, representatives,
trustees, beneficiaries, executors, successors, assigns and any other person or
entity, including any government agency seeking to assert a claim on his behalf,
hereby unconditionally releases and forever discharges the Affiliated Companies
and their respective agents, servants, officers, directors, employees, parents,
attorneys, subsidiaries, divisions, affiliates, predecessors, successors and
assigns, all their respective employee benefit plans and their administrators,
trustees and other fiduciaries (severally and collectively called the "Released
Parties") from any and all manner of injuries, causes of actions, claims,
including, but not limited to, claims for back pay, front pay or reinstatement,
and demands of any kind whatsoever, in law or in equity, and from all debts,
counterclaims, cross-claims, rights, disputes, controversies, judgments,
agreements, contracts, promises, representations, misrepresentations,
allegations, obligations, duties, suits, expenses, assessments, penalties,
charges, interest, losses, costs, damages,

                                       6
<PAGE>

compensatory damages, consequential damages, punitive damages, sanctions, and
liabilities whatsoever, in law or in equity, whether known or unknown, asserted
or unasserted, claimed or unclaimed, foreseen or unforeseen, suspected or
unsuspected, discovered or undiscovered, accrued or unaccrued, anticipated or
unanticipated, contingent or fixed, or any that Employee or any person or entity
acting for Employee now has or hereafter may have against any of the Released
Parties for any acts, circumstances, conduct, commissions, omissions, failure to
act, practices or events up to and including the date hereof and the continuing
effects thereof, it being Employee's intention to effect a general release of
all claims. This general release includes, without in any way limiting the
generality of the foregoing, all claims or causes of action based upon torts
(such as, without limitation, negligence, fraud, defamation, libel, slander,
tortious interference and/or wrongful discharge); express and implied contracts
(including, without limitation, prior agreements between Employee and the
Company); any claims for attorneys' fees; any claims arising out of or relating
to Employee's employment or termination of employment with the Company; and any
claims arising from any alleged violation by any of the Released Parties of any
federal, state or local statutes, ordinances, rules, Executive Orders or
regulations, including, but not limited to, any of the following, as amended:
Title VII of the Civil Rights Act of 1964, the Rehabilitation Act of 1973, the
Pennsylvania Worker's Compensation Act, the Americans with Disabilities Act, the
Employee Retirement Income Security Act of 1974, the Pennsylvania Human
Relations Act, the Civil Rights Act of 1991, and the Age Discrimination in
Employment Act, and every other source of legal rights and obligations which may
be waived and/or released; provided, however, that the foregoing release shall
not adversely affect Employee's rights under this Agreement.

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               Nothing in this release is intended as a waiver of, or to
interfere with, (i) Employee's right to indemnification by the Company pursuant
to, and to the extent provided in, Section 11 of the Company's By-Laws in
existence on the date hereof, or (ii) Employee's right to file a charge under,
or to testify, assist or participate in any manner in any investigation, hearing
or proceeding under any statute over which the Equal Employment Opportunity
Commission has jurisdiction; provided, however, that Employee agrees that the
waiver and release in Paragraph 4 bars him from receiving any personal financial
recovery or other personal remedy as a result of, or in connection with, any
such charge, investigation, hearing or proceeding.

          5.   Employee acknowledges and agrees that he shall be subject to the
covenants set forth in Exhibit B to this Agreement which is incorporated by
reference as if set forth fully in this Agreement.

          6.   Employee agrees that he waives, releases and foregoes any chance,
right or opportunity to seek employment with or to provide services to any of
the Affiliated Companies, now or ever in the future, and further agrees that
Employee will not apply for or accept any such employment or provide any such
services, on his own behalf or on behalf of any other person or entity.

          7.   The terms of this Agreement shall remain strictly confidential.
Employee agrees that he will not, unless compelled by law or judicial process to
do so, disclose or discuss, directly or indirectly, its terms with anyone other
than his spouse, attorney and financial advisors.  Notwithstanding the
foregoing, the Company shall be entitled to make such public disclosure of this
Agreement as the Company, in its sole and absolute judgment, deems necessary or
appropriate under applicable law and regulations.

                                       8
<PAGE>

          8.   Employee and the Company agree to the following:

               a.   Employee will not make, publish or disseminate any
          derogatory statements or comments, whether orally or in writing, about
          any of the Affiliated Companies or their officers or directors, or
          take any action which a reasonable person would expect, directly or
          indirectly, to impair the good will, business reputation or good name
          of any of them; and the officers and directors of the Company will not
          make, publish or disseminate any derogatory statements or comments,
          whether orally or in writing, about Employee, or take any action which
          a reasonable person would expect, directly or indirectly, to impair
          his good will, business reputation or good name.

               b.   Employee agrees that he will cooperate with any Affiliated
          Company in any actual or threatened litigation or other proceedings,
          including but not limited to litigation involving current or former
          holders of Class B Common Stock of AquaSource, Inc. and/or former
          employee Donald Clayton. Such cooperation shall include, but not be
          limited to, testifying on any Affiliated Company's behalf at
          depositions, before administrative or regulatory bodies or in court or
          arbitration or similar proceedings. Company will reimburse Employee
          for reasonable out-of-pocket expenses incurred by Employee in
          connection with the foregoing and approved in advance by Company.

          9.   In addition to any other remedy herein set forth or otherwise
available to the Company at law or in equity, in the event that Employee
breaches or otherwise fails to observe any and all of the covenants, agreements
or duties herein set

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forth, as determined by a court or other body of competent jurisdiction, the
Company may, in its discretion, terminate this Agreement and shall thereafter be
released from performing hereunder.

          10.  It is expressly understood and agreed that by entering into this
Agreement, the Company does not admit in any way that it has treated Employee
unlawfully or wrongfully.  To the contrary, the Company expressly denies that it
has violated any of Employee's rights or harmed him in any way.

          11.  Employee acknowledges that he has carefully read and fully
understands all the provisions and effects of this Agreement; that he has had
the opportunity to consult and thoroughly discuss all aspects of it with an
attorney of his own choice; that he is voluntarily entering into this Agreement;
and that neither the Company nor its agents or attorneys made any
representations or promises concerning the terms or effects of this Agreement
other than those contained herein.

          12.  Employee acknowledges that he has been given no less than twenty-
one (21) days to consider this Agreement before executing it. Employee
acknowledges that he has been advised orally and by this writing to consult with
an attorney prior to signing this Agreement. He further acknowledges that he may
revoke this Agreement for a period of seven (7) days from the date he executes
it (the "Revocation Period"), by notifying in writing, David R. High, Vice
President and General Counsel of the Company at Cherrington Corporate Center,
400 Fairway Drive, Suite 300, Moon Township, PA 15108. In the event Employee
revokes this Agreement during the Revocation Period, this Agreement shall be
null and void in its entirety and all of the Company's obligations hereunder
shall cease immediately.

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          13.  The parties agree that this Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the Commonwealth of
Pennsylvania without regard to its conflicts of law rules, except as preempted
by federal law.  In the event that there is any claim, dispute, or other matter
in question arising out of or relating in any way, directly or indirectly, to
this Agreement, the enforcement of any provision herein, breach of any provision
thereof, the parties hereto expressly agree that it shall be submitted to the
federal, state or local courts, as appropriate, of the Commonwealth of
Pennsylvania located in the City of Pittsburgh and County of Allegheny, except
as preempted by federal law.  This provision to submit all claims, disputes or
matters in question to such courts shall be specifically enforceable; and each
party, hereby waiving any defense of inconvenient forum and waiving personal
service of process and venue, consents to jurisdiction in Pennsylvania for all
purposes of any other party seeking or securing any legal and/or equitable
relief.  The provisions hereof are severable, except the provisions of Paragraph
4 are not severable from the consideration provided in Paragraph 2.  If any
term, condition, clause or provision of this Agreement shall be deemed
unenforceable, it shall have no effect on the enforceability of the other
provisions hereof.

          14.  THE PARTIES IRREVOCABLY WAIVE ANY AND ALL RIGHT THEY MAY HAVE TO
A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR CLAIM OF ANY NATURE RELATING TO
THIS AGREEMENT, ANY DOCUMENTS EXECUTED IN CONNECTION HEREWITH OR ANY
TRANSACTIONS CONTEMPLATED IN ANY OF SUCH DOCUMENTS.  THE PARTIES ACKNOWLEDGE
THAT THE FOREGOING WAIVER IS KNOWING AND VOLUNTARY.

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<PAGE>

          15.  This Agreement represents the entire agreement of the parties
with respect to the subject matter hereof and any amendments hereto shall not be
effective unless they are in writing signed by all parties and/or their duly
authorized representatives.  The Employment Agreement, the Severance Agreement
and the Non-Competition and Confidentiality Agreement shall be of no further
force or effect after the Termination Date.

          16.  This Agreement shall inure to the benefit of Employee, or, in the
event of Employee's death, his estate.

          17.  By signing this Agreement, Employee is making the following
representation:  "I HAVE READ THIS AGREEMENT, AND HAVE HAD AN OPPORTUNITY TO
CONSULT WITH AN ATTORNEY OF MY CHOOSING ABOUT IT.  I HAVE BEEN GIVEN THE
NECESSARY TIME TO CONSIDER ITS CONTENTS AND I FULLY UNDERSTAND ALL OF ITS TERMS.
I AM SIGNING THIS AGREEMENT VOLUNTARILY."

          This Agreement is executed this 19th day of October, 2001.

                                   EMPLOYEE

/s/ David R. High                  /s/ David D. Marshall
---------------------------        --------------------------------
Witness                            David D. Marshall

Attest:                            DQE, Inc.

/s/ Douglas L. Rabuzzi             By:/s/ David R. High
---------------------------        --------------------------------
Assistant Secretary                Executive Vice President

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<PAGE>

                                   EXHIBIT A
                                   ---------

                            Awarded/Vested Options

                                                    Options O/S  Expiration
     Date of Grant   Type of Grant   Option Price   And Vested      Date
     -------------   -------------   ------------   ----------

       01-26-98         NQSO/SAR       $33.1250       35,565      09/14/04
       12-18-98         NQSO/SAR       $43.4375       57,227      09/14/04
       02-08-99         NQSO/SAR       $39.5938       14,192      09/14/04
       02-08-99         NQSO/SAR       $39.5938        8,936      08/30/04
       02-08-99         NQSO/SAR       $39.5938        5,501      08/30/04
       10-21-99         NQSO/SAR       $38.0938       12,791      09/14/04
       10-21-99         NQSO/SAR       $38.0938        1,895      09/14/04
       10-21-99         NQSO/SAR       $38.0938        6,718      08/30/04
       10-21-99         NQSO/SAR       $38.0938          917      08/30/04
       10-21-99         NQSO/SAR       $38.0938        3,090      08/30/04
       10-21-99         NQSO/SAR       $38.0938          450      08/30/04
       10-21-99         NQSO/SAR       $38.0938        6,516      02/19/02
       10-21-99         NQSO/SAR       $38.0938          919      02/19/02
       01-27-00         NQSO/SAR       $46.3125       67,478      09/14/04
       05-11-00         NQSO/SAR       $40.5625       12,599      08/30/04
       05-11-00         NQSO/SAR       $40.5625          559      02/19/02
       05-11-00         NQSO/SAR       $40.5625        4,020      02/19/02
       05-11-00         NQSO/SAR       $40.5625        2,966      08/30/04
       08-17-00           NQSO         $40.5000       15,750      09/14/04
       08-18-00         NQSO/SAR       $40.3438        7,150      09/14/04
       11-14-00         NQSO/SAR       $32.8750       13,239      09/14/04

                                      A-1
<PAGE>

                                   EXHIBIT B
                                   ---------

                               CERTAIN COVENANTS
                               -----------------

     1.        Definitions. For purposes of this Exhibit B, the following
               -----------
               capitalized terms shall have the respective meanings set forth
               below:

          a.   "Competing Business" shall mean any person, corporation or other
entity which develops, produces, markets, sells or services (1) any energy
product or service, including but not limited to gas or electric products or
services, and/or (2) any product or service which is the same as or similar to
products or services which the Company and/or an affiliate of the Company
developed, produced, marketed, or sold, including but not limited to energy
products and services, within the last year prior to the Termination Date.

          b.   "Confidential Information" shall mean all information disclosed
to Employee or known by Employee as a consequence of or through Employee's
employment, which is not generally known in the industry in which the Company
and/or an affiliate of the Company is or may become engaged, about the Company's
or an affiliate's business, products, processes, and services, including but not
limited to information relating to research, development, inventions, computer
program designs, flow charts, source and object codes, products and services
under development, pricing and pricing strategies, marketing and selling
strategies, power generating, servicing, purchasing, accounting, engineering,
costs and costing strategies, sources of supply, customer lists, customer
requirements, business methods or practices, training and training programs, and
the documentation thereof. It includes, but is not limited to, proprietary
information and trade secrets of the Company and its affiliates. It will be

                                      B-1
<PAGE>

presumed that information supplied to the Company and its affiliates from
outside sources is Confidential Information unless and until it is designated
otherwise.

          c.  "Invention" shall mean discoveries, concepts, and ideas, whether
patentable or not, including, but not limited to apparatus, processes, methods,
techniques, and formulae, as well as improvements thereof or know-how related
thereto, relating to any present or prospective activities of the Company and
its affiliates.

          d.  "Works" shall mean all material and information created by
Employee in the course of or as a result of Employee's employment by the Company
which is fixed in a tangible medium of expression, including, but not limited
to, notes, drawings, memoranda, correspondence, documents, records, notebooks,
flow charts, computer programs and source and object codes, regardless of the
medium in which they are fixed.

     2.   Confidentiality, Inventions, Works, Noncompete, Nonsolicitation, etc.
          --------------------------------------------------------------------

Employee acknowledges that the additional payments and benefits provided under
this Agreement are substantial and are good and adequate consideration for the
purposes of the covenants, promises and agreements of this Exhibit B and all
other provisions of this Agreement.

          a.  Employee acknowledges that all Confidential Information shall at
all times remain the property of the Company and its affiliates (i.e., the
parent of the Company, if any, or another company the majority interest of which
is owned, directly or indirectly, by the Company or by a parent or subsidiary of
the Company).  Employee will not at any time directly or indirectly use,
divulge, disseminate, disclose, lecture upon, or

                                      B-2
<PAGE>

publish any Confidential Information without having first obtained written
permission from the Company to do so.

          b.  (i) All Inventions made or conceived by Employee, either solely or
jointly with others, (A) during Employee's employment by the Company and (B)
within one (1) year after the Termination Date, whether or not such Inventions
were made or conceived during the hours of Employee's employment or with the use
of the Company's or an affiliates' facilities, materials, or personnel, will be
the property of the Company or its nominees and (ii) Employee will, without
royalty or any other additional consideration: (A) inform the Company promptly
and fully of such Inventions by written report, setting forth in detail a
description, the operation and the results achieved; (B) assign to the Company
all Employee's right, title, and interest in and to such Inventions, any
applications for United States and foreign Letters Patent, any continuations,
divisions, continuations-in-part, reissues, extensions or additions thereof
filed for upon such Inventions and any United States and foreign Letters Patent;
(C) assist the Company or its nominees, at the expense of the Company, to
obtain, maintain and enforce such United States and foreign Letters Patent for
such Inventions as the Company may elect; and (D) execute, acknowledge, and
deliver to the Company at its expense such written documents and instruments,
and do such other acts, such as giving testimony in support of Employee's
inventorship and invention, as may be necessary in the opinion of the Company to
obtain, maintain or enforce the United States and foreign Letters Patent upon
such Inventions and to vest the entire right and title thereto in the Company
and to confirm the complete ownership by the Company of such Inventions.

                                      B-3
<PAGE>

          c.  All Works created by Employee during his employment by the Company
will be and remain exclusively the property of the Company.  Each such Work is a
"work for hire" and the Company may file applications to register copyright as
author thereof.  Employee will take whatever steps and do whatever acts the
Company requests, including, but not limited to, placement of the Company's
proper copyright notice on such Works to secure or aid in securing copyright
protection and will assist the Company or its nominees in filing applications to
register claims of copyright in such works.  Employee will not reproduce,
distribute, display publicly, or perform publicly, alone or in combination with
any data processing or network system, any Works of the Company without the
written permission from the Company.

          d.  Employee covenants and agrees that for a period of one (1) year
following the Termination Date, Employee shall not engage, directly or
indirectly, whether as principal or as agent, officer, director, employee,
consultant, shareholder, or otherwise, alone or in association with any other
person, corporation or other entity, in any Competing Business located in the
states of Pennsylvania, Ohio, West Virginia, Maryland, New York, New Jersey or
Virginia.  Employee recognizes that the Company and its affiliates conduct or
intend to conduct business within the geographic area set forth herein, and
therefore, Employee agrees that this restriction is reasonable and necessary to
protect the Company's and its affiliates' business.

          e.  Employee agrees that for a period of two (2) years following the
Termination Date, Employee shall not, directly or indirectly, solicit the
business of, or do business with, any customer, supplier, or prospective
customer or supplier of the Company or an affiliate of the Company with whom
Employee had direct or indirect

                                      B-4
<PAGE>

contact or about whom Employee may have acquired any knowledge while employed by
the Company.

          f.  Employee agrees that for a period of two (2) years following the
Termination Date, Employee shall not, directly or indirectly, solicit or induce,
or attempt to solicit or induce, any employee of the Company or an affiliate of
the Company to leave the Company or an affiliate for any reason whatsoever, or
hire or solicit the services of any employee of the Company or an affiliate.

          g.  Employee acknowledges that the legal remedy available to the
Company and its affiliates for any breach of covenants on the part of Employee
will be inadequate, and, therefore, in the event of any threatened or actual
breach of this Agreement, the Company or an affiliate shall be entitled to
specific enforcement of this Agreement through injunctive or other equitable
relief in a court with appropriate jurisdiction.  The existence of any claim or
cause of action by Employee or other against the Company or an affiliate,
whether predicated on this Agreement or otherwise, shall not constitute a
defense to enforcement by the Company or an affiliate of this Agreement.

          h.  Promptly following the Termination Date, Employee will deliver to
the Company the originals and all copies of notes, sketches, drawings,
specifications, memoranda, correspondence, documents, records, notebooks,
computer disks and computer tapes and other repositories of Confidential
Information and inventions then in Employee's possession or under Employee's
control, whether prepared by Employee or by others, and will deliver to the
Company the originals and all copies of Works then in Employee's possession or
under Employee's control.

                                      B-5<PAGE>
                                                                    EXHIBIT 10.1

                              CONSULTING AGREEMENT

                  This Agreement, dated as of August 24, 2001, by and between
ORBITAL SCIENCES CORPORATION ("Orbital"), a Delaware corporation, with its
principal place of business located at 21700 Atlantic Boulevard, Dulles,
Virginia, 20166 and Michael Griffin (the "Consultant"), an individual, Social
Security number ###-##-#### whose address is 12325 Myterra Way, Oak Hill, VA
20171.

                  W I T N E S S E T H:

                  WHEREAS, the Consultant has expertise in particular areas
relevant to Orbital's business;

                  WHEREAS, the Consultant desires to provide services to Orbital
that draw upon such expertise; and

                  WHEREAS, Orbital desires to employ the Consultant to render
advice and other services to Orbital that draw upon the Consultant's expertise;

                  NOW THEREFORE, in consideration of the mutual promises and
covenants herein contained, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, and intending to be
legally bound hereby, the parties hereto agree as follows:

ARTICLE I - SCOPE

         (1) The Consultant shall furnish professional consulting services and
advice to Orbital at such times as are mutually agreeable to the parties. Such
services shall be performed with the authorization of and under the direction of
an authorized representative of Orbital. All such services shall be furnished at
the offices of Orbital or at such other places as may be directed. The services
that shall be performed by the Consultant are set forth in Exhibit A hereto, as
it may be modified from time to time.

         (2) The Consultant verifies that he is an independent contractor and
will be required to invoice Orbital on appropriate business letterhead. As an
independent contractor, the Consultant is not an employee of Orbital. Therefore,
the Consultant is not subject to the provisions of Orbital's employee relations
policy and is not entitled to the benefits thereunder.

<PAGE>

ARTICLE II - TERM

                  This Agreement shall commence on the date set forth above and
shall continue for a period of twelve (12) months unless terminated by one of
the parties in accordance with Article VI.

ARTICLE III - CONSIDERATION

         (1) Subject to the terms and conditions of this Agreement, Orbital, as
compensation for services rendered under this Agreement by the Consultant for
Orbital, shall pay the Consultant at a rate of One Hundred Thirty Four Dollars
and Sixty Two Cents ($134.62) per hour. Consultant shall provide without charge
responses to such reasonable, brief inquiries relating to his former areas of
responsibility as would ordinarily be made in connection with an orderly
transition following the departure of a member of senior management.

         (2) The Consultant shall have no authority to purchase goods or
services for or on behalf of Orbital under the terms of this agreement.

ARTICLE IV - INVOICING

                  The Consultant shall present an invoice for professional
services detailing the time spent and the services rendered, referencing charge
number 4600-809 and Consulting Agreement number CA0112 on the invoice. Payment
terms shall be net thirty (30) days from the date of receipt of an invoice
submitted by the Consultant; however, no interest shall be charged on invoices
not paid within such thirty (30) day period.

                  All invoices shall include the Consultant's taxpayer
identification number and shall be directed to:

                           Orbital Sciences Corporation
                           Attention: Accounts Payable
                           21700 Atlantic Boulevard
                           Dulles, VA 20166

                                       2
<PAGE>

ARTICLE V - DRAWINGS, RECORDS AND OTHER DATA

                  All drawings, designs, specifications, data and other
memoranda or records of value prepared by, or otherwise under the control of,
the Consultant, in connection with work performed hereunder, shall be and remain
the property of Orbital.

ARTICLE VI - TERMINATION

                  Orbital or the Consultant may, at any time, by giving the
other party ten (10) days' notice in writing, terminate this Agreement. This
Agreement may also be terminated immediately upon any breach of its terms by
either party. In the event of termination, Orbital shall be subject to no
liability, except to pay the Consultant for services up to and including the
date of termination. The provisions contained in Articles V, VII, VIII, IX and X
shall survive termination of the Agreement.

ARTICLE VII - PATENTS AND COPYRIGHTS; PROPRIETARY RIGHTS

                  The Consultant hereby irrevocably assigns to Orbital all
right, title and interest in and to all inventions and discoveries, whether or
not patentable and whether or not reduced to practice, and all other work
product of any nature, whether or not copyrightable, made, conceived or authored
by the Consultant in the course of performing the Services or any other work
under this Agreement and all tangible embodiments of the foregoing ("Work
Product") and all patents, copyrights, trademarks, trade secrets and all other
intellectual property rights therein and any extensions and renewals thereof.
The Consultant shall promptly furnish Orbital with complete information with
respect to all Work Product whenever made, conceived or authored by the
Consultant. All copyrightable Work Product created by the Consultant in the
course of performing the Services or any other work under this Agreement shall
be deemed to be a "work made for hire" in accordance with 17 U.S.C. Section 101
belonging exclusively to Orbital. Orbital shall have the exclusive right to
obtain and hold solely in its own name all patents, copyright, registrations,
trademark registrations, trade secrets and other such protection for the Work
Product as may be appropriate to the subject matter, and any extensions or
renewals thereof. The Consultant shall provide Orbital, and any person
designated by Orbital, all reasonably necessary cooperation in connection with
Orbital's perfection of its patent, trademark, copyright, trade secret and other
rights in the Work Product and Orbital's ownership thereof, including without
limitation signing all documents reasonably requested by Orbital both before and
after the termination of this Agreement.

ARTICLE VIII - COMPLIANCE

                  The Consultant shall comply with all Byrd Amendment reporting
and charging requirements and shall, in connection with each invoice, separately
report and charge all activities subject to such Byrd Amendment requirements.
The Consultant shall also comply with

                                       3
<PAGE>

the Procurement Integrity requirements contained in the Federal Procurement
Policy Act, 41 U.S.C. Section 423.

ARTICLE IX - PROTECTION OF PROPRIETARY INFORMATION

                  The Consultant shall not disclose any Proprietary Information
to any third party except with the express written consent of Orbital. The
Consultant shall sign a full Non-Disclosure Agreement (See Exhibit B) prior to
commencement of work.

ARTICLE X - GOVERNING LAW

                  This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Virginia.

ARTICLE XI - ASSIGNMENT

                  This Agreement and the rights and obligations of the parties
hereunder shall not be assigned by either party without the prior written
consent of the other.

ARTICLE XII - SEVERABILITY

                  If any provision of this Agreement, or the application
thereof, shall, for any reason and to any extent, be invalid or unenforceable,
the remainder of this Agreement and the application of such provisions to other
persons or circumstances shall not be affected thereby, but rather shall be
enforced to the maximum extent permissible under applicable law.

ARTICLE XIII - CITIZENSHIP OF CONSULTANT

                  The Consultant, by signature to this Agreement, affirms and
certifies to Orbital that (mark one):

         (X) The Consultant is a citizen of the United States of America.
         ( ) The Consultant is not a citizen of the United States of
             America. Set forth below is the Consultant's country of
             citizenship and his/her immigration number (if applicable).
             ---------------------------------------------------------

                  All individuals reporting for work at Orbital facilities will
be required to provide either proof of U.S. citizenship or a copy of this
contract with the individual listed as a non-U.S. citizen.

                                       4
<PAGE>

ARTICLE XIV - DESIGNATION OF ORBITAL AUTHORIZED REPRESENTATIVES

                  The representative of Orbital authorized to direct the
Consultant (as referred to in Article I) is: David W. Thompson.

ARTICLE XV - INSURANCE

Workers Compensation Insurance Waiver Agreement for sole proprietors (without
employees): This waiver agreement is executed by the Consultant for the duration
of this Agreement if space is checked below.

          (X) Consultant acknowledges that he/she is an independent contractor
          and not an employee of Orbital Sciences Corporation. Consultant
          further acknowledges that Workers Compensation insurance is either not
          available or is elective as respects sole proprietors in Consultant's
          state of domicile. Consultant has elected not to carry Workers
          Compensation insurance on himself or herself and, therefore,
          self-insures this exposure.

                  IN WITNESS WHEREOF, each of the parties of this Agreement has
caused this Agreement to be signed in its name and on its behalf by its
representative thereunto duly authorized as of the day and year first above
written.

ORBITAL SCIENCES CORPORATION                MICHAEL GRIFFIN

By                                          By:
   -----------------------------               ------------------------------
         Emily S. Bender                            Michael Griffin
         Senior Director, Human Resources

Date                                        Date:
    -----------------------------                ----------------------------

                                       5
<PAGE>

                                    EXHIBIT A

                   Services to be Performed by the Consultant

           General consulting services at the rate of 134.62 per hour.

                                       6

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