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(1)

Represents the estimated maximum number of shares of common stock of the registrant that may be issued pursuant to the merger of a wholly-owned subsidiary of the registrant into H Power Corp. This registration statement also relates to an indeterminate number of shares of the registrant’s common stock that may be issued upon stock splits, stock dividends or similar transactions in accordance with Rule 416 under the Securities Act of 1933, as amended.

(2)

Estimated solely for the purpose of calculating the registration fee in accordance with Rules 457(c) and 457(f) under the Securities Act of 1933, as amended. Based upon the average of the high and low sales prices for H Power Corp. common stock on November 21, 2002 as reported on the Nasdaq National Market, and the maximum number of shares of H Power Corp. common stock to be acquired by Plug Power in the merger (assuming exercise of all outstanding options to acquire H Power Corp. common stock).

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[PLUG POWER LOGO]

[H POWER LOGO]

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1.

To consider and vote on a proposal to approve the issuance of shares of common stock of Plug Power Inc. pursuant to the Agreement and Plan of Merger, dated as of November 11, 2002, by and among Plug Power Inc., a Delaware corporation, Monmouth Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of Plug Power Inc., and H Power Corp., a Delaware corporation, as amended, a copy of which is attached as Annex A to the accompanying joint proxy statement/prospectus.

2.

To consider and vote on a proposal to exchange options to purchase shares of common stock of Plug Power Inc. held by its employees for shares of restricted common stock of Plug Power Inc., in accordance with the terms and conditions described in the accompanying joint proxy statement/prospectus.

3.

To transact any other business as may properly come before the special meeting and any adjournments or postponements of the special meeting.

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1.

To consider and vote on a proposal to adopt and approve the Agreement and Plan of Merger, dated as of November 11, 2002, by and among Plug Power Inc., a Delaware corporation, Monmouth Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of Plug Power, and H Power Corp., a Delaware corporation, as amended, a copy of which is attached as Annex A to the accompanying joint proxy statement/prospectus, and to approve the merger as contemplated by the merger agreement.

2.

To transact any other business that may properly come before the special meeting and any adjournment or postponement of the special meeting.

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Q:

Why are Plug Power and H Power proposing the merger? (See pages 57 and 68)

A:

Plug Power and H Power are proposing the merger because they believe the resulting combined company will be a stronger, better capitalized and more competitive company. Plug Power and H Power believe that the merger will provide significant potential benefits and resources, including:

•

cash resources to fund the combined company’s growth and development;

•

benefits created from the complementary resources of Plug Power and H Power, including complementary financial, technology and intellectual property resources; and

•

potential synergy benefits from cost savings and integration of the companies’ strategic partners and suppliers.

Overall,

both Plug Power and H Power believe that the merger will provide added value to their respective stockholders. Achieving these anticipated benefits, however, is subject to certain risks discussed in “Risk Factors” beginning on page 26.

Q:

What will I receive in the merger? (See  page 75)

A:

H Power Stockholders:

If the merger is completed, Plug Power and H Power estimate that each H Power stockholder will receive approximately .80 shares of Plug Power common stock for each share of H Power common stock, based on the factors described below, each calculated as of the date of this joint proxy statement/prospectus. This amount is an estimate, however, as the exchange ratio for H Power common stock is determined based in part on:

•

the number of shares of H Power common stock outstanding immediately prior to the effective time of the merger;

•

the average trading price for shares of Plug Power common stock for 10 randomly selected days in the 20 trading day period ending on the second trading day prior to the effective time of the merger; and

•

the transaction value price, which is determined based on the value of H Power’s net cash (as defined in the merger agreement) at the effective time of the merger.

As a result, the number of shares of Plug Power common stock that each H Power stockholder will receive for each share of H Power common stock may be different than .80. For example, if H Power’s net cash (as defined in the merger agreement) is equal to $36,675,000 then the number of shares of Plug Power common stock that each H Power stockholder will receive for each share of H Power common stock will, depending on the number of shares of H Power common stock outstanding immediately prior to the effective time of the merger and the average Plug Power common stock price, range between .73 and .89. Each H Power stockholder will also receive cash, without interest, rather than a fractional share of Plug Power common stock that he, she or it would otherwise be entitled to receive in the merger.

For a description of how the exchange ratio will be determined, and examples of the exchange ratio based on assumptions regarding H Power’s net cash and the average Plug Power common stock price, each at the effective time of the merger, see the section of this joint proxy statement/prospectus titled “The Merger and Related Transactions—The Merger Agreement—Conversion of H Power Common Stock in the Merger.” Prior to each company’s respective special meeting of stockholders, the current estimated exchange ratio will be posted on Plug Power’s website at www.plugpower.com and on H Power’s website at www.hpower.com.

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Q:

Will H Power stockholders be able to trade the Plug Power common stock that they receive in the merger? (See page 100)

A:

Yes. The Plug Power common stock issued in the merger will be registered with the Securities and Exchange Commission and listed on the Nasdaq National Market under the symbol “PLUG.” All shares of Plug Power common stock that you receive in the merger will be freely transferable unless you are deemed to be an affiliate of H Power prior to the completion of the merger or an affiliate of Plug Power after the completion of the merger, or your shares are subject to other contractual restrictions. Shares of Plug Power common stock received by persons deemed to be affiliates in the merger may only be sold in compliance with Rule 145 under the Securities Act or as otherwise permitted under the Securities Act.

Q:

When do Plug Power and H Power expect to complete the merger?

A:

Plug Power and H Power expect to complete the merger when all of the conditions to completion of the merger contained in the merger agreement have been satisfied or waived. The stockholders of H Power must approve the merger agreement and the merger at their special stockholders meeting and the stockholders of Plug Power must approve the issuance of shares of Plug Power common stock pursuant to the merger agreement at their special stockholders meeting.

Q:

What happens if the merger is not completed? (See page 91)

A:

If the merger is not completed, each of Plug Power and H Power will continue as independent companies. In addition, under the terms of the merger agreement, H Power may be required to pay Plug Power a termination fee of $2,000,000. Also, each party may be required to reimburse the other for out-of-pocket expenses, including legal, accounting, investment banking, printing and other fees, related to this transaction if the merger is not completed. For a more complete discussion of requirements relating to payments of fees and expenses by each of Plug Power and H Power see the section entitled “The Merger and Related Transactions—The Merger Agreement—Payment of Termination Fee and Expenses” in this joint proxy statement/prospectus.

Q:

What vote is required to approve the merger? (See page 48)

A:

Approval of the merger agreement and the transactions contemplated by the merger agreement requires the affirmative vote of the holders of a majority of the outstanding shares of H Power common stock as of the record date. Although the approval of the stockholders of Plug Power is not required to effect the merger pursuant to Delaware general corporation law, Plug Power’s organizational documents or any other regulatory or listing requirements applicable to Plug Power, the board of directors of Plug Power has determined that the issuance of shares of Plug Power common stock pursuant to the merger agreement will be subject to, and the merger agreement requires, the affirmative vote of the holders of a majority of the shares of Plug Power common stock present in person or represented by proxy at the special meeting of Plug Power stockholders on such matter. In

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addition, approval of the stock option exchange is subject to the same voting requirement as the merger.

Q:

How do I vote on the merger? (See pages 46 and 49)

A:

First, please review the information contained or incorporated by reference in this joint proxy statement/prospectus, including the annexes, as it contains important information about Plug Power, H Power and the merger. It also contains important information about what each of the boards of directors of Plug Power and H Power, respectively, considered in evaluating the merger. Next, complete and sign the enclosed proxy card, and then mail it in the enclosed return envelope as soon as possible so that your shares can be voted at your company’s special meeting of stockholders at which, in the case of H Power, the merger agreement and the merger will be presented and voted upon, or, in the case of Plug Power, the issuance of shares of Plug Power common stock pursuant to the merger agreement and the approval of the stock option exchange will be presented and voted upon. You may also attend the special meeting of your company in person and vote at the special meeting instead of submitting a proxy.

Q:

What happens if I don’t indicate how to vote my proxy? (See pages 45 and 48)

A:

If you sign and send in your proxy, but do not include instructions on how to vote your properly signed proxy card, your shares will be voted FOR adoption and approval of the merger agreement and approval of the merger if you are an H Power stockholder or FOR the issuance of shares of Plug Power common stock pursuant to the merger agreement and FOR the stock option exchange if you are a Plug Power stockholder.

Q:

What happens if I don’t return a proxy card? (See pages 45 and 48)

A:

If you are a stockholder of H Power, not returning your proxy card will have the same effect as voting against adoption and approval of the merger agreement and against approval of the merger. If you are a stockholder of Plug Power, not returning your proxy card will have no effect as to the approval of the proposal to issue shares of Plug Power common stock pursuant to the merger agreement or the proposal to approve the stock option exchange.

Q:

Can I change my vote after I have mailed my signed proxy card? (See pages 46 and 49)

A:

Yes. You can change your vote at any time before your proxy is voted at the special meeting of your company’s stockholders at which, in the case of H Power, the merger agreement and the merger will be presented and voted upon, and in the case of Plug Power, the issuance of shares of Plug Power common stock pursuant to the merger agreement and the proposal to approve the stock option exchange will be presented and voted upon. You can do this in one of three ways:

•

first, you can send a written notice stating that you would like to revoke your proxy to the appropriate address below;

•

second, you can complete and submit a later-dated proxy card to the appropriate address below; or

•

third, you can attend the special meeting of Plug Power or H Power, as appropriate, and vote in person. Your attendance at the special meeting alone will not revoke your proxy. You must vote at the special meeting in order to revoke your previously submitted proxy.

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Q:

Can I submit my proxy by telephone or over the Internet?

A:

If you hold your shares through a bank or brokerage firm, you may be able to submit your proxy by telephone or over the Internet. You should refer to the proxy card included with your materials for instructions about how to vote. If you vote by telephone or over the Internet, you do not need to complete and mail your proxy card. If you hold shares directly, then you may not vote by telephone or over the Internet.

Q:

If my broker holds my shares in “street name,” will my broker vote my shares for me? (See pages 46 and 49)

A:

No. Your broker will not be able to vote your shares without instructions from you. If you do not provide your broker with voting instructions, your shares may be considered present at the special meeting for purposes of determining a quorum, but will not be considered to have been voted in favor of adoption and approval of the merger agreement or approval of the merger, in the case of H Power stockholders, or in favor of approval of the issuance of shares of Plug Power common stock pursuant to the merger agreement or approval of the stock option exchange, in the case of Plug Power stockholders. As a result, failure to provide your broker with voting instructions will have the effect of a vote against the merger agreement and against the approval of the merger if you are a stockholder of H Power, or the effect of a vote against approval of the issuance of shares of Plug Power common stock pursuant to the merger agreement and against the stock option exchange if you are stockholder of Plug Power. If you have instructed a broker to vote your shares and wish to change your vote, you must follow the directions received from your broker to change those instructions.

Q:

Should I send my H Power stock certificates now? (See page 79)

A:

No. If the merger is completed, Plug Power will send you written instructions for exchanging your H Power stock certificates for Plug Power stock certificates. In the meantime, you should retain your certificates as the H Power stock certificates are still valid. Please do not send in your stock certificates with your proxy. If you send your stock certificates to Plug Power, Plug Power assumes no risk of loss.

Q:

Am I entitled to appraisal rights in connection with the merger? (See page 100)

A:

No. Appraisal rights are not available under applicable law in connection with the merger.

Q:

Are there any risks I should consider in deciding whether to vote for the merger or the issuance of shares of Plug Power common stock in connection with the merger?

A:

Yes. In the section entitled “Risk Factors” beginning on page 26 of this joint proxy statement/prospectus, Plug Power and H Power have described a number of risk factors that you should consider.

Q:

What are the tax consequences to me of the merger? (See page 95)

A:

Plug Power and H Power intend to treat the merger in such a manner that receipt of Plug Power common stock in the merger would be tax-free to H Power’s stockholders. However, it is unclear whether the merger will qualify as a tax-free reorganization, and thus it is possible that the H Power stockholders will be required to recognize gain or loss for U.S. federal income tax purposes in connection with the merger. We urge you to consider carefully the discussion of the tax consequences related to the merger and to review these tax consequences with your tax advisor.

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Q:

Who can help answer my questions about the proposals?

A:

If you have any questions about the proposals presented in this joint proxy statement/prospectus, you should contact:

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increased visibility and market capitalization of the combined entity;

•

increased financial strength of the combined entity;

•

greater intellectual property and technical resources of the combined entity;

•

the fact that the proposed exchange ratio offers a significant premium to H Power stockholders relative to H Power’s stock price;

•

the risks of remaining an independent entity, and the lack of definitiveness of any financing proposal; and

•

the opinion of Lehman Brothers that, as of the date of such opinion and based upon and subject to the assumptions, limitations and qualifications set forth therein, the exchange ratio offered to the holders of  H Power common stock in the merger was fair from a financial point of view to such holders.

•

risks associated with fluctuations in Plug Power’s stock price prior to the merger;

•

the risk of disruption of sales momentum and H Power’s operations as a result of uncertainties created by the announcement of the merger;

•

the risk that certain conditions in the merger agreement may have the effect of discouraging alternative proposals for a business combination with another third party;

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•

the interests of the directors and officers that are different from, or in addition to, those of H Power’s stockholders generally, including the receipt of change of control payments under the employment agreements with certain executive officers of H Power; and

•

other applicable risks described in the section of this joint proxy statement/prospectus entitled “Risk Factors” on page 26.

•

the opinion of Stephens Inc., Plug Power’s financial advisor, to the effect that as of November 11, 2002, the exchange ratio set forth in the merger agreement was fair, from a financial point of view, to Plug Power;

•

H Power’s cash reserves and Plug Power’s belief that the addition of such cash reserves to its own balance sheet would provide Plug Power with sufficient cash to help fund operations;

•

H Power’s intellectual property, technical resources and other assets;

•

the opportunity to enhance stockholder value by combining two complementary businesses;

•

the belief that the merger represents the most favorable alternative currently available to Plug Power to increase its capital resources and further its financing and business objectives;

•

the belief that the combined company will be in a better position to continue to compete effectively in the fuel cell industry;

•

the terms of the merger agreement, including Plug Power’s right to receive a $2,000,000 termination fee or to be reimbursed for its expenses in the event that it terminates the merger agreement under certain circumstances; and

•

potential synergy benefits, including cost savings and access to H Power’s partners and suppliers.

•

the risk that the potential benefits of the merger may not be realized, in part or at all;

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•

the risk that the merger may not be consummated;

•

the risk of management and employee disruption associated with the merger;

•

the potential costs the combined company may incur to (1) terminate, renegotiate or amend H Power’s existing obligations, including real estate and facility leases, (2) streamline the combined company’s business, (3) reduce excess capacity, including terminating employees and (4) eliminate redundant operations, including the consolidation of H Power’s operations into Plug Power’s headquarters in Latham, New York.

•

the dilutive effects of the merger upon existing Plug Power stockholders;

•

the risk that the merger could adversely affect Plug Power’s stock price or Plug Power’s relationship with some of its existing or potential customers, suppliers or strategic partners;

•

the significant costs involved in consummating the merger; and

•

other applicable risks described in the section of this joint proxy statement/prospectus entitled “Risk Factors” on page 26.

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•

Dr. H. Frank Gibbard, chief executive officer of H Power, and William Zang, chief financial officer of H Power, have severance agreements effective upon a change in control of H Power;

•

certain other executive officers have change of control agreements effective upon a change in control of H Power;

•

the vesting restrictions on certain outstanding options held by certain non-employee directors of H Power to purchase H Power common stock will accelerate immediately prior to the merger; and

•

Mr. Clark, a member of H Power’s board of directors, is currently a vice-chairman of Lehman Brothers, which H Power has retained as its investment banker with respect to the merger.

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*

For the period June 27, 1997 (date of inception) to December 31, 1997

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(1)

Includes non-cash stock compensation expense of $4,400, $5,175 and $711 in the years ended May 31, 2001, 2000 and 1999, respectively.

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(1)

The estimated exchange ratio is .80 shares of Plug Power common stock for each share of H Power common stock. It is estimated that the exchange ratio could range from .73 to .89, exclusive of any adjustment required based upon H Power’s actual net cash at the effective time of the merger, as defined in the merger agreement. If the exchange ratio is .73 shares of Plug Power common stock for each share of H Power common stock, the number of shares of Plug Power common stock issued in connection with the merger would decrease to approximately 7.8 million shares from approximately 8.6 million shares. If the exchange ratio is .89 shares of Plug Power common stock for each share of H Power common stock, the number of shares of Plug Power common stock issued would increase to approximately 9.6 million shares from approximately 8.6 million shares. For further information concerning the estimated exchange ratio and the factors that may cause it to be adjusted, see the section of this document titled “The Merger and Related Transactions—The Merger Agreement—Collar Adjustment and Net Cash Adjustment.”

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(1)

The estimated exchange ratio is .80 shares of Plug Power common stock for each share of H Power common stock. It is estimated that the exchange ratio could range from .73 to .89, exclusive of any adjustment required based upon H Power’s actual net cash at the effective time of the merger, as defined in the merger agreement. If the exchange ratio is .73 shares of Plug Power common stock for each share of H Power common stock, the loss per share, basic and diluted, for pro forma combined would be $(1.85) based on the weighted average number of shares outstanding, basic and diluted, of 54,674,816. If the exchange ratio is .89, the loss per share, basic and diluted, for pro forma combined would be $(1.79) based on the weighted average number of shares outstanding, basic and diluted, of 56,415,866.

(2)

The estimated exchange ratio is .80 shares of Plug Power common stock for each share of H Power common stock. It is estimated that the exchange ratio could range from .73 to .89, exclusive of any adjustment required based upon H Power’s actual net cash at the effective time of the merger, as defined in the merger agreement. If the exchange ratio is .73 shares of Plug Power common stock for each share of H Power common stock, the loss per share, basic and diluted, for pro forma combined would be $(0.91) based on the

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weighted average number of shares outstanding, basic and diluted, of 58,392,863. If the exchange ratio is .89, the loss per share, basic and diluted, for pro forma combined would be $(0.88) based on the weighted average number of shares outstanding, basic and diluted, of 60,133,913. For further information concerning the estimated exchange ratio and the factors that may cause it to be adjusted, see the section of this joint proxy statement/prospectus entitled “The Merger and Related Transactions—The Merger Agreement—Collar Adjustment and Net Cash Adjustment” on page 78.

(3)

The unaudited equivalent pro forma per share amounts are calculated by multiplying the unaudited combined pro forma per share amounts by an assumed exchange ratio of .80 of a share of Plug Power common stock for each outstanding share of H Power common stock.

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*

Commencing on August 9, 2000 for H Power.

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Applying an assumed exchange ratio of .855 shares on November 11, 2002 and              shares on             , 2002, respectively of Plug Power common stock for each share of H Power common stock.

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•

the satisfaction of the conditions to closing, including receipt of stockholder and regulatory approvals;

•

the expected closing date of the merger;

•

the risk that the merger will not close;

•

the risk that the merger will not be treated as a tax-free reorganization for United States federal income tax purposes;

•

the risk that Plug Power will not integrate and restructure the acquired business successfully;

•

the risk that Plug Power will incur unanticipated costs to integrate and restructure the acquired business;

•

the risk that H Power will require more cash than anticipated prior to closing;

•

fluctuations in the trading price and volume of Plug Power’s common stock;

•

the risk that continuity of H Power’s operations will be disrupted in the event the transaction does not close;

•

Plug Power’s ability to develop a commercially viable fuel cell system;

•

the cost and time required for Plug Power to develop fuel cell systems;

•

market acceptance of Plug Power’s fuel cell systems;

•

Plug Power’s reliance on its relationship with certain affiliates of General Electric;

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•

Plug Power’s ability to perform on its multi-generation product plan in a manner satisfactory to its distribution partners;

•

Plug Power’s ability to manufacture fuel cell systems on a commercial basis;

•

competitive factors, such as price competition, competition from other power technologies and competition from other fuel cell companies and the cost and availability of components and parts for Plug Power’s fuel cell systems;

•

the ability to raise and provide the necessary capital to develop, manufacture and market Plug Power’s fuel cell systems;

•

Plug Power’s ability to lower the cost of its fuel cell systems and demonstrate their reliability; and

•

the cost of complying with current and future governmental regulations.

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•

H Power may be required, under certain circumstances, to pay to Plug Power a termination fee of $2,000,000;

•

either Plug Power or H Power may be required, under certain circumstances, to pay to the other party particular out-of-pocket expenses incurred in connection with pursuing the merger;

•

both companies may experience a negative reaction, from both the financial markets and customers, suppliers or partners of each company, to the termination of the merger;

•

each company must pay its own costs related to the merger (subject to reimbursement by the other party in particular cases), such as amounts payable to legal and financial advisors and independent accountants, even if the merger is not completed;

•

the price of Plug Power’s and/or H Power’s common stock may decline as a result of the costs associated with the merger and/or to the extent that the current market price of Plug Power’s and/or H Power’s common stock reflects a market assumption that the merger will be completed;

•

either company may forego other opportunities which would otherwise be available had the merger agreement not been executed, including, without limitation, foregone opportunities as a result of certain affirmative and negative covenants made by H Power in the merger agreement, such as covenants affecting the conduct of its business outside the ordinary course of business; and

•

either company may be unable to obtain additional sources of financing or conclude another sale or merger transaction on favorable terms, or at all, and the board of directors of either company may determine that the best alternative is to discontinue certain operations, liquidate certain assets, reduce expenditures, and take other actions required to limit operations in a manner inconsistent with current development and commercialization plans.

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the diversion of management’s attention from other ongoing business concerns;

•

the inability to utilize the acquired resources effectively; and

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demonstrating to the combined company’s customers, suppliers and partners that the merger will not result in adverse changes in client service standards or business focus.

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•

the integration of Plug Power and H Power is unsuccessful;

•

Plug Power does not achieve the perceived benefits of the merger as rapidly or to the extent anticipated by financial or industry analysts or investors; or

•

the effect of the merger on Plug Power’s financial results or condition is not consistent with the expectations of financial or industry analysts or investors.

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•

the accelerated vesting of certain stock options held by certain non-employee directors of H Power as a result of the merger;

•

the receipt of severance payments by certain executive officers in the event that such individuals resign or terminate their employment with H Power subsequent to the signing of the merger agreement;

•

the receipt of payments, pursuant to a termination agreement by ECO, which has a representative on the H Power board of directors;

•

the engagement of Lehman Brothers, a vice-chairman of which is a director of H Power’s board of directors, as H Power’s financial advisor in connection with the merger; and

•

the receipt of ongoing indemnification and insurance coverage with respect to acts taken and omissions to take action in their capacities as directors and officers of H Power prior to the effective time of the merger.

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(1)

the sum of the market value of Plug Power common stock issued in connection with the merger;

(2)

the fair value of H Power stock options assumed by Plug Power; and

(3)

the amount of direct transaction costs incurred by Plug Power.

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the cost competitiveness of fuel cell systems,

•

the future costs of natural gas, propane and other fuels expected to be used by our systems,

•

consumer reluctance to try a new product,

•

consumer perceptions of Plug Power’s systems’ safety,

•

regulatory requirements, and

•

the emergence of newer, more competitive technologies and products.

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the termination of employment arrangements with certain employees;

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reductions in expenditures for research and development;

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the closing of certain facilities; and

•

the termination of certain customer contracts.

•

the inability to rehire former employees or hire new employees with similar qualifications on a timely basis, and the departure of key employees;

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•

delays in further development of H Power’s residential fuel cell systems due to reductions in spending relating to research and development; and

•

delays in the timely production of its fuel cell products due to the suspension of field testing pursuant to certain customer contracts.

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1.

to consider and vote upon a proposal to approve the issuance of shares of common stock of Plug Power pursuant to the merger agreement;

2.

to consider and vote upon a proposal to exchange options to purchase shares of common stock of Plug Power held by its employees for shares of restricted common stock of Plug Power, in accordance with the terms and conditions described in this joint proxy statement/prospectus; and

3.

to transact any other business that may properly come before the special meeting and any adjournment or postponement of the special meeting.

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delivering to the Secretary of Plug Power a later-dated signed notice of revocation;

•

delivering to the Secretary of Plug Power a later-dated, signed proxy (which will automatically replace any earlier dated proxy card that you returned); or

•

attending the special meeting and voting in person.

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1.

to consider and vote upon a proposal to adopt and approve the merger agreement and approve the merger; and

2.

to transact any other business that may properly come before the special meeting and any adjournment or postponement of the special meeting.

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delivering to the Secretary of H Power a later-dated signed notice of revocation;

•

delivering to the Secretary of H Power a later-dated, signed proxy (which will automatically replace any earlier dated proxy card that you returned); or

•

attending the special meeting and voting in person.

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the fact that the proposed exchange ratio offered a significant premium to H Power’s stockholders relative to the historical and current stock price for H Power,

•

that given the competitive nature of the hydrogen fuel cell industry and H Power’s recent stock price performance, the exchange ratio gives H Power’s stockholders a value per share which may not be achievable within a reasonable time period; and

•

that the merger was therefore an attractive opportunity for H Power’s stockholders.

•

provide information to, and engage in discussion or negotiations with, a third party that makes an unsolicited superior proposal (as defined in the merger agreement); and

•

withdraw or modify its recommendation that the stockholders vote in favor of adopting and approving the merger agreement and approving the merger.

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•

increased visibility and market capitalization of the combined company;

•

increased financial strength of the combined company; and

•

greater intellectual property and technical resources of the combined company.

•

the merger agreement permits Plug Power to terminate the agreement if the H Power board of directors withdraws its recommendation in favor of the merger with Plug Power or recommends another proposal;

•

the merger agreement requires H Power to pay a termination fee to Plug Power if the merger agreement is terminated under some circumstances (See “—The Merger Agreement—Payment of Termination Fee and Expenses” on page 91);

•

risks associated with fluctuations in Plug Power’s stock price prior to the merger;

•

the risk of disruption of sales momentum and H Power’s operations as a result of uncertainties created by the announcement of the merger;

•

the interests of the directors and officers that are different from, or in addition to, those of H Power’s stockholders generally, including the receipt of change of control payments under the employment agreements with certain executive officers of H Power; and

•

other applicable risks described in the section of this joint proxy statement/prospectus entitled “Risk Factors” on page 26.

•

the H Power board of directors’ familiarity with, and information provided by H Power’s management as to, the business, financial condition, results of operations, current business strategy and future prospects of H Power, as well as the risks involved in achieving those prospects and objectives in current industry and market conditions, the nature of the markets in which H Power operates, H Power’s position in such markets, and the historical and current market prices for H Power’s shares;

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•

the information provided to the H Power board of directors by the officers of H Power and Lehman Brothers with respect to the financial aspects of the merger and the advantages of a combination of Plug Power and H Power from the point of view of H Power and its stockholders;

•

alternatives to the merger, as well as the risks, financial and otherwise, inherent in continuing as an independent public company in an industry that is changing rapidly as opposed to the strengths of a combination between Plug Power and H Power;

•

the process engaged in by H Power’s management and financial advisor, which included discussions with another merger candidate and financing institutions, enabled the H Power board of directors to have what it believed to be an accurate sense of the values that could be achieved in a third party transaction;

•

H Power’s need for financing, and the lack of definitive alternatives to the merger for available financing;

•

the review of the material terms and conditions of the merger as reflected in the merger agreement, including (1) the provisions permitting H Power to respond to unsolicited inquiries and proposals from, provide confidential information to, and participate in any discussions and negotiations with, third parties concerning sales of assets and mergers or similar transactions with H Power to the extent required to satisfy the fiduciary obligations of its directors; (2) the break-up fee; (3) the collar; and (4) the conditions precedent to the consummation of the merger, including regulatory approval and the estimated length of time to consummate the merger;

•

the premium offered to H Power’s stockholders relative to the current, historical and projected stock price for H Power, including the board’s conclusion that given the competitive nature of the fuel cell industry and H Power’s recent stock price performance, the exchange ratio gives H Power’s stockholders a value per share which may not be achievable within a reasonable time period and that the merger was thus an attractive opportunity for the stockholders;

•

the structure of the merger, which is intended to permit holders of H Power common stock to exchange all their shares of H Power common stock on a tax-free basis;

•

H Power’s low market capitalization, which further decreases financing options, and the fact that a higher market capitalization will provide the combined company with a wider array of financing options; and

•

the strategic options available to H Power, including the option of continuing to operate H Power as an independent, publicly-traded company, and the assessment of H Power’s board of directors that none of these options were reasonably likely to present superior opportunities, or were reasonably likely to create greater value for H Power’s stockholders, than the prospects presented by the merger.

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•

the merger agreement and the specific terms of the merger, including H Power’s right to terminate the merger agreement in certain situations if the product of (1) the anticipated number of shares of Plug Power common stock to be issued in the merger and (2) the reasonably anticipated average Plug Power common stock price is less than $29,675,000, the estimated net cash of H Power as of the closing of the merger;

•

publicly available information concerning H Power that Lehman Brothers believed to be relevant to its analysis, including H Power’s Annual Report on Form 10-K for the fiscal year ended May 31, 2002 and Quarterly Report on Form 10-Q for the quarter ended August 31, 2002;

•

publicly available information concerning Plug Power that Lehman Brothers believed to be relevant to its analysis, including Plug Power’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001 and Quarterly Reports on Form 10-Q for the quarter ended March 31 and June 30, 2002;

•

financial and operating information with respect to the business, operations and prospects of H Power furnished to Lehman Brothers by management of H Power, including financial projections of H Power on a stand-alone basis prepared by management of H Power;

•

H Power’s balance sheet, information with respect to H Power’s anticipated capital and investment expenditures, the likelihood that H Power would be able to meet its operating costs and capital requirements beyond October 2004, and the various capital market financing transactions that would be available to H Power on a stand-alone basis to fund its operations beyond October 2004;

•

financial and operating information with respect to the business, operations and prospects of Plug Power furnished to Lehman Brothers by management of Plug Power, including financial projections of Plug Power on a stand-alone basis prepared by management of Plug Power and financial projections of Plug

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Power after giving effect to the merger prepared by management of Plug Power and Plug Power’s representatives;

•

the trading histories of H Power’s common stock and Plug Power’s common stock from October 2001 to November 8, 2002 and a comparison of these trading histories with those of other companies in the fuel cell power source industry that Lehman Brothers deemed relevant;

•

a comparison of the historical financial results and present financial condition of H Power with those of other companies in the fuel cell power source industry that Lehman Brothers deemed relevant;

•

a comparison of the historical financial results and present financial condition of Plug Power with those of other companies in the fuel cell power source industry that Lehman Brothers deemed relevant;

•

the strategic benefits expected by Plug Power’s management and H Power’s management to result from a combination of the businesses of H Power and Plug Power;

•

the relative financial contributions of H Power and Plug Power to the combined company following consummation of the merger;

•

a possible liquidation of H Power, including the cash that would be distributed to H Power’s stockholders in connection with such liquidation;

•

a comparison of the strategic and competitive positions of H Power and Plug Power with those of other companies in the fuel cell power source industry that Lehman Brothers deemed relevant; and

•

a comparison of the financial terms of the merger with the financial terms of certain other recent transactions that Lehman Brothers deemed relevant.

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•

Plug Power;

•

Ballard Power;

•

Hydrogenics;

•

Fuel Cell Energy;

•

Proton Energy; and

•

H Power.

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•

FuelCell Energy, Inc.; and

•

Proton Energy Systems, Inc.

•

Ballard Power Systems, Inc.; and

•

Hydrogenics Corp.

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US RealTel Inc./Cypress Communications—January 10, 2002

•

Exelixis Inc./Genomica Corp—November 19, 2002

•

EM Holdings Inc./eMachines Inc.—November 9, 2001

•

Divine Inc./Eprise Corp—September 18, 2001

•

Cross Media Marketing/Lifeminders Inc.—July 19, 2001

•

Kana Communications/Broadbase Software Inc.—April 9, 2001

•

AmericanGreetings.com/Egreetings Network Inc.—February 5, 2001

•

iVillage Inc. – Women.com Networks—February 5, 2001

•

the premium per share paid by the acquiror compared to the share price of the target company prevailing (1) one day and (2) 30 days prior to the announcement of the transaction;

•

the premium per share paid by the acquiror compared to net cash on the target’s most recent publicly available balance sheet; and

•

the transaction equity value paid by the acquiror compared to the one year fiscal year forward projected revenues of the target company.

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the opinion of Stephens Inc., Plug Power’s financial advisor, to the effect that as of November 11, 2002, the exchange ratio set forth in the merger agreement was fair, from a financial point of view, to Plug Power;

•

H Power’s cash reserves and Plug Power’s belief that the addition of such cash to its own balance sheet would provide Plug Power with sufficient cash to help fund operations;

•

H Power’s intellectual property rights, technical resources and other assets;

•

the opportunity to preserve and enhance stockholder value by combining two complementary businesses;

•

the belief that the merger represents the most favorable alternative currently available to Plug Power to increase its capital resources and further its business objectives;

•

the belief that, while no assurances can be given, the merger is likely to be completed because of the limited nature of the closing conditions included in the merger agreement and the likelihood that the merger agreement will be approved by H Power’s and Plug Power’s stockholders;

•

the benefits contemplated in connection with the merger, in particular the influx of capital resources, are likely to be achieved within a reasonable time frame;

•

the belief that the combined company will be in a better position to continue to compete effectively in the fuel cell industry;

•

the terms of the merger agreement, including the ability of Plug Power to terminate the agreement if the H Power board of directors withdraws its recommendation in favor of the merger or approves or recommends any other acquisition proposal and the right to receive a $2,000,000 termination fee or to be reimbursed for Plug Power’s out-of-pocket expenses incurred in connection with the merger in the event that Plug Power terminates the merger agreement under certain circumstances;

•

the potential cost savings through the consolidation of businesses and the elimination of duplicative costs; and

•

the access to H Power’s portfolio of strategic partners and suppliers.

•

the risk that the potential benefits of the merger may not be realized, in part or at all, including the risk that H Power’s net cash at the effective time of the merger may be less than at the signing of the merger agreement or the date of the special meeting of Plug Power stockholders;

•

the risk that the merger may not be consummated, including the risks associated with obtaining the necessary approvals required to complete the merger, notwithstanding the voting agreements obtained from stockholders representing beneficial ownership of approximately 12.2% of H Power’s common stock as of November 15, 2002;

•

the risk of management and employee disruption associated with the merger, including the risk that despite the efforts of the combined company, key technical, marketing and management personnel might not remain employed by the combined company;

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•

the potential costs the combined company may incur to (1) terminate, renegotiate or amend H Power’s existing obligations, including real estate and facility leases, (2) streamline the combined company’s business, (3) reduce excess capacity, including terminating employees and (4) eliminate redundant operations, including the consolidation of H Power’s operations into Plug Power’s headquarters in Latham, N.Y.;

•

the dilutive effect of the merger on Plug Power’s existing stockholders;

•

the risk that the merger could adversely affect Plug Power’s relationship with some of its existing or potential customers, suppliers or strategic partners;

•

the potential negative effect on Plug Power’s stock price as a result of the public announcement of the merger;

•

the significant costs involved in consummating the merger; and

•

other applicable risks described in this joint proxy statement/prospectus under “Risk Factors.”

•

the potential benefits and potential negative factors associated with the merger;

•

information concerning H Power’s business, financial performance and condition, particularly its cash position, operations, intellectual property, technology and management;

•

the timing of the financing provided by the merger;

•

the relative inaccessibility and cost of other capital sources in the current economic environment;

•

current financial market conditions and historical market prices, volatility and trading information with respect to Plug Power common stock and H Power common stock;

•

the terms of the merger agreement and related agreements;

•

the potential impact of the merger on the customers, suppliers, strategic partners and employees of Plug Power and the combined company;

•

Plug Power’s management’s view as to the integration of H Power;

•

the results of the due diligence investigation conducted by Plug Power’s management, accountants, financial advisors and legal counsel;

•

the expected percentage ownership of the combined company by H Power’s stockholders;

•

the strategic and financial alternatives available to Plug Power;

•

the maturation cycle with respect to the fuel cell market generally;

•

advice of Plug Power’s outside legal counsel, on the proposed terms of the merger agreement; and

•

the analyses performed by Stephens, and its opinion (the full text of which is attached as Annex D to this joint proxy statement/prospectus).

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(1)

analyzed certain publicly available financial statements and reports regarding Plug Power and H Power;

(2)

analyzed certain internal financial statements and other financial and operating data concerning Plug Power and H Power prepared by the management of each;

(3)

analyzed, on a pro forma basis, the effect of the merger on Plug Power’s balance sheet, capitalization ratios, earnings and book value;

(4)

reviewed and compared the reported prices and trading activity for the H Power shares and Plug Power shares, with that of certain other comparable publicly-traded companies and their securities;

(5)

analyzed the assets, liabilities and operations of H Power;

(6)

reviewed, to the extent publicly available, certain comparable transactions;

(7)

reviewed the merger agreement and related documents;

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(8)

discussed with the management of Plug Power the operations of, and future business prospects for, Plug Power and the anticipated financial consequences of the merger to Plug Power, including the expected costs of integrating H Power into Plug Power and any expected synergies;

(9)

assisted in Plug Power’s deliberations regarding the material financial terms of the merger and Plug Power’s negotiations with H Power;

(10)

considered certain financial and strategic alternatives available to Plug Power; and

(11)

performed such other analyses and provided such other services as Stephens deemed appropriate.

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•

.58-.99 based on a ratio of market capitalization to net cash

•

.79-1.19 based on a ratio of market capitalization to book value

•

Valueclick Inc. / Be Free Inc. – March 11, 2002

•

MCSi Inc. / Zengine Inc. – October 5, 2001

•

Divine Inc. / Eprise Corp. – September 18, 2001

•

Cross Media Marketing Corp. / Lifeminders Inc. – July 19, 2001

•

Verso Technologies Inc. / Telemate Net Software Inc. – May 7, 2001

•

Kana Software Inc. / Broadbase Software Inc. – April 9, 2001

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•

74-.99 based on a ratio of transaction value to net cash

•

69-1.19 based on a ratio of transaction value to book value

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exchange  ratio  =

(the transaction value price ÷ average Plug Power common stock price) ÷ the total number of shares of H Power common stock outstanding immediately prior to the effective time of the merger.

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•

between $6.47 and $5.29 (or equal to such prices), there is no change to the exchange ratio as derived from the formula above;

•

greater than $6.47, then the exchange ratio shall equal the exchange ratio that would be determined if the average Plug Power common stock price was $6.47; and

•

less than $5.29, then the exchange ratio shall equal the exchange ratio that would be determined if the average Plug Power common stock price was $5.29.

•

If net cash of H Power (as determined in accordance with the merger agreement as discussed below) is less than $36,675,000, the transaction value price is adjusted to equal $50,675,000 minus the difference between $36,675,000 and the net cash;

•

If net cash of H Power is equal to $36,675,000, the transaction value price remains $50,675,000; and

•

If net cash of H Power is greater than $36,675,000, the transaction value price is adjusted to equal $50,675,000 plus the difference between net cash and $36,675,000.

•

The sum of:

¡

cash, cash equivalents and short term investments of H Power;

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¡

15% of the amount by which H Power’s inventories exceed a value of $2,174,000 (up to a maximum addition of $30,000);

¡

$500,000, but only in the event Plug Power has received written confirmation of a specified payment of $500,000 in accordance with the ECO termination agreement (see “—Other Material Agreements Relating to the Merger—ECO Termination Agreement”); and

¡

the aggregate amounts, if any, of severance paid by H Power between November 11, 2002 through the effective time of the merger to specified employees (up to certain maximum amounts per employee);

•

less the sum of:

¡

current liabilities, excluding any current liabilities addressed in any of the bullet points below;

¡

amounts payable under the ECO termination agreement, other than specified payments aggregating $4,215,000;

¡

the aggregate amounts of liabilities of H Power and its subsidiaries that were not liabilities both existing as of November 11, 2002 and identified in the merger agreement, with certain specified exceptions for:

n

$180,000 in payment obligations under a specified consulting agreement;

n

specified severance obligations; and

n

specified lease obligations;

¡

amounts payable pursuant to stay-bonus arrangements and specified management bonus arrangements, to the extent not accrued on the net cash statement (described below);

¡

amounts that H Power’s accounts receivable (including unbilled receivables and tax credit receivable), net of allowance for doubtful accounts, are less than $533,229 (up to a maximum amount of $293,000), excluding any accounts receivable with respect to Peugeot Citroen Automobiles S.A.;

¡

$360,000, unless Plug Power receives correspondence from an authorized individual at Peugeot stating that an account receivable existing as of November 11, 2002 in the amount of approximately $360,000 is valid and not in dispute, and Peugeot fully intends to pay the entire amount of the receivable;

¡

amounts that prepaid and other current assets are less than $1,191,359 (up to a maximum amount of $449,000);

¡

$35,000 for each of up to four specific fuel cell units to the extent H Power has not fully terminated the applicable service, maintenance and warranty obligations therefor;

¡

15% of the amount by which the aggregate value of H Power’s inventories is less than $2,174,000;

¡

any amounts which may be paid by H Power or Plug Power for an extended reporting period endorsement to the H Power directors and officers liability insurance coverage to the extent such amounts have not been paid by the effective time of the merger or resulted in an equivalent reduction in the total amount of cash and cash equivalents in the first bullet point above;

¡

amounts of liabilities as of November 11, 2002 that also exist as of the date the net cash statement is delivered to Plug Power which are attributable to binding obligations or commitments of H Power and its subsidiaries to purchase materials, components (including sub-systems) and replacement parts; and

¡

$180,284, unless Plug Power receives correspondence from an authorized individual at the National Institute of Standards and Technology (NIST) stating that H Power and its subsidiaries have no payment obligations to NIST.

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•

is to be prepared in accordance with generally accepted accounting principles (GAAP) applied consistently with H Power’s past practices (other than for certain items that are specifically contemplated to be non-GAAP);

•

is to explain in reasonable detail the calculation of the anticipated net cash as of the effective time of the merger; and

•

is to include reasonable supporting documentation.

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•

the right to receive any dividend or other distribution, if any, with respect to H Power common stock with a record date occurring prior to the effective time of the merger, and

•

the right to receive the merger consideration.

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•

Plug Power and its board of directors shall be substituted for H Power and the H Power board of directors or duly authorized board committee administering the H Power stock option plans;

•

each H Power stock option assumed by Plug Power will be exercisable solely for shares of Plug Power common stock;

•

the number of shares of Plug Power common stock subject to such H Power stock option will be equal to the number of shares of H Power common stock subject to such H Power stock option immediately prior to the effective time of the merger multiplied by the exchange ratio, rounded down to the nearest share;

•

the per share exercise price under each H Power stock option will be adjusted by dividing the per share exercise price under each such H Power stock option by the exchange ratio, rounded up to the nearest cent.

•

the corporate organization, existence, good standing and qualification to do business of H Power and its subsidiaries;

•

compliance with applicable laws by H Power and its subsidiaries;

•

permits required to conduct H Power’s and its subsidiaries’ business and compliance with those permits;

•

the certificates of incorporation and bylaws of H Power and its subsidiaries;

•

authorization of the merger agreement by H Power;

•

H Power’s capitalization;

•

H Power’s subsidiaries;

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•

consents and approvals required to complete the merger;

•

H Power’s filings and reports with the Securities and Exchange Commission;

•

H Power’s consolidated financial statements;

•

H Power’s cash, cash equivalents and short-term investments;

•

litigation involving H Power and its subsidiaries;

•

changes in H Power’s and its subsidiaries’ business since May 31, 2002 and actions taken by H Power since May 31, 2002;

•

H Power’s and its subsidiaries’ liabilities;

•

H Power’s product and service warranty obligations;

•

H Power’s and its subsidiaries’ taxes;

•

H Power’s and its subsidiaries’ properties;

•

intellectual property matters pertaining to H Power and its subsidiaries;

•

environmental matters pertaining to H Power and its subsidiaries;

•

H Power’s and its affiliates’ employee benefit plans;

•

H Power’s and its subsidiaries’ labor relations and employment matters;

•

payments required to be made by H Power and its subsidiaries to brokers and agents in connection with the merger;

•

the fairness opinion received by H Power from Lehman Brothers;

•

the vote of H Power stockholders required to approve the merger;

•

the inapplicability of anti-takeover laws to the merger;

•

H Power’s and its subsidiaries’ material contracts;

•

the nature of the accounts receivables of H Power and its subsidiaries;

•

H Power’s and its subsidiaries’ accounting policies and management letters;

•

the nature of specified relationships with customers, distributors and suppliers of H Power and its subsidiaries;

•

product liability matters;

•

the absence of specified business practices and of illegal transactions in securities by H Power’s directors and executive officers;

•

compliance with H Power’s cash investment policy;

•

H Power’s and its subsidiaries’ insurance coverage;

•

H Power’s and its subsidiaries’ ability to satisfy certain standards to increase the likelihood that the merger will be treated as a “reorganization” for federal income tax purposes;

•

the fact that neither H Power nor its affiliates owns any Plug Power common stock;

•

the absence of contracts with affiliates;

•

the accuracy of the information supplied by H Power in this joint proxy statement/prospectus; and

•

the approvals of the merger, the merger agreement and the contemplated transactions by H Power’s board of directors.

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•

the corporate organization, existence, good standing and qualification to do business of Plug Power and its subsidiaries;

•

compliance with applicable laws by Plug Power and its subsidiaries;

•

permits required to conduct Plug Power’s and its subsidiaries’ business and compliance with those permits;

•

the certificate of incorporation and bylaws of Plug Power and its subsidiaries;

•

authorization of the merger agreement by Plug Power and Monmouth Acquisition Corp.;

•

Plug Power’s and Monmouth Acquisition Corp.’s capitalization;

•

Plug Power’s subsidiaries;

•

consents and approvals required to complete the merger;

•

Plug Power’s filings and reports with the Securities and Exchange Commission;

•

Plug Power’s consolidated financial statements;

•

litigation involving Plug Power;

•

changes in Plug Power’s and its subsidiaries’ business since December 31, 2001;

•

Plug Power’s and its subsidiaries’ liabilities;

•

Plug Power’s and its subsidiaries’ taxes;

•

intellectual property matters pertaining to Plug Power and its subsidiaries;

•

environmental matters pertaining to Plug Power;

•

Plug Power’s and its subsidiaries’ material contracts;

•

Plug Power’s labor relations;

•

payments required to be made by Plug Power and its subsidiaries to brokers and agents in connection with the merger;

•

the fact that neither Plug Power nor its affiliates owns any H Power common stock;

•

approvals of the merger agreement and the contemplated transactions by Plug Power’s board of directors;

•

the fairness opinion received by Plug Power from Stephens; and

•

the accuracy of the information supplied by Plug Power in this joint proxy statement/prospectus.

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•

splitting, combining, reclassifying, repurchasing, redeeming or otherwise acquiring any shares of its capital stock or other securities, except for dividends paid by a subsidiary to H Power or another of its subsidiaries;

•

issuing or selling any of its stock or any other securities or equity equivalents, other than outstanding options;

•

making any equipment purchases or capital expenditures in excess of $10,000 in the aggregate;

•

acquiring, selling, leasing, licensing, encumbering, transferring or disposing of any of its assets;

•

entering into, modifying or amending any agreement related to the licensing of its intellectual property assets;

•

incurring any indebtedness or making any loan or advance;

•

paying, discharging or satisfying any claim, liability or obligation, outside the ordinary course, or in excess of $5,000 in the aggregate;

•

changing its accounting policies;

•

making any tax elections or settling any material tax liability in excess of $10,000;

•

except with respect to stay bonus agreements approved by Plug Power, adopting or amending any employee benefit plan or any agreement between H Power or its subsidiaries and their directors, officers or employees;

•

increasing the compensation of any director, officer or employee;

•

amending its organizational documents;

•

authorizing a liquidation, dissolution, merger, consolidation, restructuring, recapitalization or reorganization;

•

settling any pending or threatened litigation for an amount in excess of $15,000 in the aggregate;

•

amending the term of any outstanding security;

•

entering into, modifying, amending any existing or entering into any new material contract or otherwise subjecting H Power or its subsidiaries to any material commitment, obligation or liability, or entering into any contract or agreement requiring H Power or any of its subsidiaries to pay in excess of $10,000;

•

licensing, assigning or otherwise transferring any rights to its intellectual property assets;

•

permitting any of its or its subsidiaries’ insurance policies to be canceled;

•

entering into any agreement with any customer or distributor related to the offering of discounts, extended warranties, service contracts, bundling of any products, rights of return or any other agreements or arrangements outside the ordinary course of business;

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•

amending or restating any of its Securities and Exchange Commission reports, except to the extent advised by H Power’s legal or accounting advisors that such action is required;

•

taking any action which would make any of its representations and warranties untrue or incorrect; and

•

agreeing to take any of the actions described above.

•

solicit, initiate or encourage, including by way of furnishing non-public information, or take any other action to facilitate any inquiries or the making of any proposal that constitutes an acquisition proposal;

•

participate in any discussion with, or otherwise communicate in any way with, any person relating to any acquisition proposal; or

•

enter into any agreement regarding an acquisition proposal.

•

adversely withdraw or modify, or propose to withdraw or modify, its approval or recommendation of the merger or the merger agreement;

•

approve or recommend, or propose to approve or recommend, any other acquisition proposal;

•

approve or recommend, or propose to approve or recommend, or execute or enter into a letter of intent or agreement relating to an acquisition proposal; or

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•

resolve to do any of the foregoing.

•

tender offer, merger, consolidation or similar transaction involving H Power; or

•

sale, lease or other disposition, directly or indirectly, by merger, consolidation, share exchange or otherwise, of any material assets or securities of H Power.

•

the stockholders of H Power have not yet approved the merger agreement and the merger;

•

the non-solicitation provisions described in this section have not been breached by H Power or its representatives; and

•

the H Power board of directors determines in good faith, after consultation with its outside legal counsel, that failing to take such action would constitute a breach of its fiduciary duties under applicable law.

•

the H Power board of directors determines in good faith, after consulting with its outside legal counsel and its financial advisor, would, if consummated, result in a transaction that is more favorable to the stockholders of H Power than the merger; and

•

is for all of H Power’s common stock.

•

a superior proposal is made and not withdrawn;

•

neither H Power nor any of its representatives has breached the non-solicitation provisions of the merger agreement described above; and

•

the board of directors of H Power concludes in good faith, after consultation with its outside legal counsel that, in light of the superior proposal, the withdrawal or modification of its recommendation is required in order for the H Power board of directors to comply with its fiduciary duties to H Power’s stockholders under applicable law.

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•

any change or event which it believes could reasonably be expected to cause any of its representations or warranties contained in the merger agreement to be untrue in any material respect; and

•

any material failure of such party to comply with any covenant under the merger agreement.

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•

taking all actions necessary to obtain any necessary consents, approvals, orders, exemptions and authorizations by or from any public or private third party, including any that are required to be obtained under any federal, state or local law or regulation or any contract, agreement or instrument to which H Power or any of its subsidiaries is a party or by which any of their properties or assets are bound;

•

to defend all lawsuits or other legal proceedings challenging the merger agreement or the consummation of the merger;

•

to cause to be lifted or rescinded any injunction or restraining order or other order adversely affecting the ability of the parties to consummate the transactions contemplated in the merger agreement; and

•

to effect all necessary registrations and filings and submissions of information requested by governmental authorities.

•

deliver notice of “plant closing” compliant with the Worker Adjustment Retraining Act of 1986 (WARN Act) and expressly approved in writing by Plug Power to each employee and any other individual entitled to specific notice of H Power’s implementation of a “plant closing”; and

•

deliver appropriate and effective notices of the closing of H Power’s Canadian facility, compliant with any and all Canadian or Quebec provincial laws similar to the WARN Act and expressly approved in writing by Plug Power to the Quebec Ministry of Labor, to each affected employee, and to any other entity with respect to which such notice is required or recommended under applicable law.

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•

incur or become subject to any liabilities, as described in the merger agreement,

•

authorize, commit to or make any equipment purchases or capital expenditures, or

•

acquire, sell, lease, license, encumber, transfer or dispose of any assets,

•

will report directly to H Power’s board of directors;

•

will be authorized up through the date of the effectiveness of the merger to take any and all actions as directed by the H Power board of directors, to implement cost saving measures and take other actions consistent with the objective of maximizing long-term cash preservation, taking into account Plug Power’s expectations of realizable cash following the integration of Plug Power and H Power; and

•

is acceptable to Plug Power.

•

the merger agreement must have been adopted and approved, and the merger must have been approved, by the requisite vote of the stockholders of H Power and the issuance of shares of Plug Power common stock in the merger pursuant to the merger agreement must have been approved by the requisite vote of the stockholders of Plug Power;

•

no statute, order, decree, ruling or injunction may have been enacted or issued which makes the merger illegal or prohibits completion of the merger and all waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 shall have expired or terminated;

•

Plug Power’s registration statement on Form S-4 of which this joint proxy statement/prospectus forms a part must have been declared effective by the Securities and Exchange Commission, no stop order suspending its effectiveness may be in effect and no proceedings for suspension of its effectiveness may be pending before or threatened by the Securities and Exchange Commission; and

•

the shares of Plug Power common stock to be issued in the merger must have been approved for listing on the Nasdaq National Market, subject to official notice of issuance.

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each of Plug Power’s and Monmouth Acquisition Corp.’s representations and warranties must have been true and correct as of November 11, 2002, and must continue to be true and correct on and as of the date the merger is to be completed as if made on such date, except:

(1)

to the extent Plug Power’s and Monmouth Acquisition Corp.’s representations and warranties address matters only as of a particular date, they must be true and correct only as of that date; or

(2)

to the extent that any inaccuracies of such representations and warranties do not individually, or in the aggregate, have and could not reasonably be expected to have a material adverse effect on Plug Power and its subsidiaries, as further described below;

•

Plug Power must have performed, or complied in all material respects with, all of the obligations required by the merger agreement to be performed or complied with by it;

•

no event that could reasonably be expected to have a material adverse effect on Plug Power may have occurred (excluding changes to the Plug Power common stock trading price), as further described below; and

•

Plug Power and Monmouth Acquisition Corp. must have obtained all consents and approvals required to be obtained in connection with the merger agreement.

•

each of H Power’s representations and warranties must have been true and correct as of November 11, 2002, and must continue to be true and correct on and as of the date the merger is to be completed as if made on such date, except:

(1)

to the extent H Power’s representations and warranties address matters only as of a particular date, they must be true and correct only as of that date; or

(2)

to the extent that any inaccuracies of such representations and warranties do not individually, or in the aggregate, have or could not reasonably be expected to have a material adverse effect on H Power and its subsidiaries, as further described below;

•

H Power must have performed, or complied in all material respects with, all of the obligations required by the merger agreement to be performed or complied with by it;

•

no event that could reasonably be expected to have a material adverse effect on H Power may have occurred (excluding changes to the H Power common stock trading price), as further described below;

•

H Power must have obtained all consents and approvals required by specific contracts identified in the merger agreement;

•

each of the affiliate letters contemplated by the merger agreement, as described below, must have been delivered;

•

H Power must have taken all action necessary to cause its stock options to be treated as provided for in the merger agreement;

•

H Power and its subsidiaries must not have incurred any liabilities other than those included and accounted for in the net cash statement, and, between the date of delivery of the net cash statement and the effective time of the merger, H Power must not have authorized, committed to or made any equipment purchases or capital expenditures or acquired, sold, leased, licensed, encumbered, transferred or disposed of any assets, except as including and accounted for in the net cash statement;

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•

at the effective time of the merger, H Power shall have net cash, as such term is defined in the merger agreement, of at least $27,500,000; and

•

at the effective time of the merger the ECO termination agreement (as described below in the section entitled “—Other Material Agreements Relating to the Merger—ECO Termination Agreement” on  page 95) will be in full force and effect and no party to that agreement will be in default.

•

by mutual written consent duly authorized by the boards of directors of Plug Power and H Power;

•

by Plug Power or H Power, if

(1)

H Power’s stockholders fail to adopt and approve the merger agreement and approve the merger at the H Power special meeting or at any adjournment of that meeting, except that the right to terminate the merger agreement under this provision is not available to H Power where the failure to obtain stockholder approval was caused by H Power’s action or failure to act which constitutes a breach by H Power of the merger agreement; or

(2)

Plug Power’s stockholders fail to approve the issuance of Plug Power common stock pursuant to the merger agreement at the Plug Power special meeting or at any adjournment of that meeting, except that the right to terminate the merger agreement under this provision is not available to Plug Power where the failure to obtain stockholder approval was caused by Plug Power’s action or failure to act which constitutes a breach by Plug Power of the merger agreement.

•

by Plug Power or H Power, if any governmental authority has issued a final and nonappealable injunction, which prohibits the completion of merger;

•

by Plug Power or H Power, if the merger is not completed before March 31, 2003, except that either party’s right to terminate the merger agreement under this provision will not be available to any party who is in material breach of the merger agreement or because of an injunction, or if such party’s action or failure to act has been a principal cause of, or resulted in, the failure of the merger to occur on or before such date of termination and such action or failure to act constitutes a breach of the merger agreement;

•

by H Power, upon a breach of any representation, warranty, covenant or agreement on the part of Plug Power or Monmouth Acquisition Corp. set forth in the merger agreement, if the breach cannot be or has not been cured within 30 business days after delivery of written notice to Plug Power of the breach. If the breach is cured during those 30 business days, or if the breach is not reasonably likely to have a material adverse effect on Plug Power, as further described below, H Power may not terminate the merger agreement under this provision;

•

by Plug Power, upon a breach of any representation, warranty, covenant or agreement on the part of H Power set forth in the merger agreement, if the breach cannot be or has not been cured within 30 business days after delivery of written notice to H Power of the breach. If the breach is cured during those 30 business days, or if the breach is not reasonably likely to have a material adverse effect on H Power, as further described below, Plug Power may not terminate the merger agreement under this provision;

•

by Plug Power, if H Power has breached the provisions of the merger agreement that prohibit the solicitation of, and discussions and negotiations with respect to, acquisition proposals;

•

by Plug Power, if certain of the persons who signed voting agreements have breached particular material representations, warranties, covenants or other agreements contained in the voting agreements; and

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•

by Plug Power, if:

(1)

H Power’s board of directors withdraws or modifies in a manner adverse to Plug Power or Monmouth Acquisition Corp. its recommendation in favor of the adoption and approval of the merger agreement or the approval of the merger;

(2)

H Power’s board of directors approves or recommends any other acquisition proposal;

(3)

H Power’s board of directors approves, recommends, executes or enters into any agreement relating to any other acquisition proposal; or

(4)

a tender or exchange offer relating to the securities of H Power is commenced by a person unaffiliated with Plug Power, and H Power does not send to its securityholders within 30 business days after such tender or exchange offer is first published, sent or given, a statement disclosing that H Power recommends rejection of such tender or exchange offer.

•

it will become null and void and, except in the limited circumstances described below, have no effect, without any liability by any party to the merger agreement or its affiliates, directors, officers or stockholders; and

•

all rights and obligations of any party under the merger agreement other than specified agreements will cease.

•

Plug Power terminates the merger agreement because H Power has breached the provisions of the merger agreement that prohibit the solicitation of, and discussions and negotiations with respect to, acquisition proposals; or

•

Plug Power terminates the merger agreement because H Power’s board of directors:

(1)

withdraws or modifies in a manner adverse to Plug Power or Monmouth Acquisition Corp., its recommendation in favor of the adoption and approval of the merger agreement or the approval of the merger; or

(2)

approves or recommends any other acquisition proposal; or

(3)

approves, recommends, executes or enters into any agreement relating to any other acquisition proposal; or

•

Plug Power terminates the merger agreement because a tender or exchange offer relating to the securities of H Power is commenced by a person unaffiliated with Plug Power, and H Power does not send to its securityholders within 10 business days after such tender or exchange offer is first published, sent or given, a statement disclosing that H Power recommends rejection of such tender or exchange offer;

•

either H Power or Plug Power terminates the merger agreement as a result of the events described in the second bullet point under the section above entitled “—Termination of the Merger Agreement” due to failure to obtain the required vote of the stockholders of H Power; or

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•

Plug Power terminates the merger agreement because there has been a breach of a representation, warranty, covenant or agreement on the part of H Power set forth in the merger agreement, and such breach can not be or has not been cured within 30 days after the delivery of written notice to H Power of the breach, and such breach is reasonably likely, individually or in the aggregate, to have a material adverse effect on H Power.

•

the anticipated number of shares of Plug Power common stock to be issued in the merger; and

•

the reasonably anticipated average Plug Power common stock price

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•

the anticipated number of shares of Plug Power common stock to be issued in the merger (including such increase in the exchange ratio); and

•

the average Plug Power common stock price

•

H Power breaches any representation, warranty, covenant or agreement set forth in the merger agreement, the breach has had or is reasonably likely to have a material adverse effect on H Power, as further described below, and the breach cannot be or has not been cured within 30 business days after delivery of written notice to H Power of the breach; or

•

certain of the persons who signed voting agreements breach particular material representations, warranties, covenants or other agreements contained in such voting agreements.

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•

the business, operations, assets (including intangible assets), liabilities, results of operations or condition (financial or otherwise) of such entity and its subsidiaries as a whole; or

•

the ability of such entity to perform its obligations under the merger agreement.

•

vote their shares and any newly acquired shares in favor of approval of the merger agreement and the merger and any matter necessary for consummation of the merger;

•

vote their shares and any newly acquired shares against approval of any acquisition proposal (including, without limitation, any superior proposal);

•

vote their shares and any newly acquired shares against any proposal for any action or agreement that would result in a breach of any covenant, representation or warranty or any other obligation or agreement of H Power under the merger agreement or which could result in any of the conditions of H Power’s obligations under the merger agreement not being fulfilled;

•

vote their shares and any newly acquired shares against any action which could reasonably be expected to impede, interfere with, delay, postpone or materially adversely affect consummation of the transactions contemplated by the merger agreement;

•

vote their shares and any newly acquired shares in favor of any other matter necessary for consummation of the transactions contemplated by the merger agreement, and in connection therewith to execute any documents which are necessary or appropriate in order to effectuate the foregoing; and

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•

grant, and did grant, Plug Power irrevocable proxies to vote their shares and any newly acquired shares as required by the voting agreement.

•

sell, tender, transfer, pledge, encumber, assign or otherwise dispose of any of its shares or newly acquired shares;

•

deposit any shares or newly acquired shares into a voting trust or enter into a voting agreement or arrangement with respect to such shares or grant any proxy or power of attorney with respect thereto;

•

enter into any contract, option or other arrangement or undertaking with respect to the direct or indirect sale, transfer, pledge, encumbrance, assignment or other disposition of any shares or newly acquired shares; or

•

take any action that would make any representation or warranty of such stockholder contained in the voting agreement untrue or incorrect or have the effect of preventing or disabling such stockholder from performing such stockholder’s obligations under the voting agreement.

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•

a citizen or resident of the U.S.;

•

a domestic corporation or domestic partnership;

•

an estate, the income of which (from sources without the United States which is not effectively connected with the conduct of a trade or business in the U.S.) is subject to U.S. income tax; or

•

a trust, if a court within the U.S. is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust, and that is also not the U.S. government, a state government, or an agency or instrumentality thereof.

•

a broker-dealer or a dealer in securities or commodities;

•

a bank, thrift or other financial institution;

•

a regulated investment company or a real estate investment trust;

•

an insurance company;

•

a tax-exempt organization;

•

a holder subject to the alternative minimum tax provisions of the Internal Revenue Code;

•

a person holding shares as a part of a hedge, straddle, conversion or other risk reduction or constructive sale transaction; or

•

a person with a “functional currency” other than the U.S. dollar.

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•

No gain or loss will be recognized for U.S. federal income tax purposes by H Power stockholders as a result of the merger except with respect to any cash received in lieu of fractional shares.

•

H Power stockholders receiving cash in lieu of a fractional share interest will be treated as having received a fractional share of Plug Power common stock in the merger and as having that fractional share subsequently redeemed by Plug Power. Gain or loss recognized on such exchange will be measured by the difference between the amount of cash received and the portion of the adjusted tax basis in the stockholder’s shares of H Power stock that is allocable to such fractional share. Any gain or loss recognized on such exchange generally will be capital gain or loss. Capital gains of individuals derived with respect to capital assets held for more than one year are classified as long-term capital gain and are eligible for reduced rates of taxation. The deductibility of capital losses is subject to limitations.

•

The aggregate tax basis of Plug Power common stock received as a result of the merger will equal the H Power stockholder’s aggregate adjusted basis in the shares of H Power common stock surrendered in the merger, decreased by the basis allocable to fractional shares for which cash is received in the merger. The holding period of the Plug Power common stock will include the holding period for the H Power common stock surrendered in exchange therefor.

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•

H Power stockholders should be viewed as exchanging shares of H Power common stock for shares of Plug Power common stock and any cash in lieu of the fractional shares exchanged as a result of the merger in a taxable exchange.

•

An H Power stockholder will recognize gain or loss in an amount equal to the difference, if any, between (1) the sum of the fair market value of the Plug Power common stock at the time of the merger and any cash in lieu of the fractional shares exchanged therefore and (2) such stockholder’s adjusted basis in his, her or its shares of H Power common stock surrendered. Gain or loss will be computed separately for separate blocks of stock.

•

Under most circumstances, any gain or loss recognized as a result of the merger will be capital gain or loss. Capital gains of individuals derived with respect to capital assets held for more than one year are classified as long-term capital gain and are eligible for reduced rates of taxation. The deductibility of capital losses is subject to limitations.

•

The tax basis of Plug Power common stock received as a result of the merger will equal the fair market value of the Plug Power common stock at the time of the merger. The holding period of the shares of Plug Power common stock received in the exchange will begin on the day after the merger.

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•

pursuant to an effective registration statement under the Securities Act covering the resale of those shares;

•

in compliance with Rule 145(d) under the Securities Act; or

•

in a transaction which, in the opinion of counsel reasonably satisfactory to Plug Power or as described in a “no-action” or interpretive letter from the Securities and Exchange Commission, is not required to be registered under the Securities Act.

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(i)

The estimated exchange ratio is .80 shares of Plug Power common stock for each share of H Power common stock. It is estimated that the exchange ratio could range from .73 to .89, exclusive of any adjustment required based upon H Power’s actual net cash at the effective time of the merger, as defined in the merger agreement. If the exchange ratio is .73 shares of Plug Power common stock for each share of H Power common stock, the number of shares of Plug Power common stock issued in connection with the merger would decrease to approximately 7.8 million shares from approximately 8.6 million shares. If the exchange ratio is .89 shares of Plug Power common stock for each share of H Power common stock, the number of shares of Plug Power common stock issued would increase to approximately 9.6 million shares from approximately 8.6 million shares. For further information concerning the estimated exchange ratio and the factors that may cause it to be adjusted, see “The Merger and Related Transactions—The Merger Agreement—Collar Adjustment and Net Cash Adjustment” on page 78.

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(ii)

The nine-month period ended August 31, 2002 as presented for H Power was derived by adding the three months ended August 31, 2002 to H Power’s fiscal year ended May 31, 2002, and removing the six months ended November 30, 2001.

(iii)

The estimated exchange ratio is .80 shares of Plug Power common stock for each share of H Power common stock. It is estimated that the exchange ratio could range from .73 to .89, exclusive of any adjustment required based upon H Power’s actual net cash at the effective time of the merger, as defined in the merger agreement. If the exchange ratio is .73 shares of Plug Power common stock for each share of H Power common stock, the loss per share, basic and diluted, for pro forma combined would be $(0.91) based on the weighted average number of shares outstanding, basic and diluted, of 58,392,863. If the exchange ratio is .89 shares of Plug Power common stock for each share of H Power common stock, the loss per share, basic and diluted, for pro forma combined would be $(0.88) based on the weighted average number of shares outstanding, basic and diluted, of 60,133,913. For further information concerning the estimated exchange ratio and the factors that may cause it to be adjusted, see the section of this document titled “The Merger and Related Transactions—The Merger Agreement—Collar Adjustment and Net Cash Adjustment” on page 78.

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(iv)

The twelve-month period ended November 30, 2001 as presented for H Power was derived by adding the 6 months ended November 30, 2001 to H Power’s fiscal year ended May 31, 2001, and removing the 6 months ended November 30, 2000.

(v)

The estimated exchange ratio is .80 shares of Plug Power common stock for each share of H Power common stock. It is estimated that the exchange ratio could range from .73 to .89, exclusive of any adjustment required based upon H Power’s actual net cash at the effective time of the merger, as defined in the merger agreement. If the exchange ratio is .73 shares of Plug Power common stock for each share of H Power common stock, the loss per share, basic and diluted, for pro forma combined would be $(1.85) based on the weighted average number of shares outstanding, basic and diluted, of 54,674,816. If the exchange ratio is .89, the loss per share, basic and diluted, for pro forma combined would be $(1.79) based on the weighted average number of shares outstanding, basic and diluted, of 56,415,866. For further information concerning the estimated exchange ratio and the factors that may cause it to be adjusted, see the section of this document titled “The Merger and Related Transactions—The Merger Agreement—Collar Adjustment and Net Cash Adjustment” on page 78.

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(A)

INVENTORY – To adjust the carrying value of inventory to its net realizable value for product lines we expect to discontinue. Certain raw material inventory is not compatible with continuing product lines and as such, has been adjusted to its liquidation value.

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(B)

PREPAID EXPENSES AND OTHER CURRENT ASSETS AND RESTRICTED CASH – To write-off unrecoverable deposits for facility and equipment leases expected to be terminated.

(C)

PROPERTY, PLANT AND EQUIPMENT – Adjust property, plant and equipment to its net realizable value. A majority of the H Power property, plant and equipment relates to facilities expected to be closed or abandoned and have been adjusted accordingly.

(D)

INTANGIBLE ASSETS – To record identifiable intangible assets related to H Power purchased technology at their fair value. These purchased intangibles, in the amount of $5,500,000, have been capitalized and an adjustment for related amortization over an estimated useful life of 36 months has been included in the unaudited pro forma combined statements of operations for the year ended December 31, 2001 and the 9 months ended September 30, 2002, in the amounts of $1.8 million and $1.4 million, respectively.

(E)

GOODWILL – To record goodwill resulting from the excess of the purchase price over the fair value of the tangible and identifiable intangible assets acquired and liabilities assumed.

(F)

ACCRUED EXPENSES – To record accrued expenses for:

•

$1,846,000 change in control provisions of executive employment agreements.

•

$1,945,000 lease termination costs for facilities expected to be closed or abandoned.

•

$4,215,000 accrued expenses related to obligations under the contracts with ECO which will become payable upon termination of the contract. See the section of this document titled “The Merger and Related Transactions—Other Material Agreements Relating to the Merger—ECO Termination Agreement” on page 95.

•

$1,910,000 accrued for direct transaction costs of the acquisition.

(G)

STOCKHOLDERS’ EQUITY –

•

To eliminate the common stock, paid-in capital and accumulated deficit of H Power.

•

Record the issuance of approximately 8.6 million shares of Plug Power common stock with an estimated fair value of $50.7 million.

•

Adjustment to reflect the effects of estimated acquired in-process research and development expense of $3.0 million included in accumulated deficit. In accordance with generally accepted accounting principles, the amount allocated to in-process technology will be expensed in the quarter in which the merger is consummated. The estimated in-process research and development (IPR&D) adjustment has been excluded from the unaudited pro forma condensed combined statements of operations because it is a non-recurring charge. The effects of the IPR&D expense have been included in accumulated deficit in the September 30, 2002 unaudited pro forma condensed combined balance sheet. As required by Article 11 of Regulation S-X, the unaudited pro forma condensed combined statement of operations excludes material non-recurring charges that result directly from the merger and that will be recorded within 12 months of the merger. Accordingly, estimated in-process research and development expense of $3.0 million related directly to the merger was not included in the unaudited pro forma combined condensed statements of operations.

•

Upon consummation of the merger, substantially all of the options to purchase shares of H Power common stock held by H Power officers and employees will continue to vest and will convert to options to purchase Plug Power common stock. Consequently, a pro forma adjustment, in the amount of approximately $40,000, has been recorded to reflect the fair value of these options. The effect of this pro forma adjustment has been included in the unaudited pro forma condensed combined balance sheet as a component of the purchase price.

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(1)

To eliminate the revenue and cost of revenue related to product lines not expected to be continued.

(2)

To record amortization of identifiable intangible assets noted above over an estimated useful life of 36 months.

(3)

To adjust depreciation expense based on the adjustments to the fair value of facilities to be acquired.

(4)

To adjust rent expense for facilities and equipment expected to be disposed of or abandoned.

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•

In order for an option to be eligible for the stock option exchange it must:

•

be outstanding immediately prior to the effective time of the merger,

•

have been granted under Plug Power’s 1997 Membership Option Plan or 1999 Stock Option and Incentive Plan, and

•

have an exercise price greater than $8.53 per share of Plug Power common stock, which price was based on management’s analysis of outstanding stock option grants;

•

All non-director employees of Plug Power holding eligible stock options may participate in the stock option exchange, including executive officers of Plug Power, other than employees of Plug Power who have received a notice of termination of their employment with Plug Power as of the commencement date of the offering;

•

For each option exchanged, the holder will receive a number of shares of restricted common stock of Plug Power equal to one third of the number of shares of Plug Power common stock underlying the exchanged option (rounded down to the nearest whole share of restricted stock); provided, that each option holder who exchanges all of his or her options shall receive a minimum of 500 shares of restricted common stock;

•

Each option holder will be required to exchange the full number of shares of Plug Power common stock subject to an individual option award;

•

Subject to the preceding bullet, each option holder may exchange all or some of his or her options, whether or not they are vested, provided, that each option holder must exchange all options received on or after 6 months before the date of the offer that have a lower exercise price than the option with the highest exercise price that the option holder exchanges;

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•

Any options that an option holder chooses not to exchange pursuant to the offer will remain outstanding and will retain their current exercise price and other terms;

•

Each option holder must remain an employee after the option holder exchanges his or her options and through the date that Plug Power issues the shares of restricted common stock in the exchange in order for such option holder to receive such shares; and

•

After commencing the offer, Plug Power may terminate the offer upon the occurrence of certain events such as a change in accounting principles, a lawsuit challenging the offer, or a definitive agreement is entered into for an acquisition for Plug Power.

•

Employee Incentives.    As noted above, one of the primary purposes of granting stock options to employees is to align the interests of Plug Power’s employees with those of its stockholders in order to maximize stockholder value. In addition to the fact that a substantial majority of outstanding stock options had exercise prices in excess of recent market prices for Plug Power common stock, the Plug Power board of directors considered the fact that upon an increase in the Plug Power common stock market price to $10.00 per share (i.e., a 68% increase over the market price of shares of Plug Power common stock as of November 22, 2002) only 36% of all outstanding options, and 42% of all exercisable options, would have an exercise price that is less than the market price of Plug Power common stock. The stock option exchange will help to realign employee incentives as employees will benefit from any appreciation in the shares of restricted common stock received in the stock option exchange.

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•

Alternatives.    In consultation with its advisors, the board of directors of Plug Power considered a number of alternatives to the stock option exchange as a means to realign employee incentives, including:

•

repricing the current stock options (where the exercise price exceeds the market value of Plug Power common stock) to the current fair market value or some other value;

•

granting additional stock options at current fair market value;

•

canceling the existing options (where the exercise price exceeds the market value of Plug Power common stock) and granting new options 6 months and 1 day after the cancellation;

•

providing cash to employees in exchange for options (where the exercise price exceeds the market value of Plug Power common stock) based on a predetermined value per share; or

•

a combination of the above.

•

Accounting Treatment.    The stock option exchange will be subject to fixed accounting treatment. Under this form of accounting, the charge to Plug Power’s earnings in the form of a compensation expense is fixed at the time of the grant of the restricted stock to an amount equal to the difference between the fair market value of the restricted stock on the date of grant and the amount which the recipient pays for the restricted stock. In comparison, an option repricing would be subject to variable accounting, under which the charge to earnings is adjusted quarterly such that it is equal to the difference between the exercise price and the fair market value of the shares of Plug Power common stock. As a result, if the fair market value of Plug Power common stock were to increase by $1 after the stock option exchange, under fixed accounting Plug Power’s compensation expense would not be affected. However, if the fair market value of Plug Power common stock were to increase by $1 after a repricing, under variable accounting Plug Power’s compensation expense would increase by $1 multiplied by the number of repriced options. Further, variable accounting would require Plug Power to recognize additional compensation expense for any subsequent quarter in which there is an increase in fair market value of its common stock. For this reason, the board of directors determined that the fixed accounting treatment of the stock option exchange was preferable as compared to the variable accounting treatment of repricing.

•

Cash Reserves.    Unlike the alternative to provide cash to employees in exchange for their options, the stock option exchange preserves Plug Power’s cash reserves which are important to Plug Power’s continuing operations.

•

Potential Future Declines in Stock Price.    In the event that the stock price of Plug Power common stock declines in the future, repricing the existing options or issuing additional options may fail to properly incentivize employees if the new exercise price exceeds the trading price of Plug Power common stock in the future. By contrast, the shares of restricted stock received in the stock option exchange would retain value even if the Plug power common stock price declined.

•

Effect on Earnings Per Share.    The board of directors of Plug Power also considered the fact that the issuance of shares of restricted stock in the stock option exchange will cause an immediate dilution to earnings per share because there will be more outstanding shares.

•

Effect on Shares Available for Future Grants. Because the exchange ratio in the stock option exchange contemplates issuing a number of shares of restricted common stock of Plug Power equal to one third of the number of shares of Plug Power common stock underlying the exchanged options, the number of shares subject to outstanding stock awards will decrease and, accordingly, the number of shares available for issuance under the Plug Power 1999 Stock Option and Incentive Plan will increase as a result of the stock option exchange.

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Terms of the Stock Option Exchange.    Plug Power’s board of directors considered the following terms of the stock option exchange to be potential benefits:

•

The option exchange ratio provides that for each option exchanged the option holder will receive a number of shares of restricted common stock of Plug Power equal to one third of the number of shares of Plug Power common stock underlying the exchanged options. Therefore, for example, if an eligible option holder owns options to purchase 5,000 shares of Plug Power common stock and such option holder exchanges all of his or her options in connection with the offer, he or she would receive 1,666 shares of restricted stock. Accordingly, the stock option exchange contemplates that option holders will receive less shares of restricted stock than the current number of shares of common stock underlying their options in order to reflect the decrease in value of such options since their date of grant.

•

The shares of restricted common stock of Plug Power to be issued in the exchange will not vest until on or about the second anniversary of the grant date of such shares, at the discretion of the board of directors, at which time they will vest in full. This vesting period provides additional incentive to employees to align their interests with those of Plug Power’s stockholders. In addition, because the vesting periods for outstanding options granted to employees range between 1 to 5 years in duration, depending upon the date of issuance of the options to be exchanged, the vesting period of the shares of restricted common stock obtained as a result of the exchange may be more or less than the remaining vesting period of such exchanged options.

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(1)

The dollar value of the shares of restricted stock to be received in the exchange is indeterminable at this time as it depends, in part, upon the market value of shares of Plug Power’s common stock at the time of the exchange.

(2)

Includes only shares of Plug Power common stock underlying options with respect to which the option exercise price is greater than $8.53 per share.

(3)

Existing stock option awards eligible for inclusion in the stock option exchange consist of 750,000 options with a strike price of $11.19, of which 225,000 are vested and an additional 150,000 will vest on December 15, 2003, 187,500 will vest on December 15, 2004 and 187,500 will vest on December 15, 2005. Dr. Saillant is not eligible to participate in the stock option exchange because he is a director of Plug Power.

(4)

Existing stock option awards eligible for inclusion in the stock option exchange consist of 50,000 options with a strike price of $83.50, of which 30,000 are vested and an additional 10,000 will vest on each of January 28, 2003 and January 28, 2004 and 30,000 options with a strike price of $17.94, of which 20,000 are vested and an additional 10,000 will vest on January 11, 2003.

(5)

Existing stock option awards eligible for inclusion in the stock option exchange consist of 220,000 options with a strike price of $24.53, of which 55,000 are vested and an additional 55,000 will vest on each of May 16, 2003, May 16, 2004 and May 16, 2005.

(6)

Existing stock option awards eligible for inclusion in the stock option exchange consist of 70,000 options with a strike price of $87.00, of which 42,000 are vested and an additional 14,000 will vest on each of May 1, 2003 and May 1, 2004; 70,000 options with a strike price of $19.25, of which 52,500 are vested and an additional 17,500 will vest on November 16, 2003; 50,000 options with a strike price of $17.94, of which 16,670 are vested and an additional 16,665 will vest on each of January 11, 2003 and January 11, 2004; and 50,000 options with a strike price of $17.94, of which 16,670 are vested and an additional 16,665 will vest on each of January 11, 2003 and January 11, 2004.

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100,000 options with a strike price of $17.88, all of which are vested.

(8)

Because directors will not be entitled to participate in the exchange, they will not receive any benefits as a result of the exchange.

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grant incentive stock options;

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grant non-qualified stock options;

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grant stock appreciation rights;

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issue or sell common stock with vesting or other restrictions, or without restrictions;

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grant rights to receive common stock in the future with or without vesting;

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grant common stock upon the attainment of specified performance goals; and

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grant dividend rights in respect of common stock.

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in cash or by certified or bank check or other instrument acceptable to the committee;

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in the sole discretion of the committee, by delivery of shares of common stock that have been owned by the optionee free of restrictions for at least 6 months;

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by promissory note if the loan of these funds to the optionee has been authorized by the board of directors and the optionee pays so much of the exercise price as represents the par value of the common stock acquired in a form other than a promissory note; or

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by a broker under irrevocable instructions to the broker selling the underlying shares from the optionee.

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Growing demand for premium power to supply the expanding digital economy;

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Increasing concern about the safety and security of centralized power generating facilities;

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Increasing problems to site and build transmission and generating facilities;

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Increasing desire by utilities to avoid costly transmission, maintenance and distribution expenditures;

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Continuing privatization and deregulation of utilities, which is likely to expand the market for alternative power; and

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Increasing regulation of the environmental impact of conventional fossil fuel and nuclear power generation and transmission.

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formulation and fabrication of electrodes and membrane-electrode assemblies;

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design and fabrication of bipolar plates;

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management of heat and water within the fuel cell stack and overall system;

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fabrication and assembly methodologies for cells and stacks;

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hydrogen fuel storage and generation; and

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steam reforming technology.

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each person known by H Power to own beneficially 5% or more of the H Power common stock,

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each director of H Power,

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each executive officer of H Power, and

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all of the directors and executive officers of H Power as a group.

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Less than 1% of the outstanding common stock.

(1)

Unless otherwise indicated, the address of all persons is c/o H Power Corp., 60 Montgomery Street, Belleville, New Jersey 07109.

(2)

The number of shares beneficially owned by each stockholder is determined under rules issued by the Securities and Exchange Commission and includes voting and investment power with respect to securities. Under these rules, beneficial ownership includes any shares as to which the individual or entity has sole or shared voting power or investment power and includes any shares as to which the individual or entity has the right to acquire beneficial ownership within 60 days after November 15, 2002 through the exercise of any warrant, stock option or other right. The inclusion in this joint proxy statement/prospectus of such shares, however, does not constitute an admission that the named stockholder is a direct or indirect beneficial owner of such shares.

(3)

Includes 55,827 shares held by Mr. Rothstein and 486,000 shares held by Cynthia Rothstein, his spouse. Includes stock options to purchase 160,000 shares granted to Mr. Rothstein. Also includes stock options to purchase 50,000 shares granted to Fuel Cell Components and Integrators, Inc., a company controlled by Mr. Rothstein, 7,000 shares held by his brother Carl Rothstein and 588,354 shares held by his children as follows: Allan Rothstein 274,590 shares, Steven Rothstein 114,764 shares and Tammy Rothstein 199,000 shares. Also includes 25,000 shares held by Mr. Rothstein as trustee for Jordan H. Rothstein 2000 Irrevocable Trust, 25,000 shares held by Mr. Rothstein as trustee for Nicole S. Rothstein 2000 Irrevocable Trust, and 6,820 shares held in custodial accounts for Mr. Rothstein’s grandchildren. Also includes 25,000 shares of common stock held by Dynamark Corp., a company controlled by members of Mr. Rothstein’s family. Mr. Rothstein disclaims beneficial ownership of all shares of common stock held by any members of his family. For a discussion of the stockholders’ and voting agreement to which Mr. Rothstein and his affiliates are subject, see “—Stockholders’ and Voting Agreement.”

(4)

In connection with the merger agreement, Plug Power entered into voting agreements with Dr. H. Frank Gibbard, Dr. Arthur Kaufman and ECO Fuel Cells, LLC. Pursuant to these voting agreements, each of the stockholders agreed to vote and has granted to Plug Power an irrevocable proxy and power of attorney to vote his or its shares of common stock of H Power owned as of November 11, 2002 and acquired thereafter (i) in favor of approval of the merger agreement and the merger and any matter necessary for consummation of the merger; (ii) against (x) approval of any other acquisition proposal, (y) any proposal for any action or agreement that would result in a breach of any covenant, representation or warranty or any other obligation or agreement of H Power under the merger agreement or which could result in any of the conditions of H Power’s obligations under the merger agreement not being fulfilled, and (z) any action which could reasonably be expected to impede, interfere with, delay, postpone or materially adversely affect consummation of the transactions contemplated by the merger agreement; and (iii) in favor of any other matter necessary for consummation of the transactions contemplated by the merger agreement which is considered at any such meeting of stockholders or in such consent, and in connection therewith to execute any documents which are necessary or appropriate in order to effectuate the foregoing or, at the request of Plug Power, to permit Plug Power to vote such shares directly. As a result of these voting agreements, Plug Power may be deemed to have sole power to control the vote of these shares on the matters related to the merger. Plug Power has no voting power with respect to any other matters. More specifically, pursuant to these voting agreements, Plug Power has the sole power to vote, and may be deemed to be the beneficial owner of an aggregate of 1,339,035 shares of the common stock of H Power. Plug Power has no power to dispose of these shares.

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(5)

Includes 69,200 shares held in trust for Mr. Entman. Also includes 518,480 shares held in trust for Elise Entman, his spouse, for which Mr. Entman serves as trustee. Also includes options to purchase 160,000 shares granted to Mr. Entman. Also includes 230,482 shares held in trust for Brian Entman and 226,922 shares held in trust for Scott Entman, his children. Also includes stock options to purchase 1,191 shares granted to Brian Entman. Mr. Entman disclaims beneficial ownership of all shares of common stock held by any members of his family. For a discussion of the stockholders’ and voting agreement to which Mr. Entman and his affiliates are subject, see “—Stockholders’ and Voting Agreement.”

(6)

Includes 19,350 shares owned by Dr. Gibbard and stock options to purchase 170,000 shares of H Power common stock, which may be acquired upon the exercise of options within 60 days of November 15, 2002.

(7)

Includes 3,125 shares of H Power common stock, which may be acquired upon the exercise of options within 60 days of November 15, 2002.

(8)

Includes 16,667 shares of H Power common stock, which may be acquired upon the exercise of options within 60 days of November 15, 2002.

(9)

Includes 8,333 shares of H Power common stock, which may be acquired upon the exercise of options within 60 days of November 15, 2002.

(10)

Includes 10,667 shares of H Power common stock, which may be acquired upon the exercise of options within 60 days of November 15, 2002. Does not include options to purchase 1,500 shares of H Power common stock which will become immediately vested and exercisable at the effective time of the merger. See “The Merger and Related Transactions—Interests of H Power Directors and Officers in the Merger—Accelerated Vesting of Options” appearing on page 67 of this joint proxy statement/prospectus.

(11)

Includes 10,667 shares of H Power common stock, which may be acquired upon the exercise of options within 60 days of November 15, 2002. Does not include options to purchase 1,500 shares of H Power common stock which will become immediately vested and exercisable at the effective time of the merger. See “The Merger and Related Transactions—Interests of H Power Directors and Officers in the Merger—Accelerated Vesting of Options” appearing on page 67 of this joint proxy statement/prospectus.

(12)

Includes 10,667 shares of H Power common stock, which may be acquired upon the exercise of options within 60 days of November 15, 2002. Does not include options to purchase 1,500 shares of H Power common stock which will become immediately vested and exercisable at the effective time of the merger. See “The Merger and Related Transactions—Interests of H Power Directors and Officers in the Merger—Accelerated Vesting of Options” appearing on page 67 of this joint proxy statement/prospectus.

(13)

Includes 75,000 shares of H Power common stock, which may be acquired upon the exercise of options within 60 days of November 15, 2002.

(14)

Does not include options to purchase 1,500 shares of H Power common stock which will become immediately vested and exercisable at the effective time of the merger. See “The Merger and Related Transactions—Interests of H Power Directors and Officers in the Merger—Accelerated Vesting of Options” appearing on page 67 of this joint proxy statement/prospectus.

(15)

Does not include options to purchase 1,500 shares of H Power common stock which will become immediately vested and exercisable at the effective time of the merger. See “The Merger and Related Transactions—Interests of H Power Directors and Officers in the Merger—Accelerated Vesting of Options” appearing on page 67 of this joint proxy statement/prospectus.

(16)

Mr. Hance is the designee of ECO Fuel Cells, LLC on H Power’s board of directors and serves as a director of ECO Fuel Cells, LLC, but he does not have or share voting or investment control over the 950,000 shares of common stock held by ECO Fuel Cells, LLC.

(17)

Includes 305,126 shares of H Power common stock, which may be acquired upon the exercise of options within 60 days of November 15, 2002.

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their shares will be present and counted for quorum purposes at every meeting of H Power’s stockholders;

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their shares will be voted on all matters in the same proportion as the votes cast by H Power’s other stockholders;

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in the case of a tender offer or an exchange offer for H Power’s common stock, their shares will be tendered in the same proportion as the shares tendered by H Power’s other stockholders;

•

they may sell or transfer their shares without the prior written consent of H Power’s independent directors, in transactions meeting the requirements of Rule 144 under the Securities Act of 1933, as amended, so long as in all cases the manner of sale requirements of Rule 144(f) are complied with, and certain other limited circumstances;

•

they will not increase their percentage ownership in H Power by more than 3% of the outstanding common stock, in the case of each family, above the levels of fully diluted ownership that existed immediately following H Power’s initial public offering; and

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they will not seek to be represented on, seek the removal of any directors from, or otherwise change the composition of, H Power’s board of directors or otherwise control H Power’s board of directors or have any involvement in H Power’s management.

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each person known by Plug Power to own beneficially 5% or more of the Plug Power common stock,

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each director of Plug Power,

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each executive officer of Plug Power, and

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all of the directors and executive officers of Plug Power as a group.

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Represents less than 1% of the outstanding shares of Plug Power common stock.

(1)

Unless otherwise indicated, each of the stockholders has sole voting and investment power with respect to the shares of Plug Power common stock beneficially owned by the stockholder. The address of Mechanical Technology, Inc. is 431 New Karner Road, Albany, New York 12205. The address of Edison Development Corporation is c/o DTE Energy Company, 2000 Second Avenue, 644 WCB, Detroit, Michigan 48226. The address of General Electric is c/o GE Power Systems, One River Road, Schenectady, New York 12345. The address of all other listed stockholders is c/o Plug Power Inc., 968 Albany-Shaker Road, Latham, New York 12110.

(2)

The number of shares beneficially owned by each stockholder is determined under rules promulgated by the Securities and Exchange Commission and includes voting or investment power with respect to securities. Under these rules, beneficial ownership includes any shares as to which the individual or entity has sole or shared voting power or investment power and includes any shares as to which the individual or entity has the right to acquire beneficial ownership within 60 days after November 15, 2002, through the exercise of any warrant, stock option or other right. The inclusion in this joint proxy statement/prospectus of such Plug Power shares, however, does not constitute an admission that the named stockholder is a direct or indirect beneficial owner of such shares. The number of shares of Plug Power common stock outstanding used in calculating the percentage for each listed person includes the shares of Plug Power common stock underlying options held by such person that are exercisable within 60 days of November 15, 2002, but excludes shares of Plug Power common stock underlying options held by any other person. Percentage of beneficial ownership is based on 50,359,220 shares of Plug Power common stock outstanding as of November 15, 2002.

(3)

Includes 14,390,981 shares owned of record by Edison Development Corporation, an indirect wholly-owned subsidiary of DTE Energy Company, of which 270,000 are shares of Plug Power common stock issuable upon the exercise of outstanding options that are exercisable within 60 days of November 15, 2002.

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(4)

Includes 5,666,666 shares of Plug Power common stock owned of record by GEPS Equities, Inc., an indirect wholly-owned subsidiary of General Electric Company that operates within its GE Power Systems business and 725,000 shares of Plug Power common stock issuable upon the exercise of an outstanding option that is exercisable within 60 days of November 15, 2002, by GEPS Equities, Inc.

(5)

Includes 14,390,981 shares owned of record by Edison Development Corporation, an indirect wholly-owned subsidiary of DTE Energy Company, of which 270,000 are shares of Plug Power common stock issuable upon the exercise of outstanding options that are exercisable within 60 days of November 15, 2002. Mr. Earley, a director and executive officer of DTE Energy, may be deemed the beneficial owner of these shares. Mr. Earley disclaims beneficial ownership of these shares. Also includes 45,000 shares of Plug Power common stock issuable upon exercise of outstanding options held by Mr. Earley that are exercisable within 60 days of November 15, 2002. Mr. Earley has assigned to DTE Energy Company his right to receive the shares underlying such options and any proceeds from the sale of such shares.

(6)

Includes 15,000 shares of Plug Power common stock issuable upon exercise of outstanding options that are exercisable within 60 days of November 15, 2002.

(7)

Includes 15,000 shares of Plug Power common stock issuable upon exercise of outstanding options that are exercisable within 60 days of November 15, 2002.

(8)

Includes 25,000 shares of Plug Power common stock issuable upon exercise of outstanding options that are exercisable within 60 days of November 15, 2002.

(9)

Includes 220,000 shares of Plug Power common stock issuable upon exercise of outstanding options held by Mr. McNamee that are exercisable within 60 days of November 15, 2002.

(10)

Includes 5,666,666 shares of Plug Power common stock owned of record by GEPS Equities, Inc., an indirect wholly-owned subsidiary of General Electric Company that operates within its GE Power Systems business and 725,000 shares of Plug Power common stock issuable upon the exercise of an outstanding option that is exercisable within 60 days of November 15, 2002, by GEPS Equities, Inc. Mr. Rice, a senior vice president of General Electric Company and the president and chief executive officer of GE Power Systems, disclaims beneficial ownership of these shares. Also includes 25,000 shares of Plug Power common stock issuable upon exercise of outstanding options held by Mr. Rice that are exercisable within 60 days of November 15, 2002. Mr. Rice has assigned to General Electric Company his right to receive the shares underlying such options and any proceeds from the sale of such shares.

(11)

Includes 45,000 shares of Plug Power common stock issuable upon exercise of outstanding options that are exercisable within 60 days of November 15, 2002.

(12)

Includes 230,873 shares of Plug Power common stock issuable upon exercise of outstanding options that are exercisable within 60 days of November 15, 2002.

(13)

Includes 194,997 shares of Plug Power common stock issuable upon exercise of outstanding options that are exercisable within 60 days of November 15, 2002.

(14)

Includes 69,226 shares of Plug Power common stock issuable upon exercise of outstanding options that are exercisable within 60 days of November 15, 2002.

(15)

includes 156,672 shares of Plug Power common stock issuable upon exercise of outstanding options that are exercisable within 60 days of November 15, 2002.

(16)

Includes 113,404 shares of Plug Power common stock issuable upon exercise of outstanding options that are exercisable within 60 days of November 15, 2002.

(17)

Includes 2,150,172 shares of Plug Power common stock issuable upon exercise of outstanding options, by the executive officers and directors as a group, that are exercisable within 60 days of November 15, 2002.

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any breach of the director’s duty of loyalty to the corporation or its stockholders;

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acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of the law;

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willful or negligent violation of the laws governing the payment of dividends or the purchase or redemption of stock; and

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any transaction from which the director derived an improper personal benefit.

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before such person became an interested stockholder, the board of directors of the corporation approved the transaction in which the interested stockholder became an interested stockholder or approved the business combination;

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upon the closing of the transaction that resulted in the interested stockholder’s becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding shares held by directors who are also officers of the corporation and shares held by employee stock plans; or

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following the transaction in which such person became an interested stockholder, the business combination is approved by the board of directors of the corporation and authorized at a meeting of stockholders by the affirmative vote of the holders of 66 2/3% of the outstanding voting stock of the corporation not owned by the interested stockholder.

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Annual Report on Form 10-K for the fiscal year ended December 31, 2001;

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Quarterly Report on Form 10-Q for the quarter ended March 31, 2002;

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Quarterly Report on Form 10-Q for the quarter ended June 30, 2002;

•

Quarterly Report on Form 10-Q for the quarter ended September 30, 2002;

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Current Report on Form 8-K filed on August 14, 2002;

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Current Report on Form 8-K filed on November 13, 2002;

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Proxy Statement filed on April 24, 2002 for the stockholders meeting held on May 16, 2002; and

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The description of Plug Power’s common stock contained in Plug Power’s registration statement filed on Form 8-A on November 1, 1999 and any amendment or report filed for the purpose of updating such description.

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(1)

The sum of the four quarters’ net loss per share does not equal the amount reported for the full year since each quarter is calculated separately.

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*

Filed herewith