MECHANICAL TECHNOLOGY INC (Form: S-8, Received: 06/24/2014 14:07:17)

Registration No. 333-_________

As filed with the Securities and Exchange Commission on June 24, 2014

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM S‑8

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

Mechanical Technology, Incorporated
(Exact name of registrant as specified in its charter)

New York	14-1462255
(State of Incorporation)	(I.R.S Employer Identification No.)

325 Washington Avenue Extension
Albany, NY 12205
(Address of Principal Executive Offices and Zip Code)

Mechanical Technology, Incorporated 2014 Equity Incentive Plan
(Full title of the plan)

		Copies to:
	Kevin G. Lynch
	Chief Executive Officer and Chairman	Penny Somer-Greif, Esquire
	Mechanical Technology, Incorporated	Ober, Kaler, Grimes & Shriver
	325 Washington Avenue Extension	100 Light Street
	Albany, NY 12205	Baltimore, MD 21202
	(518) 218-2550	(410) 685-1120
	(Name, Address and Telephone Number of Agent for Service)

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨	Accelerated filer ¨
Non-accelerated filer (Do not check if a smaller reporting company) ¨	Smaller reporting company T

CALCULATION OF REGISTRATION FEE

Title of securities to be registered	Amount to be registered(1)	Proposed maximum offering price per share (2)(3)	Proposed maximum aggregate offering price (2)(3)	Amount of registration fee
Common Stock, $0.01 par value	500,000 shares	$1.27	$635,000	$81.79

(1) Also registered hereunder are such additional number of shares of Common Stock, presently indeterminable, as may be necessary to satisfy the anti-dilution provisions of the Equity Incentive Plan to which this Registration Statement relates pursuant to Rule 416(a).

(2) Calculated on the basis of the average of the high and low sale prices of the Registrant’s Common Stock as reported on June 20, 2014 on the OTC Markets Group quotation system which date is within 5 business days prior to the date of the filing of this Registration Statement, in accordance with Rules 457(h) and 457(c).

(3) Estimated solely for the purpose of determining the registration fee in accordance with Rule 457(h).

This Registration Statement shall become effective upon filing in accordance with Section 8(a) of the Securities Act of 1933, as amended and Rule 462(a) thereunder.

Part I

Information Required in the Section 10(a) Prospectus

The documents containing the information specified in Part I of Form S-8 (plan information and registrant information) will be sent or given to participants in the Mechanical Technology, Incorporated 2014 Equity Incentive Plan as specified by Rule 428(b)(1) promulgated under the Securities Act of 1933.

Such documents are not being filed with the Securities and Exchange Commission (the “Commission”), but constitute (along with the documents incorporated by reference into this Registration Statement pursuant to Item 3 of Part II hereof) a prospectus that meets the requirements of Section 10(a) of the Securities Act.

Part II

Information Required in the Registration Statement

Item 3. Incorporation of Documents by Reference.

The following documents filed or to be filed by Mechanical Technology, Incorporated (the “Registrant”) with the Commission are incorporated by reference in this Registration Statement:

(a) The Company’s Annual Report on Form 10-K for the year ended December 31, 2013, as filed with the Commission on March 6, 2014.

(b) The Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2014, as filed with the Commission on May 8, 2014.

(d) The description of the Company’s common stock, par value $0.01 per share, incorporated by reference in the Company’s registration statement on Form 10 (File No. 0-6890) filed in connection with the registration of the Company’s common stock under Section 12(g) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and all amendments or reports filed for the purpose of updating such description.

In addition, all documents filed by the Registrant pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date hereof and prior to the filing of a post‑effective amendment that indicates that all securities offered hereby have been sold or which deregisters all securities then remaining unsold shall be deemed to be incorporated herein by reference and to be a part hereof from the date of filing of each such document. Any statement contained in this Registration Statement, or in a document incorporated or deemed to be incorporated by reference herein, shall be deemed to be modified or superseded for purposes of this Registration Statement to the extent that a statement contained in any other subsequently filed document which also is incorporated or deemed to be incorporated by reference herein, modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Registration Statement.

Item 4. Description of Securities

Not applicable.

Item 5. Interests of Named Experts and Counsel

None.

Item 6. Indemnification of Directors and Officers

Pursuant to the statutes of the State of New York, a director or officer of a corporation is entitled, under specified circumstances, to indemnification by the corporation against reasonable expenses, including attorney’s fees, incurred by him/her in connection with the defense of a civil or criminal proceeding to which he/she has been made, or threatened to be made, a party by reason of the fact that he/she was such director or officer. In certain circumstances, indemnity is provided against judgments, fines and amounts paid in settlement. In general, indemnification is available where the director or officer acted in good faith, for a purpose he/she reasonably believed to be in the best interests of the corporation. Specific court approval is required in some cases. The foregoing statement is subject to the detailed provisions of Sections 715, 717 and 721-725 of the New York Business Corporation Law.

The Registrant’s Certificate of Incorporation provides for indemnification and protects against personal liability as follows:

SEVENTH: The corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, proceeding or suit (including one by or in the right of the corporation to procure a judgment in its favor), whether civil or criminal, by reason of the fact that he, his testator or intestate is or was a director or officer of the corporation, or is or was serving any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise in any capacity at the request of the corporation, against judgments, fines, amounts paid in settlement and expenses, including attorneys’ fees, actually incurred as a result of or in connection with any such action, proceeding or suit, or any appeal therefrom, if such director or officer acted in good faith for a purpose which he reasonably believed to be in or not opposed to the best interests of the corporation and, in criminal actions or proceedings, in addition, had no reasonable cause to believe that his conduct was unlawful; provided, however, that no indemnification shall be made to or on behalf of any director or officer if a judgment or other final adjudication adverse to the director or officer establishes that his acts were committed in bad faith or were the result of active and deliberate dishonesty and were material to the cause of action so adjudicated, or that he personally gained a financial profit or other advantage to which he was not legally entitled.

EIGHTH: Directors of the corporation shall not be personally liable to the corporation or its shareholders for any breath of duty in such capacity; provided, however, that this provision shall not operate so as to eliminate or limit (i) the liability of any director if a judgment or other final adjudication adverse to him establishes that his acts or omissions were in bad faith or involved intentional misconduct or a knowing violation of the law or that he personally gained in fact a financial profit or other advantage to which he was not legally entitled or that his acts violated Section 719 of the New York Business Corporation Law, or (ii) the liability of any director for any act or omission prior to the date on which this Article became effective.

Item 7. Exemption From Registration Claimed

Not Applicable.

Item 8. List of Exhibits

The following exhibits are filed with or incorporated by reference in this Registration Statement (numbering corresponds to Exhibit Table in Item 601 of Regulation S‑K):

Exhibit
Number	Description

4.1	Mechanical Technology, Incorporated 2014 Equity Incentive Plan (incorporated by reference to Exhibit A to the Registrant’s Proxy Statement on Schedule 14A filed with the Commission on April 25, 2014).

4.2	Form of Restricted Stock Grant Agreement under Mechanical Technology, Incorporated 2014 Equity Incentive Plan (filed herewith).

4.3	Form of Nonstatutory Stock Option Grant Agreement under the Mechanical Technology, Incorporated 2014 Equity Incentive Plan (filed herewith).

4.4	Form of Incentive Stock Option Grant Agreement under the Mechanical Technology, Incorporated 2014 Equity Incentive Plan (filed herewith).

5.1	Opinion of Daniel M. Sleasman as to the legality of the Common Stock.

23.1	Consent of Daniel M. Sleasman (contained in the opinion included as Exhibit 5.1).

23.2	Consent of Independent Registered Public Accounting Firm – UHY LLP.

24.1	Power of Attorney (included on signature page).

Item 9. Undertakings

The undersigned Registrant hereby undertakes:

1. To file, during any period in which offers or sales are being made, a post‑effective amendment to this registration statement to include any material information with respect to the plan of distribution not previously disclosed in this registration statement or any material change to such information in this registration statement;

2. That, for the purpose of determining any liability under the Securities Act of 1933, each such post‑effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof;

3. To remove from registration by means of a post‑effective amendment any of the securities being registered which remain unsold at the termination of the offering;

4. That, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof; and

5. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S‑8 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in the city of Albany, State of New York, on June 24, 2014.

MECHANICAL TECHOLOGY, INCORPORATED

By: /s/ Kevin G. Lynch

Kevin G. Lynch,

Chief Executive Officer

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoint Kevin G. Lynch and Frederick W. Jones, and each of them, as his or her true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Registration Statement, and to file the same with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute, may lawfully do or cause to be done by virtue thereof. This power of attorney may be executed in counterparts.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the date indicated:

Signature	Title	Date
/s/ Kevin G. Lynch	Chairman, Chief Executive Officer and Director
Kevin G. Lynch	(Principal Executive Officer)	June 24, 2014

/s/ Frederick W. Jones	Chief Financial Officer and Secretary
Frederick W. Jones	(Principal Financial and Accounting Officer)	June 24, 2014

/s/ Thomas J. Marusak	Director
Thomas J. Marusak		June 24, 2014

/s/ David C. Michaels	Director
David C. Michaels		June 24, 2014


/s/ E. Dennis O’Connor	Director
E. Dennis O’Connor		June 24, 2014

/s/ William P. Phelan	Director
William P. Phelan		June 24, 2014

/s/ Walter L. Robb	Director
Dr. Walter L. Robb		June 24, 2014

EXHIBIT INDEX

Exhibit
Number	Description

4.1	Mechanical Technology, Incorporated 2014 Equity Incentive Plan (incorporated by reference to Exhibit A to the Registrant’s Proxy Statement on Schedule 14A filed with the Commission on April 25, 2014).

4.2	Form of Restricted Stock Grant Agreement under Mechanical Technology, Incorporated 2014 Equity Incentive Plan (filed herewith).

4.3	Form of Nonstatutory Stock Option Grant Agreement under the Mechanical Technology, Incorporated 2014 Equity Incentive Plan (filed herewith).

4.4	Form of Incentive Stock Option Grant Agreement under the Mechanical Technology, Incorporated 2014 Equity Incentive Plan (filed herewith).

5.1	Opinion of Daniel M. Sleasman as to the legality of the Common Stock.

23.1	Consent of Daniel M. Sleasman (contained in the opinion included as Exhibit 5.1).

23.2	Consent of Independent Registered Public Accounting Firm – UHY LLP.

24.1	Power of Attorney (included on signature page).

All exhibits for which no other filing information is given are filed herewith.

Exhibit 4.4

Mechanical Technology, Incorporated 2014 Equity Incentive Plan

Incentive Stock Option Grant Agreement

This Incentive Stock Option Grant Agreement (the “Agreement”) is entered into on [INSERT DATE], by and between Mechanical Technology, Incorporated, a New York corporation (the “Company”), and [INSERT OPTIONEE NAME] (the “Optionee”), effective as of [INSERT GRANT DATE] (the “Grant Date”).

In consideration of the premises, mutual covenants and agreements herein, the Company and the Optionee agree as follows:

1. Grant of Options . The Company hereby grants to the Optionee, pursuant to the Mechanical Technology, Incorporated 2014 Equity Incentive Plan (the “Plan”), a stock option to purchase from the Company, at a price of $[INSERT PRICE] per share (the “Exercise Price”), up to [INSERT GRANT AMOUNT] shares of Common Stock, subject to the provisions of this Agreement and the Plan (the “Options”). The Options shall expire at 5:00 p.m. Eastern Time on the last business day preceding the tenth anniversary of the Grant Date, or, if the Optionee is a Ten-Percent Stockholder, the fifth anniversary of the Grant Date (in either case, the “Expiration Date”), unless fully exercised or terminated earlier.

2. Terminology . Unless stated otherwise in this Agreement, capitalized terms in this Agreement shall have the meaning set forth in the Plan.

3. Exercise of Options .

(a) Vesting . Subject to the terms of the Plan with respect to vesting, the Options granted shall vest in whole or in part, in accordance with the time and/or performance-based vesting conditions set forth in the schedule attached hereto as Exhibit A, provided that the Optionee is in the continuous employ of, or in a service relationship with, the Company from the Grant Date through the applicable date upon which such Options become vested. The extent to which the Options are vested as of a particular vesting date shall be rounded down to the nearest whole share. However, vesting is rounded up to the nearest whole share on the last vesting date.

(b) Right to Exercise . The Optionee shall have the right to exercise the Options, whether or not vested, in whole or in part at any time prior to the Expiration Date or earlier termination of the Options in accordance with the Plan and this Agreement; provided, that to the extent, if any, that the aggregate Fair Market Value of the Common Stock subject to the Options as of the Grant Date, plus the aggregate fair market value (determined as of the date of grant) of all other stock with respect to which incentive stock options granted to the Optionee prior to the Grant Date under all plans of the Company and its parent and subsidiary corporations first become exercisable during any calendar year exceeds $100,000 (the “Annual Limitation”), then except as otherwise provided in this Agreement the Options shall be exercisable during that year only to the extent, if any, that their exercisability does not cause the Annual Limitation to be exceeded. Any Options that are not exercisable due to the proviso in the preceding sentence shall be exercisable during the next calendar year, subject again to the application of that proviso. To the extent not exercised, the number of shares as to which the Options are exercisable shall accumulate and remain exercisable, in whole or in part, at any time after becoming exercisable, but not later than the Expiration Date or other termination of the Options. In the event of the Optionee’s termination of employment, the exercisability is governed by Section 4. If an unvested Option is exercised, the Optionee will receive restricted stock subject to the same vesting terms and conditions as that Option.

(c) Exercise Procedure . Subject to the conditions set forth in this Agreement, the Options shall be exercised (to the extent then exercisable) by delivery of written notice of exercise on any business day to the Corporate Secretary of the Company (or other person designated by the Administrator) in such form as the Administrator may require from time to time. Such notice shall specify the number of shares in respect to which the Options are being exercised and shall be accompanied by full payment of the Exercise Price for such shares in accordance with Section 3(e) of this Agreement. The exercise shall be effective upon receipt by the Corporate Secretary of the Company of such written notice accompanied by the required payment. The Options may be exercised only in multiples of whole shares and may not be exercised at any one time as to fewer than one hundred shares (or such lesser number of shares as to which the Options are then exercisable). No fractional shares shall be issued pursuant to the Options.

(d) Effect . The exercise, in whole or in part, of the Options shall cause a reduction in the number of shares of Common Stock subject to the remaining Options equal to the number of shares of Common Stock with respect to which the Options are exercised.

(e) Method of Payment . In addition to any other method approved by the Administrator, if any, payment of the Exercise Price shall be made by delivery of cash, certified or cashier’s check, money order or other cash equivalent acceptable to Administrator in its sole discretion, or any combination thereof, as determined by the Administrator in its discretion at the time of exercise.

(f) Issuance of Shares Upon Exercise . Upon due exercise of the Options, in whole or in part, in accordance with the terms of this Agreement, the Company shall issue to the Optionee, the brokerage firm specified in the Optionee’s delivery instructions pursuant to a broker-assisted cashless exercise, or such other person exercising the Options, as the case may be, the number of shares of Common Stock so paid for, in the form of fully paid and non-assessable stock and shall deliver certificates therefor as soon as practicable thereafter.

(g) Restrictions on Exercise and Upon Shares Issued upon Exercise . Notwithstanding any other provision of the Agreement, the Options may not be exercised at any time that the Company does not have in effect a registration statement under the Securities Act of 1933, as amended, relating to the offer of Common Stock to the Optionee under the Plan, unless the Company agrees to permit such exercise. Upon the issuance of any shares of Common Stock pursuant to the exercise of the Options, the Optionee will, upon the request of the Company, agree in writing that the Optionee is acquiring such shares for investment only and not with a view to resale, and that the Optionee will not sell, pledge or otherwise dispose of such shares so issued unless: (i) the Company is furnished with an opinion of counsel to the effect that registration of such shares pursuant to the Securities Act of 1933, as amended, is not required by that Act or by the rules and regulations thereunder; (ii) the staff of the Securities and Exchange Commission has issued a “no-action” letter with respect to such disposition; or (iii) such registration or notification as is, in the opinion of counsel for the Company, required for the lawful disposition of such shares has been filed by the Company and has become effective; provided, however, that the Company is not obligated hereby to file any such registration or notification. In addition, the Common Stock issued upon the exercise of any Options shall be subject to repurchase by the Company for an amount equal to the Exercise Price of such Options (i) upon the occurrence of an event described in Section 4(d) of this Agreement, or (ii) if the Options were not vested when they were exercised, upon the occurrence of any event that would have resulted in the termination of those Options under the Plan and this Agreement if those Options had not been exercised. The Company may place a legend embodying such restrictions on the certificates evidencing such shares.

4. Termination of Employment or Service .

(a) Exercise Period Following Cessation of Employment or Other Service Relationship, In General . If Optionee ceases to be employed by, or in a service relationship with, the Company or any Affiliate for any reason other than death, Disability, discharge for Cause or in connection with a Substantial Corporate Change, (i) the unvested Options shall terminate immediately upon such cessation, and (ii) the vested Options shall remain exercisable during the 30‑day period following such cessation, but in no event after the Expiration Date. Unless sooner terminated, any unexercised vested Options shall terminate upon the expiration of such 30‑day period.

(b) Death of Optionee . If Optionee dies prior to the expiration or other termination of the Options, (i) the unvested Options shall vest immediately upon Optionee’s death, and (ii) the Options shall remain exercisable following Optionee’s death by Optionee’s executor, personal representative, or the person(s) to whom the Options are transferred by will or the laws of descent and distribution until the Expiration Date.

(c) Disability of Optionee . If Optionee ceases to be employed by, or in a service relationship with, the Company or any Affiliate as a result of Optionee’s Disability, (i) the unvested Options shall vest immediately upon such cessation, and (ii) the Options shall remain exercisable during the 3-month period following such cessation (or the one-year period following such cessation, if the Optionee is disabled within the meaning of Section 22(e)(3) of the Code), but in no event after the Expiration Date.

(d) Misconduct . Notwithstanding anything to the contrary in this Agreement, the Options shall terminate in their entirety, regardless of whether the Options are vested, immediately upon Optionee’s discharge of employment or other service relationship for Cause or upon Optionee’s commission of any of the following acts during any period following the cessation of Optionee’s employment or other service relationship during which the Options otherwise would be exercisable: (i) fraud on or misappropriation or embezzlement of any funds or property of the Company or any Affiliate; or (ii) breach by Optionee of any provision of any employment, non-disclosure, non-competition, non-solicitation, assignment of inventions, or other similar agreement executed by Optionee for the benefit of the Company or any Affiliate, as determined by the Administrator, which determination will be conclusive.

5. Adjustments and Business Combinations .

(a) Adjustments for Events Affecting Common Stock . In the event of changes in the Common Stock of the Company by reason of any stock dividend, spin-off, split-up, reverse stock split, recapitalization, reclassification, merger, consolidation, liquidation, business combination or exchange of shares and the like, the exercise price of, number of shares covered by and the other terms of the Options shall adjust as provided in the Plan, and the Administrator shall, in its discretion, in its discretion and without the consent of the Optionee, make any other substitutions for or adjustments in the Options, including but not limited to providing or mandating alternative settlement methods such as settlement of the Options in cash or in shares of Common Stock or other securities of the Company or of any other entity, or in any other matters which relate to the Options as the Administrator shall, in its sole discretion, determine to be necessary or appropriate.

(b) Adjustments for Other Events . The Administrator is authorized to make, in its discretion and without the consent of the Optionee, adjustments in the terms and conditions of, and the criteria included in, the Options in recognition of changes in applicable laws, regulations, or accounting principles, whenever the Administrator determines that such adjustments are appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Options or the Plan.

(c) Binding Nature of Adjustments . Adjustments under this Section 5 will be made by the Administrator, whose determination as to what adjustments, if any, will be made and the extent thereof will be final, binding and conclusive. No fractional shares will be issued pursuant to the Options on account of any such adjustments.

(d) Effect of Substantial Corporate Change. All outstanding portions of the Options, if any, shall become fully vested upon the occurrence of any Substantial Corporate Change and shall be exercisable in accordance with the Plan; provided, that unless otherwise decided in the sole discretion of the Administrator, the acceleration of vesting in connection with a Substantial Corporate Change shall be limited as provided in the Plan.

6. Non-Guarantee of Employment . Nothing in the Plan or in this Agreement shall confer on an individual any legal or equitable right against the Company or the Administrator, except as expressly provided in the Plan or this Agreement. Nothing in the Plan or in this Agreement shall: (a) constitute an inducement, consideration, or a contract for employment or service between an individual and the Company or any Affiliate; (b) confer any right on an individual to continue in the service of the Company or any Affiliate; or (c) interfere in any way with the right of the Company or any Affiliate to terminate such service at any time with or without cause or notice, or to increase or decrease compensation for such service.

7. No Rights as Stockholder . The Optionee shall not have any of the rights of a stockholder with respect to the shares of Common Stock that may be issued upon the exercise of the Options (including, without limitation, any rights to receive dividends or noncash distributions with respect to such shares) until such shares of Common Stock have been issued to him or her upon the due exercise of the Options. No adjustment shall be made for dividends or distributions or other rights for which the record date is prior to the date such certificate or certificates are issued.

8. Incentive/Nonqualified Nature of the Options . The Options are intended to qualify as an incentive stock option within the meaning of Section 422A of the Code to the extent set forth herein, and this Agreement shall be so construed; provided , however , to the extent that the aggregate Fair Market Value as of the date of this grant, of the shares into which the Options become exercisable for the first time by the Optionee during any calendar year exceeds $100,000, the portion of the Options which are in excess of the $100,000 limitation will be treated as a nonqualified stock option.

9. Withholding of Taxes .

(a) In General . At the time the Options are exercised in whole or in part, or at any time thereafter as requested by the Company, the Optionee hereby authorizes withholding from payroll or any other payment of any kind due the Optionee and otherwise agrees to make adequate provision for foreign, federal, state and local taxes required by law to be withheld, if any, which arise in connection with the Options (including, without limitation, upon a disqualifying disposition with the meaning of Code section 421(b)). The Company may require the Optionee to make a cash payment to cover any withholding tax obligation as a condition of exercise of the Options. If the Optionee does not make such payment when requested, the Company may refuse to issue any stock certificate under the Plan until arrangements satisfactory to the Administrator for such payment have been made.

(b) Means of Payment . The Administrator may, in its sole discretion, permit the Optionee to satisfy, in whole or in part, any withholding tax obligation which may arise in connection with the Options by any of the following means or by a combination of such means: (i) tendering a cash payment; (ii) authorizing the Company to deduct any such tax obligations from any payment of any kind otherwise due to the Optionee; (iii) authorizing the Company to withhold shares of Common Stock otherwise issuable to the Optionee pursuant to the exercise of the Options; or (iv) delivering to the Company unencumbered shares of Common Stock already owned by the Optionee.

(c) Disposition of Shares . The acceptance of shares of Common Stock upon exercise of the Options shall constitute an agreement by the Optionee (i) to notify the Company if any of such shares are disposed of by the Optionee within two years from the Grant Date or within one year from the date the shares were issued to the Optionee pursuant to the exercise of the Options, and (ii) if required by law, to remit to the Company, at the time of any such disposition, an amount sufficient to satisfy the Company’s withholding tax obligations with respect to such disposition, whether or not, as to both (i) and (ii), the Optionee is employed by or has any other relationship with the Company at the time of such disposition.

10. The Company’s Rights . The existence of the Options shall not affect in any way the right or power of the Company or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in the Company’s capital structure or its business, or any merger or consolidation of the Company, or any issue of bonds, debentures, preferred or other stocks with preference ahead of or convertible into, or otherwise affecting the Common Stock or the rights thereof, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of the Company’s assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise.

11. Optionee . Whenever the word “Optionee” is used in any provision of this Agreement under circumstances where the provision should logically be construed, as determined by the Administrator, to apply to the estate, personal representative or beneficiary to whom the Options may be transferred by will, by the laws of descent and distribution, or pursuant to a qualified domestic relations order as defined in Code section 414(p), the word “Optionee” shall be deemed to include such person.

12. Transferability of Options . The Options are not transferable other than by will or the laws of descent and distribution, pursuant to a qualified domestic relations order as defined in Code section 414(p), or as otherwise permitted by the Administrator, in its sole discretion. During the lifetime of the Optionee, the Options may be exercised only by the Optionee, by such permitted transferees or, during the period the Optionee is under a legal disability, by the Optionee’s guardian or legal representative. Except as provided above, the Options may not be assigned, transferred, pledged, hypothecated or disposed of in any way (whether by operation of law or otherwise) and shall not be subject to execution, attachment or similar process.

13. Notices . All notices and other communications made or given pursuant to this Agreement shall be in writing and shall be sufficiently made or given if hand delivered or mailed by certified mail, addressed to the Optionee at the address contained in the records of the Company, or addressed to the Administrator, care of the Company for the attention of its Corporate Secretary at its principal office or, if the receiving party consents in advance, transmitted and received via telecopy or via such other electronic transmission mechanism as may be available to the parties.

14. Entire Agreement . This Agreement and the Plan contain the entire agreement between the parties with respect to the Options granted hereunder. Any oral or written agreements, representations, warranties, written inducements, or other communications made prior to the execution of this Agreement with respect to the Options granted hereunder shall be void and ineffective for all purposes.

15. Amendment . This Agreement may not be modified, except as provided in the Plan or in a written document signed by each of the parties hereto.

16. Conformity with Plan . This Agreement is intended to conform in all respects with, and is subject to all applicable provisions of, the Plan, which is incorporated herein by reference. Inconsistencies between this Agreement and the Plan shall be resolved in accordance with the terms of the Plan. In the event of any ambiguity in this Agreement or any matters as to which this Agreement is silent, the Plan shall govern. A copy of the Plan is available upon request to the Administrator.

17. Governing Law . This Agreement shall be governed by and construed in accordance with the laws of the State of New York, other than the conflict of laws principles thereof.

18. Headings . The headings in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement.

[Signatures appear on the following page.]

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer as of the date first above written.

Mechanical Technology, Incorporated

By:

Print Name:

Title:

The undersigned hereby acknowledges that he/she has carefully read this Agreement and the Plan and agrees to be bound by all of the provisions set forth in such documents.

	OPTIONEE:


DATE:
	Print Name:


Date:
		Optionee Signature

		Received by Mechanical Technology, Incorporated on


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Broker Address


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