Exhibit 10.136

Mechanical Technology Incorporated

431 New Karner Road

Albany, NY 12205

Tel: 518.533.2200 Fax: 518.533.2201

www.mechtech.com

 

MECHANICAL TECHNOLOGY, INC.

September 25, 2002

Cynthia A. Scheuer

2757 Doellner Circle

Castleton, NY 12033

Re: Chief Financial Officer and Vice President Mechanical Technology, Inc. and
Treasurer of MTI MicroFuel Cells Inc.

Dear Cynthia:

This letter will memorialize our agreement with respect to the terms of your
employment with Mechanical Technology, Inc. ("MTI") and MTI MicroFuel Cells Inc.
("MTIMFC" and, together with MTI, the "Companies"). You will be Vice President
and Chief Financial Officer of MTI and Treasurer of MTIMFC. As Vice President
and Chief Financial Officer you will be responsible for supervising the
accounting department. As Treasurer of MTIMFC you will be responsible for the
treasury function.

Base Salary and Bonus

. Effective April 1, 2002, your salary will be $150,000 per year. In addition,
you will be eligible to receive an annual bonus in the form of stock options to
purchase MTI and/or MTIMFC common stock, as determined by your supervisor, Bill
Acker, and the MTI and/or MTIMFC Board of Directors.

Stock Options

. You will be eligible for option grants at the discretion of the Boards of
Directors of the Companies.

Other Benefits

. You will be eligible for all benefits generally available to employees and
officers of the Companies including the Companies' 401(k) plan and health
insurance plan. You will be eligible for three (3) weeks of paid vacation
annually (which shall accrue based upon your work schedule at the time of the
accrual).

Termination of Employment

. In the event that your employment is terminated by both MTI and MTIMFC without
"cause", you will receive (i) six months of salary continuation payments and
(ii) continued coverage for six months under the Companies' health insurance
plans, on the same terms as during your employment. At the end of that six month
period, you shall be entitled to group health continuation coverage in
accordance with Section 4980B of the Code. For purposes of this agreement,
"cause" shall mean (i) your gross misconduct, negligence, theft, dishonesty,
fraud, or gross dereliction of duties; (ii) your indictment on any felony charge
or a misdemeanor charge involving theft, moral turpitude or a violation of the
federal securities laws (whether or not related to your conduct at work); or
(iii) your death or permanent disability (consistent with the requirements of
state and federal law).

You agree to devote your full energy and attention to the Companies.

This letter replaces in its entirety the offer letter from MTI dated October 8,
1997 (the "Original Offer Letter"). The provisions of any agreement (other than
the Original Offer Letter) between you and the Companies or any of their
affiliates, including, but not limited to, any non-competition agreement, shall
continue to be effective, in accordance with the terms of any such agreement. If
the foregoing is acceptable, please countersign this letter in the space
provided below and return it to me.

Sincerely,

/s/William Acker

William Acker

President

Agreed & Accepted:

 

/s/Cynthia A. Scheuer

Cynthia A. Scheuer

9/25/02

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Date