Document:

MECHANICAL TECHNOLOGY, INCORPORATED 
AMENDED AND
RESTATED 2006 EQUITY INCENTIVE PLAN 

Purpose 

Mechanical Technology, Incorporated, a New
York corporation (the “Company”), wishes to recruit,
reward, and retain employees, directors, and other service providers, including
consultants. To further these objectives, the Company hereby sets forth the
Mechanical Technology, Incorporated Amended and Restated 2006 Equity Incentive
Plan (the “Plan”), originally effective May 18, 2006 upon approval of its
adoption by the Company’s stockholders (the “Effective Date”), and as amended
and restated by the Company effective September 16, 2009, to provide options
(“Options”) to employees, directors, and other service providers of the Company
and its Eligible Affiliates to purchase shares of the Company’s common stock
(the “Common Stock”).

The Company may also make direct grants or
sales of Common Stock (with any or no restrictions) (“Restricted Stock
Grants”) to participants, and may also grant
stock appreciation rights
(“SARs”), restricted stock units providing for a future issuance of shares
(“RSUs”), and other share-based awards (“Other Share-Based Awards”). Grants
of the various equity-related instruments are “Awards.”

Participants 

All Employees of the Company and of any
Eligible Affiliates are potentially eligible for Awards under this Plan.
Eligible individuals become “optionees” or “recipients” when the
Administrator grants them, respectively, an Option or one of the other Awards
under this Plan. The Administrator may also grant Awards to directors,
consultants, and certain other service providers of the Company or any Eligible
Affiliate. (Optionees and recipients are referred to collectively as
“participants.”) The term
participant also includes, where appropriate, a person authorized to exercise an
Award or purchase or receive an Award in place of the original
recipient. 

“Employee” means any person the
Company or a Related Company employs as a common law employee. Other service
providers must be natural persons to participate. 

Administrator 

The “Administrator” is the Compensation
Committee (the “Compensation
Committee”) of the Board of Directors
(the “Board”), unless the Board specifies a different committee or acts under the
Plan as though it were the Compensation Committee. 

The Administrator is responsible for the
general operation and administration of the Plan and for carrying out the Plan’s
provisions and has full discretion in interpreting and administering the
provisions of the Plan and reconciling any inconsistencies with any Award
Agreement. Subject to the express provisions of the Plan, the Administrator may
exercise such powers and authority of the Board as the Administrator may find
necessary or appropriate to carry out its functions. The Administrator may act
through meetings of a majority of its members or by unanimous consent. The
Administrator may delegate its functions
to officers or other Employees of the Company
or Eligible Affiliates. The Administrator’s powers will include, but not be
limited to, the power to amend, waive, or extend any provision or limitation of
any Award. 

The Administrator may provide that an
Award is exercisable for shares while the shares are subject to forfeiture under
conditions the Administrator specifies. 

Granting of Awards 

Subject to the terms of the Plan, the
Administrator will, in its sole discretion, determine 

	the persons who receive Awards,
  
	the terms of such Awards (including amendment, release, or
  extension of any provision),
  
	the schedule for exercisability or nonforfeitability
  (including any requirements that the participants or the Company satisfy
  performance criteria),
  
	the time and conditions for expiration of the Awards,
  and
  
	the form of payment due upon exercise or purchase (including
  any repricing or replacement of outstanding Awards).

The Administrator may allow participants
to exercise otherwise non-exercisable portions of Awards, subject, in the
Administrator’s sole discretion, to whatever conditions it considers
appropriate. 

The Administrator’s determinations under
the Plan need not be uniform and need not consider whether possible recipients
are similarly situated. 

Options for Employees may be “incentive
stock options” (“ISOs”) within the meaning of Section 422 of the Internal Revenue
Code of 1986 (the “Code”), or the corresponding provision of any subsequently enacted
tax statute, or nonqualified stock options (“NQSOs”), and the Administrator
will specify which form of option it is granting. (If the Administrator fails to
specify the form of an option grant to an Employee, it will be an ISO to the extent the
tax laws permit.) Any options granted to outside directors or other persons who
are not Employees must be nonqualified stock options. Neither the Company nor
the Administrator will be liable if any Option intended initially to be an ISO
fails to so qualify or is amended to be an NQSO. 

The Administrator may set whatever
conditions it considers appropriate for the SARs or other Awards, subject to the
terms of the Plan. 

Nonexempt Employee 

Any Option or SAR granted to an Employee
who is a nonexempt Employee for purposes of the Fair Labor Standards Act of 1938
(the “FLSA”) cannot by its terms be exercisable by the Employee for a period of at
least six months after its Date of Grant, to the extent required under the FLSA
for such Option or SAR to be excluded from the Employee’s “regular rate” (as
defined under the FLSA). The Administrator may impose such other conditions or
limitations on Options or SARs granted to nonexempt Employees as it may deem
appropriate to qualify such Options or SARs for exemption from such Employees’
regular rate under the FLSA. Nonexempt Employees will not be eligible for other
types of Awards under the Plan except to the extent that such Awards comply with
the FLSA. 

Substitutions 

The Administrator may grant Awards in
substitution for options or other equity interests held by individuals who
become Employees or other service providers of the Company or of an Eligible
Affiliate as a result of the Company’s or Eligible Affiliate’s acquiring or
merging with the individual’s employer or acquiring its assets. In addition, the
Administrator may provide for the Plan’s assumption of Awards granted outside
the Plan to persons who would have been eligible under the terms of the Plan to
receive a grant (or who were eligible under the acquired company’s plan),
including (i) persons who provided services to any acquired company or business,
(ii) persons who provided services to the Company or any Related Company, and
(iii) persons who received Awards from the Company before the Effective Date of
the Plan. If appropriate to conform the Awards to the interests for which they
are substitutes, the Administrator may grant substitute Awards under terms and
conditions (including, for exercisable Awards, Exercise Price) that vary from
those the Plan otherwise requires. 

Date Of Grant 

The Date of Grant will be the date as
of which the Administrator grants an Award to a person, as specified in the
Administrator’s minutes or other written evidence of action. 

Exercise Price 

The Exercise Price is, for Options,
the value of the consideration that a participant must provide in exchange for
one share of Common Stock and, for SARs, the measurement price. The
Administrator will determine the Exercise Price under each Award and may set the
Exercise Price without regard to the Exercise Price of any other Awards granted
at the same or any other time. The Company may use the consideration it receives
from the participant for general corporate purposes. 

The Exercise Price per share for ISOs,
NQSOs, and SARs may not be less than
100% of the Fair Market Value of a share of
Common Stock on the Date of Grant, provided,
however, that if the Administrator decides to
grant an ISO to someone described in Code Sections 422(b)(6) and 424(d) (as a
more-than-10%-stockholder), the Exercise Price must be at least 110% of the Fair
Market Value. 

Repricing 

(1) The Administrator may, with or without
stockholder approval, amend an outstanding Option granted under the Plan to
provide an Exercise Price per share that is lower than the then-current Exercise
Price of such outstanding Option, and (2) the Administrator may, with or without
stockholder approval, cancel any outstanding option (whether or not granted
under the Plan) and grant in substitution therefore new Awards under the Plan
covering the same or a different number of share of Common Stock and having an
exercise price per share lower than the then-current exercise price per share of
the cancelled option. 

Fair Market Value 

“Fair
Market Value” of a share of Common Stock
for purposes of the Plan will be determined as follows: 

	if the Common Stock trades on a national
  securities exchange or market, the closing sale price (for the primary trading
  session) on the Date of Grant;
  
	if the Common Stock does not trade on any such
  exchange or market, the average of the closing bid and asked prices as
  reported by the National Association of Securities Dealers, Inc. Automated
  Quotation System (“Nasdaq”) for the Date of Grant;
  
	if no such closing sale price information is
  available, the average of bids and asked prices that Nasdaq reports for the
  Date of Grant;
  
	if Nasdaq does not report such bid and asked
  prices for the Date of Grant, the average of the bid and asked prices as
  reported by any other commercial service for the Date of Grant; or
  
	if the Company ceases to have publicly-traded
  stock, the Administrator will determine the Fair Market Value for purposes of
  the Plan using any measure of value it determines to be appropriate
  (including, as it considers appropriate, relying on appraisals) in a manner
  consistent with the valuation principles under Code Section 409A, except as
  the Board or Committee may expressly determine otherwise.

For any date that is not a trading day,
the Fair Market Value of a share of Common Stock for such date will be
determined by using the foregoing provisions, as appropriate, for the
immediately preceding trading day and with the timing in the formulas above
adjusted accordingly. The Committee can substitute a particular time of day or
other measure of “closing sale price” or “bid and asked prices” if appropriate
because of exchange or market procedures or can, in its sole discretion, use
weighted averages either on a daily basis or such longer period as complies with
Code Section 409A.

2 

The Administrator has sole discretion to
determine the Fair Market Value for purposes of this Plan, and all Awards are
conditioned on the participants’ agreement that the Administrator’s
determination is conclusive and binding even though others might make a
different determination. 

Exercisability 

The Administrator will determine the times
and conditions for exercise or retention of each Award. 

Awards will become exercisable or
nonforfeitable at such times and in such manner as the Administrator determines
and the Award Agreement indicates; provided, however, that the Administrator may,
on such terms and conditions as it determines appropriate, accelerate the time
at which the participant may exercise any portion of an Option or at which
restrictions on the Awards will lapse. 

If the Administrator does not specify
otherwise, Awards will become exercisable or non-forfeitable as to
25% per
year on each anniversary of the Date of Grant, so long as the participant
remains employed or continues his relationship as an individual service
provider, and with respect to exercisable Awards, will expire as of the tenth
anniversary of the Date of Grant (unless they expire earlier under the Plan or
the Award Agreement). The Administrator has the sole discretion to determine
that a change in service-providing relationship eliminates any further service
credit on the exercise schedule. 

Substantial Corporate
Change 

Upon a Substantial Corporate Change, the Plan
and any unexercised or forfeitable Awards will terminate (after the occurrence
of one of the alternatives set forth below under Termination Alternatives) unless
either (i) an Award Agreement with a participant provides otherwise or (ii)
provision is made in writing in connection with such transaction for 

	the assumption or continuation of outstanding
  Awards, or
  
	the substitution for such Awards with awards
  covering the stock or securities of a successor employer entity, or a parent
  or subsidiary of such successor,

with appropriate adjustments as to the
number and kind of shares of stock and prices (and with fractional shares
rounded down to the nearest whole share unless the Administrator determines
otherwise), in which event the Awards will continue in the manner and under the
terms so provided, with such increases in exercisability or nonforfeitability,
if any, as the Administrator determines appropriate in its sole
discretion. 

Termination Alternatives

If an Award would otherwise terminate
under the preceding provisions, the Administrator will either 

	provide that optionees or holders of SARs or other
  exercisable Awards will have the right, at such time before the completion of
  the transaction causing such termination as the Board or the Administrator
  reasonably designates, to exercise any unexercised portions of the Options or
  SARs or other exercisable Awards, including portions of such Awards not
  already exercisable, or
  
	for any Awards, cause the Company, or agree to
  allow the successor, to cancel each Award after payment to the participant of
  an amount, if any, in cash, cash equivalents, or successor equity interests
  substantially equal to the fair market value of the consideration (as valued
  by the Administrator) paid for the Company’s shares, under the transaction
  minus, for Options and SARs or other exercisable Awards, the Exercise Price
  for the shares covered by such Awards (and, for any Awards, where the Board or
  the Administrator determines it is appropriate, any required taxes,
  withholdings or other required deductions), and with such allocation among
  cash, cash equivalents, and/or successor equity interests as the Administrator
  determines or approves.

A “Substantial Corporate Change” means any of the following events
after the initial Effective Date of the Plan: 

		(i)		sale of all or
      substantially all of the assets of the Company to one or more individuals,
      entities, or groups (other than an Excluded Owner) acting
    together,
		 
		(ii)		complete or
      substantially complete dissolution or liquidation of the
  Company,
		 
		(iii)		a person, entity, or
      group acting together (other than an Excluded Owner) acquires or attains
      ownership of more than 50% of the undiluted total voting power of the
      Company’s then-outstanding securities eligible to vote to elect members of
      the Board (“Company Voting
      Securities”),
		 
	      	(iv)	      	completion of a
      merger, consolidation, or reorganization of the Company with or into any
      other entity (other than an Excluded Owner) unless the holders of the
      Company Voting Securities outstanding immediately before such completion,
      together with any trustee or other fiduciary holding securities under a
      Company benefit plan, hold securities that represent immediately after
      such merger or consolidation at least 50% of the combined voting power of
      the then outstanding voting securities of either the Company or the other
      surviving entity or its ultimate parent;

3 

		(v)		the individuals who
      constitute the Board immediately before a proxy contest cease to
      constitute at least a majority of the Board (excluding any Board seat that
      is vacant or otherwise unoccupied) immediately following the proxy
      contest; or
		 
	      	(vi)	      	during any one year
      period, the individuals who constitute the Board at the beginning of the
      period (the “Incumbent
      Directors”) cease for any reason to
      constitute at least a majority of the Board (excluding any Board seat that
      is vacant or otherwise unoccupied), provided that any individuals that a
      majority of Incumbent Directors approve for service on the Board are
      treated as Incumbent Directors.

An “Excluded Owner” consists of the
Company, any Related Company, any Company benefit plan, any underwriter
temporarily holding securities for an offering of such securities, investors or
directors designated by the Board, or any trusts or other entities in which any
of the foregoing entities, individuals or members of their immediate family hold
a majority of the ownership or beneficial interests. 

Even if other tests are met, a
Substantial Corporate Change has not occurred under any circumstance in which the Company
files for bankruptcy protection or is reorganized following a bankruptcy filing.

The Administrator may determine that a
particular participant’s Awards will not become fully exercisable or
nonforfeitable as a result of what the Administrator, in its sole discretion,
determines is the participant’s insufficient cooperation with the Company with
respect to a Substantial Corporate
Change.

The Administrator may allow conditional
exercises before the completion of a Substantial Corporate Change that are
then rescinded if no Substantial Corporate
Change occurs. 

If any portion of an Award becomes
exercisable solely as a result of a Substantial Corporate Change, the
Administrator may provide that, upon exercise of such Award, the participant
will receive shares subject to a right of repurchase by the Company or its
successor at the Exercise Price; this repurchase right (x) will lapse at the
same rate as the Award would have become exercisable under its terms without a
Substantial Corporate Change and (y) will not apply to any shares subject to the portion
of the Award that was exercisable under its terms without regard to the
Substantial Corporate Change. 

Any Award granted to a participant in
replacement of other awards not under this Plan will only become fully
exercisable upon a Substantial Corporate
Change if (i) the plan under which the
participant originally received the awards specifically provided for such
acceleration, (ii) the Administrator provided for such acceleration in replacing
the options, or (iii) the Administrator so provides at another time. 

If a Substantial Corporate Change other
than a liquidation or dissolution of the Company occurs, the Company’s
repurchase and other rights under each outstanding Restricted Stock Grant will
inure to the benefit of the Company’s successor and will apply to the cash,
securities, or other property into which the Common Stock was converted or
exchanged pursuant to such Substantial
Corporate Change in the same manner and to
the same extent as they applied to the Common Stock subject to such Restricted
Stock Grant. If a Substantial Corporate
Change involving the liquidation or
dissolution of the Company occurs, except to the extent the instrument
evidencing any Restricted Stock Grant or any other agreement between a
participant and the Company provides specifically to the contrary, all
restrictions and conditions on all Restricted Stock Grants then outstanding will
automatically be treated as terminated or satisfied. 

The Board or other Administrator may take
any actions described in the Substantial
Corporate Change section, without any
requirement to seek participant consent. 

Limitation on ISOs 

An Option granted as an ISO will be an ISO
only to the extent that the aggregate Fair Market Value (determined at the Date
of Grant) of the stock with respect to which ISOs are exercisable for the first
time by the optionee during any calendar year (under the Plan and all other
plans of the Company and its parent or subsidiary corporations, within the
meaning of Code Section 422(e) and (f)), does not exceed $100,000. This
limitation applies to options in the order in which such options were granted.
If, by design or operation, the Option exceeds this limit, the excess will be
treated as an NQSO. 

Method of Exercise 

To exercise any exercisable portion of an
Award, the participant must: 

	deliver notice of exercise to the Secretary of the
  Company (or to whomever the Administrator designates), in a form complying
  with any rules the Administrator may issue, signed or otherwise authenticated
  by the participant, and specifying the number of shares of Common Stock
  underlying the portion of the Award the participant is exercising;
  
	for the shares of Common Stock with respect to
  which the participant is exercising the Award, pay the full Exercise Price by
  cash or a check or any other form of consideration permitted by the
  Administrator; and
  
	deliver to the Administrator such representations
  and documents as the Administrator, in its sole discretion, may consider
  necessary or advisable. 

4 

Payment in full of the Exercise Price need
not accompany the written notice of exercise if the exercise complies with a
legally permissible cashless exercise method involving sale to the market,
including, for example, that the notice directs that the stock certificates (or
other indicia of ownership) for the shares issued upon the exercise be delivered
to a licensed broker acceptable to the Company as the agent for the individual
exercising the Award and at the time the stock certificates (or other indicia)
are delivered to the broker, the broker will tender to the Company cash or cash
equivalents acceptable to the Company and equal to the Exercise Price and any
required withholding taxes, provided such method complies with the Sarbanes
Oxley Act of 2002. 

Award Expiration 

No one may exercise an Option or other
exercisable Award more than ten years after its Date of Grant (or five years for
ISOs granted to 10% owners covered by Code Sections 422(b)(6) and 424(d)). In
addition, unless the Award Agreement provides otherwise, either initially or by
amendment, no one may exercise otherwise exercisable portions of an Award after
the first to occur of: 

Employment Termination 

The 1st day after three (3)
months after the date of termination of service-providing relationship (other
than for death or Disability), where termination of service-providing
relationship means the time when the employer-employee or other individual
service-providing relationship between the individual and the Company (and all
Related Companies) ends for any reason. The Administrator may provide that
Awards terminate immediately upon termination of service for “cause” under an
Employee’s employment or consultant’s services agreement or under another
definition specified in the Award Agreement. Unless the Award Agreement or the
Administrator provides otherwise, termination of service-providing
relationship does not include instances in which the Company immediately rehires a common
law employee as an independent contractor. The Administrator, in its sole
discretion, will determine all questions of whether particular terminations or
leaves of absence are terminations of service and may decide to suspend the
exercise or forfeiture schedule during a leave rather than to terminate the
Award. Unless the Award Agreement or the Administrator provides otherwise,
terminations of service include situations in which the participant’s employer ceases
to be related to the Company closely enough to be a Related Company for new
grants. The Administrator may provide that Options and SARs will begin their
three (3) month expiration period when any securities trading blackout
applicable to the departing officer, employee, or director expires. 

Gross Misconduct 

For the Company’s termination of the
participant’s service-providing relationship as a result of the participant’s
Gross Misconduct, the time of such termination. For purposes of this Plan,
“Gross Misconduct” means the participant has 

	committed fraud, misappropriation, embezzlement,
  or willful misconduct; 
  
	committed or been indicted for or convicted of, or
  pled guilty or no contest to, any misdemeanor (other than for minor
  infractions or traffic violations) involving fraud, breach of trust,
  misappropriation, or other similar activity or otherwise relating to the
  Company or any Related Company, or any felony; or
  
	committed an act of gross negligence or otherwise
  acted with willful disregard for the Company’s or a Related Company’s best
  interests. 

If the participant has an employment or
other agreement in effect at the time of his or her termination that specifies
“cause” for termination, “Gross Misconduct” for purposes of his or her
termination will refer to “cause” under the employment or other agreement,
rather than to the foregoing definition.

Disability 

The
first annual anniversary of the participant’s
termination of service for disability, where “disability” means the inability to engage in any substantial gainful
activity because of any medically determinable physical or mental impairment
that can be expected to result in death or that has lasted or can be expected to
last for a continuous period of not less than 12 months, or, if the Company then
maintains long-term disability insurance, the date as of which the individual is
eligible for benefits under that insurance; or 

Death 

The
first
annual anniversary of the participant’s date
of death. 

If the Administrator permits exercise
of an Award after termination of service-providing relationship, the Award will
nevertheless expire as of the date that the former service provider violates any
covenant not to compete or other post-employment covenant in effect between the
Company or a Related Company and the former employee or other service provider.
In addition, an optionee who exercises an
ISO, if permitted, more than three (3) months after termination of employment
with the Company and/or Eligible Affiliates will only receive ISO treatment to
the extent the law permits, and becoming or remaining an employee of another
related company (that is not an Eligible Affiliate) or an independent contractor
will not prevent loss of ISO status because of the formal termination of
employment. 

Nothing in this Plan extends the term of
an Award beyond the tenth anniversary of its Date of Grant, nor does anything in
this Award Expiration section make an Award exercisable or nonforfeitable that has
not otherwise become exercisable or nonforfeitable, unless the Administrator
specifies otherwise. 

5 

Restricted Stock Awards 

The Administrator may grant Awards
entitling recipients to acquire Restricted Stock, subject to the Company’s right
to repurchase all or part of such shares at their issue price or other stated or
formula price (or to require forfeiture of such shares if issued at no cost)
from the recipient if conditions specified by the Administrator in the
applicable Award are not satisfied before the end of the applicable restriction
period or periods. Instead of granting Awards for Restricted Stock, the
Administrator may grant RSUs entitling the recipient to receive shares of Common
Stock to be delivered at the time such grants vest (and, together with
Restricted Stock, “Restricted Stock
Awards”).

The Administrator will
determine the terms and conditions of a Restricted Stock Award, including the
conditions for vesting and repurchase (or forfeiture) and the issue price, if
any.

Restricted Stock
Dividends

Participants holding shares of Restricted
Stock will be entitled to all ordinary cash dividends paid with respect to such
shares, unless the Administrator provides otherwise. If any such dividends or
distributions are paid in shares, or consist of a dividend or distribution to
holders of Common Stock other than an ordinary cash dividend, the shares, cash,
or other property will be subject to the same restrictions on transferability
and forfeitability as the shares of Restricted Stock with respect to which they
were paid. Each dividend payment will be made no later than the end of the
calendar year in which the dividends are paid to shareholders of that class of
stock or, if later, the 15th day of the third month following the date the
dividends are paid to shareholders of that class of stock. 

Stock Certificates

The Administrator may require the
participant to deposit in escrow any stock certificates the Company issues in
respect of shares of Restricted Stock, together with a stock power endorsed in
blank, with the Company (or its designee). At the expiration of the applicable
restriction periods, the Company (or such designee) will deliver the
certificates no longer subject to such restrictions to the participant or if the
participant has died, to the beneficiary the participant has designated in a
manner acceptable to the Company to receive amounts due or exercise rights of
the participant if the participant dies before receipt or exercise (the
“Designated Beneficiary”). In the absence of an effective designation by a
participant, “Designated
Beneficiary” will mean the person or
persons entitled to such certificates or amounts pursuant to the participant’s
will or, as applicable, as determined pursuant to the laws of descent and
distribution. 

RSU Settlement 

Upon the vesting of and/or lapsing of any
other restrictions (i.e., settlement) with respect to each RSU, the Company will
pay the participant one share of Common Stock or an amount of cash equal to the
Fair Market Value of one share of Common Stock, as provided in the applicable
Award agreement. The Administrator may, in its discretion, provide that
settlement of RSUs will be deferred, on a mandatory basis or at the election of
the participant, and to the extent applicable, in a manner consistent the Code
Section 409A. 

RSU Voting Rights 

A participant will have no voting rights
with respect to any RSUs. 

RSU Dividend
Equivalents 

To the extent the Administrator provides,
in its sole discretion, a grant of RSUs may provide participants with the right
to receive an amount equal to any dividends or other distributions declared and
paid on an equal number of outstanding shares of Common Stock (“Dividend Equivalents”). The
Company may pay the Dividend Equivalents currently or may credit them to an
account for the participants, may settle them in cash and/or shares of Common
Stock, and may subject them to the same restrictions on transfer and
forfeitability as the RSUs with respect to which the DERs are paid, as
determined by the Administrator in its sole discretion, subject in each case to
such terms and conditions as the Administrator may establish, in each case to be
set forth in the applicable Award agreement. 

Stock Appreciation Rights 

A SAR represents the right to receive a
payment in Common Stock, equal to the excess, if any, of the Fair Market Value
on the date the SAR is exercised over the SAR’s Exercise Price. The
Administrator will establish in its sole discretion all applicable terms and
conditions, and describe such determination in the applicable Award Agreement,
provided that the SAR will expire no more than 10 years after its Date of Grant.

Other Share-Based Awards 

The Administrator may grant Other
Share-Based Awards that are denominated in, valued in whole or in part by
reference to, or otherwise based on or related to the Common Stock. The
Administrator, in its sole discretion, will determine purchase, exercise,
exchange, or conversion of the Other Share-Based Awards and all other terms and
conditions applicable to the Awards. 

6 

Award Agreement 

Award Agreements (which could be
certificates) will describe the terms of each Award and will include such terms
and conditions, consistent with the Plan, as the Administrator may determine are
necessary or advisable. To the extent an Award Agreement contains any provision
that contradicts any provision of this Plan, the terms of the provision of this
Plan supersede the contradictory provision of the Award Agreement, except as the
Award Agreement otherwise expressly provides. The Award Agreements may contain
special rules. 

Other Restrictions 

Without any requirements to seek a
participant’s consent, the Company may require the participant to use one or
more specified brokerage firms to exercise Awards and to hold shares received
from or under Awards until the later of one year after exercise or lapse of all
forfeiture restrictions or two years after the Date of Grant. 

Acceleration 

The Administrator may at any time provide
that any Award will become immediately exercisable or vested in whole or in
part, free of some or all restrictions or conditions, or otherwise realizable in
full or in part, as the case may be. 

Stock Subject To Plan 

Except as adjusted below under
Adjustments upon Changes in Capital
Stock,

	
the
aggregate number of shares of Common Stock the Company may issue under Awards
may not exceed 600,000 shares of Common Stock, of which a maximum of 600,000 shares can be used
for Awards other than Options and SARs,

	
the Company can issue under ISOs from the
preceding total an aggregate of 25,000 shares of Common Stock, and

	
the
maximum number of shares that may be granted or covered under Awards for a
single individual in a calendar year (including for purposes of Appendix I) may
not exceed 600,000. (The individual maximum applies only to Awards first made
under this Plan and not to Awards made in substitution of a prior employer’s
options or other incentives, except as Code Section 162(m) otherwise requires.)

The Common Stock will come from either
authorized but unissued shares or from previously issued shares that the Company
reacquires, including shares it purchases on the open market or holds as
treasury shares. If any Award expires, is canceled, surrendered, or forfeited,
or terminates for any other reason without having been fully exercised, or is
settled in cash, or otherwise results in Common Stock not being issued (any
shares which are retained by the Company to satisfy the Exercise Price or any
withholding taxes due with respect to an Award shall be treated as not issued
and should continue to be available under the Plan), the shares of Common Stock
available under that Award will again be available for the granting of new
Awards. SARs shall be counted in full against the number of shares available for
issuance under the Plan, regardless of the number of shares issued upon
settlement of the SARs. Shares restored to the Plan will only count for purposes
of the ISO authorized number if the Code so permits. 

No adjustment will be made for a dividend
or other right (except a stock dividend)
for which the record date precedes the date
of exercise. Any dividend equivalents distributed under the Plan shall be
applied against the number of shares available for Awards under the Plan.

The participant will have no rights of a
stockholder with respect to the shares of stock subject to an Award except to
the extent that the Company has issued certificates for, or otherwise confirmed
ownership of, such shares upon the exercise or the granting of an Award, or the
Administrator otherwise specifies. 

The Company will not issue fractional
shares pursuant to the exercise of an Award, unless the Administrator determines
otherwise, but the Administrator may, in its discretion, direct the Company to
make a cash payment in lieu of fractional shares. 

Person Who May Exercise 

During the participant’s lifetime, only
the participant or his duly appointed guardian or personal representative may
exercise or hold an Award (other than nonforfeitable Common Stock). After his
death, a Designated Beneficiary or, if there is no Designated Beneficiary, a
participant’s personal representative or any other person authorized under a
will or under the laws of descent and distribution may exercise any then
exercisable portion of an Award or hold any then nonforfeitable portion of any
Award. If someone other than the original recipient seeks to exercise or hold
any portion of an Award, the Administrator may request such proof as it may
consider necessary or appropriate of the person’s right to exercise or hold the
Award. 

7 

Performance Rules 

Subject to the terms of the Plan, the
Administrator will have the authority to establish and administer performance
objectives with respect to such Awards as it considers appropriate, which
performance objectives must be satisfied, as the Administrator specifies, before
the participant receives or retains an Award or before the Award becomes
nonforfeitable or exercisable. 

The Administrator will determine whether
such performance objectives are attained, and such determination will be final
and conclusive. 

The Administrator may express each
performance objective in absolute and/or relative terms, and may use comparisons
with current internal targets, the past performance of the Company (including
the performance of one or more Related Companies) and/or the past or current
performance of other companies. In the case of earnings-based measures,
performance objectives may use comparisons relating to capital (including, but
not limited to, the cost of capital), shareholders’ equity and/or shares
outstanding, or to assets or net assets. 

The Administrator also retains the
discretion to specify that it can adjust a performance objective award payout
downwards under such factors as it considers appropriate. 

Adjustments Upon Changes In Capital
Stock 

Subject to any required action by the
Company (which it agrees to promptly take) or its stockholders, and subject to
the provisions of applicable corporate law, if, after the Date of Grant of an
Award, 

	      	(i)	      	the outstanding shares
      of Common Stock increase or decrease or change into or are exchanged for a
      different number or kind of security because of any recapitalization,
      reclassification, stock split, or reverse stock split, the Administrator
      must make a proportionate and appropriate adjustment in the number of
      shares of Common Stock underlying each Award, so that the proportionate
      interest of the participant immediately following such event in the fully
      diluted equity of the Company will, to the extent practicable, be the same
      as immediately before such event or
		 
		(ii)		the outstanding shares
      of Common Stock increase or decrease or change into or are exchanged for a
      different number or kind of security because of any combination of shares,
      exchange of shares, stock dividend, or other distribution payable in
      capital stock or some other increase or decrease in such Common Stock
      occurs without the Company’s receiving consideration (excluding, unless
      the Administrator determines otherwise, stock repurchases), the
      Administrator may make what it determines to be an equitable adjustment in
      the number of shares of Common Stock underlying each
  Award.

Neither adjustment applies to Common Stock
that the participant has already purchased which is subject to the adjustments
applicable to Common Stock. Unless the Administrator determines another method
would be appropriate, any such adjustment to an exercisable Award will not
change the total price with respect to shares of Common Stock underlying the
unexercised portion of such Award but will include a corresponding proportionate
adjustment in the Award’s Exercise Price and in any applicable repurchase
obligations or rights. The Board or other Administrator may take any actions
described in this section without any requirement to seek participant consent.

The Administrator will make a commensurate
change to the maximum number and kind of shares provided in each portion of the
Stock Subject to Plan section. 

Any issue by the Company of any class of
preferred stock, or securities convertible into shares of common or preferred
stock of any class, will not affect, and no adjustment by reason thereof will be
made with respect to, the number of shares of Common Stock subject to any Award
or the Exercise Price except as this Adjustments section specifically
provides. The grant of an Award under the Plan will not affect in any way the
right or power of the Company to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure, or to merge or
to consolidate, or to dissolve, liquidate, sell, or transfer all or any part of
its business or assets. 

Related Company Employees

Employees of Eligible Affiliates will be
potentially entitled to participate
in the Plan, except as the Administrator
otherwise designates. 

“Eligible Affiliate” means MTI
MicroFuel Cells Inc., MTI Instruments, Inc., and any other Related Companies,
except as the Administrator otherwise specifies. For ISO grants,
“Related Company” means any corporation in an unbroken chain of corporations
including the Company if, at the time a participant receives an ISO under the
Plan, each corporation (other than the last corporation in the unbroken chain)
owns stock possessing 50% or more of the total combined voting power of all
classes of stock in another corporation in such chain. “Related Company” also
includes a single-member limited liability company included within the chain
described in the preceding sentence. The Administrator may use a different
definition of Related Company for NQSOs and other Awards and may include other
forms of entity at the same level of equity relationship (or such other level as
the Board or the Administrator specifies). 

8 

Legal Compliance 

The Company will not issue any shares of
Common Stock under an Award until all applicable requirements imposed by Federal
and state securities and other laws, rules, and regulations, and by any
applicable regulatory agencies or stock exchanges or markets, have been fully
met. To that end, the Company may require the participant to take any reasonable
action to comply with such requirements before issuing such shares, including
compliance with any Company black-out periods or trading restrictions. No
provision in the Plan or action taken under it authorizes any action that
Federal or state laws or any other laws, rules or regulations otherwise
prohibit. 

The Plan is intended to conform to the
extent necessary with all provisions of the Securities Act of 1933
(“Securities Act”) and the Securities Exchange Act of 1934 and all regulations
and rules the Securities and Exchange Commission issues under those laws.
Notwithstanding anything in the Plan to the contrary, the Administrator must
administer the Plan, and Awards may be granted and exercised, only in a way that
conforms to such laws, rules, and regulations and any other laws, rules and
regulations. To the extent permitted by applicable law, the Plan and any Awards
will be treated as amended to the extent necessary to comply with such laws,
rules, and regulations, and the Administrator may make any further amendments to
Awards that are necessary for such compliance.

Purchase For Investment And Other Restrictions 

Unless a registration statement under the
Securities Act covers the shares of Common Stock a participant receives under an
Award, the Administrator may require, at the time of grant and/or exercise, that
the participant agree in writing to acquire such shares for investment and not
for public resale or distribution, unless and until the shares subject to the
Award are registered under the Securities Act. Unless the shares are registered
under the Securities Act, the participant must acknowledge: 

	that the shares received under the Award are not
  so registered, and
  
	that the participant may not sell or otherwise
  transfer the shares unless 

		-		such sale or transfer complies with all
      applicable laws, rules, and regulations, including all applicable Federal
      and state securities laws, rules, and regulations, and either
		-		the shares have been registered under the
      Securities Act in connection with the sale or transfer thereof,
    or
	          	-	   	counsel satisfactory to the Company has
      issued an opinion satisfactory to the Company that the sale or other
      transfer of such shares is exempt from registration under the Securities
      Act.

Additionally, the Common Stock, when
issued under an Award, will be subject to any other transfer restrictions,
rights of first refusal, rights of repurchase or of forfeiture, and voting
agreements set forth in or incorporated by reference into other applicable
documents, including the Award Agreements, or the Company’s articles or
certificate of incorporation, by-laws, or generally applicable stockholders’
agreements. 

The Administrator may, in its sole
discretion, take whatever additional actions it considers appropriate to comply
with such restrictions and applicable laws, including placing legends on
certificates and issuing stop transfer orders to transfer agents and registrars.

Taxes, Withholding and Other Required
Deductions 

The participant must satisfy all
applicable federal, state, and local or other tax, withholding, and other
obligations and required deductions before the Company will deliver stock
certificates or otherwise recognize ownership of Common Stock under an Award.
The Company may decide to satisfy such obligations through additional
withholding on salary or wages. If the Company elects not to or cannot withhold
from other compensation, the participant must pay the Company the full amount,
if any, required to satisfy such amounts, or, if and to the extent permitted,
have a broker tender to the Company cash equal to the withholding obligations.
Payment of these obligations is due before the Company will issue any shares on
exercise or release from forfeiture of an Award or, if the Company so requires,
at the same time as is payment of the exercise price unless the Company
determines otherwise. If provided for in an ISO or other Award or approved by
the Administrator in its sole discretion (other than with respect to ISOs), a
participant may satisfy such obligations in whole or in part by delivery of
shares of Common Stock, including shares retained from the Award creating the
obligation, valued at their Fair Market Value; provided, however, except as the Administrator
otherwise provides, the total amount where stock is being used to satisfy such
obligations cannot exceed the Company’s minimum statutory withholding
obligations (based on minimum statutory withholding rates, including payroll
taxes, that are applicable to such supplemental taxable income). Shares
surrendered to satisfy any obligation pursuant to this section cannot be subject
to any repurchase, forfeiture, unfulfilled vesting or other similar
requirements. 

Transfers, Assignments, And Pledges 

Except as otherwise permitted by the
Administrator, an Award may not be assigned, pledged, or otherwise transferred
in any way, whether by operation of law or otherwise or through any legal or
equitable proceedings (including bankruptcy), by the participant to any person,
except by will or by operation of applicable laws of descent and distribution.

9 

Amendment or Termination of Plan and Options 

The Board may amend, suspend, or terminate
the Plan at any time, without the consent of the participants or their
beneficiaries; provided, however, that such actions are consistent with this section. Except
as required by law or by the Substantial
Corporate Change or Adjustment Upon Changes in Capital Stock sections or permitted under the Method of Exercise section, the
Administrator may not, without the participant’s or Designated Beneficiary’s
consent, modify the terms and conditions of an Award so as to materially
adversely affect the participant. No amendment, suspension, or termination of
the Plan will, without the participant’s or Designated Beneficiary’s consent,
terminate or materially adversely affect any right or obligations under any
outstanding Awards, except as provided in the
Substantial Corporate Change or the
Adjustments Upon Changes in Capital
Stock sections.

The following actions will
require prior applicable stockholder approval: 

		(i)		any amendment to an
      Award intended to comply with Section 162(m), which amendment provides
      that the Award will become exercisable, realizable or vested, as
      applicable to such Award; and
		 
	      	(ii)	      	any amendment
      requiring stockholder approval under applicable law or the rules of any
      exchange upon which the Company’s shares are
traded.

In addition, if at any time the approval
of the Company’s stockholders is required as to any other modification or
amendment under Section 422 of the Code or any successor provision with respect
to ISOs, the Board may not effect such modification or amendment without such
approval. The Administrator may not make any Award that is conditioned upon
stockholder approval of any amendment to the Plan. 

Privileges of Stock Ownership 

No participant and no Designated
Beneficiary or other person claiming under or through such participant will have
any right, title, or interest in or to any shares of Common Stock allocated or
reserved under the Plan or subject to any Award except as to such shares of
Common Stock, if any, already issued to such participant. 

Effect on Other Plans

Whether receiving or exercising an Award
causes the participant to accrue or receive additional benefits under any
pension or other plan is governed solely by the terms of such other plan.

Limitations on Liability

Notwithstanding any other provisions of
the Plan, no individual acting as a director, officer, other employee, or agent
of the Company will be liable to any participant, former participant, spouse,
Designated Beneficiary, or any other person for any claim, loss, liability, or
expense incurred in connection with the Plan, nor will such individual be
personally liable because of any contract or other instrument he executes in
such other capacity. The Company will indemnify and hold harmless each director,
officer, other employee, or agent of the Company to whom any duty or power
relating to the administration or interpretation of the Plan has been or will be
delegated, against any cost or expense (including attorneys’ fees) or liability
(including any sum paid in settlement of a claim with the Board’s approval)
arising out of any act or omission to act concerning this Plan unless arising
out of such person’s own fraud or bad faith. 

No Employment Contract

Nothing contained in this Plan constitutes
an employment contract between the Company and the participants. The Plan does
not give any participant any right to be retained in the Company’s employ, nor
does it enlarge or diminish the Company’s right to end the participant’s
employment or other relationship with the Company. 

Applicable Law 

The laws of the State of New York (other
than its choice of law provisions) govern this Plan and its interpretation.

Duration of the Plan 

The Administrator may not grant Awards
under the Plan after the tenth anniversary of the Effective Date. The Plan will
then terminate but will continue to govern unexercised and unexpired Awards.

Authorization of
Sub-Plans

The Board may from time to time establish
one or more sub-plans under the Plan for purposes of satisfying any applicable
laws, rules or regulations of various jurisdictions. The Board will establish
such sub-plans by adopting supplements to this Plan containing (i) such
limitations on the Administrator’s discretion under the Plan as the Board
considers necessary or desirable, or (ii) such additional terms and conditions
not otherwise inconsistent with the Plan as the Board considers necessary or
desirable. All supplements the Board adopts will be treated as part of the Plan,
but each supplement will apply only to participants within the affected
jurisdiction and the Company will not be required to provide copies of any
supplement to participants in any jurisdiction that is not the subject of such
supplement. 

10 

Compliance with Code Section
409A 

No Award may provide for deferral of
compensation that does not comply with Section 409A of the Code, unless the
Administrator, at the time of grant or by later amendment, specifically provides
that the Award is not intended to comply with Section 409A of the Code, provided
that nothing in this Plan or otherwise constitutes a guaranty to the
participants that any Awards will comply with Section 409A. 

Approval of the Plan 

The Plan in its original form was adopted
and effective upon approval by the Company’s stockholders on May 18, 2006. The
Plan as amended and restated was adopted and effective upon approval by the
Company’s Board of Directors on September 16, 2009. 

11 

APPENDIX I 
Performance Grants under Code Section
162(m) 

Special Performance
Goals 

The Administrator may choose to designate
that either the granting or vesting of Awards (other than Options and SARs) for
Performance Periods are based on
“Special Performance
Goals,” using exclusively one or more of
the following measures, as long as Special Performance Goals are substantially
uncertain to be attained when established: 

	earnings per share (on a fully diluted or other
  basis), 
  
	stock price targets or stock price maintenance,
  
  
	pretax or after tax net income, 
  
	operating income, 
  
	gross revenue, 
  
	gross margin, 
  
	operating profit before or after discontinued
  operations and/or taxes 
  
	earnings before or after discontinued operations,
  interest, taxes, depreciation, and/or amortization, 
  
	earnings growth, 
  
	cash flow or cash position, 
  
	sales or sales growth or market share, 
  
	return on sales, assets, equity, or investment,
  
  
	improvement of financial ratings, 
  
	achievement of balance sheet or income statement
  objectives, 
  
	total shareholder return, 
  
	entering into OEM contracts for military,
  industrial and consumer, or 
  
	achievement of specified technical improvements in
  products or products under development.
  

The Administrator may express each Special
Performance Goal in absolute and/or relative terms, and may use comparisons with
current internal targets, the Company’s past performance (including the
performance of one or more Related Companies) and/or the past or current
performance of other companies. The Administrator may set Special Performance
Goals that vary by Participant or by Award, that may be particular to a
Participant or the department, branch, line of business, subsidiary or other
unit in which the Participant works, and that may cover such Performance Period
as the Administrator may specify.

The Administrator will determine the
measures for setting Special Performance Goals for any given Performance Period
in accordance with generally accepted accounting principles (“GAAP”), where
applicable, and in a manner consistent with the methods used in the Company’s
audited financial statements. Absent specific contrary determination by the
Administrator during the Applicable Period, the Special Performance Goals will
not take into account (i) extraordinary items as determined by the Company’s
independent public accountants in accordance with GAAP, (ii) changes in
accounting, (iii) gains or losses on the dispositions of discontinued
operations, (iv) the writedown of any asset, and (v) charges for restructuring
and rationalization programs. 

Performance Period 

A “Performance Period” is a period
for which the Administrator sets Special Performance Goals and during which the
Administrator measures performance to determine whether a Participant is
entitled to payment or vesting of an Award under the Plan. A Performance Period may coincide with one or more complete or
partial fiscal years of the Company. 

Applicable Period 

The “Applicable Period” with respect to
any Performance Period means a period beginning on or before the first day of
the Performance Period and ending no later
than the earlier of (i) the 90th day of the Performance Period or (ii) the date
on which 25% of the Performance Period has been completed. 

Administrator 

The Administrator for purposes of granting
Awards that use Special Performance Goals must be a committee consisting of two
or more directors, each of whom qualifies as an “outside director” within the
meaning of Section 162(m), and those outside directors will have exclusive
authority under this Plan to make Awards and establish and determine
satisfaction of Special Performance Goals under this Appendix. Assuming the
minimum number of outside directors can still act, the Administrator may satisfy
this requirement through (i) providing that persons who are not “outside
directors” cannot vote on an issue, (ii) allowing those persons to abstain from
voting, or (iii) creating a subcommittee of qualifying outside directors to take
action with respect to this Plan. 

12 

Payment of Awards 

Subject to the limitations set forth in
this Appendix, Awards determined under the Plan for a Performance Period will be
paid or vested as soon as practicable following the end of the Performance
Period to which the Awards apply. The Administrator may not waive the
achievement of the applicable Special Performance Goals except in the case of
the death or disability of the Participant. 

Certification 

No Award will be paid or vested, as
applicable, unless and until the Administrator, based on the Company’s audited
financial results for such Performance Period (as prepared and reviewed by the
Company’s independent public accountants), has certified in the manner
prescribed under applicable regulations the extent to which the Performance
Goals for the Performance Period have been satisfied and the Administrator has
made its decisions regarding the extent of any Negative Discretion Adjustment of
Awards. 

Negative Discretion 

The Administrator’s powers include the
power to make “Negative Discretion
Adjustments,” which are adjustments that
eliminate or reduce (but do not increase) an Award otherwise payable to a
Participant for a Performance Period. No Negative Discretion Adjustment may
cause an Award to fail to qualify as “performance based compensation” under
Section 162(m). 

Duration of Appendix I 

Appendix I will remain effective for the
duration of the Plan, unless the Board terminates it earlier, provided, however, that the continued
effectiveness of Appendix I will be subject to the approval of the Company’s
shareholders at such times and in such manner as Section 162(m) may require.

Disclosure and Approval of Appendix I

Appendix I must be submitted to Company
shareholders for their approval as part of the Plan. The specific terms of the
Plan, including the class of employees eligible to be Participants, the measures used
for Special Performance Goals, and the terms of payment of Awards, must be
disclosed to the shareholders to the extent Section 162(m) requires. 

Purpose of Appendix I 

This Appendix is intended to conform with
all provisions of Code Section 162(m) and Treas. Reg. Section 1.162-27 to the
extent necessary to allow the Company a Federal income tax deduction for Awards
as “qualified performance based compensation,” provided that the Administrator
retains the discretion whether to make Awards that do not so qualify, and that
the Administrator may also grant Awards that satisfy Code Section 162(m) without
the application of this Appendix. 

13AWARD AGREEMENT (NON-QUALIFIED
STOCK OPTION)

under the
MECHANICAL TECHNOLOGY, INCORPORATED
AMENDED AND RESTATED
2006 EQUITY INCENTIVE PLAN

THIS AGREEMENT is made as of the ___ day
of _____, 20__, by and between Mechanical Technology, Incorporated, a New York
corporation (the "Company"), and [NAME OF DIRECTOR] (the "Optionee").

WITNESSETH: 

WHEREAS, the Optionee is now a Director of
the Company, and the Company desires to provide additional incentives to the
Optionee, to encourage stock ownership by the Optionee, and to encourage the
Optionee to remain as a Director of the Company, and as an inducement thereto
the Company has determined to grant to the Optionee a non-qualified stock option
pursuant to the Company's Amended and Restated 2006 Equity Incentive Plan
("Plan"); 

NOW, THEREFORE, it is agreed between the
parties as follows:

	1.	     	Grant of Option.
      Subject to the terms and conditions
      hereof, the Company hereby grants to the Optionee the right and option
      (the "Option") to purchase from the Company up to, but not exceeding in
      the aggregate, ___________ shares of the Company's Common Stock, par value
      $0.01 ("Common Stock"), at a price of $__________ per share (the "fair
      market value" of the Common Stock, determined as provided in the Plan, on
      the date of grant of this Option). This option is not
      intended to meet the
      requirements for "incentive stock options" under Section 422A of the
      Internal Revenue Code (the "Code").
	 
	2.		Right to Exercise
      Option. The Option hereby granted may
      not be exercised immediately upon the grant hereof, and shall remain
      exercisable until exercised or until the expiration of the Option (as
      hereinafter provided), whichever occurs first. Any provision of this
      Agreement notwithstanding, this Option shall not be exercisable on or
      after [10 years after the date of grant], on which date all Options
      hereunder shall expire.
	 
	3.		Death. If the Optionee should
      die the executor or administrator of the estate of the Optionee, or the
      person or persons to whom the Option shall have been transferred by will
      or by the laws of descent and distribution, shall have the right, within
      one year from the date of the Optionee's death, to exercise this Option to
      the extent that it shall have been exercisable and unexercised on the date
      of the Optionee's death, subject to any other limitation on the exercise
      of such Option in effect at the date of
exercise.

 

	4.	     	Exercise
      of Option. The Optionee, from time to
      time during the period when the Option hereby granted may by its terms be
      exercised, may exercise the Option in whole or in part as at the time
      permitted, by delivery to the Company of:
	 
	 		(a)	     	a written notice
      signed by the Optionee (i) stating the number of shares that the Optionee
      has elected to purchase at that time from the Company, and (ii) upon the
      request of the Company, representing that the Optionee is acquiring the
      shares being purchased for investment and not for resale; and
	 
	 		(b)		payment for the shares
      in the form of either (i) cash, personal check, bank draft, money order,
      (ii) the surrender of previously-acquired shares of the Company's Common
      Stock, duly endorsed for transfer (or with duly executed stock powers
      attached), or (iii) a written election to have shares of the Company's
      Common Stock withheld from the shares to be received by the Optionee upon
      exercise of the Option (the aggregate fair market value of which shares
      will satisfy in full or in part the exercise price of the Option), for an
      amount equal to the purchase price of the shares then to be
      purchased.
	 
	 		After
      receipt of the foregoing and subject to Section 5 below and to any
      restrictions imposed pursuant to the next paragraph, in the case of the
      Optionee's surrender of any previously-acquired shares that are subject to
      a risk of forfeiture, the Company shall issue the shares in the name of
      the Optionee and deliver the certificates therefor to the
    Optionee.
	 
	 		Any
      previously-acquired shares surrendered in payment of a portion of the
      exercise price may include shares subject to a risk of forfeiture that
      were issued under this Plan or another plan of the Company, but in such
      case any shares issued upon exercise of this Option, the purchase or
      exercise price of which was paid for by surrendering shares subject to a
      risk of forfeiture, shall themselves be subject to the same risk of
      forfeiture for the same period and on the same terms as the shares so
      surrendered as payment. Shares of the Company's Common Stock (including
      shares to be acquired pursuant to the exercise of this Option) that are
      surrendered as payment for shares purchased pursuant to the exercise of
      this Option shall be valued, for such purpose, at the "fair market value"
      of the Company's Common Stock, determined in accordance with the Plan, on
      the business day preceding the date of surrender of the certificates for
      such shares to the Company, duly endorsed for transfer (or with duly
      executed stock powers attached) and accompanied by a notice of election to
      exercise the Option (in the case of the surrender of already-owned shares)
      or on the business day preceding the date of the Optionee's delivery to
      the Company of a notice of election to exercise the Option and written
      election to have shares withheld from the shares to be received by the
      Optionee upon exercise of the Option (in the case of shares to be acquired
      pursuant to the exercise of this Option), as the case may
  be.

 

	5.	     	Compliance With
      Securities Laws. Anything to the
      contrary herein notwithstanding, the Company's obligation to sell and
      deliver stock under this Option is subject to such compliance with federal
      and state laws, rules and regulations applying to the authorization,
      issuance or sale of securities as the Company deems necessary or
      advisable. The Company shall not be required to sell and deliver stock
      pursuant hereto unless and until it receives satisfactory proof that the
      issuance or transfer of such shares will not violate any of the provisions
      of the Securities Act of 1933 or the Securities Exchange Act of 1934 or
      the rules and regulations of the Securities and Exchange Commission
      promulgated thereunder or the provisions of any state law governing the
      sale of securities, or that there has been compliance with the provisions
      of such acts, rules, regulations and state laws.
	 
	6.		Non-Assignability. The Option
      hereby granted shall not be transferable by the Optionee other than by
      will or the laws of descent and distribution, and except as specifically
      set forth herein, the Option may be exercised during the Optionee's
      lifetime only by the Optionee. Any transferee of the Option shall take the
      same subject to the terms and conditions of this Agreement. No such
      transfer of the Option shall be effective to bind the Company unless the
      Company shall have been furnished with written notice thereof and a copy
      of the will and/or such other evidence as the Company may deem necessary
      to establish the validity of the transfer and the acceptance by the
      transferee or transferees of the terms and conditions of this Agreement.
      No assignment or transfer of this Option, or of the rights represented
      thereby, whether voluntary or involuntary, by operation of law or
      otherwise, except a transfer by the Optionee by will or by the laws of
      descent and distribution, shall vest in the purported assignee or
      transferee any interest or right herein whatsoever.
	 
	7.		Withholding. The Optionee hereby
      authorizes the Company to withhold from his compensation or other payments
      due to him, or agrees to tender the applicable amount to the Company, in
      cash or shares of the Company's Common Stock then owned by the Optionee,
      to satisfy any requirements for withholding of income and employment taxes
      in connection with the exercise of the Option granted hereby; shares of
      the Company's Common Stock that are surrendered in payment of the
      Optionee's withholding and other tax obligations shall be valued, for such
      purpose, at the "fair market value" of the Company's Common Stock,
      determined in accordance with the Plan, on the business day preceding the
      date of surrender of the certificates for such shares to the Company for
      such purpose, duly endorsed for transfer (or with duly executed stock
      powers attached).
	 
	8.		Disputes. As a condition to the
      granting of the Option granted hereby, the Optionee and the Optionee's
      successors and assigns agree that any dispute or disagreement which shall
      arise under or as a result of this Agreement shall be determined by the
      Board of Directors of the Company in its sole discretion and judgment (or
      by such Committee of the Board, or such other person or groups of persons,
      to whom the Board may have delegated such authority and responsibility),
      and that any such determination and any interpretation by the Board (or
      any such committee, person or group of persons) of the terms of this
      Agreement shall be final and shall be binding and conclusive for all
      purposes.

 

	9.	     	Adjustments. In the event of any stock dividend, stock split,
      reclassification, merger, consolidation, or similar transaction affecting
      the shares covered by this Option, the rights of the Optionee shall be as
      provided in the Plan and any adjustment therein provided, if any, shall be
      made in accordance with the Plan.
	 
	10.		Rights as
      Shareholder. The Optionee shall have no
      rights as a shareholder of the Company with respect to any of the shares
      covered by this Option until the issuance of a stock certificate or
      certificates upon the exercise of the Option in full or in part and
      payment by the Optionee of the purchase price for such shares, and then
      only with respect to the shares represented by such certificate or
      certificates.
	 
	11.		Notices. Every notice relating to this Agreement shall be in
      writing and if given by mail shall be given by registered or certified
      mail with return receipt requested. All notices to the Company shall be
      delivered to the Secretary at the Company's headquarters in Albany, New
      York, or addressed to the Secretary of the Company and mailed to him
      at:

Mechanical Technology, Inc.
431 New
Karner Road
Albany, New York 12205

	 		All notices by the Company to the
      Optionee shall be delivered to the Optionee personally or addressed to the
      Optionee at the Optionee's last residence address as then contained in the
      records of the Company or such other address as the Optionee may
      designate. Either party by notice to the other may designate a different
      address to which notices shall be addressed. Any notice given by the
      Company to the Optionee at the Optionee's last designated address shall be
      effective to bind any other person who shall acquire rights
      hereunder.
	 
	12.	     	"Optionee" to Include Certain
      Transferees. Whenever the word
      "Optionee" is used in any provision of this Agreement under circumstances
      where the provision should logically apply to any other person or persons
      to whom the Option, in accordance with the provisions of Section 6 hereof,
      may be transferred, the word "Optionee" shall be deemed to include such
      person or persons.
	 
	13.		Governing Law. This Agreement has been made in and shall be construed
      in accordance with the laws of the State of New York.
	 
	14.		Provisions of Plan
      Controlling. The provisions hereof are
      subject to the terms and provisions of the Plan, a copy of which will be
      provided to the Optionee upon request. In the event of any conflict
      between the provisions of this Option and the provisions of the Plan, the
      provisions of the Plan shall control. Capitalized terms used and not
      defined herein shall have the meaning, if any, set forth in the
      Plan.

 

IN WITNESS WHEREOF, the parties hereto
have executed this Agreement as of the day and year first above written.

	MECHANICAL TECHNOLOGY,  
	INCORPORATED  
	     	  
		  
		  
	By:  	  	                   
    

 

	Name: 	 	                   
    

 

	Title: 	 	                   
    

	 	                   
    
	Optionee  

NOTICE OF EXERCISE OF NONQUALIFIED
STOCK OPTION
GRANTED UNDER THE
MECHANICAL TECHNOLOGY, INCORPORATED
AMENDED AND RESTATED 2006 EQUITY
INCENTIVE PLAN 

Secretary 
Mechanical Technology, Incorporated
431 New Karner Road
Albany, New
York 12205 

Dear Sir/Madam: 

A non-qualified stock option ("Option")
was granted to me on _____________, 20__ to purchase _____________ shares of
Mechanical Technology, Incorporated Common Stock, par value $0.01 per share, at
a price of $_____ per share.

I hereby elect to exercise my Option with
respect to _______ shares.

Payment of the purchase price for the
shares being purchased upon my exercise of the Option is enclosed herewith as
follows (must equal total purchase price for the shares):

	$_______	      	By personal
      check, cash, bank draft or money order, in such amount;
	  
	$_______	 	By the
      surrender of certificates, enclosed herewith, for _______ shares of
      Mechanical Technology, Incorporated Common Stock registered in my name,
      which shares had a "fair market value, as of the close of business
      yesterday, equal to such amount; and/or
	  
	$_______		By my
      election hereby to have _______ shares of Mechanical Technology,
      Incorporated Common Stock withheld from the shares to be received by me
      upon exercise of the Option, which shares had a "fair market value, as of
      the close of business yesterday, equal to such
amount.

I authorize the Company to withhold from
my compensation or other payments due to me, or agree to tender the applicable
amount to the Company, to satisfy any requirements for withholding of income and
employment taxes due as a result of my exercise of this option. 

I represent that the shares of stock that
I am purchasing upon this exercise of my Option are being purchased for
investment purposes and not with a view to resale. This representation shall not
be binding upon me if the shares of Common Stock that I am purchasing are
subject to an effective Registration Statement under the Securities Act of 1933.

		 	
	  	Optionee  	 
	Dated:
      ________________, 20__

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