February 24, 2009
Mr. Peng K. Lim
P.O. Box 16005
Albany, NY 12212
|
Re:
|
Amendment to
Employment Agreement, Chief Executive Officer of Mechanical
Technology, Incorporated
|
Dear Mr. Lim:
This letter amends our recent
letter agreement dated December 31, 2008 (the “ Prior
Letter ”) with respect to the terms of your
employment with Mechanical Technology, Incorporated (“
MTI ” or the “ Company
”) as Chairman and Chief Executive Officer of MTI and
President and Chief Executive Officer of MTI MicroFuel Cells Inc.
(“ MTI Micro ”). The terms of your
employment agreement as set forth in the Prior Letter are hereby
amended effective as of February 20, 2009 as follows:
1. Base Salary Deferral .
Effective March 1, 2009, and continuing through the earlier to
occur of May 31, 2009 or the initial closing of a Series A
Preferred Stock financing of MTI Micro (the “ Deferral
Period ”), $8,333 per month of your base salary shall
be temporarily deferred (hereinafter, the “ Deferred
Salary ”). In consideration of this salary deferral,
at the end of the Deferral Period, you will be either (A) paid an
amount equal to your total Deferred Salary since March 1, 2009,
less applicable tax withholding, paid in equity interests in (i)
MTI Micro Series A Preferred Stock based on the per share valuation
paid by the investors in the Series A Preferred Stock financing, if
the next MTI Micro preferred financing closes on or before May 31,
2009, or (ii) MTI Micro common stock based on a per share valuation
agreed upon by MTI Micro and the majority of the MTI Micro bridge
note holders, if the next preferred financing does not close on or
before May 31, 2009; or (B) in the event (i) the next preferred
financing does not close on or before May 31, 2009 and the parties
cannot agree on a valuation for MTI Micro common stock, or (ii) a
change in control of MTI Micro occurs before June 30, 2009, or
(iii) upon the insolvency of, or commission of any act of
bankruptcy by, MTI Micro, or assignment for the benefit of
creditors by MTI Micro, or filing by or against MTI Micro of a
petition in bankruptcy or any petition for relief under the federal
bankruptcy act, then you will be issued a secured convertible
promissory note in the same form as issued to those certain
noteholders participating in the MTI Micro September 2008 bridge
financing, as extended to date (the “ MTI Micro Bridge
Financing ”), in the amount of your Deferred Salary
since March 1, 2009, less applicable tax withholding, and you shall
be include
