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<B><FONT FACE="Courier New" SIZE=2><P ALIGN="CENTER">UNITED STATES</P>
<P ALIGN="CENTER">SECURITIES AND EXCHANGE COMMISSION</P>
<U><P ALIGN="CENTER">WASHINGTON, DC 20549</P>
</U><P>                   <U>                                  </P></B></U></FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=384>
<TR><TD VALIGN="TOP">
<B><FONT FACE="Courier New" SIZE=2><P ALIGN="CENTER">FORM 8-K</P>
<P ALIGN="CENTER"></B></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" HEIGHT=22>
<B><FONT FACE="Courier New" SIZE=2><P ALIGN="CENTER">CURRENT REPORT</B></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" HEIGHT=47>
<B><FONT FACE="Courier New" SIZE=2><P ALIGN="CENTER">PURSUANT TO SECTION 13 OR 15(d) OF THE</P>
<P ALIGN="CENTER">SECURITIES EXCHANGE ACT OF 1934   </P>
<P ALIGN="CENTER"></B></FONT></TD>
</TR>
</TABLE>
</CENTER></P>

<FONT FACE="Courier New" SIZE=2><P>                                   </P></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=590>
<TR><TD VALIGN="TOP">
<FONT FACE="Courier New" SIZE=2><P ALIGN="CENTER">December 20, 2005</FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=2><P ALIGN="CENTER">Date of Report (Date of earliest event reported)</U></FONT></TD>
</TR>
</TABLE>

<FONT FACE="Courier New" SIZE=2><P>                           </P>
<P>                                    </P></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=590>
<TR><TD VALIGN="TOP" HEIGHT=36>
<U><FONT FACE="Courier New" SIZE=2><P ALIGN="CENTER">MECHANICAL TECHNOLOGY INCORPORATED</U></FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT FACE="Courier New" SIZE=2><P ALIGN="CENTER">(Exact name of registrant as specified in its chapter)</FONT></TD>
</TR>
</TABLE>

<FONT FACE="Courier New" SIZE=2><P>          </P></FONT>
<TABLE BORDER CELLSPACING=1 CELLPADDING=7 WIDTH=590>
<TR><TD WIDTH="38%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=2><P ALIGN="CENTER">NEW YORK</U></FONT></TD>
<TD WIDTH="33%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=2><P ALIGN="CENTER">0-6890</U></FONT></TD>
<TD WIDTH="30%" VALIGN="TOP">
<U><FONT FACE="Courier New" SIZE=2><P ALIGN="CENTER">14-1462255</U></FONT></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P>(State or other jurisdiction</P>
<P>of incorporation)    </FONT></TD>
<TD WIDTH="33%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P>(Commission File Number)</FONT></TD>
<TD WIDTH="30%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=1><P ALIGN="CENTER">(IRS Employer Identification</P>
<P ALIGN="CENTER">No.)</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=3>&nbsp;</TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=3 HEIGHT=39>
<FONT FACE="Courier New" SIZE=2><P ALIGN="CENTER">431 NEW KARNER ROAD, ALBANY, NEW YORK 12205</P>
<P ALIGN="CENTER">(Address of principal executive offices) (Zip Code)</P>
<P ALIGN="CENTER"></FONT></TD>
</TR>
</TABLE>

<FONT FACE="Courier New" SIZE=2><P ALIGN="CENTER">&nbsp;</P>
<P>    </P></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=590>
<TR><TD VALIGN="TOP" HEIGHT=41>
<FONT FACE="Courier New" SIZE=2><P ALIGN="CENTER">Registrant's telephone number, including area code:</P>
<U><P ALIGN="CENTER">(518) 533-2200</P>
</U></FONT></TD>
</TR>
</TABLE>

<FONT FACE="Courier New" SIZE=2><P>                                                                   Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): </P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[  ]  Written communications pursuant to Rule&nbsp;425 under the Securities Act (17 CFR 230.425) </P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[  ]  Soliciting material pursuant to Rule&nbsp;14a-12 under the Exchange Act (17 CFR 240.14a-12) </P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[  ]  Pre-commencement communications pursuant to Rule&nbsp;14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) </P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[  ]  Pre-commencement communications pursuant to Rule&nbsp;13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) </P>

<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P ALIGN="CENTER">1</P>
</FONT>
<B><FONT FACE="Courier New" SIZE=2><P>Item 1.01  Entry into a Material Definitive Agreement</P>
</B>
<P>Today, Dr. William P. Acker, Chief Executive Officer (&quot;CEO&quot;) of MTI MicroFuel Cells Inc. (&quot;MTI Micro&quot;), a majority-owned subsidiary of Mechanical Technology Incorporated (&quot;MTI&quot; or the &quot;Company&quot;), announced that he will step down from his position with MTI Micro effective upon MTI Micro hiring a new CEO. Dr. Acker will continue to serve as CEO until his successor is in place.  Once his successor is in place, Dr. Acker will step down as CEO and will become an Advisor to MTI Micro for a period of 12 months.  Dr. Acker will continue to serve as a member of the Board of Directors of MTI Micro, serving at the pleasure of the shareholders of MTI Micro, and will also serve as the Chairman of the Technology Committee. </P>

<P>Dr. Acker had an employment agreement with MTI Micro that provided 1) a base salary of $250,000; 2) an annual bonus of MTI Micro stock options as determined at the discretion of the Board of Directors; and 3) he would receive, if he is terminated without cause A) 100% of his base salary and benefits for one year, subject to reduction for any amounts earned in other employment, and B) be permitted to exercise any vested options on his date of termination and those options, if any, that would have vested within the twelve month period following the end of the month of his date of termination.</P>

<P>In connection with this succession plan Dr. Acker has entered into a new employment agreement with MTI Micro that provides 1) he will receive a base salary of $250,000 during his remaining term as CEO and during his 12-month term as Advisor, however, if he earns cash compensation from outside employment during the first six months of his term as Advisor his compensation will be subject to reduction for any cash amounts earned in excess of $5,000 per month from such outside employment;  2) any remaining unvested MTI or MTI Micro stock options will automatically vest upon the termination of his employment at the end of his role as Advisor; 3)upon termination of his employment all of his outstanding MTI and MTI Micro stock options will have their terms modified so that they will remain exercisable through December 31, 2009, unless he commences employment with a direct competitor of MTI Micro, in which case all options shall expire on the date he commences such employment.  </P>

<P>Dr. Acker will receive no severance as a result of this change.</P>

<B><P>Item 9.01. Financial Statements and Exhibits.</P>
</B>
<P>(c) Exhibits.</P>

<P>&nbsp;</P></FONT>
<TABLE BORDER CELLSPACING=1 CELLPADDING=7 WIDTH=590>
<TR><TD WIDTH="24%" VALIGN="TOP">
<B><FONT FACE="Courier New" SIZE=2><P>Exhibit Number</B></FONT></TD>
<TD WIDTH="76%" VALIGN="TOP">
<B><FONT FACE="Courier New" SIZE=2>
<P>Description</B></FONT></TD>
</TR>
<TR><TD WIDTH="24%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=2>
<P>10.133</FONT></TD>
<TD WIDTH="76%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=2><P>Employment Agreement dated December 20, 2005 between William P. Acker and MTI MicroFuel Cells, Inc.</FONT></TD>
</TR>
</TABLE>


<FONT FACE="Courier New" SIZE=2><P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P ALIGN="CENTER">2</P>

<P>&nbsp;</P>
<B><P ALIGN="CENTER">SIGNATURES</P>
</B>
<P>Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.</P>
</FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=590>
<TR><TD WIDTH="44%" VALIGN="TOP" HEIGHT=28><P></P></TD>
<TD WIDTH="56%" VALIGN="TOP" HEIGHT=28>
<FONT FACE="Courier New" SIZE=2><P>MECHANICAL TECHNOLOGY INCORPORATED</P>
</FONT></TD>
</TR>
<TR><TD WIDTH="44%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="56%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="44%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=2><P>Date: December 21, 2005</FONT></TD>
<TD WIDTH="56%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=2><P>By:<U> /S/ CYNTHIA A. SCHEUER</P>
</U><P>Name:  Cynthia A. Scheuer                                                                     </FONT></TD>
</TR>
<TR><TD WIDTH="44%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="56%" VALIGN="TOP">
<FONT FACE="Courier New" SIZE=2><P>Title: Vice President, Chief</P>
<P>       Financial Officer and Secretary</FONT></TD>
</TR>
</TABLE>

<FONT FACE="Courier New" SIZE=2><P>                            </P>

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<P ALIGN="CENTER">3</P></FONT></BODY>
</HTML>
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
December 20, 2005
Date of Report (Date of earliest event reported)
MECHANICAL TECHNOLOGY INCORPORATED
(Exact name of registrant as specified in its chapter)
NEW YORK
0-6890
14-1462255
(State or other jurisdiction
of incorporation)
(Commission File Number)
(IRS Employer Identification
No.)
431 NEW KARNER ROAD, ALBANY, NEW YORK 12205
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(518) 533-2200
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
[  ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[  ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[  ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[  ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
1
Item 1.01  Entry into a Material Definitive Agreement
Today, Dr. William P. Acker, Chief Executive Officer ("CEO") of MTI MicroFuel Cells Inc. ("MTI Micro"), a majority-owned subsidiary of Mechanical Technology Incorporated ("MTI" or the "Company"), announced that he will step down from his position with MTI Micro effective upon MTI Micro hiring a new CEO. Dr. Acker will continue to serve as CEO until his successor is in place.  Once his successor is in place, Dr. Acker will step down as CEO and will become an Advisor to MTI Micro for a period of 12 months.  Dr. Acker will continue to serve as a member of the Board of Directors of MTI Micro, serving at the pleasure of the shareholders of MTI Micro, and will also serve as the Chairman of the Technology Committee.
Dr. Acker had an employment agreement with MTI Micro that provided 1) a base salary of $250,000; 2) an annual bonus of MTI Micro stock options as determined at the discretion of the Board of Directors; and 3) he would receive, if he is terminated without cause A) 100% of his base salary and benefits for one year, subject to reduction for any amounts earned in other employment, and B) be permitted to exercise any vested options on his date of termination and those options, if any, that would have vested within the twelve month period following the end of the month of his date of termination.
In connection with this succession plan Dr. Acker has entered into a new employment agreement with MTI Micro that provides 1) he will receive a base salary of $250,000 during his remaining term as CEO and during his 12-month term as Advisor, however, if he earns cash compensation from outside employment during the first six months of his term as Advisor his compensation will be subject to reduction for any cash amounts earned in excess of $5,000 per month from such outside employment;  2) any remaining unvested MTI or MTI Micro stock options will automatically vest upon the termination of his employment at the end of his role as Advisor; 3)upon termination of his employment all of his outstanding MTI and MTI Micro stock options will have their terms modified so that they will remain exercisable through December 31, 2009, unless he commences employment with a direct competitor of MTI Micro, in which case all options shall expire on the date he commences such employment.
Dr. Acker will receive no severance as a result of this change.
Item 9.01. Financial Statements and Exhibits.
(c) Exhibits.
Exhibit Number
Description
10.133
Employment Agreement dated December 20, 2005 between William P. Acker and MTI MicroFuel Cells, Inc.
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
MECHANICAL TECHNOLOGY INCORPORATED
Date: December 21, 2005
By:
/S/ CYNTHIA A. SCHEUER
Name:  Cynthia A. Scheuer
Title: Vice President, Chief
Financial Officer and Secretary
3