UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 11-K (x) ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED) For the fiscal year end December 31, 1998 OR { } TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED) For the transition period from to Commission file number 0-6890 Mechanical Technology Incorporated MTI Savings and Retirement Plan (Title of Plan) Mechanical Technology Incorporated (Issuer of Securities) 968 Albany-Shaker Road Latham, New York 12110 (Address of Principal Executive Office) Item 4: Page ____ Financial Statements ____________________ Mechanical Technology Incorporated MTI Savings and Retirement Plan Report of Independent Accountants 4 	Statements of net assets available for benefits at December 31, 1998 and 1997 5 	Statement of changes in net assets available for 		benefits for the years ended December 31, 1998 and 1997 6 Notes to financial statements 7-20 Supplemental schedule of assets held for investment purposes 21 Supplement schedules of reportable transactions 22-23 Exhibits Consent of Independent Accountants 24 REQUIRED INFORMATION Mechanical Technology Incorporated MTI Savings and Retirement Plan (the "Plan") is subject to the Employee Retirement Income Security Act of 1974 ("ERISA"). Therefore, in lieu of the requirements of Items 1-3 of Form 11-K, the financial statements and schedules of the Plan for the two fiscal years ended December 31, 1998 and 1997, which have been prepared in accordance with the financial reporting requirements of ERISA, are attached hereto as Item 4 and incorporated herein by this reference. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. Mechanical Technology Incorporated MTI Savings and Retirement Plan DATE: June 28, 1999 BY: s/Cynthia A. Scheuer ____________________ Cynthia A. Scheuer Employer, as Plan Sponsor and Plan Representative 	Report of Independent Accountants To the Participants and Administrator of Mechanical Technology Incorporated MTI Savings and Retirement Plan In our opinion, the accompanying statements of net assets available for benefits and the related statements of changes in net assets available for benefits present fairly, in all material respects, the net assets available for benefits of Mechanical Technology Incorporated MTI Savings and Retirement Plan (the "Plan") at December 31, 1998 and December 31, 1997, and the changes in net assets available for benefits for the years then ended in conformity with generally accepted accounting principles. These financial statements are the responsibility of the Plan's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with generally accepted auditing standards which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules of assets held for investment purposes and reportable transactions are presented for the purpose of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. These supplemental schedules are the responsibility of the Plan's management. The supplemental schedules have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. PricewaterhouseCoopers L.L.P June 14, 1999 MECHANICAL TECHNOLOGY INCORPORATED MTI SAVINGS AND RETIREMENT PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS December 31, 1998 and December 31, 1997 				 DECEMBER 31, 				 1998	 		1997 ____ ____ ASSETS Cash and cash equivalents $ - $ 26,932 	Investments in MTI stock fund, at fair value (cost 1998, $314) 327 - 	Investments in registered investment companies, at fair value (cost 1998, $14,633,054) 15,940,420 6,452,487 	Investments in pooled separate accounts, at fair value - 1,421,185 	Guaranteed investment contracts, at contract value - 9,435,386 Participant notes receivable 92,352 173,262 ____________ ___________ Total investments 16,033,099 17,482,320 	Contributions receivable - employer 5,191 2,688 	Contributions receivable - participants 11,997 6,284 ____________ ____________ Total assets 16,050,287 17,518,224 ____________ ____________ NET ASSETS AVAILABLE FOR BENEFITS $ 16,050,287 $ 17,518,224 ============ ============ The accompanying notes are an integral part of the financial statements. MECHANICAL TECHNOLOGY INCORPORTED MTI SAVINGS AND RETIREMENT PLAN STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS Years Ended December 31, 1998 and December 31, 1997 DECEMBER 31, 1998 1997 ____ ____ Additions to net assets attributed to: 	Investment income: Interest $ 809,753 $ 898,533 Net appreciation in fair value of investments 1,969,991 1,749,481 ___________ ____________ 2,779,744 2,648,014 Less investment expenses 22,914 53,982 ___________ ____________ Net investment income 2,756,830 2,594,032 ___________ ____________ 	Contributions: Employer 201,996 288,873 Participant 391,950 632,739 Rollovers - 5,797 ___________ ____________ 593,946 927,409 ___________ ____________ Total additions 3,350,776 3,521,441 ___________ ____________ Deductions from net assets attributed to: Benefits paid to participants 4,804,745 4,626,552 Employee forfeitures 13,968 17,220 ___________ ____________ Total deductions 4,818,713 4,643,772 ___________ ____________ Net decrease prior to transfers (1,467,937) (1,122,331) Transfer (Note 9) - (2,454,807) ___________ ____________ Net decrease (1,467,937) (3,577,138) ___________ ____________ Net assets available for benefits: Beginning of year 17,518,224 21,095,362 ___________ ____________ End of year $ 16,050,287 $ 17,518,224 =========== ============ The accompanying notes are an integral part of the financial statements. MECHANICAL TECHNOLOGY INCORPORATED MTI SAVINGS AND RETIREMENT PLAN NOTES TO FINANCIAL STATEMENTS 1.	DESCRIPTION OF PLAN The following brief description of the Mechanical Technology Incorporated MTI Savings and Retirement Plan (Plan) provides only general information. Participants should refer to the Plan agreement for more complete information. A. General The Plan is a defined contribution plan covering substantially all employees of Mechanical Technology Incorporated (Plan Sponsor). Effective July 1, 1998, employees are eligible to participate in the Plan after completing 6 months of service and attaining the age of 21. Prior to July 1, 1998, employees were eligible to participate upon the first day of the month following completion of at least one thousand hours of service during any consecutive twelve-month period commencing with the employee's date of hire and the attainment of age 21. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA), as amended. B. Contributions Participant contributions: The Plan permits pre-tax (basic) participant contributions through compensation deferrals not to exceed the greater of 15% of compensation or the maximum permitted by the Internal Revenue Code. Participants may also elect to make after-tax (voluntary) contributions to the Plan not exceeding 9% of compensation. Participants may also contribute amounts representing distributions from other qualified defined benefit or contribution plans. Plan Sponsor contributions: The Plan Sponsor matches, on a discretionary basis, participant basic contributions. Matching contributions have, in the past, been as much as 4% of credited compensation, as defined in the Plan agreement. The Plan Sponsor may also make additional discretionary profit sharing contributions for the benefit of plan participants employed on the last day of the Plan's fiscal year. Profit sharing contributions, if any, are allocated to plan participants based on the ratio of participant compensation to the total compensation of all eligible plan participants. C. Participant Accounts Each participant's account is credited with the participant's contribution and allocations of (a) the Plan Sponsor's contribution and, (b) Plan earnings, and charged with an allocation of administrative expenses. Allocations are based on participant earnings or account balances, as defined. The benefit to which a participant is entitled is the benefit that can be provided from the participant's vested account. D. Vesting Participants are immediately vested in their contributions plus actual earnings thereon. As of July 1, 1998, a participant is fully vested in the Plan Sponsor matching and discretionary contribution portion of their accounts plus actual earnings thereon upon the earliest of completing five years of credited service, previously seven years; the event of death, disability or retirement; MTI terminates or freezes the Plan. E. Investment Options Participants may direct the investment of contributions in multiples of 5% in any of the investment options identified below, as selected by the Plan's trustees. Changes to the investment fund designations may be made daily through the Plan's third party record-keeper. The fund's investment strategies are subject to change and future performance cannot be guaranteed. Number of Participants Investment Options Available as of July 1998 as of December 31, 1998 ____________________________________________ _______________________ MTI Stock Fund 2 MFS/F&C International Growth Fund 7 MFS Global Growth Fund 64 MFS Emerging Growth Fund 88 MFS Total Return Fund 75 MFS Bond Fund 64 MFS Fixed Fund 171 Massachusetts Investors Growth Stock Fund 97 Massachusetts Investors Trust Fund 49 MTI Stock Fund The fund is a unitized fund which invests in Mechanical Technology Incorporated common stock and maintains a portion of the fund in money market investments. MFS/F&C International Growth Fund The fund's foreign growth securities may include securities of more-established companies which represent opportunities for long-term growth. The fund may invest up to 100% of its total assets in foreign securities and up to 25% in emerging market securities. The fund may also invest in derivative securities. MFS Global Growth Fund The fund invests primarily in securities in three market sectors: U.S. emerging growth, foreign growth, and emerging markets. The fund may invest up to 100% of its total assets in foreign and emerging market securities and generally will invest between 25% and 75% in such securities. The fund may also invest up to 35% in high-yield securities and may invest in derivative securities. MFS Emerging Growth Fund The fund invests primarily in emerging growth companies that display the potential to become major enterprises. The fund may invest up to 25% of its total assets in foreign and emerging market securities. The fund may also invest in derivative securities. MFS Total Return Fund At least 25% of the fund's assets will be invested in fixed-income securities, and at least 40% and no more than 75% of assets will be invested in stocks. The fund may also invest in derivative securities. MFS Bond Fund The fund invests at least 80% of its assets in investment-grade bonds, including U.S. government securities and high-grade corporate debt. The fund may invest up to 20% of its assets in high-yield securities. The fund may also invest in derivative securities. MFS Fixed Fund The fund strives to maintain a stable $1 unit value by investing primarily in stable-value investment contracts issued by major insurance companies, and major banks. Not more than 20% of the fund shall be positioned in any individual issuer. Massachusetts Investors Growth Stock Fund The fund emphasis is placed on companies that the fund manager believes has strong management, a successful track record, a history of consistent long-term earnings growth and the potential for market leadership. The fund may invest up to 50% of its total assets in foreign and emerging market securities. The fund may also invest in derivative securities. Massachusetts Investors Trust Fund The fund invests primarily in stocks representing well-known companies across a wide range of industries. The fund may invest up to 35% of its total assets in foreign and emerging market securities. The fund may also invest in derivative securities. Investment Options Available Through June 1998 ______________________________________________ Fidelity Asset Manager The fund was diversified among domestic and foreign stocks, bonds, and short-term and money market instruments, seeking a high total return with reduced risk over the long term. Fidelity Magellan The fund invested in securities convertible into common stock of domestic, foreign, and multinational issuers of all sizes to increase the value of the fund's shares over the long term. MassMutual Government Reserve The fund invested primarily in cash, United States Treasury or Agency securities, and other investments that are issued or guaranteed by the United States Government, its agencies and instrumentalities. MassMutual Destiny Conservative The fund invested primarily in common stocks, publicly traded bonds and short-term interest bearing investments with a primary focus on income and capital preservation. MassMutual Destiny Moderate The fund invested primarily in common stocks, publicly traded bonds and short-term interest bearing investments with a primary focus on achieving growth through a balance of income and capital appreciation. MassMutual Destiny Aggressive The fund invested primarily in common stocks, publicly traded bonds and short-term interest bearing investments with a primary focus on capital appreciation. MassMutual Destiny Equity The fund invested primarily in foreign and domestic common stocks, including small capitalization common stocks. MassMutual International Equity The fund invested primarily in common stocks of companies domiciled in foreign countries with no more than 25% of its assets invested in common stock of the United States and Canada. Guaranteed Investment Contracts Investments in a Government Separate Account that had its underlying investments in a portfolio of Government Securities. It was a separate pool of investments independent from the general assets of Mass Mutual. Investments in guaranteed investment contracts issued by insurance companies. Fidelity Equity Income II The fund had the flexibility to invest the balance in all types of domestic and foreign securities, including bonds. The fund also considered the potential for capital appreciation. Fidelity Blue Chip The fund invested primarily in a diversified portfolio of common stocks of well-known and established companies. Fidelity Contrafund The fund invested mainly in equity securities of companies where value is not fully recognized by the public. The issuing company may be unpopular but have promising improvements on the horizon such as new products or a change in management. The fund could also invest in any type of security that might produce capital appreciation. F. Participant notes receivable Plan participants may borrow from their fund accounts a minimum of $1,000 up to a maximum equal to the lesser of $50,000 or 50 percent of their account balance. Loan transactions are treated as a transfer to (from) the investment funds from (to) the participant notes fund. Loan terms range from 1 to 5 years. The loans are collateralized by the balance in the participant's account and bear interest at the Prime interest rate plus 2 percent on the date the loan is made. Interest rates range from 8 to 10.5 percent. Principal and interest is paid ratably through monthly payroll deductions. G. Payment of benefits Normal retirement age is 65. The Plan permits early retirement at age 55 with five years of service. Upon retirement, disability or death, a participant or beneficiary may elect to receive his or her vested individual account balance of more than $5,000 in the form of an annuity, a lump-sum payment or monthly installments over the recipient's life expectancy, not exceeding ten years. A participant or beneficiary with a vested individual account balance under $5,000 will receive a lump-sum payment. A terminated participant is entitled to a lump-sum payment of the vested interest in his or her account. A terminated participant with five or less years of service forfeits the right to receive a portion of the accumulated benefit attributable to Plan Sponsor contributions. H. Forfeited Accounts At December 31, 1998, forfeited non-vested accounts totaled $ 72,096. These amounts will be used to first pay Plan administrative expenses, then to reduce future employer contributions. I. Plan Administrative Costs The Company pays both the annual trustee fees and the annual audit fees of the Plan. 2.	SIGNIFICANT ACCOUNTING POLICIES A. Basis of preparation The financial statements of the Plan are prepared on the accrual basis of accounting. B. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and changes therein, and disclosure of contingent assets and liabilities. Actual results could differ from those estimates. C. Risks and Uncertainties The Plan provides for various investment options in any combination of stocks, fixed income securities, mutual funds and other investment securities. Investment securities are exposed to various risks, such as interest rate, market and credit. Due to the level of risk associated with certain investment securities and the level of uncertainty related to changes in the value of investment securities, it is at least reasonably possible that changes in risks in the near term would materially affect participant's account balances and the amounts reported in the statement of net assets available for plan benefits and the statement of changes in net assets available for plan benefits. D. Investment Valuation and Income Recognition The Plan's investments are stated at fair value except for its investment contracts which are valued at contract value (Note 4). Shares of registered investment companies and pooled separate accounts are valued at quoted market prices which represent the net asset value of shares or units held by the Plan at year-end. Participant notes receivable are valued at cost, which approximates fair value. Purchases and sales of securities are recorded on a trade-date basis. Gains or losses on sales of securities are based on average cost. Interest income is recorded on the accrual basis. The Plan presents in the Statements of Changes in Net Assets Available for Benefits the net appreciation (depreciation) in the fair value of its investments which consists of the realized gains or losses (computed on average cost) and the unrealized appreciation (depreciation) on those investments. E. Payments of Benefits Benefits are recorded when paid. F. Reclassification Certain 1997 amounts have been reclassified to conform with the 1998 presentation. 3. INVESTMENTS Except for its investment contracts with insurance companies (Note 4), the Plan's investments are held by an investment company. The following table presents the fair values of investments, which includes investments that represent 5 percent or more of total plan assets. DECEMBER 31, 1998 Cost/ Number Contract Fair of Shares Value Value _________ ________ _____ Investments at Fair Value as Determined by Quoted Market Prices MTI Stock Fund 29 $ 314 $ 327 ========== ========== Registered investment companies: MFS/F&C International Growth Fund 2,564 $ 42,580 $ 39,873 MFS Global Growth Fund 13,910 282,910 269,994 MFS Emerging Growth Fund 87,517 2,974,778 3,903,270 MFS Total Return Fund 46,825 763,688 700,505 MFS Bond Fund 21,291 288,977 282,965 MFS Fixed Fund 7,401,375 7,401,375 7,401,375 Massachusetts Investors Growth Stock Fund 154,862 2,029,414 2,463,857 Massachusetts Investors Trust Fund 43,387 849,332 878,581 __________ __________ $14,633,054 $15,940,420 ========== ========== Investments at Estimated Fair Value Participant notes receivable $ 92,352 $ 92,352 ========== ========== Total $14,725,720 $16,033,099 ========== ========== Investment income of the Plan is as follows: Year Ended Net appreciation in fair value of investments: December 31, Investments at fair value as determined 1998 by quoted market prices: MTI stock fund $ 13 Registered investment companies 2,818,366 Pooled separate accounts 142,515 ___________ 2,960,894 	Investments at contract value: Guaranteed investment contracts (990,903) ___________ $ 1,969,991 =========== DECEMBER 31, 1997 Cost/ Number Contract of Units Value Fair Value ________ ________ __________ Investments at Fair Value as Determined by Quoted Market Prices Registered investment companies: Fidelity Asset Manager 126,122 * $ 2,063,806 Fidelity Magellan 151,296 * 2,911,801 Fidelity Contrafund 5,016 * 918,936 Fidelity Equity Income II 1,629 * 281,367 Fidelity Blue Chip 1,605 * 276,577 _____________ $ 6,452,487 Pooled separate accounts: ============= Government Reserves 1,809 * $ 232,618 Destiny Conservative 500 * 74,147 Destiny Moderate 1,286 * 201,431 Destiny Aggressive 1,964 * 320,718 Destiny Equity 2,969 * 539,477 International Equity 235 * 52,794 _____________ $ 1,421,185 ============= Investments at Estimated Fair Value Participant notes receivable $ 173,262 $ 173,262 ========= ============= Investments at Contract Value Various guaranteed investment contracts with insurance companies with interest rates ranging from 6.84% to 7.30% and maturing at various dates through January 3, 2000. * $ 9,435,386 ============= Total $ 17,482,320 ============= 	*Information is not available. Investment income of the Plan is as follows: Year Ended Net appreciation in fair value of investments: December 31, Investments at fair value as determined 1997 by quoted market prices: ____________ Registered investment companies $ 1,565,279 Pooled separate accounts 184,202 _____________ $ 1,749,481 ============= 4.	INVESTMENT CONTRACTS WITH INSURANCE COMPANIES The Plan entered into investment contracts with insurance companies (the Companies). The Companies maintained the contributions in a pooled account. The account was credited with actual earnings on the underlying investments (principally bank certificates of deposit) and charged for Plan withdrawals and administration expenses charged by the Companies. The contracts are included in the financial statements at contract value, which approximates fair value, as reported to the Plan by the Companies. Contract value represents contributions made under the contract, plus earnings, less Plan withdrawals and administrative expenses. These contracts provided a liquidity guarantee by financially responsible third parties of principal and previously accrued interest for liquidations, transfers, loans, or hardship withdrawals initiated by plan participants exercising their rights to withdraw, borrow or transfer funds under the terms of the on-going Plan. The average yield on their contracts was 4.03% and 7.05% for the years ended December 31, 1998 and December 31, 1997 respectively. 5. INFORMATION CERTIFIED BY INVESTMENT CUSTODIANS The investments at fair and contract value, interest income, net appreciation in fair value of investments, benefits paid to participants and employee forfeitures presented in the Statements of Net Assets Available for Benefits and Statements of Changes in Net Assets Available for Benefits for the years ended December 31, 1998 and 1997 have been certified by the Plan's investment custodian. 6. PLAN TERMINATION Although it has not expressed any intent to do so, the Plan Sponsor has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants will become fully vested in their accounts. 7. CONCENTRATION OF CREDIT RISK Financial instruments which potentially subject the Plan to concentrations of credit risk consist principally of investments in guaranteed income deposits with insurance companies. To reduce credit risk, the Plan places these investments with high credit quality financial institutions and limits the amount of credit exposure to any one financial institution. 8. INCOME TAX STATUS An application for Determination Letter will be filed in July 1999 with the Internal Revenue Service (IRS) by the Plan Sponsor . The Plan trustees believe that the Plan and related trust are designed in accordance with applicable sections of the Internal Revenue Code. The Plan was amended and restated in 1998, when the Plan changed record-keepers and trustees. The Plan had a Determination Letter dated February 8, 1996 for the Plan in effect through June 30, 1998. 9. 	TRANSFER On June 27, 1997, Plug Power, L.L.C. ("Plug Power") was formed and employees were transferred from the Plan Sponsor to Plug Power. Plug Power established its own benefit plan and the accounts of employees transferred were transferred to the Plug Power plan during the third quarter of 1997. 10.	PLAN AMENDMENT AND RESTATEMENT Effective July 1, 1998, the Plan changed its record-keeper to MFS Retirement Services, Inc. and its trustee to Reliance Trust Company. In connection with this change, the plan was amended and restated. Significant Plan changes include: 	a. Vesting over a five year period. b. Forfeitures are used first to pay the Plan's administrative expenses and excess may be used to reduce matching contributions. 11. ALLOCATION OF NET ASSETS Allocation of net assets available for plan benefits at December 31, 1998 is as follows: MASS- MFS/F&C ACHUSETTS MASS- PART- INTER- MFS MFS MFS INVESTORS ACHUSETTS ICIPANT MTI NATIONAL GLOBAL EMERGING TOTAL MFS MFS GROWTH INVESTORS NOTES STOCK GROWTH GROWTH GROWTH RETURN BOND FIXED STOCK TRUST RECEIV- FUND FUND FUND FUND FUND FUND FUND FUND FUND ABLE TOTAL -------------------------------------------------------------------------------------------------------------- ASSETS Cash and cash equivalents $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Investments in MTI stock fund, at fair value 327 - - - - - - - - - 327 Investments in registered investment companies, at fair value - 39,873 269,994 3,903,270 700,505 282,965 7,401,375 2,463,857 878,581 - 15,940,420 Investments in pooled separate accounts, at fair value - - - - - - - - - - - Guaranteed investment contracts, at contract value - - - - - - - - - - - Participant notes receivable - - - - - - - - - 92,352 92,352 Contributions receivable - employer 10 22 377 769 680 476 1,509 994 354 - 5,191 Contributions receivable - participants 15 34 805 2,114 1,311 887 2,825 2,470 994 542 11,997 ------------------------------------------------------------------------------------------------------------------- Total assets 352 39,929 271,176 3,906,153 702,496 284,328 7,405,709 2,467,321 879,929 92,894 16,050,287 ------------------------------------------------------------------------------------------------------------------- NET ASSETS AVAILABLE FOR BENEFITS $352 $ 39,929 $271,176 $3,906,153 $702,496 $284,328 $7,405,709 $2,467,321 $ 879,929 $92,894 $16,050,287 =================================================================================================================== The accompanying notes are an integral part of the financial statements. Allocation of net assets available for plan benefits at December 31, 1997 is as follows: -----------------------MASS MUTUAL----------------------- FIDELITY GOVERN- DESTINY DESTINY DESTINY INTER- ASSET FIDELITY MENT CONSER- MOD- AGGRESS- DESTINY NATIONAL MANAGER MAGELLAN RESERVES VATIVE ERATE IVE EQUITY EQUITY --------------------------------------------------------------------------------- ASSETS Cash and cash equivalents $ - $ - $ - $ - $ - $ - $ - $ - Investments in MTI stock fund, at fair value - - - - - - - - - Investments in registered investment companies, at fair value 2,063,806 2,911,801 - - - - - - Investments in pooled separate accounts, at fair value - - 232,618 74,147 201,431 320,718 539,477 52,794 Guaranteed investment contracts, at contract value - - - - - - - - - Participant notes receivable - - - - - - - - Contributions receivable - employer - - - - - - - - Contributions receivable - participants - - - - - - - - --------------------------------------------------------------------------------- Total assets 2,063,806 2,911,801 232,618 74,147 201,431 320,718 539,477 52,794 --------------------------------------------------------------------------------- NET ASSETS AVAILABLE FOR BENEFITS $2,063,806 $2,911,801 $232,618 $74,147 $201,431 $320,718 $539,477 $ 52,794 ================================================================================= PART- ICIPANT FIDELITY FIDELITY FIDELITY NOTES GUARANTEED CONTRA- EQUITY BLUE RECEIV- INVESTMENT FUND INCOME II CHIP OTHER ABLE CONTRACTS TOTAL ------------------------------------------------------------------- ASSETS Cash and cash equivalents $ - $ - $ - $26,932 $ - $ - $ 26,932 Investments in MTI stock fund, at fair value - - - - - - - - Investments in registered investment companies, at fair value 918,936 281,367 276,577 - - - 6,452,487 Investments in pooled separate accounts, at fair value - - - - - - 1,421,185 Guaranteed investment contracts, at contract value - - - - - - 9,435,386 9,435,386 Participant notes receivable - - - - 173,262 - 173,262 Contributions receivable - employer - - - 2,688 - - 2,688 Contributions receivable - participants - - - 6,284 - - 6,284 ------------------------------------------------------------------------- Total assets 918,936 281,367 276,577 35,904 173,262 9,435,386 17,518,224 ------------------------------------------------------------------------- NET ASSETS AVAILABLE FOR BENEFITS $918,936 $ 281,367 $276,577 $35,904 $173,262 $9,435,386 $17,518,224 ========================================================================= The accompanying notes are an integral part of the financial statements. Changes in net assets available for plan benefits for the Year Ended December 31, 1998 is as follows: MASS- MFS/F&C ACHUSETTS INTER- MFS MFS MFS INVESTORS MTI NATIONAL GLOBAL EMERGING TOTAL MFS MFS GROWTH STOCK GROWTH GROWTH GROWTH RETURN BOND FIXED STOCK FUND FUND FUND FUND FUND FUND FUND FUND --------------------------------------------------------------------------------------- Additions to net assets attributed to: Investment Income: Interest $ - $ 835 $ 20,472 $ 35,115 $ 94,465 $ 8,032 $ 168,221 $ 196,512 Net appreciation (depreciation) in fair value of investments 13 (2,657) (12,603) 652,819 (62,365) (5,684) 775,826 299,822 --------------------------------------------------------------------------------------- Net investment income 13 (1,822) 7,869 687,934 32,100 2,348 944,047 496,334 --------------------------------------------------------------------------------------- Less investment expenses - 2 2 12 5 3 56 18 --------------------------------------------------------------------------------------- 13 (1,824) 7,867 687,922 32,095 2,345 943,991 496,316 Contributions: Employer 109 752 4,792 14,955 7,596 3,962 32,260 15,436 Participant 205 901 11,254 35,836 16,962 9,482 69,366 38,259 Rollovers - - - - - - - - --------------------------------------------------------------------------------------- 314 1,653 16,046 50,791 24,558 13,444 101,626 53,695 --------------------------------------------------------------------------------------- Total additions 327 (171) 23,913 738,713 56,653 15,789 1,045,617 550,011 --------------------------------------------------------------------------------------- Deductions from net assets attributed to: Benefits paid to participants - 262 - 143,187 333 - 189,421 19,892 Employee forfeitures - 37 - 3,145 47 - - 3,267 --------------------------------------------------------------------------------------- Total deductions - 299 - 146,332 380 - 189,421 23,159 --------------------------------------------------------------------------------------- Net increase/ (decrease) prior to interfund transfers 327 (470) 23,913 592,381 56,273 15,789 856,196 526,852 --------------------------------------------------------------------------------------- Transfers - 40,087 245,593 3,324,261 643,069 258,678 6,640,854 1,933,611 Loan activity transfers - 256 488 1,283 2,142 346 12,429 4,223 2,360 Interfund transfers - - - (14,655) (979) 8,152 (108,104) (829) --------------------------------------------------------------------------------------- Net increase 327 39,873 269,994 3,903,270 700,505 282,965 7,401,375 2,463,857 --------------------------------------------------------------------------------------- Net assets available for benefits: Beginning of year - - - - - - - - --------------------------------------------------------------------------------------- End of year $ 327 $ 39,873 $269,994 $3,903,270 $700,505 $282,965 $7,401,375 $2,463,857 ======================================================================================= MASS- ACHU- PART- SETTS ICIPANT INVESTORS NOTES TRUST RECEIV- SUB- FUND OTHER ABLE TOTAL ----------------------------------------- Additions to net assets attributed to: Investment Income: Interest $ 37,653 $ - $ 4,749 $ 566,054 Net appreciation (depreciation) in fair value of investments 30,117 - - 1,675,288 ----------------------------------------- 67,770 - 4,749 2,241,342 Less investment expenses 4 - - 102 ----------------------------------------- Net investment income 67,766 - 4,749 2,241,240 ----------------------------------------- Contributions: Employer 7,667 5,191 - 92,720 Participant 17,768 11,997 - 212,030 Rollovers - - - - ----------------------------------------- 25,435 17,188 - 304,750 ----------------------------------------- Total additions 93,201 17,188 4,749 2,545,990 ----------------------------------------- Deductions from net assets attributed to: Benefits paid to participants 12,470 - - 365,565 Employee forfeitures 2,129 - - 8,625 ----------------------------------------- Total deductions 14,599 - - 374,190 ----------------------------------------- Net increase/ (decrease) prior to interfund transfers 78,602 17,188 4,749 2,171,800 ----------------------------------------- Transfers 681,204 - 111,130 13,878,487 Loan activity transfers 2,360 - (23,527) - Interfund transfers 116,415 - - - ----------------------------------------- Net increase 878,581 17,188 92,352 16,050,287 ----------------------------------------- Net assets available for benefits: Beginning of year - - - - ----------------------------------------- End of year $ 878,581 $17,188 $92,352 $16,050,287 ========================================= The accompanying notes are an integral part of the financial statements. Changes in net assets available for plan benefits for the Year Ended December 31, 1998 is as follows: ---------------------------MASSMUTUAL---------------------- FIDELITY GOVERN- DESTINY DESTINY DESTINY ASSET FIDELITY MENT CONSER- MOD- AGGRESS- DESTINY MANAGER MAGELLAN RESERVES VATIVE ERATE IVE EQUITY -------------------------------------------------------------------------------------- Additions to net assets attributed to: Investment Income: Interest $ 34,269 $ 7,765 $ 5,726 $ - $ - $ - $ - Net appreciation (depreciation) in fair value of investments 183,049 603,854 - 7,965 16,644 34,475 70,769 ------------------------------------------------------------------------------------------ 217,318 611,619 5,726 7,965 16,644 34,475 70,769 Less investment expenses 2,734 3,754 442 272 463 599 738 ------------------------------------------------------------------------------------------ Net investment income 214,584 607,865 5,284 7,693 16,181 33,876 70,031 ------------------------------------------------------------------------------------------ Contributions: Employer 11,650 10,485 3,510 2,648 8,832 9,512 5,025 Participant 28,191 23,604 7,295 4,759 14,086 22,909 16,838 Rollovers - - - - - - - ------------------------------------------------------------------------------------------ 39,841 34,089 10,805 7,407 22,918 32,421 21,863 ------------------------------------------------------------------------------------------ Total additions 254,425 641,954 16,089 15,100 39,099 66,297 91,894 ------------------------------------------------------------------------------------------ Deductions from net assets attributed to: Benefits paid to participants 418,296 658,505 55,482 24,760 75,061 41,290 163,200 Employee forfeitures 359 - 1,748 333 - 353 - ------------------------------------------------------------------------------------------ Total deductions 418,655 658,505 57,230 25,093 75,061 41,643 163,200 ------------------------------------------------------------------------------------------ Net (decrease)/ increase prior to interfund transfers (164,230) (16,551) (41,141) (9,993) (35,962) 24,654 (71,306) ------------------------------------------------------------------------------------------ Transfers (1,830,046) (2,318,375) (178,696) (393,035) (108,593) (328,232) (414,256) Loan activity transfers - - - - - - - Interfund transfers (69,530) (576,875) (12,781) 328,881 (56,876) (17,140) (53,915) ------------------------------------------------------------------------------------------ Net decrease (2,063,806) (2,911,801) (232,618) (74,147) (201,431) (320,718) (539,477) ------------------------------------------------------------------------------------------ Net assets available for benefits: Beginning of year 2,063,806 2,911,801 232,618 74,147 201,431 320,718 539,477 ------------------------------------------------------------------------------------------ End of year $ - $ - $ - $ - $ - $ - $ - ========================================================================================== MASS- PART- MUTUAL ICIPANT INTER- FIDELITY FIDELITY FIDELITY NOTES GUARANTEED NATIONAL CONTRA- EQUITY BLUE RECEIV- INVESTMENT SUB EQUITY FUND INCOME II CHIP OTHER ABLE CONTRACTS TOTAL TOTAL ---------------------------------------------------------------------------------------------------------------- Additions to net assets attributed to: Investment Income: Interest $ - $ - $ - $ - $ - $ 5,817 $ 190,122 $ 243,699 $ 809,753 Net appreciation (depreciation) in fair value of investments 12,662 217,939 44,490 93,759 - - (990,903) 294,703 1,969,991 ---------------------------------------------------------------------------------------------------------------- 12,662 217,939 44,490 93,759 - 5,817 (800,781) 538,402 2,779,744 Less investment expenses 83 1,120 426 524 - - 11,657 22,812 22,914 ---------------------------------------------------------------------------------------------------------------- Net investment income 12,579 216,819 44,064 93,235 - 5,817 (812,438) 515,590 2,756,830 ---------------------------------------------------------------------------------------------------------------- Contributions: Employer 906 6,353 2,731 2,611 (2,688) - 47,701 109,276 201,996 Participant 3,158 22,327 12,304 4,892 (33,216) (64,759) 117,532 179,920 391,950 Rollovers - - - - - - - - - ---------------------------------------------------------------------------------------------------------------- 4,064 28,680 15,035 7,503 (35,904) (64,759) 165,233 289,196 593,946 ---------------------------------------------------------------------------------------------------------------- Total additions 16,643 245,499 59,099 100,738 (35,904) (58,942) (647,205) 804,786 3,350,776 ---------------------------------------------------------------------------------------------------------------- Deductions from net assets attributed to: Benefits paid to participants 15,019 142,811 115,213 11,648 - 3,190 2,714,705 4,439,180 4,804,745 Employee forfeitures - 379 779 768 - - 624 5,343 13,968 ---------------------------------------------------------------------------------------------------------------- Total deductions 15,019 143,190 115,992 12,416 - 3,190 2,715,329 4,444,523 4,818,713 ---------------------------------------------------------------------------------------------------------------- Net (decrease) increase prior to interfund transfers 1,624 102,309 (56,893) 88,322 (35,904) (62,132) (3,362,534) (3,639,737) (1,467,937) ---------------------------------------------------------------------------------------------------------------- Transfers (40,087) (1,005,886) (131,268) (681,204) - (111,130) (6,337,679) (13,878,487) - Loan activity transfers - - - - - - - - - Interfund transfers (14,331) (15,359) (93,206) 316,305 - - 264,827 - - ---------------------------------------------------------------------------------------------------------------- Net (decrease) (52,794) (918,936) (281,367) (276,577) (35,904) (173,262) (9,435,386) (17,518,224) (1,467,937) ---------------------------------------------------------------------------------------------------------------- Net assets available for benefits: Beginning of year 52,794 918,936 281,367 276,577 35,904 173,262 9,435,386 17,518,224 17,518,224 ---------------------------------------------------------------------------------------------------------------- End of year $ - $ - $ - $ - $ - $ - $ - $ - $ 16,050,287 ================================================================================================================ The accompanying notes are an integral part of the financial statements. Changes in net assets available for plan benefits for the Year Ended December 31, 1997 is as follows: -------------------------MASS MUTUAL------------------------------- FIDELITY GOVERN- DESTINY DESTINY DESTINY ASSET FIDELITY MENT CONSER- MOD- AGGRESS- DESTINY MANAGER MAGELLAN RESERVES VATIVE ERATE IVE EQUITY --------------------------------------------------------------------------------------------------- Additions to net assets attributed to: Investment Income: Interest $ 74,099 $ 54,330 $ 11,887 $ - $ - $ - $ - Net appreciation in fair value of investments 358,463 808,461 - 8,502 32,027 45,008 90,939 --------------------------------------------------------------------------------------------------- 432,562 862,791 11,887 8,502 32,027 45,008 90,939 Less investment expenses 6,130 9,299 1,076 295 937 1,147 1,316 --------------------------------------------------------------------------------------------------- Net investment income 426,432 853,492 10,811 8,207 31,090 43,861 89,623 --------------------------------------------------------------------------------------------------- Contributions: Employer 28,847 36,477 6,184 3,679 18,872 24,815 19,345 Participant 83,672 85,375 14,635 9,646 39,015 57,333 46,599 Rollovers 2,899 2,898 - - - - - --------------------------------------------------------------------------------------------------- 115,418 124,750 20,819 13,325 57,887 82,148 65,944 --------------------------------------------------------------------------------------------------- Total additions 541,850 978,242 31,630 21,532 88,977 126,009 155,567 --------------------------------------------------------------------------------------------------- Deductions from net assets attributed to: Benefits paid to participants 566,923 1,028,587 32,185 135 6,433 25,631 6,439 Employee forfeitures 2,791 8,302 1,231 - 875 1,111 1,456 --------------------------------------------------------------------------------------------------- Total deductions 569,714 1,036,889 33,416 135 7,308 26,742 7,895 --------------------------------------------------------------------------------------------------- Net (decrease) increase prior to interfund transfers (27,864) (58,647) (1,786) 21,397 81,669 99,267 147,672 --------------------------------------------------------------------------------------------------- Transfers (210,736) (850,939) (3,027) (929) (45,876) (28,065) (43,315) Interfund transfers (68,063) (214,773) - - (2,547) 31,109 170,452 --------------------------------------------------------------------------------------------------- Net (decrease) increase (306,663) (1,124,359) (4,813) 20,468 33,246 102,311 274,809 --------------------------------------------------------------------------------------------------- Net assets available for benefits: Beginning of year 2,370,469 4,036,160 237,431 53,679 168,185 218,407 264,668 --------------------------------------------------------------------------------------------------- End of year $ 2,063,806 $ 2,911,801 $ 232,618 $ 74,147 $ 201,431 $ 320,718 $ 539,477 =================================================================================================== MASS- PART- MUTUAL ICIPANT INTER- FIDELITY FIDELITY FIDELITY NOTES GUARANTEED NATIONAL CONTRA- EQUITY BLUE RECEIV- INVESTMENT EQUITY FUND INCOME II CHIP OTHER ABLE CONTRACTS TOTAL ----------------------------------------------------------------------------------------------------- Additions to net assets attributed to: Investment Income: Interest $ - $ - $ - $ - $ - $ 15,458 $ 742,759 $ 898,533 Net appreciation in fair value of investments 7,726 208,400 90,526 99,429 - - - 1,749,481 ----------------------------------------------------------------------------------------------------- 7,726 208,400 90,526 99,429 - 15,458 742,759 2,648,014 Less investment expenses 95 2,367 1,122 1,182 - - 29,016 53,982 ----------------------------------------------------------------------------------------------------- Net investment income 7,631 206,033 89,404 98,247 - 15,458 713,743 2,594,032 ----------------------------------------------------------------------------------------------------- Contributions: Employer 1,326 21,550 8,923 4,862 2,688 - 111,305 288,873 Participant 2,111 55,930 25,134 11,997 33,216 (152,023) 320,099 632,739 Rollovers - - - - - - - 5,797 ----------------------------------------------------------------------------------------------------- 3,437 77,480 34,057 16,859 35,904 (152,023) 431,404 927,409 ----------------------------------------------------------------------------------------------------- Total additions 11,068 283,513 123,461 115,106 35,904 (136,565) 1,145,147 3,521,441 ----------------------------------------------------------------------------------------------------- Deductions from net assets attributed to: Benefits paid to participants - 119,634 227,698 228,755 - (14,011) 2,398,143 4,626,552 Employee forfeitures - 62 - 62 - - 1,330 17,220 ----------------------------------------------------------------------------------------------------- Total deductions - 119,696 227,698 228,817 - (14,011) 2,399,473 4,643,772 ----------------------------------------------------------------------------------------------------- Net (decrease) increase prior to interfund transfers 11,068 163,817 (104,237) (113,711) 35,904 (122,554) (1,254,326) (1,122,331) ----------------------------------------------------------------------------------------------------- Transfers (65,755) (263,609) (40,904) (152,736) - (35,809) (713,107) (2,454,807) Interfund transfers 107,481 70,689 24,007 152,776 - - (271,131) - ----------------------------------------------------------------------------------------------------- Net (decrease) increase 52,794 (29,103) (121,134) (113,671) 35,904 (158,363) (2,238,564) (3,577,138) ----------------------------------------------------------------------------------------------------- Net assets available for benefits: Beginning of year - 948,039 402,501 390,248 - 331,625 11,673,950 21,095,362 ----------------------------------------------------------------------------------------------------- End of year $ 52,794 $918,936 $ 281,367 $ 276,577 $ 35,904 $ 173,262 $ 9,435,386 $ 17,518,224 ===================================================================================================== The accompanying notes are an integral part of the financial statements. MECHANICAL TECHNOLOGY INCORPORATED MTI SAVINGS & RETIREMENT PLAN Line 27a - Schedule of Assets Held for Investment Purposes (a) (b)Identity of (c)Description of (d)Cost (e)Current issue, investment Value borrower, including lessor, maturity date, or similar rate of interest, party collateral, par or maturity value Mechanical Technology Incorporated Common Stock $ 314 $ 327 MFS F&C International Growth Fund 42,580 39,873 MFS Global Growth Fund 282,910 269,994 MFS Emerging Growth Fund 2,974,778 3,903,270 MFS MA Investors Growth Fund 2,029,414 2,463,857 MFS MA Investors Trust Fund 849,332 878,581 MFS Total Return Fund 763,688 700,505 MFS Bond Fund 288,977 282,965 MFS Fixed Fund 7,401,375 7,401,375 Participant Notes 8 - 10.5% - 92,352 __________ __________ Total investments $14,633,368 $16,033,099 ========== ========== MECHANICAL TECHNOLOGY INCORPORATED MTI SAVINGS AND RETIREMENT PLAN Line 27d - Schedule of Reportable Transactions Individual Transactions - For the Year Ended December 31, 1998 Net asset value as of December 31, 1997 = $17,518,224 (a)Identity (b)Description of asset (c)Purchase (d)Selling (e)Lease (f)Expense (g)Cost of (h)Current value (i)Net gain of party (include interest rate price price rental incurred asset of asset on or (loss) involved and maturity in with transaction case of a loan) transaction date MFS Emerging Growth Fund 1,005,886 N/A N/A N/A 1,005,886 1,005,886 - MFS Emerging Growth Fund 2,318,375 N/A N/A N/A 2,318,375 2,318,375 - MFS Massachusetts Investors Growth Stock Fund 1,830,047 N/A N/A N/A 1,830,047 1,830,047 - MFS Fixed Fund 5,038,838 N/A N/A N/A 5,038,838 5,038,838 - MFS Fixed Fund 1,665,138 N/A N/A N/A 1,665,138 1,665,138 - MECHANICAL TECHNOLOGY INCORPORATED MTI SAVINGS AND RETIREMENT PLAN Line 27d - Schedule of Reportable Transactions Series of Transactions - For the Year Ended December 31, 1998 Net Asset Value as of December 31, 1997 = $17,518,224 (a)Identity (b)Description of asset (c)Purchase (d)Selling (e)Lease (f)Expense (g)Cost of (h)Current value (i)Net gain of party (include interest rate price price rental incurred asset of asset on or (loss) involved and maturity in with transaction case of a loan) transaction date MFS Emerging Growth Fund 3,324,261 N/A N/A N/A 3,324,261 3,324,261 - MFS Massachusetts Investors Growth Stock Fund 1,933,611 N/A N/A N/A 1,933,611 1,933,611 - MFS Fixed Fund 6,703,975 N/A N/A N/A 6,703,975 6,703,975 - MFS Fixed Fund 953,021 N/A N/A N/A 953,021 953,021 - Mass Mutual Destiny Aggressive N/A 387,613 N/A 599 387,613 387,613 - Mass Mutual Destiny Conservative N/A 89,520 N/A 272 89,520 89,520 - Mass Mutual Destiny Equity N/A 632,109 N/A 739 632,109 632,109 - Mass Mutual Destiny Moderate N/A 240,993 N/A 463 240,993 240,993 - Mass Mutual International Equity N/A 69,520 N/A 83 69,520 69,520 - Mass Mutual Government Reserve N/A 249,148 N/A 442 249,148 249,148 - Mass Mutual Fidelity Blue Chip N/A 377,839 N/A 524 377,839 377,839 - Mass Mutual Fidelity Contrafund N/A 1,165,555 N/A 1,120 1,165,555 1,165,555 - Mass Mutual Fidelity Equity Income II N/A 340,892 N/A 426 340,892 340,892 - Mass Mutual Fidelity Magellan N/A 4,135,875 N/A N/A 3,795,445 4,135,875 - Mass Mutual Fidelity Asset Manager N/A 2,459,548 N/A N/A 2,300,978 2,459,548 - New York Guaranteed Investment Life Contract N/A 1,892,402 N/A N/A 1,730,380 1,892,402 -