Exhibit 10.21

FUEL TECH, INC.

EMPLOYMENT AGREEMENT - GENERAL

Agreement made as of the 20th day of September, 2010 between Fuel Tech, Inc., a
Delaware Corporation (the “Company”) with its principal place of business at
27601 Bella Vista Parkway, Warrenville, IL 60555, and Vincent J. Arnone of 57
Malibu Court, Burr Ridge, IL 60521 (“Employee”).

In consideration of the Company’s employment of Employee and the compensation to
be paid to the Employee, the Company and the Employee agree, as follows:

 

1. Employment Status.

 

  (a) Employment with the Company is contingent on Employee signing this
agreement, subject to the provisions regarding legal advice and rescission in
Section 13 below. Employee shall also be entitled to participate in such
benefits as the Company provides to its employees generally.

No statement in this Employment Agreement shall be construed to grant any
Employee an employment contract of fixed duration. Nothing contained in any
provision of this Employment Agreement shall be interpreted as altering the
at-will employment relationship or as a limitation, either express or implied,
on the Company’s right to discipline or discharge an Employee. Either the
Employee or the Company may terminate the employment relationship at any time,
for any reason, with or without notice and with or without cause.

 

  (b) Position. Employee is employed initially as Executive Vice President,
Worldwide Operations.

 

  (c) Base Salary. Employee shall initially have an annual base salary of
$325,000 prorated from commencement of employment and paid semi-monthly less
applicable withholdings.

 

  (d) Executive Officer Incentive Plan Equivalency. The Company has in place a
2010 Executive Officer Incentive Plan (the “EOIP”) with 100% of the available
Incentive Pool Participation Percentage(s) (as that term is defined in the EOIP)
currently allocated to the Company’s Chief Executive Officer, Chief Financial
Officer and the Executive Vice President, Marketing & Sales. As such, for the
remainder of 2010, the Company shall not modify the EOIP to include Employee’s
participation in the EOIP. Instead, to the extent the Company’s Executive Vice
President, Marketing & Sales receives an actual cash payout under the 2010 EOIP
or under any other 2010 short term incentive cash bonus plan the Compensation &
Nominating Committee (the “Committee”) approves as a substitute for or in
addition to the EOIP ( collectively, the “2010 EVP Payout”), Employee shall
receive in cash and in the timeframe provided for such payouts under the EOIP, a
prorated lump sum amount equal to the 2010 EVP Payout (prorated from Employee’s
employment commencement date through December 31, 2010) less applicable
withholdings. For subsequent calendar years following 2010, Employee shall
participate in the then current short term incentive cash bonus plan made
available to Employee, if any, as determined by the Company, in its sole
discretion.

 

  (e) Stock Options. Contingent on approval of such grant by the Company’s
Compensation & Nominating Committee (“Committee”), Employee shall receive a
non-qualified stock option award under the Company’s Incentive Plan (the “Plan”)
on the Company’s standard terms to acquire 40,000 Company common shares
effective as of, and at an exercise price determined at the Fair Market Value
Per Share under the Plan on the later of: (a) the date of Employee’s
commencement of employment, (b) the date the Committee approves such grant under
the Plan or, if the foregoing applicable date shall be in a don’t trade period
under the Company’s Insider Trading policy, then (c) on the first date of the
Company’s next open window period under that policy.

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  (f) Vacation. Employee shall be entitled to eight days of vacation from date
of hire through December 31, 2010, fully accrued as of Employee’s hire date.
Thereafter, commencing January 1, 2011, Employee shall be entitled to 25 days of
vacation per calendar year accrued under the Company’s normal vacation policy.

 

  (g) Benefit Plans. Employee shall be entitled to participate in the Company’s
401(k) and Profit Sharing Plan and such other benefit and health and welfare
plans as are extended by the Company to employees generally.

 

  (h) Salary Continuation/Change of Control. If Employee’s employment is
involuntarily terminated not for cause within a year after an event of “Change
of Control” as defined in the Fuel Tech, Inc. Incentive Plan (“Plan”), Employee
shall be entitled to continuation of base salary and benefits for up to the
earlier of one year after such termination or until Employee shall attain
comparable employment with an equivalent salary. “Benefits” for this purpose
shall include Medical and Dental coverage, 401(k) participation and other plans
and programs in which the officers of the Company generally are entitled to
participate, and, with respect to EOIP payouts, such amount for a prior year as
is earned but unpaid under the terms of that prior year plan and, for a current
year, such amount as the Compensation and Nominating Committee of the Board of
Directors of the Company, or any successor company, shall approve. “Cause” shall
mean conviction of Employee under or a plea of guilty by Employee to any state
or Federal felony charge (or the equivalent thereof outside the United States);
any instance of fraud, embezzlement, self-dealing, insider trading or similar
malfeasance with respect to the Company regardless of amount; substance or
alcohol abuse; or other conduct for which dismissal has been identified in the
Fuel Tech, Inc. Employee Handbook, or any successor manual, or the Company’s
Code of Business Conduct and Ethics, all as from time to time in effect, as a
potential disciplinary measure.

 

2. Best Efforts. The Employee while employed by the Company shall devote
Employee’s best efforts, and Employee’s time and attention to the interests of
the Company as required by the Company and shall faithfully perform all duties
from time to time assigned to Employee and shall conform to all of the Company’s
requirements for proper business conduct including, without limitation, the
Company’s policies, procedures and guidelines set forth in the Company’s Code of
Business Ethics and Conduct, and the Company’s Employee Handbook as well as all
applicable national, state, and local laws, regulations, and ordinances. The
Company reserves the right, in its sole discretion, to change any such policies,
procedures, or guidelines, in whole or in part, at any time in the future, with
or without notice to Employee.

 

3. Disclosure. Employee shall disclose promptly and completely to the Company in
writing, and shall respond to all inquiries made by the Company whether during
or after employment about, all inventions, programs, processes, software, data,
formulae, trade secrets, ideas, concepts, discoveries and developments
(“Developments”), whether patentable or not, which during employment the
Employee may make, conceive, reduce to writing or other storage media, or with
respect to which Employee shall acquire the right to grant licenses or to become
licensed, either solely or jointly with others, which:

 

  (a) Relates to any subject matter with which Employee’s work for the Company
may be concerned; or

 

  (b) Relates to or is concerned with the business, products or projects of the
Company or that of its customers; or

 

  (c) Involves the use of the Company’s time, material or facilities.

Employee agrees that all such Developments are and shall remain the sole and
absolute property of the Company or its nominees. Employee will not withhold
Developments from the Company for the use or benefit of Employee or any other
person or entity after Employee’s employment terminates.

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4. Copyrights. Employee agrees that all writings, illustrations, models,
pictures, software, and other such materials and original works of authorship
created or produced by Employee during the term of his employment with the
Company and relating to his employment with the Company shall be work made for
hire under U.S. copyright laws and shall be at all times the sole and absolute
property of the Company or its nominees. To the extent that such works are not
works made for hire under the U.S. copyright laws, then Employee grants,
assigns, and transfers to the Company any and all rights (including but not
limited to copyrights) in and to all such works.

 

5. Assignment. At all times during and after Employee’s employment with the
Company and at no expense to Employee, Employee shall execute and deliver such
assignments and other documents as may be reasonably requested by the Company to
obtain or uphold for the benefit of the Company, patents, trademarks, and
copyrights in any and all countries for Developments, whether or not Employee is
the inventor or creator thereof. The Company shall be the sole and absolute
owner of any resulting patents, trademarks, and copyrights for Developments.

 

6. Development Exclusions. This Employment Agreement does not apply to a
Development or an original work of authorship that was developed entirely on the
Employees’ own time and that used no equipment or facility or trade secret
information of the Company and (a) that does not result from any work performed
by the Employee for the Company or (b) that does not relate to the business of
the Company.

 

7. Development Compensation. Employee shall receive no compensation for actions
required of the Employee under the requirements of Sections 3 and 4 and 5 above
whether during or after termination of employment, provided, however, that
Employee shall be reimbursed by the Company for any of Employee’s reasonable out
of pocket expenses necessarily arising out of such actions and such expenses are
approved in advance by the Company.

 

8. Confidentiality; Non-Use. At all times during and after Employee’s employment
by the Company, Employee shall hold in strictest confidence, and, without the
express prior written authorization of the officer of the Company to whom
Employee reports or of the Board of Directors of the Company, Employee shall not
disclose or transfer to any third party or use for Employee’s own benefit, any
Development or any secret or confidential Company information relating to
research or development programs, products or services, customer information,
customer lists, business processes, business plans, or sales or marketing plans.

 

9. Company Property. Employee shall carefully preserve the Company’s property
and not convert it to personal use. At the termination of Employee’s employment,
Employee shall return to the Company any and all Company property entrusted to
Employee, including without limiting the generality of the foregoing, all notes,
correspondence, books, laboratory logs, computer disks and tapes or other data
storage media, engineering records, drawings; and also any keys, key cards,
credit cards, telephone cards, computers, equipment and vehicles.

 

10. Employee Disputes. Employee agrees that in any claim which he may bring
against the Company or which the Company may bring against the Employee, the
Employee now and will in the future agree and consent that, at the Company’s
sole election and in its absolute discretion, any such claim may be determined
in arbitration or, once initiated in any court by the Employee, may be removed
by the Company from that court to arbitration.

 

11.

Arbitration. Except as otherwise provided in this section, any controversy or
claim between Employee and the Company arising out of or relating to Employee’s
employment or termination of employment or any other dispute between the
parties, whether arising in tort, contract, or pursuant to a statute,
regulation, or ordinance now in existence or which may in the future be enacted
or recognized, will be settled and determined by a single arbitrator whose award
will be accepted as final and binding upon the parties. The arbitration will be
conducted within the district of the federal district court with jurisdiction
over Employee’s most recent place of employment with the Company and in
accordance with the American Arbitration Association (“AAA”) Employment
Arbitration Rules

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  in effect at the time such arbitration is properly initiated, except in the
event of any conflict with applicable law or the terms of this section, in which
case applicable law will take precedence under all circumstances and the terms
of this Agreement will take precedence over the AAA rules. The arbitrator will
render a written decision to the parties setting forth the rationale for any
award. The costs of the arbitration, including administrative fees and fees
charged by the arbitrator, will be allocated pursuant to the AAA rules or, in
the absence of any rules covering such costs, will be shared equally between the
parties. Each party will bear its or his own travel expenses and attorneys’
fees. A judgment may be entered upon the arbitrator’s decision and the decision
will be enforceable by any court having jurisdiction thereof. In any situation
in which emergency injunctive relief may be necessary, either party may seek
such relief from a court until such time as the arbitrator is able to address
the matter covered by this section.

 

12. Waiver of Jury Trial. In the event that either party files, and is allowed
by the courts to prosecute, a court action on a dispute between the Employee and
the Company, the plaintiff in such an action agrees not to request, and hereby
waives his, her, or its right to, a trial by jury.

 

13. Legal Advice; Rescission. Employee agrees that this agreement involves
Employee’s waiver of certain legal rights. Employee may, if Employee so chooses,
consult with an attorney about the terms of this agreement before signing it.
Employee further acknowledges that (a) the Company has given Employee a
twenty-one (21) day period in which to consider the terms and binding effect of
this agreement, and (b) that, if Employee does sign this agreement, Employee
shall have seven days thereafter to change Employee’s mind and revoke it.
Employee agrees that if Employee decides to revoke this agreement, Employee will
inform the Company in writing within that seven (7) day period and obtain a
written acknowledgment of receipt by the Company of the revocation. Employee
understands that revocation of this agreement will affect Employee’s employment
status. Employee states that Employee has carefully read this agreement; that
Employee understands its final and binding effect and agrees to be bound by its
terms; and that Employee has signed this agreement voluntarily.

 

14. Law. This Employment Agreement and any disputes arising between the Company
and Employee shall be interpreted and governed by the law of the state of
Employee’s last place of employment with the Company, excluding its choice of
laws rules.

 

15. Integration; No Oral Modifications. This written Employment Agreement is the
only employment agreement between the Company and the Employee and supersedes
all other writings or understandings related to Employee’s employment. This
Employment Agreement, including this provision, may not be modified by any oral
statements made by any person. This Employment Agreement, including this
provision, may be modified only by a written agreement signed both by the
Employee and by an authorized officer of the Company.

 

16. Severability. Company and Employee agree that if any of the agreements,
covenants, restrictions and waivers by Employee in this Employment Agreement is
held invalid by a court of competent jurisdiction, such provisions shall be
stricken or modified by the Court and the remaining and modified provisions
shall remain in full force and effect.

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

 

/s/ Vincent J. Arnone

Vincent J. Arnone – Employee FUEL TECH, INC. By:  

/s/ Douglas J. Bailey

Name: Douglas G. Bailey Title: President and Chief Executive Officer