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SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-K
 (Mark One)
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
 For the fiscal year ended: December 31, 2010
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
 For the transition period from  to
 Commission File No. 001-33059
 Fuel Tech, Inc.
 (Exact name of registrant as specified in its charter)
 Delaware
    
    20-5657551(State or other jurisdiction of incorporation of organization)
    
    (I.R.S. Employer Identification Number)
 www.ftek.com
 Securities registered pursuant to Section 12(b) of the Act:
 Common Stock $0.01 par value per share
    
    The NASDAQ Stock Market, Inc(Title of Class)
    
    (Name of Exchange on Which Registered)
 Securities registered pursuant to Section 12(g) of the Act: None
 Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of
the Securities Act.
 Yes o No þ
 Indicate by check mark if the registrant is not required to file reports pursuant to Section
13 or Section 15(d) of the Act.
 Yes o No þ
 Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes þ No o
 Indicate by check mark whether the registrant has submitted electronically and posted on its
corporate Web site, if any, every Interactive Data File required to be submitted and posted to Rule
405 of Regulation S-T (§229.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such files). Yes o No o
 Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is
not contained herein, and will not be contained, to the best of the registrants knowledge, in
definitive proxy or information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. o
 Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer,
non-accelerated filer or a smaller reporting company (as defined in rule 12b-2 under the Securities
Exchange Act of 1934).
 Large accelerated filer o   
    Accelerated filer þ
    Non-accelerated filer o
    Smaller reporting company o(Do not check if a smaller reporting company)
 Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
 Yes o No þ
 The aggregate market value of the voting stock held by non-affiliates of the registrant at June 30,
2010 was approximately $114,758,000. The aggregate market value of the voting stock held by
non-affiliates of the registrant at March 4, 2011 was approximately $140,939,000.
 Indicate number of shares outstanding of each of the registered classes of Common Stock at March 4,
2011: 24,213,467 shares of Common Stock, $0.01 par value.
 Documents incorporated by reference:
 Certain portions of the registrants definitive Proxy Statement for the annual meeting of
stockholders to be held in 2011 are incorporated by reference in Parts II, III, and IV hereof.




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##### 



TABLE OF CONTENTS
 PagePART IItem 1. Business
    
    
    1Item 1A. Risk Factors
    
    
    7Item 1B. Unresolved Staff Comments
    
    
    8Item 2. Properties
    
    
    9Item 3. Legal Proceedings
    
    
    9PART IIItem 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchase
of Equity Securities
    
    
    10Item 6. Selected Financial Data
    
    
    12Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    13Item 7A. Quantitative and Qualitative Disclosures about Market Risk
    
    
    20Item 8. Financial Statements and Supplementary Data
    
    
    21Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    45Item 9A. Controls and Procedures
    
    
    45Item 9B. Other Information
    
    
    45PART IIIItem 10. Directors, Executive Officers and Corporate Governance
    
    
    46Item 11. Executive Compensation
    
    
    47Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
    
    
    47Item 13. Certain Relationships and Related Transactions, and Director Independence
    
    
    47Item 14. Principal Accountant Fees and Services
    
    
    48PART IVItem 15. Exhibits and Financial Statement Schedules
    
    
    48Signatures and Certifications
    
    
    51EX-4.8EX-10.15EX-10.16EX-10.17EX-10.19EX-10.20EX-23.1EX-23.2EX-31.1EX-31.2EX-32




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TABLE OF DEFINED TERMS
 Term
    
    DefinitionABC
    
    American Bailey CorporationAIG
    
    Ammonia Injection GridASCR
    
    A trademark used to describe Fuel Techs Advanced SCR processCAAA
    
    Clean Air Act Amendments of 1990CAIR
    
    Clean Air Interstate RuleCASCADE
    
    A trademark used to describe Fuel Techs combination of SNCR and SCRCAVR
    
    Clean Air Visibility RuleCFD
    
    Computational Fluid DynamicsCommon Shares
    
    Shares of the Common Stock of Fuel TechCommon Stock
    
    Common Stock of Fuel TechEPA
    
    The U.S. Environmental Protection AgencyFGC
    
    Flue Gas ConditioningFUEL CHEM®
    
    A trademark used to describe Fuel Techs fuel and flue gas treatment processes,
including its TIFI® Targeted In-Furnace Injection technology to control
slagging, fouling, corrosion and a variety of sulfur trioxide-related issuesGSG
    
    Graduated Straightening GridHERT High Energy Reagent Technology
    
    A trademark used to describe a Fuel Tech SNCR processLoan Notes
    
    Nil-coupon, non-redeemable convertible unsecured loan notes of Fuel TechNOx
    
    Oxides of nitrogenNOxOUT®
    
    A trademark used to describe Fuel Techs SNCR process for the reduction of NOxNOxOUT-SCR®
    
    A trademark used to describe Fuel Techs direct injection of urea as a catalyst
reagentSCR
    
    Selective Catalytic ReductionSIP Call
    
    State Implementation Plan RegulationSNCR
    
    Selective Non-Catalytic ReductionTCI® Targeted Corrosion Inhibition
    
    A FUEL CHEM program designed for high-temperature slag and corrosion control,
principally in waste-to-energy boilersTIFI® Targeted In-Furnace Injection
    
    A proprietary technology that enables the precise injection of a chemical
reagent into a boiler or furnace as part of a FUEL CHEM programULTRA
    
    A trademark used to describe Fuel Techs process for generating ammonia for use
as SCR reagent




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PART I
 Forward-Looking Statements
  
 ITEM 1   BUSINESS
  Fuel Tech
  ® ®   ® 2.5 ®
 American Bailey Corporation
  1




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Air Pollution Control
 Regulations and Markets
        2




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Products
 TM
 
    
    Low NOx Burners and Ultra Low NOx Burners (LNB and ULNB) are available for coal-, oil-,
and gas-fired industrial and utility units. Each system application is specifically
designed to maximize NOx reduction. Computational fluid dynamics combustion modeling is
used to validate the design prior to fabrication of equipment. NOx reductions can range
from 40%-60% depending on the fuel type. Over-Fire Air (OFA) systems stage combustion for
enhanced NOx reduction. Additional NOx reductions, beyond Low NOx Burners, of 35% - 50%
are possible on different boiler configurations on a range of fuel types. Combined overall
reductions range from 50% - 70%, with overall capital costs ranging from $10 - $20/kW and
levelized total costs ranging from $300 - $1,500/ton of NOx removed, depending on the
scope.
 3




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
    
    Fuel Techs NOxOUT and HERT SNCR processes use non-hazardous urea as the reagent rather
than ammonia. Both the NOxOUT and HERT processes on their own are capable of reducing NOx
by up to 25%  50% for utilities and by potentially significantly greater amounts for
industrial units in many types of plants with capital costs ranging from $5  $20/kW for
utility boilers and with total annualized operating costs ranging from $1,000  $2,000/ton
of NOx removed.
 
    
    Fuel Techs Advanced Selective Catalytic Reduction (ASCR) systems include LNB, OFA, and
SNCR components, along with a downsized SCR catalyst, Ammonia Injection Grid (AIG), and
Graduated Straightening Grid (GSG) systems to provide up to 90% NOx reduction at
significantly lower capital and operating costs than conventional SCR systems while
providing greater operational flexibility to plant operators. The capital costs for ASCR
systems can range from $30  $150/kW depending on boiler size and configuration, which is
significantly less than that of conventional SCRs, which can cost $300/kW or more, while
operating costs are competitive with those experienced by SCR systems. The CASCADE and
NOxOUT-SCR® processes are basic types of ASCR systems which use just SNCR and
SCR catalyst components. The CASCADE systems can achieve 60%  70% NOx reduction, with
capital costs being a portion of the ASCR values defined above. Fuel Techs NOxOUT-SCR
process utilizes urea as the SCR catalyst reagent to achieve NOx reductions of up to 85%
from smaller stationary combustion sources with capital and operating costs competitive
with equivalently sized, standard SCR systems.
 
    
    Fuel Techs ULTRA process is designed to convert urea to ammonia safely and
economically for use as a reagent in the SCR process for NOx reduction. Recent local
objections in the ammonia permitting process have raised concerns regarding the safety of
ammonia shipment and storage in quantities sufficient to supply SCR. In addition, the
Department of Homeland Security has characterized anhydrous ammonia as a Toxic Inhalation
Hazard (TIH) commodity. This is contributing to new restrictions by rail carriers on the
movement of anhydrous ammonia and to an escalation in associated rail transport and
insurance rates. Overseas, new coal-fired power plants incorporating SCR systems are
expected to be constructed at a rapid rate in China, and Fuel Techs ULTRA process is
believed to be a market leader for the safe conversion of urea to ammonia just prior to
injection into the flue gas duct, which is particularly important near densely populated
cities, major waterways, harbors or islands, or where the transport of anhydrous or aqueous
ammonia is a safety concern.
 
    
    Under an exclusive licensing agreement with FGC Corporation, Fuel Tech sells Flue Gas
Conditioning systems incorporating FGC Corporation technology for utility applications in
all geographies outside the United States and Canada. Flue Gas Conditioning systems
improve the efficiency of particulate collectors, including electrostatic precipitators
(ESPs) and fabric filters. These conditioning systems represent a far lower capital cost
approach to improving ash particulate capture versus the alternative of installing larger
ESPs or fabric filter technology to meet opacity levels.
 
    
    Fuel Techs SCR management group provides process design optimization, performance
testing and improvement, and catalyst selection services for SCR systems on coal-fired
boilers. In addition, other related services, including start-ups, maintenance support and
general consulting services for SCR systems, Ammonia Injection Grid design and tuning to
help optimize catalyst performance, and catalyst management services to help optimize
catalyst life, are now offered to customers around the world. Fuel Tech also specializes
in both physical experimental models, which involve construction of scale models through
which fluids are tested, and computational fluid dynamics models, which simulate fluid flow
by generating a virtual replication of real-world geometry and operating inputs. Fuel Tech
designs flow corrective devices, such as turning vanes, ash screens, static mixers and our
patent pending Graduated Straightening Grid GSG. Fuel Techs models
help clients optimize performance in flow critical equipment, such as selective catalytic
reactors in SCR systems, where the effectiveness and longevity of catalysts are of utmost
concern. The Companys modeling capabilities are also applied to other power plant systems
where proper flow distribution and mixing are important for performance, such as flue gas
desulphurization scrubbers, electrostatic precipitators, air heaters, exhaust stacks and
carbon injection systems for mercury removal.
  NOx Reduction Competition
   4




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APC BACKLOG
  FUEL CHEM
 Product and Markets
 ®
 ® 3 2.5 2
  3
 3
 2
 5




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Competition
 3
 INTELLECTUAL PROPERTY
   EMPLOYEES
  6




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ITEM 1A   RISK FACTORS
    -
    
    The Air Pollution Control technology segment includes technologies to reduce NOx
emissions in flue gas from boilers, incinerators, furnaces and other stationary combustion
sources. These include Low and Ultra Low NOx Burners (LNB and ULNB), Over-Fire Air (OFA)
systems, NOxOUT® and HERT Selective Non-Catalytic Reduction (SNCR)
systems, and Advanced Selective Catalytic Reduction (ASCR) systems. The ASCR
system includes ULNB, OFA, and SNCR components, along with a downsized SCR catalyst,
Ammonia Injection Grid (AIG), and Graduated Straightening Grid
(GSG) systems to
provide high NOx reductions at significantly lower capital and operating costs than
conventional SCR systems. The CASCADE and NOxOUT-SCR® processes
are basic types of ASCR systems, using just SNCR and SCR catalyst components. ULTRA
technology creates ammonia at a plant site using safe urea for use with any SCR
application. Flue Gas Conditioning systems are chemical injection systems offered in
markets outside the U.S. and Canada to enhance electrostatic precipitator and fabric
filter performance in controlling particulate emissions.
 -

    
    The FUEL CHEM® technology segment, which uses chemical processes in
combination with advanced Computational Fluid Dynamics (CFD) and Chemical Kinetics
Modeling (CKM) boiler modeling, for the control of slagging, fouling, corrosion, opacity
and other sulfur trioxide-related issues in furnaces and boilers through the addition of
chemicals into the furnace using TIFI®Targeted In-Furnace Injection
technology.
   Products NOx Reduction Competition Air Pollution Control
 3
  Regulations and Markets Air Pollution Control
   7




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Organization and Significant Accounting Policies, Risk
Concentrations
   
 ITEM 1B   UNRESOLVED STAFF COMMENTS
  8




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ITEM 2   PROPERTIES
   -

    
    The Stamford, Connecticut building lease term, for approximately 6,440 square feet,
runs from February 1, 2010 to December 31, 2019. The facility houses certain
administrative functions such as Investor Relations and certain APC sales functions.
This lease replaces the prior facility lease for a separate location in Stamford which
expired on January 31, 2010.
 -

    
    The Beijing, China building lease term, for approximately 5,800 square feet, runs
from September 1, 2010 to August 31, 2011. This facility serves as the operating
headquarters for our Beijing Fuel Tech operation. Fuel Tech has the option to extend the
lease term at a market rate to be agreed upon between Fuel Tech and the lessor.
 -

    
    The Durham, North Carolina building lease term, for approximately 16,000 square
feet, runs from November 1, 2005 to April 30, 2014. Fuel Tech has no option to extend
the lease.
 -

    
    The Gallarate, Italy building lease term, for approximately 1,300 square feet, runs
from July 1, 2005 to April 30, 2013. This facility serves as the operating headquarters
for our Italy operations.
 
 ITEM 3   LEGAL PROCEEDINGS
  9




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PART II
 
 ITEM 5   MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASE OF
EQUITY SECURITIES
 Market
  Prices
  2010
    
    High
    
    LowFourth Quarter
    
    $
    10.04
    
    
    $
    5.95Third Quarter
    
    
    6.81
    
    
    
    5.36Second Quarter
    
    
    8.41
    
    
    
    5.15First Quarter
    
    
    9.29
    
    
    
    5.27
 2009
    
    High
    
    LowFourth Quarter
    
    $
    12.65
    
    
    $
    7.51Third Quarter
    
    
    12.55
    
    
    
    7.90Second Quarter
    
    
    14.15
    
    
    
    9.28First Quarter
    
    
    12.23
    
    
    
    7.01
 Dividends
  Share Repurchase Program
  Holders
  Transfer Agent
  10




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Performance Graph
  
 11




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ITEM 6   SELECTED FINANCIAL DATA
  CONSOLIDATED STATEMENT of OPERATIONS DATA(in thousands of dollars, except for share
    
    For the years ended December 31and per- share data)
    
    2010
    
    2009
    
    2008
    
    2007
    
    2006Revenues
    
    $
    81,795
    
    
    $
    71,397
    
    
    $
    81,074
    
    
    $
    80,297
    
    
    $
    75,115Cost of sales
    
    
    46,821
    
    
    
    42,444
    
    
    
    44,345
    
    
    
    42,471
    
    
    
    38,429Selling, general and administrative and
other costs and expenses
    
    
    31,037
    
    
    
    32,034
    
    
    
    30,502
    
    
    
    27,087
    
    
    
    25,953Operating income (loss)
    
    
    3,937
    
    
    
    (3,081
    )
    
    
    6,227
    
    
    
    10,739
    
    
    
    10,733Net income (loss)
    
    
    1,753
    
    
    
    (2,306
    )
    
    
    3,360
    
    
    
    7,243
    
    
    
    6,826Basic income (loss) per common share
    
    $
    0.07
    
    
    $
    (0.10
    )
    
    $
    0.14
    
    
    $
    0.33
    
    
    $
    0.32Diluted income (loss) per common share
    
    $
    0.07
    
    
    $
    (0.10
    )
    
    $
    0.14
    
    
    $
    0.29
    
    
    $
    0.28Weighted-average basic shares outstanding
    
    
    24,213,000
    
    
    
    24,148,000
    
    
    
    23,608,000
    
    
    
    22,280,000
    
    
    
    21,491,000Weighted-average diluted shares outstanding
    
    
    24,405,000
    
    
    
    24,148,000
    
    
    
    24,590,000
    
    
    
    24,720,000
    
    
    
    24,187,000
 CONSOLIDATED BALANCE SHEET DATA
    
    December 31(in thousands of dollars)
    
    2010
    
    2009
    
    2008
    
    2007
    
    2006Working capital
    
    $
    36,645
    
    
    $
    30,578
    
    
    $
    43,956
    
    
    $
    45,143
    
    
    $
    38,715Total assets
    
    
    103,203
    
    
    
    92,262
    
    
    
    88,631
    
    
    
    87,214
    
    
    
    65,660Long-term obligations
    
    
    1,482
    
    
    
    2,196
    
    
    
    1,389
    
    
    
    1,255
    
    
    
    500Total liabilities
    
    
    19,293
    
    
    
    14,040
    
    
    
    15,056
    
    
    
    23,975
    
    
    
    18,005Stockholders equity (1)
    
    
    83,910
    
    
    
    78,222
    
    
    
    73,575
    
    
    
    63,239
    
    
    
    47,655
 
 Notes:(1)
    
    Stockholders equity includes the principal amount of nil coupon non-redeemable perpetual
loan notes. See Note 5 to the consolidated financial statements. 12




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ITEM 7  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (amounts in thousands of dollars)
 Background
  Air Pollution Control Technologies
 ®  TM ®
 FUEL CHEM Technologies
 ® ®
  Critical Accounting Policies and Estimates
  Revenue Recognition
   13




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Allowance for Doubtful Accounts
  Assessment of Potential Impairments of Goodwill and Intangible Assets
     14




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Impairment of Long-Lived Assets and Amortizable Intangible Assets
  Valuation Allowance for Deferred Income Taxes
  Stock-Based Compensation
  Recently Adopted Accounting Standards
   15




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2010 versus 2009
        -
    
    Personnel and other expenses related to the reduction and restructuring of the workforce
decreased $1,012 for fiscal 2010.-
    
    Stock compensation expense decreased $1,782 due to the full vesting of options with a
comparative higher value than recent grants.
 16




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-
    
    Fees paid to outside service providers decreased $501 as a result of strategic hiring
and cost containment measures.-
    
    Depreciation decreased year over year $243 as a result of an accelerated leasehold
improvement that was terminated in January 2010.-
    
    Partially offsetting these amounts was an increase of $1,389 relating to the
implementation of new incentive programs for domestic and international employees, and-
    
    Internal and external commissions increased $740 as a result of increased revenue from
both of the product segments.
    2009 versus 2008
      17




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-
    
    Personnel and other expenses related to the acquisitions of substantially all of the
assets of Tackticks LLC, FlowTack LLC, and ACT contributed additional incremental expenses
of $2,292 for fiscal 2009.-
    
    The implementation of a new sales commission program for both the APC and FUEL CHEM
technology segments resulted in an increase of $793 in commission expense.-
    
    The Company also incurred year-over-year increases in depreciation expense of $395
driven by the acceleration of leasehold improvement amortization expense related to the
termination of the current Stamford office lease, legal fees of $250 due to international
contracts and acquisition-related activities, and accounting and auditing fees of $109
primarily related to acquisition-related activities.-
    
    Partially offsetting these amounts was a $781 gain from the revaluation of the
contingent liability related to the ACT acquisition.
    Liquidity and Sources of Capital
      18




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19




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Contractual Obligations and Commitments
  Contractual Cash
    
    Payments due by period in thousands of dollarsObligations
    
    Total
    
    2011
    
    2012-2013
    
    2014-2015
    
    ThereafterShort-term debt
obligations
    
    $
    2,269
    
    
    $
    2,269
    
    
    $
    
    
    
    $
    
    
    
    $
    Estimated interest
payments on debt
obligations*
    
    
    68
    
    
    
    68
    
    
    
    
    
    
    
    
    
    
    
    Operating lease
obligations
    
    
    3,422
    
    
    
    629
    
    
    
    1,016
    
    
    
    617
    
    
    
    1,160Total
    
    $
    5,759
    
    
    $
    2,966
    
    
    $
    1,016
    
    
    $
    617
    
    
    $
    1,160
  *
    
    Debt obligations consist solely of borrowings under the Companys Chinese revolving credit
facility which bears interest at a rate of 120% of the Peoples Bank of China (PBOC) Base Rate, or
5.8%, at December 31, 2010.
   -
    
    in support of the warranty period defined in the contract; or-
    
    in support of the system performance criteria that are defined in the contract.
  Commercial
    
    Commitment expiration by period in thousands of dollarsCommitments
    
    Total
    
    2011
    
    2012-2013
    
    2014-2015
    
    ThereafterStandby letters of
credit and bank
guarantees
    
    $
    1,265
    
    
    $
    584
    
    
    $
    681
    
    
    $
    
    
    
    $
    Performance Surety
Bonds
    
    $
    2,156
    
    
    $
    2,156
    
    
    $
    
    
    
    $
    
    
    
    $
    Total
    
    $
    3,421
    
    
    $
    2,740
    
    
    $
    681
    
    
    $
    
    
    
    $
    
 Off-Balance-Sheet Transactions
  
 ITEM 7A  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
   20




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ITEM 8  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 Report of Independent Registered Public Accounting Firm
 
 Internal Control  Integrated Framework
  (a) (b) (c)
  Internal Control
 Integrated Framework
  
 21




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Report of Independent Registered Public Accounting Firm
 
     
 22




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Fuel Tech, Inc.
Consolidated Balance Sheets  in thousands of dollars, except share and per-share data
 December 31,2010
    
    2009ASSETSCurrent assets:Restricted cash
    
    $
    
    
    
    $
    200Cash and cash equivalents
    
    
    30,524
    
    
    
    20,965Accounts receivable, net of allowance for doubtful accounts of $82 and
$70, respectively
    
    
    21,175
    
    
    
    17,877Inventories
    
    
    807
    
    
    
    450Deferred income taxes
    
    
    89
    
    
    
    636Prepaid expenses and other current assets
    
    
    1,861
    
    
    
    2,294Total current assets
    
    
    54,456
    
    
    
    42,422Property and equipment, net of accumulated depreciation of $15,767 and
$14,562, respectively
    
    
    14,384
    
    
    
    15,549Goodwill
    
    
    21,051
    
    
    
    21,051Other intangible assets, net of accumulated amortization of $3,203 and
$2,817, respectively
    
    
    6,050
    
    
    
    6,749Deferred income taxes
    
    
    5,000
    
    
    
    4,183Other assets
    
    
    2,262
    
    
    
    2,308Total assets
    
    $
    103,203
    
    
    $
    92,262LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Short-term debt
    
    $
    2,269
    
    
    $
    2,925Accounts payable
    
    
    7,516
    
    
    
    5,824Accrued liabilities:Employee compensation
    
    
    2,863
    
    
    
    671Income taxes payable
    
    
    1,857
    
    
    
    Other accrued liabilities
    
    
    3,306
    
    
    
    2,424Total current liabilities
    
    
    17,811
    
    
    
    11,844Other liabilities
    
    
    1,482
    
    
    
    2,196Total liabilities
    
    
    19,293
    
    
    
    14,040Stockholders equity:Common stock, $.01 par value, 40,000,000 shares authorized,
24,213,467 and 24,211,967 shares issued and outstanding, respectively
    
    
    242
    
    
    
    242Additional paid-in capital
    
    
    129,424
    
    
    
    125,458Accumulated deficit
    
    
    (46,075
    )
    
    
    (47,828
    )Accumulated other comprehensive income
    
    
    243
    
    
    
    269Nil coupon perpetual loan notes
    
    
    76
    
    
    
    81Total stockholders equity
    
    
    83,910
    
    
    
    78,222Total liabilities and stockholders equity
    
    $
    103,203
    
    
    $
    92,262
  23




---



##### Table of Contents



Fuel Tech, Inc.
Consolidated Statements of Operations  in thousands of dollars, except share and per-share data
 For the years ended December 31,2010
    
    2009
    
    2008Revenues
    
    $
    81,795
    
    
    $
    71,397
    
    
    $
    81,074Costs and expenses:Cost of sales
    
    
    46,821
    
    
    
    42,444
    
    
    
    44,345Selling, general and administrative
    
    
    30,857
    
    
    
    32,273
    
    
    
    28,402Gain on revaluation of ACT liability
    
    
    (768
    )
    
    
    (781
    )
    
    
    Research and development
    
    
    948
    
    
    
    542
    
    
    
    2,10077,858
    
    
    
    74,478
    
    
    
    74,847Operating income (loss)
    
    
    3,937
    
    
    
    (3,081
    )
    
    
    6,227Interest expense
    
    
    (143
    )
    
    
    (120
    )
    
    
    (135
    )Interest income
    
    
    11
    
    
    
    32
    
    
    
    741Other expense
    
    
    (119
    )
    
    
    (241
    )
    
    
    (226
    )Income (loss) before taxes
    
    
    3,686
    
    
    
    (3,410
    )
    
    
    6,607Income tax (expense) benefit
    
    
    (1,933
    )
    
    
    1,104
    
    
    
    (3,247
    )Net income (loss)
    
    $
    1,753
    
    
    $
    (2,306
    )
    
    $
    3,360Net income (loss) per common share:Basic
    
    $
    0.07
    
    
    $
    (0.10
    )
    
    $
    0.14Diluted
    
    $
    0.07
    
    
    $
    (0.10
    )
    
    $
    0.14Weighted-average number of common shares outstanding:Basic
    
    
    24,213,000
    
    
    
    24,148,000
    
    
    
    23,608,000Diluted
    
    
    24,405,000
    
    
    
    24,148,000
    
    
    
    24,590,000
  24




---



##### Table of Contents



Fuel Tech, Inc.
Consolidated Statements of Stockholders Equity  in thousands of dollars or shares, as appropriate
 AccumulatedAdditional
    
    
    
    
    
    
    Other
    
    
    Nil CouponCommon Stock
    
    
    Paid-in
    
    
    Accumulated
    
    
    Comprehensive
    
    
    PerpetualShares
    
    
    Amount
    
    
    Capital
    
    
    Deficit
    
    
    Income (Loss)
    
    
    Loan Notes
    
    
    TotalBalance at
December 31, 2007
    
    
    22,410
    
    
    $
    224
    
    
    $
    111,459
    
    
    $
    (48,882
    )
    
    $
    166
    
    
    $
    272
    
    
    $
    63,239Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,360
    
    
    
    
    
    
    
    
    
    
    
    3,360Foreign currency
translation adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    21
    
    
    
    
    
    
    
    21Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,381Exercise of stock
options and warrants
    
    
    1,657
    
    
    
    17
    
    
    
    602
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    619Conversion of nil coupon
perpetual loan notes into
Common Shares
    
    
    44
    
    
    
    
    
    
    
    191
    
    
    
    
    
    
    
    
    
    
    
    (191
    )
    
    
    Tax benefit from stock
compensation expense
    
    
    
    
    
    
    
    
    
    
    548
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    548Stock compensation expense
    
    
    
    
    
    
    
    
    
    
    5,815
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,815Issuance of deferred
shares of stock
    
    
    
    
    
    
    
    
    
    
    73
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    73Reclassification of liability award
    
    
    
    
    
    
    
    
    
    
    (100
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (100
    )Balance at
December 31, 2008
    
    
    24,111
    
    
    $
    241
    
    
    $
    118,588
    
    
    $
    (45,522
    )
    
    $
    187
    
    
    $
    81
    
    
    $
    73,575Comprehensive loss:Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,306
    )
    
    
    
    
    
    
    
    
    
    
    (2,306
    )Foreign currency
translation adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    82
    
    
    
    
    
    
    
    82Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,224
    )Exercise of stock
options
    
    
    101
    
    
    
    1
    
    
    
    605
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    606Conversion of nil coupon
perpetual loan notes into
Common Shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Tax benefit from stock
compensation expense
    
    
    
    
    
    
    
    
    
    
    78
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    78Stock compensation expense
    
    
    
    
    
    
    
    
    
    
    6,011
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,011Issuance of deferred shares of stock
    
    
    
    
    
    
    
    
    
    
    86
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    86Reclassification of liability award
    
    
    
    
    
    
    
    
    
    
    90
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    90Balance at
December 31, 2009
    
    
    24,212
    
    
    $
    242
    
    
    $
    125,458
    
    
    $
    (47,828
    )
    
    $
    269
    
    
    $
    81
    
    
    $
    78,222Comprehensive loss:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,753
    
    
    
    
    
    
    
    
    
    
    
    1,753Foreign currency
translation adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (26
    )
    
    
    
    
    
    
    (26
    )Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,727Exercise of stock
Options
    
    
    1
    
    
    
    
    
    
    
    10
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10Repurchase of nil coupon
perpetual loan notes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5
    )
    
    
    (5
    )Tax benefit from stock
compensation expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Stock compensation expense
    
    
    
    
    
    
    
    
    
    
    4,179
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,179Issuance of deferred shares of stock
    
    
    
    
    
    
    
    
    
    
    95
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    95Expiration of fully vested options
    
    
    
    
    
    
    
    
    
    
    (318
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (318
    )Balance at
December 31, 2010
    
    
    24,213
    
    
    $
    242
    
    
    $
    129,424
    
    
    $
    (46,075
    )
    
    $
    243
    
    
    $
    76
    
    
    $
    83,910
  25




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##### Table of Contents



Fuel Tech, Inc.
Consolidated Statements of Cash Flows  in thousands of dollars
 For the years ended December 31,2010
    
    2009
    
    2008OPERATING ACTIVITIESNet income (loss)
    
    $
    1,753
    
    
    $
    (2,306
    )
    
    $
    3,360Adjustments to reconcile net income to net cash provided by operating
activities:Depreciation
    
    
    3,195
    
    
    
    3,796
    
    
    
    2,810Amortization
    
    
    886
    
    
    
    1,312
    
    
    
    184Loss on equipment disposals/impaired assets
    
    
    20
    
    
    
    94
    
    
    
    35Gain on revaluation of ACT liability
    
    
    (768
    )
    
    
    (781
    )
    
    
    Deferred income tax
    
    
    (588
    )
    
    
    (1,492
    )
    
    
    814Stock compensation expense
    
    
    4,179
    
    
    
    6,011
    
    
    
    5,815Deferred director fees
    
    
    95
    
    
    
    
    
    
    
    Changes in operating assets and liabilities:Accounts receivable
    
    
    (3,365
    )
    
    
    5,488
    
    
    
    8,491Inventories
    
    
    (354
    )
    
    
    563
    
    
    
    (828
    )Prepaid expenses, other current assets and other noncurrent assets
    
    
    (27
    )
    
    
    3,293
    
    
    
    (3,509
    )Accounts payable
    
    
    1,765
    
    
    
    (2,372
    )
    
    
    (5,436
    )Accrued liabilities and other noncurrent liabilities
    
    
    5,379
    
    
    
    (113
    )
    
    
    (3,720
    )Other
    
    
    20
    
    
    
    34
    
    
    
    31Net cash provided by operating activities
    
    
    12,190
    
    
    
    13,527
    
    
    
    8,047INVESTING ACTIVITIESProceeds from sales of short-term investments
    
    
    
    
    
    
    
    
    
    
    1,998Decrease (increase) in restricted cash
    
    
    200
    
    
    
    (200
    )
    
    
    Purchases of property, equipment and patents
    
    
    (2,206
    )
    
    
    (2,004
    )
    
    
    (9,839
    )Acquisitions of businesses
    
    
    
    
    
    
    (20,185
    )
    
    
    (3,928
    )Net cash used in investing activities
    
    
    (2,006
    )
    
    
    (22,389
    )
    
    
    (11,769
    )FINANCING ACTIVITIES(Payments) / proceeds from debt
    
    
    (737
    )
    
    
    737
    
    
    
    137Proceeds from exercise of stock options and warrants
    
    
    10
    
    
    
    605
    
    
    
    619Reclassification of liability award
    
    
    
    
    
    
    90
    
    
    
    Excess tax benefit for stock-based compensation
    
    
    
    
    
    
    78
    
    
    
    548Other
    
    
    (5
    )
    
    
    86
    
    
    
    73Net cash (used in) provided by financing activities
    
    
    (732
    )
    
    
    1,596
    
    
    
    1,377Effect of exchange rate fluctuations on cash
    
    
    107
    
    
    
    82
    
    
    
    21Net increase (decrease) in cash and cash equivalents
    
    
    9,559
    
    
    
    (7,184
    )
    
    
    (2,324
    )Cash and cash equivalents at beginning of year
    
    
    20,965
    
    
    
    28,149
    
    
    
    30,473Cash and cash equivalents at end of year
    
    $
    30,524
    
    
    $
    20,965
    
    
    $
    28,149Supplemental Cash Flow Information:Non-cash activities:(Decrease) increase in contingent consideration payable
    
    $
    
    
    
    $
    2,307
    
    
    $
    Cash paid for:Interest
    
    $
    143
    
    
    $
    120
    
    
    $
    135Income taxes paid
    
    $
    297
    
    
    $
    195
    
    
    $
    5,905
  26




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##### Table of Contents



Notes to Consolidated Financial Statements
 in thousands of dollars, except share and per-share data
 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
 Organization
    Basis of Presentation
  Use of Estimates
  Reclassifications
  Fair Value of Financial Instruments
  Cash and Cash Equivalents
  Foreign Currency Risk Management
  27




---



##### Table of Contents



Accounts Receivable
  Allowance for Doubtful Accounts
  Balance at
    
    Provision charged
    
    Write-offs /
    
    Balance atYear
    
    January 1
    
    to expense
    
    Recoveries
    
    December 312008
    
    $
    150
    
    
    $
    
    
    
    $
    (70
    )
    
    $
    802009
    
    $
    80
    
    
    $
    41
    
    
    $
    (51
    )
    
    $
    702010
    
    $
    70
    
    
    $
    50
    
    
    $
    (38
    )
    
    $
    82
 Inventories
  Foreign Currency Translation and Transactions
  Comprehensive Income
  Research and Development
  Product/System Warranty
  Goodwill and Other Intangibles
  28




---



##### Table of Contents



2010
    
    2009Gross
    
    
    
    
    
    Net
    
    Gross
    
    
    
    
    
    NetDescription of
    
    Amortization
    
    Carrying
    
    Accumulated
    
    Carrying
    
    Carrying
    
    Accumulated
    
    CarryingOther Intangible
    
    Period
    
    Amount
    
    Amortization
    
    Amount
    
    Amount
    
    Amortization
    
    AmountCustomer list
    
    3-15 years
    
    $
    4,567
    
    
    $
    (1,337
    )
    
    $
    3,230
    
    
    $
    4,567
    
    
    $
    (890
    )
    
    $
    3,677Tradenames
    
    8 years
    
    
    351
    
    
    
    (88
    )
    
    
    263
    
    
    
    351
    
    
    
    (44
    )
    
    
    307Patent assets
    
    8-10 years
    
    
    2,228
    
    
    
    (1,131
    )
    
    
    1,097
    
    
    
    2,041
    
    
    
    (1,029
    )
    
    
    1,012Covenant not to
complete
    
    5-6 years
    
    
    376
    
    
    
    (162
    )
    
    
    214
    
    
    
    476
    
    
    
    (191
    )
    
    
    285Technologies
    
    7-8 years
    
    
    1,731
    
    
    
    (485
    )
    
    
    1,246
    
    
    
    1,731
    
    
    
    (263
    )
    
    
    1,468Miscellaneous
    
    Less than 1 year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    400
    
    
    
    (400
    )
    
    
    Total
    
    
    
    $
    9,253
    
    
    $
    (3,203
    )
    
    $
    6,050
    
    
    $
    9,566
    
    
    $
    (2,817
    )
    
    $
    6,749
  EstimatedAmortizationYear
    
    Expense2011
    
    $
    9312012
    
    
    8972013
    
    
    8322014
    
    
    7692015
    
    
    737Thereafter
    
    
    1884Total
    
    $
    6,050
 29




---



##### Table of Contents



Property and Equipment
  DepreciableDescription of Property and Equipment
    
    Life
    
    
    2010
    
    
    2009Land
    
    
    
    
    
    $
    1,440
    
    
    $
    1,440Building
    
    39 years
    
    
    4,535
    
    
    
    4,535Building and leasehold improvements
    
    3-39 years
    
    
    4,425
    
    
    
    4,632Field equipment
    
    3-4 years
    
    
    14,630
    
    
    
    14,448Computer equipment and software
    
    2-3 years
    
    
    3,663
    
    
    
    3,596Furniture and fixtures
    
    3-10 years
    
    
    1,436
    
    
    
    1,438Vehicles
    
    5 years
    
    
    22
    
    
    
    22Total cost
    
    
    
    
    
    
    30,151
    
    
    
    30,111Less accumulated depreciation
    
    
    
    
    
    
    (15,767
    )
    
    
    (14,562
    )Total net book value
    
    
    
    
    
    $
    14,384
    
    
    $
    15,549
  Revenue Recognition
   Cost of Sales
  30




---



##### Table of Contents



Selling, General and Administrative Expenses
  Distribution Costs
  Income Taxes
   Stock-Based Compensation
  Basic and Diluted Earnings (Loss) per Common Share
  2010
    
    2009
    
    2008Basic weighted-average shares
    
    
    24,213,000
    
    
    
    24,148,000
    
    
    
    23,608,000Conversion of unsecured loan notes
    
    
    7,000
    
    
    
    
    
    
    
    43,000Unexercised options and warrants
    
    
    185,000
    
    
    
    
    
    
    
    939,000Diluted weighted-average shares
    
    
    24,405,000
    
    
    
    24,148,000
    
    
    
    24,590,000
 31




---



##### Table of Contents



Risk Concentrations
      Recently Issued and Adopted Accounting Standards
    32




---



##### Table of Contents



2. CONSTRUCTION CONTRACTS IN PROGRESS
  2010
    
    
    2009Costs incurred on uncompleted contracts
    
    $
    19,928
    
    
    $
    12,608Estimated earnings
    
    
    10,305
    
    
    
    8,556Earned revenue
    
    
    30,233
    
    
    
    21,164Less billings to date
    
    
    (24,083
    )
    
    
    (13,666
    )Total
    
    $
    6,150
    
    
    $
    7,498Classified as follows:Costs and estimated earnings in excess of billings on
uncompleted contracts
    
    $
    6,800
    
    
    $
    7,814Billings in excess of costs and estimated earnings on
uncompleted contracts
    
    
    (650
    )
    
    
    (316
    )Total
    
    $
    6,150
    
    
    $
    7,498
   3. TAXATION
  2010
    
    2009
    
    2008Origin of income (loss) before taxesUnited States
    
    $
    4,144
    
    
    $
    (3,378
    )
    
    $
    7,963Foreign
    
    
    (458
    )
    
    
    (32
    )
    
    
    (1,356
    )Income (loss) before taxes
    
    $
    3,686
    
    
    $
    (3,410
    )
    
    $
    6,607
  2010
    
    2009
    
    2008Current:Federal
    
    $
    2,520
    
    
    $
    195
    
    
    $
    1,395State
    
    
    414
    
    
    
    28
    
    
    
    411Foreign
    
    
    103
    
    
    
    
    
    
    
    (84
    )Total current
    
    
    3,037
    
    
    
    223
    
    
    
    1,722Deferred:Federal
    
    
    (1,051
    )
    
    
    (1,219
    )
    
    
    1,464State
    
    
    (97
    )
    
    
    (108
    )
    
    
    61Foreign
    
    
    44
    
    
    
    
    
    
    
    Total deferred
    
    
    (1,104
    )
    
    
    (1,327
    )
    
    
    1,525Income tax expense (benefit)
    
    $
    1,933
    
    
    $
    (1,104
    )
    
    $
    3,247
 33




---



##### Table of Contents



2010
    
    2009
    
    2008Provision at the U.S. federal statutory rate
    
    
    35.0
    %
    
    
    (35.0
    )%
    
    
    35.0
    %State taxes, net of federal benefit
    
    
    3.9
    %
    
    
    (2.2
    )%
    
    
    4.5
    %Foreign losses without tax benefit
    
    
    0.6
    %
    
    
    0.3
    %
    
    
    5.9
    %Valuation allowance
    
    
    6.5
    %
    
    
    0.0
    %
    
    
    0.0
    %Research credits
    
    
    0.0
    %
    
    
    (1.8
    )%
    
    
    (1.2
    )%Stock-based compensation
    
    
    4.4
    %
    
    
    4.1
    %
    
    
    3.7
    %Other
    
    
    2.0
    %
    
    
    2.2
    %
    
    
    1.2
    %Income tax expense (benefit) effective rate
    
    
    52.4
    %
    
    
    (32.4
    )%
    
    
    49.1
    %
  2010
    
    2009Deferred tax assets:Stock compensation expense
    
    $
    7,442
    
    
    $
    6,302Research and development credit
    
    
    
    
    
    
    513Alternative minimum tax credit
    
    
    
    
    
    
    275Warranty reserve
    
    
    82
    
    
    
    76Accounts receivable
    
    
    31
    
    
    
    27Vacation accrual
    
    
    80
    
    
    
    45Commissions and other accruals
    
    
    177
    
    
    
    Deferred rent liability
    
    
    52
    
    
    
    25Intangible assets
    
    
    403
    
    
    
    283Other
    
    
    
    
    
    
    30Net operating loss carryforwards
    
    
    1,102
    
    
    
    1,001Total deferred tax assets
    
    
    9,369
    
    
    
    8,577Deferred tax liabilities:Equipment
    
    
    (1,243
    )
    
    
    (1,200
    )Prepaid expenses
    
    
    (110
    )
    
    
    (123
    )Patents
    
    
    (195
    )
    
    
    (126
    )Goodwill
    
    
    (1,630
    )
    
    
    (1,132
    )Total deferred tax liabilities
    
    
    (3,178
    )
    
    
    (2,581
    )Net deferred tax asset before valuation allowance
    
    
    6,191
    
    
    
    5,996Valuation allowances for deferred tax assets
    
    
    (1,102
    )
    
    
    (1,177
    )Net deferred tax asset
    
    $
    5,089
    
    
    $
    4,819
  Current assets
    
    $
    89
    
    
    $
    636Long-term assets
    
    
    5,000
    
    
    
    4,183Net deferred tax asset
    
    $
    5,089
    
    
    $
    4,819
  Balance at
    
    Charged to costs
    
    
    
    
    
    Balance atYear
    
    January 1
    
    and expenses
    
    (Deductions)/Other
    
    December 312008
    
    $
    1,218
    
    
    
    
    
    
    
    203
    
    
    $
    1,4212009
    
    $
    1,421
    
    
    
    
    
    
    
    (244
    )
    
    $
    1,1772010
    
    $
    1,177
    
    
    
    
    
    
    
    (75
    )
    
    $
    1,102
 34




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##### Table of Contents



Description
    
    2010
    
    2009
    
    2008Balance at beginning of period
    
    $
    724
    
    
    $
    713
    
    
    $
    678Increases in positions taken in a prior period
    
    
    
    
    
    
    11
    
    
    
    Decreases in positions taken in a prior period
    
    
    
    
    
    
    
    
    
    
    Increases in positions taken in a current period
    
    
    60
    
    
    
    
    
    
    
    35Decreases in positions taken in a current period
    
    
    
    
    
    
    
    
    
    
    Decreases due to settlements
    
    
    
    
    
    
    
    
    
    
    Decreases due to lapse of statute of limitations
    
    
    (120
    )
    
    
    
    
    
    
    Balance at end of period
    
    $
    664
    
    
    $
    724
    
    
    $
    713
      4. COMMON SHARES
   35




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##### Table of Contents



5. NIL COUPON NON-REDEEMABLE CONVERTIBLE UNSECURED LOAN NOTES
   6. STOCK-BASED COMPENSATION
   For the Year Ended December 31,2010
    
    2009
    
    2008Stock options
    
    $
    4,170
    
    
    $
    6,011
    
    
    $
    5,815Restricted stock units
    
    
    9
    
    
    
    
    
    
    
    Total stock-based compensation expense
    
    
    4,179
    
    
    
    6,011
    
    
    
    5,815Tax benefit of stock-based compensation expense
    
    
    (1,412
    )
    
    
    (2,083
    )
    
    
    (1,933
    )After-tax effect of stock based compensation
    
    $
    2,767
    
    
    $
    3,928
    
    
    $
    3,882
  Stock Options
   36




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##### Table of Contents



2010
    
    2009
    
    2008Expected dividend yield
    
    
    0.00
    %
    
    
    0.00
    %
    
    
    0.00
    %Risk-free interest rate
    
    
    1.74
    %
    
    
    2.46
    %
    
    
    2.85
    %Expected volatility
    
    
    67.7
    %
    
    
    68.0
    %
    
    
    59.3
    %Expected life of option
    
    5.5
    years
    
    5.1
    years
    
    5.2
    years
  2010
    
    2009
    
    2008Number
    
    Weighted-
    
    Number
    
    Weighted-
    
    Number
    
    Weighted-of
    
    Average
    
    of
    
    Average
    
    of
    
    AverageOptions
    
    Exercise Price
    
    Options
    
    Exercise Price
    
    Options
    
    Exercise PriceOutstanding at beginning of year
    
    
    3,051,125
    
    
    $
    15.28
    
    
    
    2,905,325
    
    
    $
    16.30
    
    
    
    2,464,325
    
    
    $
    15.03Granted
    
    
    110,000
    
    
    
    5.71
    
    
    
    510,000
    
    
    
    9.96
    
    
    
    757,250
    
    
    
    18.05Exercised
    
    
    (1,500
    )
    
    
    6.35
    
    
    
    (101,000
    )
    
    
    5.84
    
    
    
    (171,125
    )
    
    
    3.61Expired or forfeited
    
    
    (303,500
    )
    
    
    17.51
    
    
    
    (263,200
    )
    
    
    18.82
    
    
    
    (145,125
    )
    
    
    18.69Outstanding at end of year
    
    
    2,856,125
    
    
    $
    14.68
    
    
    
    3,051,125
    
    
    $
    15.28
    
    
    
    2,905,325
    
    
    $
    16.30Exercisable at end of year
    
    
    2,277,625
    
    
    $
    14.98
    
    
    
    1,784,000
    
    
    $
    14.28
    
    
    
    1,461,700
    
    
    $
    12.92Weighted-average fair value of
options granted during the year
    
    
    
    
    
    $
    3.38
    
    
    
    
    
    
    $
    5.83
    
    
    
    
    
    
    $
    9.65
  Weighted-AverageNumber
    
    Weighted-
    
    Remainingof
    
    Average
    
    Contractual
    
    AggregateOptions
    
    Exercise Price
    
    Term
    
    Intrinsic ValueOutstanding on January 1, 2010
    
    
    3,051,125
    
    
    $
    15.28Granted
    
    
    110,000
    
    
    
    5.71Exercised
    
    
    (1,500
    )
    
    
    6.35
    
    
    
    
    
    
    $
    2Expired or forfeited
    
    
    (303,500
    )
    
    
    17.51Outstanding on December 31, 2010
    
    
    2,856,125
    
    
    $
    14.68
    
    
    5.8
    years
    
    $
    3,572Exercisable on December 31, 2010
    
    
    2,277,625
    
    
    $
    14.98
    
    
    5.3
    years
    
    $
    3,408
 37




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##### Table of Contents



Options Outstanding
    
    
    
    
    
    Options ExercisableWeighted-Average
    
    Weighted-
    
    
    
    
    
    Weighted-Range of
    
    
    
    Number of
    
    Remaining
    
    Average
    
    Number of
    
    AverageExercise Prices
    
    
    
    Options
    
    Contractual Life
    
    Exercise Price
    
    Options
    
    Exercise Price$
    2.76  - $5.51
    
    
    
    
    
    485,000
    
    
    4.1
    years
    
    $
    4.44
    
    
    
    485,000
    
    
    $
    4.44$
    5.52  - $11.03
    
    
    
    
    
    872,375
    
    
    6.4
    years
    
    
    8.72
    
    
    
    530,000
    
    
    
    8.15$
    11.04  - $22.06
    
    
    
    
    
    617,000
    
    
    6.2
    years
    
    
    16.03
    
    
    
    434,750
    
    
    
    15.39$
    22.07  - $27.57
    
    
    
    
    
    881,750
    
    
    5.9
    years
    
    
    25.27
    
    
    
    827,875
    
    
    
    25.31$
    2.76  - $27.57
    
    
    
    
    
    2,856,125
    
    
    5.8
    years
    
    $
    14.68
    
    
    
    2,277,625
    
    
    $
    14.98
  Non-Vested Stock
    
    Weighted-AverageOptions
    
    Grant DateOutstanding
    
    Fair ValueOutstanding on January 1, 2010
    
    
    1,267,125
    
    
    $
    9.20Granted
    
    
    110,000
    
    
    
    3.38Vested
    
    
    (535,875
    )
    
    
    9.83Forfeited
    
    
    (262,750
    )
    
    
    9.21Outstanding on December 31, 2010
    
    
    578,500
    
    
    $
    7.50
    Restricted Stock Units
   Weighted AverageGrant DateShares
    
    
    Fair ValueUnvested restricted stock units at December 31, 2009
    
    
    
    
    
    $
    Granted
    
    
    149,000
    
    
    
    8.63Forfeited
    
    
    
    
    
    
    Vested
    
    
    
    
    
    
    Unvested restricted stock units at December 31, 2010
    
    
    149,000
    
    
    $
    8.63
 38




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##### Table of Contents



Deferred Directors Fees
  7. COMMITMENTS
 Operating Leases
  Year of Payment
    
    Amount2011
    
    $
    6292012
    
    
    5362013
    
    
    4802014
    
    
    3272015
    
    
    290Thereafter
    
    
    1,160Total
    
    $
    3,422
  
 Year of Payment
    
    Amount2011
    
    $
    1242012
    
    
    1242013
    
    
    1242014
    
    
    1242015
    
    
    133Thereafter
    
    
    532Total
    
    $
    1,161
  -
    
    The Stamford, Connecticut building lease term, for approximately 6,440 square feet,
runs from February 1, 2010 to January 31, 2019. The facility houses certain
administrative functions such as Investor Relations and certain APC sales functions.-
    
    The Beijing, China building lease term, for approximately 5,800 square feet, runs
from September 1, 2010 to August 31, 2011. This facility serves as the operating
headquarters for our Beijing Fuel Tech operation. Fuel Tech has the option to extend the
lease term at a market rate to be agreed upon between Fuel Tech and the lessor.-
    
    The Durham, North Carolina building lease term, for approximately 16,000 square
feet, runs from November 1, 2005 to April 30, 2014. Fuel Tech has no option to extend
the lease.-
    
    The Gallarate, Italy building lease term, for approximately 1,300 square feet, runs
from July 1, 2005 to April 30, 2013. This facility serves as the operating headquarters
for our Italy operations.
 39




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##### Table of Contents



Performance Guarantees
  -
    
    in support of the warranty period defined in the contract; or-
    
    in support of the system performance criteria that are defined in the contract.
  Product Warranties
  2010
    
    2009
    
    2008Aggregate product warranty liability
at beginning of year
    
    $
    199
    
    
    $
    265
    
    
    $
    464Net aggregate expense related to
product warranties
    
    
    170
    
    
    
    60
    
    
    
    (45
    )Aggregate reductions for payments
    
    
    (154
    )
    
    
    (126
    )
    
    
    (154
    )Aggregate product warranty liability
at end of year
    
    $
    215
    
    
    $
    199
    
    
    $
    265
 8. DEBT FINANCING
   40




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##### Table of Contents



9. RELATED PARTY TRANSACTIONS
  10. DEFINED CONTRIBUTION PLAN
  11. BUSINESS SEGMENT, GEOGRAPHIC AND QUARTERLY FINANCIAL DATA
 Business Segment Financial Data
  -
    
    The Air Pollution Control technology segment includes technologies to reduce NOx
emissions in flue gas from boilers, incinerators, furnaces and other stationary combustion
sources. These include Low and Ultra Low NOx Burners (LNB and ULNB), Over-Fire Air (OFA)
systems, NOxOUT® and HERT Selective Non-Catalytic Reduction (SNCR)
systems, and Advanced Selective Catalytic Reduction (ASCRTM) systems. The ASCR
system includes ULNB, OFA, and SNCR components, along with a downsized SCR catalyst,
Ammonia Injection Grid (AIG), and Graduated Straightening Grid GSG systems to
provide high NOx reductions at significantly lower capital and operating costs than
conventional SCR systems. The CASCADE and NOxOUT-SCR® processes
are basic types of ASCR systems, using just SNCR and SCR catalyst components. ULTRA
technology creates ammonia at a plant site using safe urea for use with any SCR
application. Flue Gas Conditioning systems are chemical injection systems offered in
markets
 41




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##### Table of Contents



outside the U.S. and Canada to enhance electrostatic precipitator and fabric filter
performance in controlling particulate emissions.-
    
    The FUEL CHEM® technology segment, which uses chemical processes in
combination with advanced CFD and CKM boiler modeling, for the control of slagging,
fouling, corrosion, opacity and other sulfur trioxide-related issues in furnaces and
boilers through the addition of chemicals into the furnace using TIFI®Targeted
In-Furnace Injection technology.
    For the year ended
    
    Air Pollution Control
    
    FUEL CHEMDecember 31, 2010
    
    Segment
    
    Segment
    
    Other
    
    TotalRevenues from external customers
    
    $
    40,917
    
    
    $
    40,878
    
    
    $
    
    
    
    $
    81,795Cost of sales
    
    
    (27,024
    )
    
    
    (19,797
    )
    
    
    
    
    
    
    (46,821
    )Gross margin
    
    
    13,893
    
    
    
    21,081
    
    
    
    
    
    
    
    34,974Selling, general and administrative
    
    
    
    
    
    
    
    
    
    
    (30,857
    )
    
    
    (30,857
    )Gain from revaluation of ACT
liability
    
    
    
    
    
    
    
    
    
    
    768
    
    
    
    768Research and development
    
    
    
    
    
    
    
    
    
    
    (948
    )
    
    
    (948
    )Operating income (loss)
    
    $
    13,893
    
    
    $
    21,081
    
    
    $
    (31,037
    )
    
    $
    3,937
 For the year ended
    
    Air Pollution Control
    
    FUEL CHEMDecember 31, 2009
    
    Segment
    
    Segment
    
    Other
    
    TotalRevenues from external customers
    
    $
    34,721
    
    
    $
    36,676
    
    
    $
    
    
    
    $
    71,397Cost of sales
    
    
    (21,518
    )
    
    
    (20,926
    )
    
    
    
    
    
    
    (42,444
    )Gross margin
    
    
    13,203
    
    
    
    15,750
    
    
    
    
    
    
    
    28,953Selling, general and administrative
    
    
    
    
    
    
    
    
    
    
    (32,273
    )
    
    
    (32,273
    )Gain from revaluation of ACT
liability
    
    
    
    
    
    
    
    
    
    
    781
    
    
    
    781Research and development
    
    
    
    
    
    
    
    
    
    
    (542
    )
    
    
    (542
    )Operating income (loss)
    
    $
    13,203
    
    
    $
    15,750
    
    
    $
    (32,034
    )
    
    $
    (3,081
    )
 For the year ended
    
    Air Pollution Control
    
    FUEL CHEMDecember 31, 2008
    
    Segment
    
    Segment
    
    Other
    
    TotalRevenues from external customers
    
    $
    44,393
    
    
    $
    36,681
    
    
    $
    
    
    
    $
    81,074Cost of sales
    
    
    (24,365
    )
    
    
    (19,979
    )
    
    
    (1
    )
    
    
    (44,345
    )Gross margin
    
    
    20,028
    
    
    
    16,702
    
    
    
    (1
    )
    
    
    36,729Selling, general and administrative
    
    
    
    
    
    
    
    
    
    
    (28,402
    )
    
    
    (28,402
    )Research and development
    
    
    
    
    
    
    
    
    
    
    (2,100
    )
    
    
    (2,100
    )Operating income (loss)
    
    $
    20,028
    
    
    $
    16,702
    
    
    $
    (30,503
    )
    
    $
    6,227
 42




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##### Table of Contents



Geographic Segment Financial Data
  For the years ended December 31,
    
    2010
    
    2009
    
    2008Revenues:United States
    
    $
    69,002
    
    
    $
    55,395
    
    
    $
    68,433Foreign
    
    
    12,793
    
    
    
    16,002
    
    
    
    12,641$
    81,795
    
    
    $
    71,397
    
    
    $
    81,074
 As of December 31,
    
    2010
    
    2009
    
    2008Assets:United States
    
    $
    92,485
    
    
    $
    82,261
    
    
    $
    80,999Foreign
    
    
    10,718
    
    
    
    10,001
    
    
    
    7,632$
    103,203
    
    
    $
    92,262
    
    
    $
    88,631
 Quarterly Financial Data
  For the quarters ended
    
    March 31
    
    June 30
    
    September 30
    
    December 312010Revenues
    
    $
    17,617
    
    
    $
    18,902
    
    
    $
    20,279
    
    
    $
    24,997Cost of sales
    
    
    9,500
    
    
    
    11,067
    
    
    
    11,496
    
    
    
    14,758Net income (loss)
    
    
    214
    
    
    
    (309
    )
    
    
    817
    
    
    
    1,031Net income (loss) per Common Share:Basic
    
    $
    0.01
    
    
    $
    (0.01
    )
    
    $
    0.03
    
    
    $
    0.04Diluted
    
    $
    0.01
    
    
    $
    (0.01
    )
    
    $
    0.03
    
    
    $
    0.042009 (a)Revenues
    
    $
    17,317
    
    
    $
    18,922
    
    
    $
    16,475
    
    
    $
    18,683Cost of sales
    
    
    11,374
    
    
    
    10,378
    
    
    
    10,034
    
    
    
    10,658Net income (loss)
    
    
    (1,562
    )
    
    
    (278
    )
    
    
    (698
    )
    
    
    232Net income (loss) per Common Share:Basic
    
    $
    (0.06
    )
    
    $
    (0.01
    )
    
    $
    (0.03
    )
    
    $
    0.01Diluted
    
    $
    (0.06
    )
    
    $
    (0.01
    )
    
    $
    (0.03
    )
    
    $
    0.01
 
 (a)
    
    The total of the basic and diluted net income (loss) amounts per share for the four
quarters ending December 31, 2009 does not sum to the amounts presented on the consolidated
statement of income for the year ending December 31, 2009 due to rounding. 43




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##### Table of Contents



12. BUSINESS ACQUISITIONS
  Advanced Combustion Technology, Inc.
    Net working capital acquired
    
    $
    4,293Intangible assets subject to amortization:Customer relationships (11 year useful life)
    
    
    3,019Patents (8 year useful life)
    
    
    1,907APC order backlog (0.5 year useful life)
    
    
    400Tradenames (8 year useful life)
    
    
    351Covenants not-to-compete (5 year useful life)
    
    
    140Goodwill
    
    
    13,512Total acquisition costs
    
    
    23,622Contingent consideration
    
    
    1,526Total net assets recorded
    
    $
    25,148
 44




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##### Table of Contents



ITEM 9  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
  
 ITEM 9A  CONTROLS AND PROCEDURES
 Disclosure Controls and Procedures
  Change in Internal Controls
  Managements Report on Internal Control Over Financial Reporting
     
 ITEM 9B  OTHER INFORMATION
  45




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##### Table of Contents



PART III
 
 ITEM 10  DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
  www.ftek.com
              46




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##### Table of Contents



ITEM 11  EXECUTIVE COMPENSATION
  
 ITEM 12  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
  Number of securitiesremaining available forNumber of Securities to be
    
    
    
    
    
    future issuance under equityissued upon exercise of
    
    Weighted-average
    
    compensation plansoutstanding options and vesting
    
    exercise price of
    
    excluding securities listed inof restricted stock units
    
    outstanding options
    
    column (a)Plan Category
    
    (a)
    
    (b)
    
    (c)Equity compensation
plans approved by
security holders
(1)
    
    
    3,005,125
    
    
    $
    14.68
    
    
    
    397,199
 
 (1)
    
    Includes Common Shares of Fuel Tech authorized for awards under Fuel Techs Incentive
Plan, as amended through June 3, 2004.   
 ITEM 13  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
  47




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##### Table of Contents



ITEM 14  PRINCIPAL ACCOUNTANT FEES AND SERVICES
  
 PART IV
 
 ITEM 15  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
 (a) (1) Financial Statements
          (2) Financial Statement Schedules
  (3) Exhibits
 Incorporated by ReferenceFiled
    
    
    
    PeriodExhibit
    
    Description
    
    Herewith
    
    Form
    
    ending
    
    Exhibit
    

Filing date3.1
    
    
    Certificate of Incorporation of Fuel Tech, Inc.
    
    
    
    8-K
    
    
    
    
    3.2
    
    
    10/05/063.2
    
    
    Certificate of Conversion of Fuel Tech, Inc.
    
    
    
    8-K
    
    
    
    
    3.1
    
    
    10/05/063.3
    
    
    By-Laws of Fuel Tech, Inc.
    
    
    
    8-K
    
    
    
    
    3.3
    
    
    10/05/064.1
    
    
    Instrument Constituting US $19,200,000 Nil Coupon Non-Redeemable
Convertible Unsecured Loan Notes of Fuel-Tech N.V., dated December 21,
1989
    
    
    
    10-Q
    
    09/30/09
    
    
    4.1
    
    
    11/04/094.2
    
    
    First Supplemental Instrument Constituting US $3,000 Nil Coupon
Non-Redeemable Convertible Unsecured Loan Notes of Fuel-Tech N.V., dated
July 10, 1990
    
    
    
    10-Q
    
    09/30/09
    
    
    4.2
    
    
    11/04/094.3
    
    
    Instrument Constituting US $6,000 Nil Coupon Non-Redeemable Convertible
Unsecured Loan Notes of Fuel-Tech N.V., dated March 12, 1993
    
    
    
    10-Q
    
    09/30/09
    
    
    4.3
    
    
    11/04/094.4*
    
    
    Fuel Tech, Inc. Incentive Plan as amended through June 3, 2004
    
    
    
    S-8
    
    
    
    
    4.1
    
    
    10/02/064.5*
    
    
    Fuel Tech, Inc. Form of Non-Executive Director Stock Option Agreement
    
    
    
    10-K
    
    12/31/06
    
    
    4.6
    
    
    03/06/074.6*
    
    
    Fuel Tech, Inc. Form of Non-Qualified Stock Option Agreement
    
    
    
    10-K
    
    12/31/06
    
    
    4.7
    
    
    03/06/074.7*
    
    
    Fuel Tech, Inc. Form of Incentive Stock Option Agreement
    
    
    
    10-K
    
    12/31/06
    
    
    4.8
    
    
    03/06/074.8*
    
    
    Fuel Tech, Inc. Form of Restricted Stock Unit Agreement
    
    X
 48




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##### Table of Contents



Incorporated by ReferenceFiled
    
    
    
    PeriodExhibit
    
    Description
    
    Herewith
    
    Form
    
    ending
    
    Exhibit
    

Filing date10.1**
    
    
    License Agreement
dated November 18,
1998 between The
Gas Technology
Institute and Fuel
Tech, Inc. relating
to the FLGR
Process.
    
    
    
    10-K
    
    12/31/99
    
    
    3.28
    
    
    03/30/0010.2**
    
    
    Amendment No. 1,
dated February 28,
2000, to License
Agreement dated
November 18, 1998
between The Gas
Technology
Institute and Fuel
Tech, Inc. relating
to the FLGR
Process.
    
    
    
    10-K
    
    12/31/99
    
    
    3.29
    
    
    03/30/0010.3*
    
    
    Employment
Agreement as of
February 28, 2006
between John
(Johnny) F. Norris
Jr. and Fuel Tech,
Inc.
    
    
    
    10-K
    
    12/31/05
    
    
    3.18
    
    
    03/10/0610.4*
    
    
    Amendment to
Employment
Agreement as of
February 28, 2007
between John
(Johnny) F. Norris
Jr. and Fuel Tech,
Inc.
    
    
    
    10-K
    
    12/31/07
    
    
    10.5
    
    
    03/05/0810.5
    
    
    Form of Indemnity
Agreement between
Fuel Tech, Inc. and
its Directors and
Officers.
    
    
    
    8-K
    
    
    
    
    99.1
    
    
    02/07/0710.6**
    
    
    Restated Supply
Agreement, dated
March 4, 2009,
between Fuel Tech,
Inc. and Martin
Marietta Magnesia
Specialties, LLC.
    
    
    
    10-K
    
    12/31/08
    
    
    10.7
    
    
    03/05/0910.7
    
    
    Asset Purchase
Agreement, dated
December 5, 2008,
among Fuel Tech,
Inc., Advanced
Combustion
Technology, Inc.,
Peter D. Marx,
Robert W. Pickering
and Charles E.
Trippel.
    
    
    
    10-K
    
    12/31/08
    
    
    10.8
    
    
    03/05/0910.8*
    
    
    Employment
Agreement, dated
April 30, 2008,
between John P.
Graham and Fuel
Tech, Inc.
    
    
    
    10-Q
    
    09/30/09
    
    
    10.1
    
    
    11/04/0910.9*
    
    
    Employment
Agreement, dated
February 1, 1998,
between Stephen P.
Brady and Fuel
Tech, Inc.
    
    
    
    10-Q
    
    09/30/09
    
    
    10.2
    
    
    11/04/0910.10*
    
    
    Employment
Agreement, dated
10/31/1998, between
William E.
Cummings, Jr. and
Fuel Tech, Inc.
    
    
    
    10-K
    
    12/31/09
    
    
    10.10
    
    
    03/04/1010.11
    
    
    Credit Agreement,
dated as of June
30, 2009, between
JPMorgan Chase
Bank, N.A. and Fuel
Tech, Inc.
    
    
    
    10-Q
    
    09/30/09
    
    
    10.5
    
    
    11/04/0910.12
    
    
    First Amendment to
Credit Agreement,
dated as of October
5, 2009, between
JPMorgan Chase
Bank, N.A. and Fuel
Tech, Inc.
    
    
    
    10-Q
    
    09/30/09
    
    
    10.6
    
    
    11/04/0910.13
    
    
    Second Amendment to
Credit Agreement,
dated as of
November 4, 2009,
between JPMorgan
Chase Bank, N.A.
and Fuel Tech, Inc.
    
    
    
    10-Q
    
    09/30/09
    
    
    10.7
    
    
    11/04/0910.14
    
    
    Sublease Agreement,
dated December 9,
2009, between Fuel
Tech, Inc. and
American Bailey
Corporation
    
    
    
    10-K
    
    12/31/09
    
    
    10.14
    
    
    03/04/10
 49




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##### Table of Contents



Incorporated by ReferenceFiled
    
    
    
    PeriodExhibit
    
    Description
    
    Herewith
    
    Form
    
    ending
    
    Exhibit
    

Filing date10.15*
    
    
    2011 Executive
Officer Incentive
Plan of Fuel Tech,
Inc.
    
    X10.16*
    
    
    Fuel Tech, Inc.
2011 FUEL
CHEM®
Officer Commission
Plan
    
    X10.17*
    
    
    Fuel Tech, Inc.
2011 APC Officer
and GSM Commission
Plan
    
    X10.18
    
    
    Employment
Agreement, dated
08/02/2010, between
David S. Collins
and Fuel Tech, Inc.
    
    
    
    10-Q
    
    06/30/10
    
    
    10.1
    
    
    08/09/1010.19
    
    
    Employment
Agreement, dated
04/01/2010, between
Douglas G. Bailey
and Fuel Tech, Inc.
    
    X10.20
    
    
    Employment
Agreement, dated
08/31/2009, between
Robert E. Puissant
and Fuel Tech, Inc.
    
    X23.1
    
    
    Consent of
Independent
Registered Public
Accounting Firm.
    
    X23.2
    
    
    Consent of
Independent
Registered Public
Accounting Firm.
    
    X31.1
    
    
    Certifications of
Chief Executive
Officer Pursuant to
Section 302 of the
Sarbanes-Oxley Act
of 2002.    
    X31.2
    
    
    Certifications of
Chief Financial
Officer Pursuant to
Section 302 of the
Sarbanes-Oxley Act
of 2002.
    
    X32.0
    
    
    Certification of
Chief Executive
Officer and Chief
Financial Officer
Pursuant to Section
906 of the
Sarbanes-Oxley Act
of 2002.
    
    X
 
 *
    
    Indicates a management contract or compensatory plan or arrangement.**
    
    Portions of this document have been omitted pursuant to a request for confidential treatment and the omitted information has been filed separately with the Securities and Exchange
Commission. 50




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##### Table of Contents



SIGNATURES AND CERTIFICATIONS
  FUEL TECH, INC.Date:  March 9, 2011
    By:
    /s/ Douglas G. BaileyDouglas G. BaileyChief Executive Officer
(Principal Executive Officer)Date:  March 9, 2011
    By:
    /s/ David S. CollinsDavid S. CollinsChief Financial Officer
(Principal Financial Officer) 51




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##### Table of Contents



Signature
    
    Title/s/ Douglas G. Bailey

Douglas G. Bailey
    
    Chairman and Director, President and Chief Executive Officer(Principal
Executive Officer)Ralph E. Bailey
    
    Director and Chairman Emeritus/s/ Miguel Espinosa

Miguel Espinosa
    
    Director/s/ Charles W. Grinnell

Charles W. Grinnell
    
    Director/s/ Thomas L. Jones

Thomas L. Jones
    
    Director/s/ John D. Morrow

John D. Morrow
    
    Director/s/ Thomas S. Shaw, Jr.

Thomas S. Shaw, Jr.
    
    Director/s/ Delbert L. Williamson

Delbert L. Williamson
    
    Director/s/ Ellen T. Albrecht

Ellen T. Albrecht
    
    Vice President and Controller


(Controller)/s/ David S. Collins

David S. Collins
    
    Sr. Vice President, Chief Financial Officer and Treasurer(Principal
Financial Officer)
 52