Document:

Fuel Tech, Inc. 2012 Executive Officer Incentive Plan

 Exhibit 4.2 
 FUEL TECH, INC. 
 2012 Executive Officer Incentive Plan

  

	1.	THE PLAN 

 1.1 Objectives. The
Executive Officer Incentive Plan (“EOIP”) of Fuel Tech, Inc., a Delaware corporation, (the “Company”), is designed to provide each Participant with financial incentives based upon Company financial results, measured in terms of
Adjusted EBITDA, Revenues and APC Bookings. The EOIP is an annual bonus plan based on successive fiscal year performance periods commencing January 1, 2012, with payouts based on each fiscal year’s performance. Capitalized terms not
otherwise defined shall have the meanings set forth in Section 4 below. 
 1.2 Plan Supersedes All Prior Incentive Compensation
Programs. This EOIP supersedes and replaces all prior cash incentive compensation programs for all Participants. 
  

	2.	ELIGIBILITY 

 2.1
Participants. The Company’s Chief Executive Officer, Chief Financial Officer, Executive Vice President of Marketing and Sales and Executive Vice President of Worldwide Operations shall each be a Participant in the EOIP. The Committee, in
its business discretion, may subjectively decide to designate additional full-time senior management employees of the Company to be Participants in the EOIP after consideration of the recommendations of the Company’s Chief Executive Officer.
The addition of new full-time senior management employees to the EOIP would require modification to the EOIP’s formulaic funding or payout mechanics, subject to approval by the Committee. 

Participants must be employed on the last day of a fiscal year (December 31) in order to be eligible for a payout under the EOIP based on that fiscal
year’s performance. No amounts will be deemed earned or payable under the EOIP by any Participant whose employment with the Company ends on or before the last day of the fiscal year. A Participant deemed to be eligible for a payout in
accordance with the provisions of the EOIP for a given fiscal year, need not be employed on the day of a bonus payout under this EOIP for such fiscal year in order to be eligible for the payout. 

2.2 Involuntary Termination of Employment. Notwithstanding the preceding paragraph, if, during a fiscal year in which the EOIP is in effect, a
Participant’s employment with the Company is involuntarily terminated: (a) not for cause by the Company, or (b) on account of the Participant’s death, or (c) on account of the Participant’s disability (as that term is
defined below), then to the extent and at the time the Company determines there shall be a payout for that fiscal year under the EOIP, the affected Participant shall be eligible for a pro rata EOIP payment (or, in the case of death, to that
employee’s estate) in accordance with the applicable calculations of Section 4, “EOIP Payouts” and subject to all the other provisions of the EOIP; provided, however, that only the normal employee wages paid to the affected
employee (as determined by the Company in its sole discretion and excluding bonuses, allowances, paid leave, vacation or severance payments) through that Participant’s separation date from the Company shall be used in such pro rata allocations.

 Any funds not paid out to a Participant under the EOIP, whether due to voluntary termination of employment, termination of employment for
cause or otherwise, will automatically revert back to the Company. 

  
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	3.	EOIP Payouts 

 3.1 Incentive
Pool. EOIP payouts are based on the Company’s performance for three financial metrics – Adjusted EBITDA, Revenues and APC Bookings. An “Incentive Pool” may or may not be created dependent on the Company’s financial
performance pertaining to all or some of those metrics during the fiscal year. If the Incentive Pool is created, each Participant is then awarded that Participant’s designated portion of the Incentive Pool on or before March 31, 2012. The
methodology for calculating EOIP payouts to Participants is more fully described below. 
 3.2 Minimum Adjusted EBITDA Threshold. No
amounts shall be payable under this EOIP for any fiscal year unless the Company has achieved the established minimum threshold of Adjusted EBITDA for such fiscal year. Accordingly, if the Company’s financial performance for the fiscal year
falls below the established minimum threshold of Adjusted EBITDA, there is no payout under the EOIP of any kind, regardless of the annual Revenue or annual APC Bookings amounts achieved. 
 3.3 Funding and Payout. 
 3.3.1 A percentage of Adjusted EBITDA is set
aside in an Incentive Pool with respect to each fiscal year to provide for bonus payments under this EOIP based on performance in the following three categories: (i) Adjusted EBITDA, (ii) Revenue and (iii) APC Bookings. The percentage
of Adjusted EBITDA that is set aside based on the Company’s actual level attained in each of these three categories shall be determined by the Committee after consideration of the recommendations of the Company’s Chief Executive Officer.

 3.3.2 Once the Company’s minimum threshold of Adjusted EBITDA is met, the percentage of Adjusted EBITDA set aside in the
Incentive Pool rises pro rata incrementally based on actual Company performance in each of the Adjusted EBITDA, Revenues, and APC Bookings financial metrics subject to an overall Incentive Pool funding percentage upper limit cap, all as shown in the
chart below. The payout formula for a Participant is shown in the chart below. 
 Executive Officer Incentive Plan Mechanics

  

																					
	 	  	 	 	  	 	 	 	Increment	 	 	 	 
	 	  	Minimums	 	  	Funding %	 	 	Value	 	  	Incremental %	 	 	% Cap	 
	 Adjusted EBITDA, as defined
	  	$	14,500	  	  	 	1.80	% 	 	$	500	  	  	 	0.0583	% 	 	 	2.50	% 
	 Revenue
	  	$	88,000	  	  	 	0.60	% 	 	$	2,500	  	  	 	0.0250	% 	 	 	0.90	% 
	 APC Bookings
	  	$	45,000	  	  	 	0.60	% 	 	$	2,500	  	  	 	0.0375	% 	 	 	0.90	% 
		  				  	  
	  
	 	 				  				 	  
	  
	 
		  				  	 	1.75	% 	 				  				 	 	4.30	% 

 Executive Officer Plan Incentive Summary 

 

					
	 Title
	  	Percentage
of Pool	 
	 Chief Executive Officer
	  	 	38.0	% 
	 Chief Financial Officer
	  	 	20.0	% 
	 EVP, Marketing & Sales
	  	 	20.0	% 
	 EVP, Worldwide Operations
	  	 	22.0	% 
		  	  
	  
	 
		  	 	100.0	% 

  
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	4.	DEFINITIONS 

“Adjusted EBITDA” – means generally earnings before interest expense, taxes, depreciation and amortization, profit
sharing plan contributions, legal expenses out of the ordinary course of the Company’s business and incentive pay (excluding sales commissions), but shall be as determined by the Company, in its sole discretion, with the assistance of its
accountants. 
 “APC Bookings” – means generally to revenue (a) to which the Company has a legally
binding, contractual right pursuant to a Sales Contract signed after December 31, 2010, and (b) which involves the sale of equipment or services associated the Company’s APC product line, all as determined by the Company, in its sole
discretion. For purposes of clarity, it is understood that APC Bookings shall not include revenue (i) for equipment or services included in the scope of work of contracts executed and entered into prior to January 1, 2012 and restated in
newly executed contracts; (ii) revenues relating to work for which authorization to proceed from the customer is required but has not been obtained in writing; or (iii) revenues relating to any equipment or services the delivery of which
has been cancelled by the customer. 
 “Committee” – means the Compensation & Nominating
Committee of the Company’s Board of Directors or such other committee as may from time to time succeed or perform the functions of that Committee. 
 “Disability” – means that a Participant, after exhausting any applicable leave available under the Company’s policies, is unable because of physical or mental condition to
perform the essential functions of such Participant’s position, with or without a reasonable accommodation. 

“Revenue” – means the Company’s net sales, as determined by the Company in its sole discretion. 

“Sales Contract” – means a comprehensive set of executed, legally binding documents between the Company and a
customer, in form and substance acceptable to the Company. 
  

	5.	OTHER CONDITIONS 

 5.1 No Alienation of
Awards. Payouts under this EOIP may not be assigned or alienated, except that payouts earned and payable may be assigned under the laws of descent and distribution of the Participant’s domicile. 

5.2 No Right of Employment. Neither the EOIP nor any action taken under the EOIP shall be construed, expressly or by implication, as either giving
to any Participant the right to be retained in the employ of the Company or any affiliate, or altering or limiting the employment-at-will relationship between the Company and any Participant. 
 5.3 Taxes, Withholding. The Company or any affiliate shall have the right to deduct from any payout under the EOIP any applicable federal, state or local taxes or other amounts required by
applicable law, rule, or regulation to be withheld with respect to such payment. 
 5.4 Code Section 409A. The EOIP is intended to
be exempt from or comply with Section 409A of the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder. 
 5.5 Plan Administration; Effectiveness for any Fiscal Year. The EOIP shall be administered by or under the authority of the Committee which shall have the full discretionary power to administer and
interpret this EOIP and to establish rules for its administration. The EOIP will not be deemed effective for any fiscal year until such time, if any, as the determination of the EOIP Adjusted EBITDA, Revenues, and APC Bookings minimum targets and
Incentive Pool funding percentage amounts contemplated by Paragraph 3 above have been released for communication to EOIP participants, which date shall be no later than March 31st of each fiscal year. 

  
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 5.6 Reservation of Rights; Governing Law; Contract Disclaimer. The Company reserves the right to
amend or cancel the EOIP in whole or in part at any time without notice. There can be no guaranty that the EOIP will be in effect in any subsequent fiscal year. The Company also reserves the right to decide all questions and issues arising under the
EOIP and its decisions are final. The EOIP shall be construed in accordance with and governed by the laws of the State of Illinois. The EOIP is a statement of the Company’s intentions and does not constitute a guarantee that any particular EOIP
payment amount will be paid. It does not create a contractual relationship or any contractually enforceable rights between the Company or its wholly owned subsidiaries and the Participant. 

  
 4Employment Agreement

 Exhibit 10.1 
 EMPLOYMENT AGREEMENT 
 THIS EMPLOYMENT AGREEMENT
(the “Agreement”), made this 26th day of
February, 2012 (the “Effective Date”), is entered into among Leslie Cross (“Executive”), Alphatec Spine, Inc., a California corporation (“ASI”), and Alphatec Holdings, Inc., a Delaware corporation (“Parent”)
(collectively, ASI and Parent shall be referred to as the “Company”). 

1.        Commencement. This Agreement, which shall govern Executive’s employment by the Company,
shall become effective on the Effective Date and the parties to this Agreement agree and acknowledge that Executive’s employment pursuant to the terms of this Agreement shall begin on February 26, 2012 (the “Commencement Date”).

 2.        At-Will Employment. The parties to this Agreement agree and acknowledge that the
Executive’s employment pursuant to this Agreement shall be considered at-will. Either party may terminate this Agreement at any time, with or without cause pursuant to the terms of this Agreement. 

3.        Title; Capacity; Office. The Company shall employ Executive, and Executive agrees to work for
the Company as its Chairman and Chief Executive Officer. Executive shall perform the duties and responsibilities inherent in the position in which Executive serves and such other duties and responsibilities as the Board of Directors (the
“Board”) (or its designee) shall from time to time reasonably assign to Executive. Executive shall report to the Chairman of the Executive Committee of the Board of Directors. In addition, it is the Company’s intention that the
Executive will be appointed or elected to serve as the Chairman of the Company’s Board of Directors (the “Board”) during the term of the Executive’s employment. 
 4.        Compensation and Benefits. While employed by the Company, Executive shall be entitled to the following (it being agreed, for the avoidance of
doubt, that other than as expressly set forth herein, amounts payable on the happening of any specified event will not be payable if the Executive is not employed by the Company upon the happening of such event): 

4.1    Salary. Commencing on the Commencement Date, the Company shall pay Executive a salary (the “Base
Salary”) at an annualized rate of $500,000, less applicable payroll withholdings, payable in accordance with the Company’s customary payroll practices. 
 4.2    Performance Bonus. Executive will be eligible to receive a discretionary cash performance bonus each fiscal year in an amount equal to 75% of the annual base salary for
such fiscal year (the “Target Bonus Amount”). The payment of the Target Bonus Amount shall be subject to the Company’s and Executive’s achievement of goals to be established and presented to the Executive each fiscal year. The
goals for the 2012 bonus payment are set forth on Exhibit A attached hereto. 
 4.3    Other
Benefits. Executive shall be entitled to participate in all benefit programs that the Company establishes and makes available to its management employees. 

 4.4     Reimbursement of Expenses. Executive shall be entitled to
prompt reimbursement for reasonable expenses incurred or paid by Executive in connection with, or related to the performance of, Executive’s duties, responsibilities or services under this Agreement, upon presentation by Executive of
documentation, expense statements, vouchers and/or such other supporting information as the Company may reasonably request. Expenses that do not comply with applicable law will not be reimbursed under any circumstances. 

4.5    Equity. Upon the approval of the Compensation Committee of the Board, the Executive shall receive a
grant of 200,000 shares of restricted common stock of Parent (the “Shares”). The Shares shall initially be unvested. All of the Shares shall vest on the anniversary of the date of issuance, provided that the stock performance metric set
forth in Exhibit B attached hereto (the “Stock Performance Metric”) has been achieved, as determined by the Compensation Committee of the Board in its sole reasonable discretion. Other than as expressly set forth herein, any shares
that do not vest on an applicable vesting date shall not be subject to vesting in the future. Notwithstanding the foregoing, any unvested Shares shall vest on the business day immediately prior to the consummation of a Change in Control (as defined
in the Plan referenced below). Executive may file an election under Section 83(b) of the United States Internal Revenue Code within thirty (30) days of the issuance date, provided Executive provides the Company with a copy of such
election. The Company shall retain any certificates representing Executive’s ownership of the Shares until Executive vests in such Shares. The Shares shall be subject, in all respects, to (i) the Parent’s 2005 Employee, Director and
Consultant Stock Plan, as amended (the “Plan”); and (ii) a Restricted Stock Agreement to be entered into by Executive and the Parent. 
 4.6    Vacation. The Executive may take up to 20 days of paid vacation during each year at such times as shall be consistent with the Company’s vacation policies and with
vacations scheduled for other executives and employees of the Company. 
 5.        Termination of
Employment. The Executive’s employment can terminate at any time by either the Company or the Executive with or without cause or notice. 
  

	6.        Additional	Covenants of the Executive. 

 6.1    Noncompetition; Nonsolicitation; Nondisparagement. 
 (a)    During Executive’s employment with the Company, Executive shall not, directly or indirectly, render services of a business, professional or commercial nature to any other
person or entity that competes with the Company’s business, whether for compensation or otherwise, or engage in any business activities competitive with the Company’s business, whether alone, as an Executive, as a partner, or as a
shareholder (other than: (i) any equity of DJO Global, Inc. (or its successor) owned by the Executive; or (ii) as the holder of not more than 1% of the combined voting power of the outstanding stock of a public company), officer or
director of any corporation or other business entity, or as a trustee, fiduciary or in any other similar representative capacity of any other entity. Notwithstanding the foregoing, the expenditure of reasonable amounts of time as a member of the
board of directors of DJO Global, Inc. (or its successor) shall not be deemed a breach of this Section 6.1(a). 

  
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 (b)    During Executive’s employment with the Company, and for a
period of one year following the termination of the Executive’s employment with the Company, the Executive shall not, without the prior written consent of the Company: 
 (i)    either individually or on behalf of or through any third party, directly or indirectly, solicit, entice or persuade or attempt to solicit, entice or persuade any employee,
agent, consultant or contractor of the Company or any of its affiliates (the “Company Group”) to leave the service of the Company Group for any reason; or 
 (ii)    either individually or on behalf of or through any third party, directly or indirectly, interfere with, or attempt to interfere with, the business relationship between the
Company Group and any vendor, supplier, surgeon or hospital with which the Company has interacted during the term of Executive’s employment with the Company. 
 (c)    During Executive’s employment with the Company and at all times thereafter, Executive shall not make any statements that are professionally or personally disparaging about,
or adverse to, the interests of the Company or any of its divisions, affiliates, subsidiaries or other related entities, or their respective directors, officers, employees, agents, successors and assigns (collectively, “Company-Related
Parties”), including, but not limited to, any statements that disparage any person, product, service, finances, financial condition, capability or any other aspect of the business of any Company-Related Party, and that Executive will not engage
in any conduct which could reasonably be expected to harm professionally or personally the reputation of any Company-Related Party. 
 (d)    If any restriction set forth in this Section 6.1 is found by any court of competent jurisdiction to be unenforceable because it extends for too long a period of time or
over too great a range of activities or in too broad a geographic area, it shall be interpreted to extend only over the maximum period of time, range of activities or geographic area as to which it may be enforceable. 

(e)    The restrictions contained in this Section 6.1 are necessary for the protection of the confidential,
nonpublic information relating to the Company and its operations, strategies, development plans, financial information and other proprietary corporate information, and are considered by Executive to be reasonable for such purpose. Executive agrees
that any breach of this Section 6 will cause the Company substantial and irrevocable damage and therefore, in the event of any such breach, in addition to such other remedies which may be available, the Company shall have the right to seek
specific performance and injunctive relief. 
 7.        Other Agreements. Executive represents
that Executive’s performance of all the terms of this Agreement as an Executive of the Company does not and will not breach any (i) agreement to keep in confidence proprietary information, knowledge or data acquired by Executive in
confidence or in trust prior to Executive’s employment with the Company or (ii) agreement to refrain from competing, directly or indirectly, with the business of any previous employer or any other party. 

8.        Notices. All notices required or permitted under this Agreement shall be in writing and shall be
deemed effective upon (i) a personal delivery, or (ii) deposit in the United States Post Office, by registered or certified mail, postage prepaid. 

  
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 9.        Entire Agreement. This Agreement and the agreements
specifically referenced herein constitute the entire agreement between the parties as of the date hereof and supersedes all prior agreements and understandings, whether written or oral relating to the subject matter of this Agreement. The Executive
and the Company agree and acknowledge that the cash compensation set forth in Section 3(a) of that certain Chairman’s Consulting Agreement, dated July 27, 2011 between the Executive and the Company (the “Consulting
Agreement”) shall be null and void after all applicable payments are made through the February 2012 payment. In addition, the Executive and the Company agree and acknowledge that the equity granted pursuant to Section 3(b) of the
Consulting Agreement shall vest in accordance with the terms of the Consulting Agreement and the restricted stock agreement related to such shares. 
 10.         Amendment. This Agreement may be amended or modified only by a written instrument executed by both the Company and Executive. 

11.        Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of both
parties and their respective successors and assigns, including any corporation into which the Company may be merged or which may succeed to its assets or business, provided, however, that the obligations of Executive are personal and shall not be
assigned by Executive. The Company may assign this Agreement following the delivery of written notice to the Executive. 
  

	12.        Miscellaneous.	

12.1    No Waiver. No delay or omission by the Company in exercising any right under this Agreement shall
operate as a waiver of that or any other right. A waiver or consent given by the Company on any one occasion shall be effective only in that instance and shall not be construed as a bar or waiver of any right on any other occasion. 

12.2    Severability. In case any provision of this Agreement shall be invalid, illegal or otherwise
unenforceable, the validity, legality and enforceability of the remaining provisions shall in no way be affected or impaired thereby. 
 12.3    Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of California. 

12.4    Consent to Arbitration. In the event of a dispute involving this Agreement, the Executive consents and
agrees that all disputes shall be resolved in accordance with the terms and conditions of the Mutual Agreement to Arbitrate Claims between the Company and the Executive. 
 12.5    Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and
the same instrument. 
 [Signature Page Follows] 

  
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 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year set forth above.

  

	
	
	
	/s/ Leslie Cross
	Leslie Cross

  

	
	ALPHATEC SPINE, INC.
	
	By:/s/ Heather Rider
	Name: Heather Rider
	Title: SVP, Global Human Resources

  

	
	ALPHATEC HOLDINGS, INC.
	
	By:/s/ Heather Rider
	Name: Heather Rider
	Title: SVP, Global Human Resources

  
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