Document:

Exhibit
      10.1 - Employment Agreement for John P. Graham

    

    FUEL
      TECH, INC.

    EMPLOYMENT
      AGREEMENT - GENERAL

    

    Agreement
      made as of the  30th
      day of
      April, 2008 between Fuel Tech, Inc., a Delaware Corporation (the "Company")
      with
      its principal place of business at 512 Kingsland Drive, Batavia, IL 60510-2299,
      and John P. Graham of 1330 Stonegate Road, Algonquin IL 60102
      ("Employee").

    

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

    

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

    

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

    

     (b)
      Position. The employee is employed initially as a Senior Vice President until
      June 1, 2008 when he shall be employed as Senior Vice President, Treasurer
      and
      Chief Financial Officer.

    

    (c)
      Base
      Salary. The employee shall initially have a base salary of $300,000 prorated
      from commencement of employment and payable in two monthly
      installments.

    

    (d)
      Annual Bonus. The Employee shall be entitled to participate in the Company’s
      Corporate Incentive Plan (the “CIP Plan”) with an initial Target Participation
      Percentage of 40% of base salary, subject to the terms of each annual plan
      as
      approved by the Compensation and Nominating Committee of the Board of Directors
      of the Company. 

    

    (e)
      Stock
      Options. You shall receive a non-qualified stock option award under the
      Company’s Incentive Plan (the “Plan”) to acquire 50,000 Company common shares
      effective as of, and at an exercise price determined at the fair market value
      under the Plan on the date of your commencement of employment, or, if such
      date
      shall be in a closed period prior to the release of Company earnings, then
      on
      the third day following the Company’s earnings release thereafter. 

    

    (f)
      Vacation. Employee shall be entitled to four weeks (20 days) of vacation
      commencing in the first year of employment.

    

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

    

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

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    2. Best
      Efforts. The Employee while employed by the Company shall devote all of
      Employee's best efforts, and all of Employee's time and attention to the
      interests of the Company during reasonable business hours and shall faithfully
      perform all duties from time to time assigned to Employee and shall conform
      to
      all of the Company's requirements for proper business conduct. 

    

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

    

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

            

    

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

            

    

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

            

    

    

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

    

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

    

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

    

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

    

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

    

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

    

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

    

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

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    11. Arbitration.
      Employee agrees that any arbitration between Employee and the Company shall
      be
      conducted under the Employment Dispute Resolution Rules of the American
      arbitration Association ("AAA") then in effect before a single neutral
      arbitrator in the municipality of Employee's then or last location of employment
      with the Company. The Company shall pay all of the fees of the AAA and the
      arbitrator. Employee does not in any such arbitration waive any statutory
      remedies available to Employee. The arbitrator shall base any award on the
      applicable law, setting forth in writing the basis of the award. Any award
      in
      arbitration shall be final and binding and may be entered in, or an order of
      enforcement may be obtained from, any court having jurisdiction.

    

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

    

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

    

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

    

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

    

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

    

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

     

    
      	
              Employee

            	
              Witness

            	 
	 	 	 
	 	 	 
	 	
              Name
                (Please print or type)

            	 

    

    

    
      	
              FUEL
                TECH, INC.

            
	 
	
              By:
                

            
	 
	
              Title:Exhibit
      10.2 - Consulting Agreement for Vincent J. Arnone dated April 30,
      2008

    

    Dear
      Vince:

    

    The
      following is an agreement (this “Agreement”) which sets out the mutual
      understanding between Fuel Tech, Inc. (the “Company”) and you as to the terms
      and conditions of your engagement as a consultant to the Company subsequent
      to
      your resignation as an employee and Senior Vice President, Treasurer and Chief
      Financial Officer of the Company, all of which have been discussed between
      us on
      amicable terms. If you are in accord with these terms and conditions, please
      sign below where indicated. 

    

    1.
      Resignation. You have simultaneously with the execution of this Agreement
      delivered your signed resignation to the Company as referenced above, and
      resignations of all directorships in Company affiliates worldwide, to be
      effective on the close of business May 31, 2008 (the “Effective Date”).

    

    2.
      Consultancy. The Company hereby engages you to act as a consultant to it from
      the Effective Date to provide advice and assistance in matters relating to
      the
      Company as requested and directed by the President and CEO. In performing such
      consultancy services you will, at the Company’s reasonable request from time to
      time, for a minimum of 40 hours per month during the Term of this Agreement
      make
      yourself available in person at the Company’s Illinois offices or at such other
      location as the Company requests.

    

    3.
      Term.
      This Agreement shall expire and your consultancy shall terminate at the close
      of
      business, September 30, 2008 (the “Termination Date”). For all purposes
      hereunder, your consultancy services may only be deemed unsatisfactory if you
      intentionally fail to provide services as reasonably requested. 

    

    4.
      Compensation. In consideration of your consultancy services hereunder during
      the
      Term, the Company shall compensate you as follows:

    

    (a)
      Cash:
      The Company shall pay you each month, the basic rate of $10,000 per month,
      payable in two installments of $5,000 on or about the 1st and 15th of each
      month
      during the Term, and, for time spent on such consulting services in any month
      in
      excess of 40 hours, at the additional rate of $200 per hour, against your
      invoices detailing such time spent.

    

    (b)
      Pro-Rated CIP: Upon successful completion of your consultancy services hereunder
      through the period ending September 30, 2008 and in lieu of continued
      participation in the Corporate Incentive Plan (“CIP”), the Company will pay you
      a cash settlement of $67,500 which is calculated based on the proration of
      a
      salary of $225,000 times a 40% Target Incentive Participation and times 75%
      representing nine rather than 12 months participation in the CIP.

    

    (c)
      Accelerated Vesting of Options: The Company shall vest, i.e. allow to be
      exercised by you, effective at the close of business on the Termination Date,
      so
      much of your Company stock option awards of December 7, 2004, December 6, 2005
      and December 7, 2006 as are scheduled to vest on December 6 and 7, 2008, all
      such accelerated vested options aggregating 41,250 shares, as illustrated by
      Schedule A attached. Other options illustrated on Schedule A which are not
      vested and not given accelerated vesting in this Section 3 (c) shall be
      forfeited by you to the Company in accordance with the terms of such
      options.

    

    (d)
      Extended Option Exercise: Following satisfactory completion of your consultancy
      on the Termination Date, all of your then vested and exercisable options,
      including those referenced in Section 3(c) above, and including those that
      are
      vested as of the Effective Date and that would have expired thirty days after
      the Effective Date would it not be for this agreement, shall be able to be
      exercised by you until the close of business on October 1, 2009 (the “Extended
      Exercise Date”). It is understood that you shall be required to pay, or make
      provision for, the exercise price and Federal and State income tax and payroll
      taxes in connection with any exercise of options. 

    

    (e)
      Expense Reimbursement. The Company shall reimburse you for your ordinary and
      necessary expenses incurred in the discharge of your consultancy hereunder;
      provided, however, that any single expenditure in the amount of $500 or more
      shall be approved in advance by the Company and your commuting expenses from
      your home to the Company’s Illinois offices shall not be reimbursed.

    

    5.
      Reporting. In performing your consultancy services you shall report to John
      F.
      Norris Jr., Chief Executive Officer. 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    6.
      Mutual
      Releases. You and the Company hereby mutually remise, release and forever
      discharge one another of and from all claims whatsoever previously arising
      which
      one party hereafter may raise against the other with respect to matters arising
      prior to the date of this Agreement. Excluded, however, from these releases
      are
      (a) claims by you against the Company for previously accrued and unpaid wages
      and vacation pay through the Effective Date; your 401(k) account and such health
      and welfare benefits as may be due to you as a former employee of the Company
      under the Company’s written plans and policies, including COBRA health benefits
      concerning which you shall receive information separately from this Agreement;
      and (b) claims by the Company against you arising out of a breach of your
      undertakings in your Employment Agreement with the Company of May 22, 1999
      (the
“Employment Agreement”) to the extent that such undertakings are intended in the
      Employment Agreement to survive your resignation, it being understood that
      it is
      not intended by this Agreement and these mutual releases to revoke such
      undertakings. 

    

    7.
      No
      Disparagement. While neither you nor the Company anticipates any set of
      circumstances where it might occur, nevertheless, you and the Company agree
      not
      to disparage one another to any third party orally or in writing. 

    

    8.
      References. So long as you shall not be in breach of your undertakings in this
      Agreement or the Employment Agreement, the Company shall provide to such parties
      to whom you may subsequently apply for employment, a favorable reference
      concerning your employment with the Company.

    

    9.
      16a
      Reports. You understand that you are required for a period of six (6) months
      following the Effective Date to file 16a SEC reports of your sales and purchases
      of Company 1934 Act registered securities and that, at the end of such six
      month
      period, you shall file a Form 4 SEC report which shall be designated as a “final
      report.” The Company agrees to assist you in making these filings and all costs
      will be borne by the Company. 

    

    10.
      Assignment. This Agreement is personal to the parties and may not be transferred
      or assigned by a party absent the express written advance consent to such
      transfer or assignment by the other party granted in its absolute discretion
      and
      any assignment without such consent shall be null and void. 

    

    11.
      Integration; Modification. This Agreement is the entire expression of our
      agreement as to your resignation and consultancy and may not be modified or
      amended except by a writing signed by you and the Company referring to this
      Agreement and stating that it is an amendment or modification of this
      Agreement.

    

    12.
      Law;
      Dispute Resolution. This Agreement shall be construed and enforced according
      to
      the internal laws of the State of Illinois without giving effect to the
      conflicts of laws rules of any state. Any dispute between the parties or claim
      raised by one against the other shall be determined in arbitration according
      to
      the terms of Sections 8 and 9 of the Employment Agreement, it being intended
      by
      the parties that such terms are incorporated by reference into this Agreement
      and shall be as fully effective as if set out in this Agreement. You furthermore
      waive any claim to trial by jury, in the event that any dispute between you
      and
      the Company or any claim raised by one against the other shall nevertheless
      be
      determined in a judicial proceeding. 

     

    Schedule
      A

     

    
      	 	
               

            	
               

            	
               

            	
               

            	
               

            	
               

            	
               

            	
               

            	
               

            	
              Options that are 

            	
               

            	
              Options that will be 

            	
               

            	
               

            	
               

            
	
              Option 

            	
               

            	
              Quantity 

            	
               

            	
               

            	
               

            	
              Options 

            	
               

            	
              Quantity 

            	
               

            	
              Scheduled to vest on

            	
               

            	
              Forfeited on December 6-7, 2008

            	
               

            	
               

            	
               

            
	
              Grant 

              Date

            	
               

            	
              of Options 

              Issued

            	
               

            	
              Quantity 

              Exercised

            	
               

            	
              Vested 

              at 12/31/07

            	
               

            	
              Not Vested 

              at 12/31/07

            	
               

            	
              December 6-7, 

              2008

            	
               

            	
              Vesting in 

              2009

            	
               

            	
              Vesting in 

              2010

            	
               

            	
              Total

            	
               

            
	
              12/09/03

            	 	 	
              20,000

            	 	 	
              15,000

            	 	 	
              5,000

            	 	 	
              0

            	 	 	
              0

            	 	 	
              0

            	 	 	
              0

            	 	 	
              0

            	 
	
              12/07/04

            	 	 	
              40,000

            	 	 	
              15,000

            	 	 	
              15,000

            	 	 	
              10,000

            	 	 	
              10,000

            	 	 	
              0

            	 	 	
              0

            	 	 	
              10,000

            	 
	
              12/06/05

            	 	 	
              45,000

            	 	 	
              0

            	 	 	
              22,500

            	 	 	
              22,500

            	 	 	
              11,250

            	 	 	
              11,250

            	 	 	
              0

            	 	 	
              22,500

            	 
	
              12/07/06

            	 	 	
              40,000

            	 	 	
              0

            	 	 	
              0

            	 	 	
              40,000

            	 	 	
              20,000

            	 	 	
              10,000

            	 	 	
              10,000

            	 	 	
              40,000

            	 
	 	 	 	
              145,000

            	 	 	
              30,000

            	 	 	
              42,500

            	 	 	
              72,500

            	 	 	
              41,250

            	 	 	
              21,250

            	 	 	
              10,000

            	 	 	
              72,500

            	 

    

     

    
      	
              Fuel
                Tech, Inc.

            
	 	 
	
              By:

            	 
	 	
              John
                F. Norris Jr.

            
	 	
              President
                and CEO

            
	
              Agreed
                to and accepted, this 30th Day of April, 2008.

            
	 	 
	 	
              Vincent
                J. Arnone

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