Document:

exv4w1

Exhibit 4.1

THIRD AMENDMENT TO

CREDIT AGREEMENT

     THIS THIRD AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is dated as of June 30, 2011 and
is by and between FUEL TECH INC., a Delaware corporation (the “Borrower”), the Loan Parties party
hereto, and JPMORGAN CHASE BANK, N.A., a national banking association (“Lender”).

     WHEREAS, Lender and the Loan Parties are parties to a Credit Agreement dated as of June 30,
2009 (as amended from time to time, the “Credit Agreement”). The Credit Agreement evidences
certain credit facilities pursuant to which the Lender has made certain revolving loans to the Loan
Parties on the terms and conditions set forth therein. The Loan Parties’ obligations under the
Credit Agreement are further evidenced by that certain Promissory Note executed by Borrower in the
original principal amount of $25,000,000.00 dated June 30, 2009 (the “Note”); and

     WHEREAS, pursuant to the First Amendment to Credit Agreement dated October 5, 2009, the
parties corrected a scrivener’s error which had occurred in Section 6.14 (b) (“Leverage Ratio”) of
the Credit Agreement;

     WHEREAS, pursuant to the Second Amendment to the Credit Agreement dated November 4, 2009, the
Lender waived a default of the covenant set forth in Section 6.14(a) of the Agreement, amended the
Minimum Net Income covenant, amended the Leverage Ratio, and amended the definitions of “Permitted
Acquisitions” and “Applicable Rate”;

     WHEREAS, the Borrower has now requested that Lender renew and reduce the revolving credit
facility evidenced by the Note and adjust the Tangible Net Worth Covenant; and the Lender is
willing to do so but only on the terms and subject to the conditions herein set forth.

     NOW THEREFORE, for good and valuable consideration, the receipt and adequacy of which is
hereby acknowledged, the parties agree as follows:

     1. The parties acknowledge the accuracy of the foregoing recitals. All capitalized terms used
herein without specific definitions should be accorded the meanings set forth for such terms in the
Credit Agreement.

     2. From and after the date hereof, the definition of “Maturity Date” shall be amended to hereafter
provide as follows:

“Maturity Date” means June 30, 2013 or any earlier date on which the
Commitment is reduced to zero or otherwise terminated pursuant to the terms hereof.”

     3. From and after the date hereof, the definition of “Revolving Commitment” shall be amended to
hereafter provide as follows:

“Revolving Commitment” means the commitment of the Lender to make
Revolving Loans and Letters of Credit hereunder, as such commitment

 

 

may be reduced
from time to time pursuant to Section 2.08. The initial amount of the Lender’s
Revolving Commitment is $15,000,000.00. So long as no Default or Event of Default
exists, Borrower shall have the right from time to time to request, which request
must be approved by the Bank in writing and in its sole discretion, an increase in
the
Revolving Commitment, provided that the Revolving Commitment, after giving effect to
such increase, shall in no case exceed $25,000,000.00.

     4. From and after the date hereof, Section 6.14(c) of the Credit Agreement shall be amended to
hereafter provide as follows:

“(c) Minimum Tangible Net Worth. Borrower’s Tangible Net Worth shall
not at any time be less than the Minimum Tangible Net Worth; “Minimum Tangible Net
Worth” is defined for purposes of this Subsection as $50,000,000.00 at all times
from the date hereof through December 31, 2011 and adjusted on the last day of each
Fiscal Year of Borrower (starting with December 31, 2011) by adding an amount equal
to fifty percent (50%) of Borrower’s Net Income (but without reduction for any net
loss) for the Fiscal Year then ended as reflected on Borrower’s audited year-end
financial statement plus 100% of all capital contributed through the issuance of
Equity Interests in the Borrower during such period; and “Tangible Net Worth” being
defined for purposes of this Subsection as Borrower’s consolidated shareholders’
equity (including retained earnings) less the net book value of all Intangible
Assets plus the amount of any LIFO reserve plus the amount of any debt subordinated
to Lender, all as determined under GAAP applied on a basis consistent with the
financial statement dated December 31, 2008. “Intangible Assets” shall mean
goodwill, patents, trademarks, customer lists and other items that are categorized
as intangible assets in accordance with GAAP.”

     5. This Amendment shall be binding upon and inure to the benefit of the successors and assigns of
the Loan Parties and the Lender.

     6. Except as expressly amended hereby, the Credit Agreement shall remain in full force and effect.
The Credit Agreement and all rights and powers created thereby are in all respects ratified and
confirmed.

     7. This Amendment has been duly authorized, executed and delivered on behalf of the Loan Parties
pursuant to all requisite corporate authority, and the Credit Agreement as amended hereby
constitutes the legal, valid and binding obligation of the Loan Parties, enforceable in accordance
with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to creditor’s rights.

     8. Borrower hereby certifies, represents and warrants to Lender that all certifications,
representations and warranties made by Borrower to Lender in or in connection with the Credit
Agreement were true in all material respects as of the date

Third Amendment to

Credit Agreement

2

 

of the Credit Agreement and are true in
all material respects on and as of the date hereof as if made on and as of the date hereof.

     9. Borrower hereby acknowledges and agrees that Borrower has no defense, offset or counterclaim to the
payment of principal, interest, fees or other liabilities owing under the Credit Agreement and
hereby waive and relinquishes any such defense, offset or counterclaim and Borrower hereby releases
Lender and its respective officers, directors, agents, affiliates, successors and assigns from any
claim, demand or cause of action, known or unknown, contingent or liquidated, which may exist or
hereafter be known to exist relating to any matter prior to the date hereof.

     10. Except as otherwise specified herein, this Amendment embodies the entire agreement and
understanding between Lender and Borrower with respect to the subject matter hereof and supersedes
all prior agreements, consents and understandings relating to such subject matter.

     11. This Amendment may be signed in any number of counterparts, each of which shall be deemed to be an
original, but all of which together shall constitute one and the same instrument.

     12. This Amendment is governed and controlled by the laws of the state of Illinois.

[Signature Page to Follow]

Third Amendment to

Credit Agreement

3

 

     IN WITNESS WHEREOF, this Amendment has been duly executed as of the date and year specified at
the beginning hereof.

	 	 	 	 	 
	 	BORROWER:

FUEL TECH, INC.,

a Delaware corporation

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	FUEL TECH S.r.l.,

organized under the laws of the Italian Republic

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	LENDER:

JPMORGAN CHASE BANK, N.A.

a national association

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

Third Amendment to

Credit Agreement

4

 

JPMORGAN CHASE BANK, N.A.

AMENDED REVOLVING LOAN NOTE

			
	$15,000,000.00

Chicago, Illinois
	 	June 30, 2011

     FOR VALUE RECEIVED, FUEL TECH, INC., a Delaware corporation (together with permitted
successors, herein called “Maker"), promises to pay to the order of JPMorgan Chase Bank, N.A.
(“Payee"), at the office of JPMorgan Chase Bank, N.A., in Chicago, Illinois, in immediately
available funds and in lawful money of the United States of America, the principal sum of Fifteen
Million and No/100 Dollars ($15,000,000.00) (or the unpaid balance of all principal advanced
against this note, if that amount is less), together with interest on the unpaid principal balance
of this note from time to time outstanding at the rate or rates provided in that certain Credit
Agreement (as amended, supplemented, restated or replaced from time to time, the “Credit
Agreement") dated as of June 30, 2009 among Maker and Payee. Any term defined in the Credit
Agreement which is used in this note and which is not otherwise defined in this note shall have the
meaning ascribed to it in the Credit Agreement.

     1. Credit Agreement; Advances. This note has been issued pursuant to the terms of the
Credit Agreement, and is the Revolving Note referred to in the Credit Agreement. Advances against
this note by Payee or other holder hereof shall be governed by the terms and provisions of the
Credit Agreement. Reference is hereby made to the Credit Agreement for all purposes. Payee is
entitled to the benefits of the Credit Agreement. The unpaid principal balance of this note at any
time shall be the total of all amounts lent or advanced against this note less the amount of all
payments or permitted prepayments made on this note and by or for the account of Maker. All loans
and advances and all payments and permitted prepayments made hereon may be endorsed by the holder
of this note on a schedule which may be attached hereto (and thereby made a part hereof for all
purposes) or otherwise recorded in the holder’s records; provided, that any failure to make
notation of (a) any advance shall not cancel, limit or otherwise affect Maker’s obligations or any
holder’s rights with respect to that advance, or (b) any payment or permitted prepayment of
principal shall not cancel, limit or otherwise affect Maker’s entitlement to credit for that
payment as of the date received by the holder.

     2. Mandatory Payments of Principal and Interest.

     (a) Accrued and unpaid interest on the unpaid principal balance of this note shall be due and
payable monthly and on the Maturity Date as provided in the Credit Agreement.

     (b) On the Maturity Date, the entire unpaid principal balance of this note and all accrued and
unpaid interest on the unpaid principal balance of this note shall be finally due and payable.

     (c) The Credit Agreement provides for prepayments of the indebtedness evidenced hereby upon
terms and conditions specified therein.

 

 

     3. Default. The Credit Agreement provides for the acceleration of the maturity of
this note and other rights and remedies upon the occurrence of certain events specified therein.

     4. Waiver by Maker and Others. Except to the extent, if any, that notice of default
is expressly required herein or in any of the other Loan Documents, Maker and any and all
co-makers, endorsers, guarantors and sureties severally waive notice (including, but not limited
to, notice of intent to accelerate and notice of acceleration, notice of protest and notice of
dishonor), presentment for payment, protest, diligence in collecting and the filing of suit for the
purpose of fixing liability and consent that the time of payment hereof may be extended and
re-extended from time to time without notice to any of them. Each such person agrees that his, her
or its liability on or with respect to this note shall not be affected by any release of or change
in any guaranty at any time existing or by the partial or complete unenforceability of any guaranty
or other surety obligation, in each case in whole or in part, with or without notice and before or
after maturity.

     5. Paragraph Headings. Paragraph headings appearing in this note are for convenient
reference only and shall not be used to interpret or limit the meaning of any provision of this
note.

     6. Choice of Law. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
APPLICABLE LAWS OF THE STATE OF ILLINOIS AND THE UNITED STATES OF AMERICA FROM TIME TO TIME IN
EFFECT.

     7. Successors and Assigns. This note and all the covenants and agreements contained
herein shall be binding upon, and shall inure to the benefit of, the respective legal
representatives, heirs, successors and permitted assigns of Maker and Payee.

     8. Records of Payments. The records of Payee shall be prima facie evidence of the
amounts owing on this note (absent manifest error).

     9. Severability. If any provision of this note is held to be illegal, invalid or
unenforceable under present or future laws, the legality, validity and enforceability of the
remaining provisions of this note shall not be affected thereby, and this note shall be liberally
construed so as to carry out the intent of the parties to it.

     10. Prior Note. This Note is an amendment, extension and replacement of the Revolving
Loan Note dated June 30, 2009 in the original principal amount of $25,000,000.00 (the “Prior Note")
(but is not a payment of said Note).

     11. Revolving Loan. Subject to the terms and provisions of the Credit Agreement,
Maker may use all or any part of the credit provided to be evidenced by this note at any time
before the Maturity Date. Maker may borrow, repay and reborrow hereunder, and except as set forth
in the Credit Agreement there is no limitation on the number of advances to be made hereunder.

[SIGNATURE PAGE TO FOLLOW]

JPMorgan Chase Bank, N.A.

Amended Revolving Loan Note

2

 

	 	 	 	 	 
	 	FUEL TECH, INC.,

a Delaware corporation,

 	 
	 	By:  	 	 
	 	 	Name:   	 	 
	 	 	Title:  	 	 
	 
	 

Signature Page to $15,000,000 Amended Revolving Loan Note

payable to JP Morgan Chase Bank, N.A.exv10w1

Exhibit 10.1

BroadSoft 2011 Executive Annual Bonus Plan

Plan Document

Purpose:

Short-term incentives (annual variable pay) serve to align Company and individual organizational
objectives and personal performance. The objectives of the BroadSoft Annual Bonus Plan are as
follows:

	 	•	 	Align individual performance with BroadSoft’s initiatives, objectives and goals for the
coming year;
	 
	 	•	 	Reward employees when criteria for earning a bonus are met and goals are obtained; and
	 
	 	•	 	Provide employees with the opportunity to earn incentive pay based on the employee’s
level of performance and associated contribution to BroadSoft and on achievement of
corporate performance goals.

Plan Name:

BroadSoft 2011 Executive Annual Bonus Plan (“the Plan”)

Effective Date:

The Plan is effective as of January 1, 2011 for calendar year 2011.

Criteria for Earning a Bonus:

          Eligibility:

The Plan only applies to those executive employees who are notified in writing by the Company that
they are eligible to receive an annual bonus under the Plan.

          Participation:

Newly eligible employees begin participating in the Plan during the calendar year in which they
become eligible. Overall awards will be prorated based upon active employment with BroadSoft and
the date on which eligibility begins. Unless otherwise expressly specified in writing, Employees
hired after September 30, 2011, are not eligible to earn a bonus under the Plan for the 2011 plan
year.

          Services:

Employees must actively perform services for BroadSoft from January 1, 2011 (or the date of hire
for new employees) through the date bonuses are paid to earn a bonus. Performance of services is a
criteria for earning a bonus, not simply a condition of payment. No bonus payments, prorated or
otherwise, can be earned if an employee is terminated or resigns for any reason prior to the date
on which annual bonuses are paid.

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE

INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS

EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

 

Award Opportunities:

Each eligible plan participant will be assigned a target award opportunity, which will be
communicated at the beginning of the plan year or when they become eligible to participate in the
Plan as specified herein. The target award represents the level of bonus payment the participant
may earn in the event the criteria for earning a bonus and individual and corporate performance are
achieved.

Performance Measurement:

Near the beginning of each calendar year, senior management will establish and communicate to each
plan participant the corporate performance objectives for BroadSoft. The goals and key performance
factors for BroadSoft will be developed by management and approved by the Compensation Committee of
the BroadSoft Board of Directors.

In addition, the participant and his or her supervisor shall work cooperatively to establish
personal objectives for 2011. A key performance objective for all plan participants shall be
compliance with BroadSoft’s general performance and conduct standards, taking into account the
nature and extent of any performance or conduct problems during the Bonus Plan year and whether or
not they have been successfully addressed.

After the end of the calendar year, overall performance against the corporate performance goals and
a participant’s overall personal performance including his or her achievement of personal
objectives and performance ratings, will be assessed and the resulting incentive amounts that may
be earned if the criteria for earning a bonus are met will be calculated as outlined below. The
Company, in its sole discretion, will determine the extent to which the Company has achieved its
corporate performance objectives and the participant’s overall personal performance upon which the
annual bonus will be based.

Funding of the Bonus Pool

A bonus pool will be established as follows:

The funding for the bonus pool will be based on the following percentages:

Executive Plan

Revenue: 70% of the target award opportunity for all executive employees entitled to
participate in the Plan in the event the Company achieves its 2011 consolidated revenue goal
specified below.

Non-GAAP EPS 30% of the target award opportunity for all executive employees entitled to
participate in the Plan in the event the Company achieves its non-GAAP EPS goal specified below.

Notwithstanding the foregoing, for Mr. Tessler, $50,000 of his total annual bonus target will
be determined exclusively as a percentage of 2011 revenue. In particular, Mr. Tessler will be paid
[***]% of the Company’s 2011 consolidated revenue, with the $50,000 fully earned if the Company
achieves 2011 consolidated revenue equal to or above $[***] million.

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE

INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS

EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

 

The Company’s 2011 revenue and non-GAAP EPS objectives for the bonus pool funding are as follows:

Revenue

	 	•	 	If the Company has 2011 consolidated revenue of $[***] million or more, 100% of this
component shall be deemed achieved.
	 
	 	•	 	If the Company has 2011 consolidated revenue of $[***] million, 80% of this component
shall be deemed achieved.
	 
	 	•	 	Bonus funding will be pro-rated for 2011 if the Company has 2011 consolidated revenue
between $[***] million and $[***] million.
	 
	 	•	 	No bonus shall be funded under this component if the Company has 2011 consolidated
revenues below $[***] million.
	 
	 	•	 	In the event that the Company’s revenue for the year exceeds $[***] million, 5% of such
revenue greater than $[***] million will be paid in bonuses to the executive team including
the Company’s three executive officers, with the actual bonus per executive team member
determined by the Compensation Committee.

Non-GAAP EPS

	 	•	 	If the Company’s non-GAAP EPS for calendar year 2011 is $[***] per diluted share or
better, 100% of this component shall be deemed achieved.
	 
	 	•	 	If the Company’s non-GAAP EPS for calendar year 2011 is $[***] per diluted share, 80% of
this component shall be deemed achieved.
	 
	 	•	 	Bonus funding will be pro-rated for 2011 if the Company’s non-GAAP EPS for calendar year
2011 is between $[***] per diluted share and $[***] per diluted share.
	 
	 	•	 	No bonus shall be funded under this component if the Company’s non-GAAP EPS for calendar
year 2011 is less than $[***] per diluted share.

For purposes of the Plan, non-GAAP EPS shall mean earnings per diluted share calculated in
accordance with General Accepted Accounting Principles plus stock-based compensation expense and
amortization of acquired intangibles assets. In addition, one time gains, especially with regard to
changes in the company’s tax provision, will not be included in non-GAAP EPS.

Grant of Restricted Shares

In addition to the foregoing, if the Company achieves revenue of $[***] million, the Compensation
Committee shall grant each of Messrs. Tessler, Hoffpauir and Tholen restricted shares, which shares
shall be fully vested as of the date of grant, equal to (a) for Mr. Tessler that number of shares
of Company Common Stock equal to the number obtained by dividing $270,000 by the average of the
closing sale price on each of the last 30 business days of 2011, (b) for Mr. Hoffpauir that number
of shares of Company Common Stock equal to the number obtained by dividing $140,000 by the average
of the closing sale price on each of the last 30 business days of 2011; and (c) for Mr. Tholen that
number of shares of Company Common Stock equal to the number obtained by dividing $150,000 by the
average of the closing sale price on each of the last 30 business days of 2011.

Bonus Process

Once all performance measures have been calculated, the final bonus pools will be established.
Each department head will receive a bonus pool equal to the funded portion of the target award
opportunity

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE

INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS

EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

 

(calculated as specified above) for all eligible plan participants within their
department. Each department head shall allocate the bonus pool to eligible plan participants, with
reference to such participant’s target award opportunity and the department head’s assessment of
such participant’s personal performance, including his or her achievement of personal performance
objectives, performance rating and peer review feedback and associated contribution to BroadSoft.
If the Company meets its performance objectives as outlined above, actual bonus awards may be
higher than target for plan participants where the Company believes their accomplishments during
the year justify special recognition. On the other hand, actual bonus awards can also be lower
than target even if an eligible plan participant meets performance expectations and the Company
meets its performance objectives as outlined in the Plan.

All department heads must stay within the funded bonus pool allocated for their departments. No
exceptions will be made.

Award Payouts:

Payouts of awards under the Plan will be made in cash or equity as soon as practical after year-end
financials are available and completion of performance reviews (subject to applicable taxes and
withholdings).

Governance:

Executive Management, Human Resources and the Compensation Committee of the BroadSoft Board of
Directors will be responsible for the administration and governance of the Plan. The decisions of
the Company and/or the Compensation Committee shall be conclusive and binding on all participants.

Amendment, Modification or Termination of Plan:

The Company reserves the right to modify any of the provision of the Plan at any time with ten (10)
days written notice. The Plan may be modified only in writing signed by the CEO or CFO.

The Plan supersedes all prior bonus programs of the Company and all other previous oral or written
statements regarding the subject matter hereof.

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE

INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS

EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

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