Document:

FTEK-2013.12.31-EX10.16

FUEL TECH, INC.

2014 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 the Company’s fiscal performance in 2014.  Capitalized terms not otherwise defined shall have the meanings set forth in Section 4 below.

1.2    Plan Supersedes All Prior Short-Term Incentive Compensation Programs for Participants.   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 Operating Officer, Chief Financial Officer, Executive Vice President of Marketing and Sales and Senior Vice President and General Counsel 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 3, “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.

		
	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, 2015.  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.

(Amounts shown in thousands)

	
											
	Executive Officer Incentive Plan Mechanics

	 
	

Minimums
	

	

Funding 
Percentage
	

	

Incremental
Value
	

Incremental
Percentage
	

	

Percentage Cap
	

	Adjusted EBITDA, as defined
	

	$10,000
	

	1.00
	%
	500
	0.10
	%
	2.00
	%

	Revenue
	

	$104,500
	

	0.50
	%
	2,500
	0.05
	%
	1.00
	%

	APC Bookings
	

	$44,500
	

	0.50
	%
	2,500
	0.05
	%
	1.00
	%

	 
	 
	2.00
	%
	 
	 
	4.00
	%

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	
			
	Executive Officer Plan Incentive Summary

	

Title
	

Percentage of Pool

	Chief Executive Officer
	30.0
	%

	Chief Operating Officer
	22.0
	%

	Chief Financial Officer
	16.0
	%

	EVP, Marketing & Sales
	16.0
	%

	SVP, General Counsel
	16.0
	%

	 
	100.0
	%

	 
	 

 

		
	4.
	DEFINITIONS

“Adjusted EBITDA” – means generally earnings before interest expense, taxes, depreciation and amortization, profit sharing plan contributions, stock compensation, incentive pay (excluding sales commissions) and other unusual or non-cash charges, but shall be as determined by the Company, in its sole discretion, with the assistance of its accountants.  In calculating Adjusted EBITDA, the Company shall exclude the effects of any acquisition or divestiture undertaken by the Company for the fiscal year in which such event occurs.

“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, 2013, and (b) which involves the sale of equipment or services associated with 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, 2014 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 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.  

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.

 
2014 Executive Officer Incentive Plan
Final Issued Effective February 25, 2014    1FTEK-2013.12.31-EX10.21

FUEL TECH, INC.
EMPLOYMENT AGREEMENT - GENERAL
Agreement made as of the  14th day of July, 2003, between Fuel Tech, Inc., a Massachusetts corporation (the "Company") with its principal place of business at 512 Kingsland Drive, Batavia, IL 60510-2299, and Albert G. Grigonis ("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. 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.
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 relating to research and development programs, products, customer information, customer lists, personnel information, marketing plans, and business, operations, 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.No Oral Modifications. This written Employment Agreement is the only employment agreement between the Company and the Employee. 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.
/s/ Albert G. Grigonis                    /s/ Suzanne Trapani-Clements
                                                
Employee    Witness

Suzanne Trapani-Clements
                                                
Name (please print or type)

FUEL TECH, INC.

By:  /s/ Ellen Albrecht
Title: Accounting Manager

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