Fuel Tech (NASDAQ: FTEK) details 2026 incentives tied to AI growth
Rhea-AI Filing Summary
Fuel Tech, Inc. adopted its 2026 Corporate Incentive Plan and 2026 Current Objectives Plan, tying employee cash bonuses and executive equity awards to financial and strategic performance. The company granted 20,850 RSUs to CEO Vincent Arnone, 8,350 to CFO Ellen Albrecht, and 6,250 to SVP William Cummings.
Under the 2026 Corporate Incentive Plan, no bonus is paid unless Operating Income reaches $250,000, after which 25% of Operating Income funds an incentive pool capped at $3 million. The 2026 Current Objectives Plan funds a separate bonus pool of up to $650,000 only if all four corporate objectives are fully achieved, including revenue targets from new technologies, data center projects, AI-driven business development, and company-wide adoption of AI tools.
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8-K Event Classification
SECURITIES AND EXCHANGE COMMISSION
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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(State or other jurisdiction of incorporation) |
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Title of each class
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Name of each exchange on which registered
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Emerging growth company
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
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ITEM 5.02
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Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers; Compensatory Arrangements of Certain Officers
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A.
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The Committee determined the number of restricted stock units to be awarded pursuant to the terms of the Company’s 2025 Executive Performance RSU Award Agreement (the “2025 Agreement”) entered into with each of the Company’s President/Chief Executive Officer, Treasurer/Chief Financial Officer and Senior Vice President, Sales. A copy of the 2025 Agreement is attached as Exhibit 99.1 to the Company’s Current Report on Form 8-K filed with the Securities Exchange Commission on April 2, 2025.
The 2025 Agreement provides for four possible RSU awards: Look-Back RSUs, Total Revenue RSUs, New Business Growth RSUs and Operating Income Growth RSUs. The Committee determined that no Total Revenue RSUs, New Business Growth RSUs or Operating Income Growth RSUs would be awarded for the 2025 performance period. With respect to Look-Back RSUs, the Committee determined to award the number of RSUs set forth in the table below.
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Name and Title
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Target Look-Back RSUs
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Actual RSUs Awarded
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Vincent J. Arnone
President and Chief Executive Officer
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41,700
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20,850
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Ellen T. Albrecht
Chief Financial Officer and Treasurer
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16,700
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8,350
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William E. Cummings, Jr.
Senior Vice President, Sales
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12,500
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6,250
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B.
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The Committee adopted Fuel Tech’s 2026 Corporate Incentive Plan (the “2026 CIP”). All employees of Fuel Tech and its wholly-owned subsidiaries (excluding sales personnel) are eligible for participation in the 2026 CIP, including Fuel Tech’s President and Chief Executive Officer (Vincent J. Arnone) and Chief Financial Officer and Treasurer (Ellen T. Albrecht). Potential cash awards under the CIP are designed to focus employees on the achievement of both positive earnings growth for Fuel Tech as well as on their own individual performance. A copy of the 2026 CIP is attached to this Report as Exhibit 99.1.
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Payouts are based on Fuel Tech’s ability to realize Operating Income. For purposes of the 2026 CIP, “Operating Income” means Fuel Tech’s operating income before the impact of incentive pay (but including adjustments to reflect the payment of sales commissions), as determined by the Committee in its sole discretion. An “Incentive Pool” may be created dependent on Fuel Tech’s obtaining specified levels of Operating Income during the fiscal year. If the Incentive Pool is created, each participant will be awarded his or her designated portion of the Incentive Pool. The focus on Operating Income provides an objective measurement of Fuel Tech’s financial performance to directly tie any payout to the overall financial performance of Fuel Tech across all business lines.
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No amounts are payable under the 2026 CIP unless Fuel Tech achieves a minimum of $250,000 in Operating Income for the applicable fiscal year. Accordingly, if Fuel Tech’s Operating Income financial performance for a fiscal year falls below $250,000, there is no payout under the 2025 CIP.
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If Fuel Tech generates Operating Income equal to or greater than $250,000 in a fiscal year, the percentage of Operating Income funded into the Incentive Pool equals 25% of all Operating Income. On the other hand, if Fuel Tech generates less than $250,000 in Operating Income in a fiscal year, no amount is funded into the Incentive Pool because the $250,000 payout threshold will not have been met.
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The aggregate size of the potential Incentive Pool is “capped” at $3 million.
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The 2026 CIP contemplates that incentive payments to individual employees will be based on the amount of the Incentive Pool; the employee’s base wages for the applicable year; the employee’s target bonus factor (a percentage assigned to each employee based on such employee’s job level and contribution) and, for all employees below the level of Vice President, the employee’s achievement percentage (an overall job performance multiplier factor that can range from 0% to 100%, and represents the employee’s achievement of individual objectives in the fiscal year).
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The target bonus factor for Mr. Arnone under the 2026 CIP is 50% and for Ms. Albrecht, 30%. In addition, the 2026 CIP provides that the achievement percentage assigned to Fuel Tech’s Principal Executive Officer (Mr. Arnone), the Principal Financial Officer (Ms. Albrecht), and any Vice President will automatically equal 100%.
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C.
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The Committee adopted Fuel Tech’s 2026 Current Objectives Plan (the “2026 COP”). All employees of Fuel Tech and its wholly-owned subsidiaries (excluding sales personnel and Fuel Tech’s President and Chief Executive Officer (Mr. Arnone)) are eligible for participation in the 2026 COP, including Fuel Tech’s Chief Financial Officer and Treasurer (Ms. Albrecht). A copy of the 2026 COP is attached to this Report as Exhibit 99.2.
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For 2026, Fuel Tech will set aside the amounts set forth in the table below upon the completion of each of the current objectives described below on or before the assigned completion date for such objective, with the total bonus pool being capped at $650,000.
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If Fuel Tech achieves all current objectives by the applicable dates set forth below, a total amount of $650,000 will be set aside into the bonus pool. If Fuel Tech fails to achieve any of the current objectives, no funds will be set aside into the Bonus Pool.
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For the 2026 COP, there are three steps for determining whether, and the extent to which, an annual cash incentive award is payable. First, at the beginning of the fiscal year, the Compensation Committee determines the target annual cash incentive award for such employee based on a percentage of such employee’s annual base salary for that year. Second, at the beginning of the fiscal year, the Compensation Committee establishes the specific company-wide performance goals that must be met in order for the employee to receive the award and the related weighting of each goal. Third, shortly after the end of the fiscal year, the Compensation Committee determines whether or not these performance goals were met and the amount of the award.
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The 2026 COP emphasizes pay-for-performance and is intended to closely align executive compensation with achievement of specified operating results as the cash incentive amount is only funded if the corporate objective has been achieved in full.
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Objective
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Deliverables to be Completed
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Business Development (Three objectives, each valued at $66,666)
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Objective One: Leverage newly acquired intellectual property in flue gas conditioning and urea-to-ammonia systems in order to generate $1 million in revenue in 2026 through a dual-track approach of securing new project awards and capturing high-margin aftermarket sales from the existing installed base ($66,666)
Objective Two: Finalize the development of high-flow injection systems and channel injector materials together with generating $500,000 in revenue by converting current dissolved gas infusion demonstrations into long-term commercial contracts relationships alongside securing at least one additional commercial contract ($66,666).
Objective Three: In 2026, secure a minimum of $5 million in contract bookings and $1 million in revenue from newly awarded contracts arising from data centers ($66,666).
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Business Growth – Base Businesses
($150,000)
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Develop a proposal support database and related documentation to enable Fuel Tech to participate in the global expansion in power generation driven by the need for additional electricity to power artificial intelligence (AI) and digital infrastructure, the retirement and repowering of legacy power plants and the need for grid stability. Database will include:
• Process evaluation parameters with possible iterations on emissions requirements.
• Equipment sizing and costing for all potential SCR components.
• Utility estimates for infrastructure planning.
• General arrangement drawings in support of each turbine model’s system design, with various views showing SCR components.
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Investment in Human Capital ($150,000)
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Completion of training by all members of the employee team to effectively utilize the AI tools in their actual workflows. All employees will be required to take a minimum volume of coursework, and every functional area must identify and implement an application for AI within their departments to increase efficiency and productivity.
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Operational Execution Excellence ($150,000)
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Outline and implement a structured program to introduce AI tools for internal use, with a goal of selecting and implementing two applications for internal use, one that would provide operational benefit and the other to provide administrative benefit. The focus will be to improve productivity, operational efficiency, and decision support while maintaining appropriate governance and security.
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ITEM 9.01
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Financial Statements and Exhibits
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Exhibit No.
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Description
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99.1
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Fuel Tech, Inc. 2026 Corporate Incentive Plan
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99.2
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Fuel Tech, Inc. 2026 Corporate Objectives Plan
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| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL Document). |
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Fuel Tech, Inc.
(Registrant) |
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By:
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/s/ Bradley W. Johnson
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Bradley W. Johnson
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Date: March 27, 2026
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Vice President, General Counsel and Secretary
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Exhibit 99.1
FUEL TECH, INC.
2026 Corporate Incentive Plan
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1. |
THE PLAN |
1.1 Objectives. This Corporate Incentive Plan of Fuel Tech, Inc., a Delaware corporation (the “Company”) is designed to provide Eligible Employees with an annual cash bonus incentive based on both Company financial results and, to the extent and in the manner set forth in Sections 3 and 4 below, the applicable Eligible Employee’s overall job performance contribution to achieving those results. Capitalized terms not otherwise defined herein shall have the meanings set forth in Section 4 of this Incentive Plan.
1.2 General. The Incentive Plan is an annual bonus plan commencing January 1, 2026, with payouts based on the Company’s financial performance in 2026. For Eligible Employees, this Incentive Plan and the 2026 Current Objectives Incentive Plan supersedes and replaces all prior annual bonus incentive compensation programs for all regular, full-time and part-time U.S., European or Canadian based employees of the Company and its wholly-owned subsidiary, Fuel Tech, S.r.L.
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2. |
ELIGIBILITY |
2.1 Eligible Employees. Except as provided in Section 2.2 and subject to Section 5.5, Eligible Employees must be employed on the last day of a fiscal year (December 31) in order to be eligible for a payout under the Incentive Plan based on that fiscal year’s performance. No amounts will be deemed earned or payable under the Incentive Plan by any employee whose employment with the Company ends on or before the close of business on the last day of the fiscal year. An Eligible Employee deemed to be eligible for a payout in accordance with the provisions of the Incentive Plan for a given fiscal year, need not be employed on the day of a bonus payout under this Incentive Plan 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 Incentive Plan is in effect, an Eligible Employee’s employment with the Company is involuntarily terminated: (a) not for cause by the Company, or (b) on account of the Eligible Employee’s death, or (c) on account of the Eligible Employee’s Disability, then to the extent and at the time the Company determines there shall be a payout for that fiscal year under the Incentive Plan, the affected Eligible Employee shall be eligible for a pro rata Incentive Plan payment (or, in the case of death, to that employee’s estate) in accordance with the applicable calculations of Section 3, “Incentive Plan Payouts” and subject to all the other provisions of the Incentive Plan. Such pro rata payment shall equal the payout amount for the affected Eligible Employee determined in accordance with Section 3 below; 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 Eligible Employee’s separation date from the Company shall be used in such pro rata allocations.
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3. |
INCENTIVE PLAN PAYOUTS |
3.1 Incentive Pool Funding.
3.1.1 Payout Threshold and Funding Cap.
(a) Notwithstanding anything to the contrary contained in this Incentive Plan, no Incentive Plan payout will be made to any Eligible Employee unless the Company has achieved the established minimum threshold of Operating Income of $250,000. Accordingly, if the Company fails to achieve the established minimum threshold of Operating Income, there is no payout under the Incentive Plan of any kind, regardless of the Company’s financial performance or the Eligible Employee’s achievement of his or her personal performance goals.
(b) Notwithstanding anything to the contrary contained in this Incentive Plan, the maximum amount that may be funded into the Incentive Pool pursuant to Section 3.1.2 below is $3 million.
3.1.2 Funding Based on Company Performance.
(a) Subject to Section 5.5, the Company will set aside a percentage of Operating Income in an Incentive Pool to provide for bonus payments under this Incentive Plan based on the amount of Operating Income earned by the Company in 2026. The percentage of Operating Income that is set aside based on the Company’s financial performance shall be determined by the Committee after consideration of the recommendations of the Company’s Chief Executive Officer.
(b) Once the Company’s minimum threshold of Operating Income is met (as described in Section 3.1.1 above), the percentage of Operating Income set aside in the Incentive Pool will be 25% of all Operating Income.
By way of illustration, if the Company earned $1.0 million in Operating Income in fiscal 2026, the amount of Operating Income funded into the Incentive Pool would equal $250,000
By way of further illustration, if the Company earned $100,000 in Operating Income in fiscal 2026, no amount would be funded into the Incentive Pool because the $250,000 payout threshold described in Section 3.1.1 above would not have been met.
3.2 Incentive Pool Allocation. The Incentive Pool shall be allocated among Eligible Employees in the manner set forth set forth below:
| B x C x D | |||
| Payout = A x E | |||
| “A” equals the total amount of the Incentive Pool. | |||
| “B” equals the Eligible Employee’s Base W-2 Wages (as defined in Section 4). | |||
| “C” equals the Eligible Employee’s Target Bonus Factor (as defined in Section 4). | |||
| “D” equals the Eligible Employee’s Realization Percentage (as defined in Section 4). | |||
| “E” equals the aggregate total sum reached by adding together the products obtained by multiplying (a) the Base W-2 Wages of each Eligible Employee times (b) such Eligible Employee’s respective Target Bonus Factor times (c) such Eligible Employee’s respective Realization Percentage. | |||
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4. |
DEFINITIONS |
“Operating Income” – means Operating Income before the impact of incentive pay (but including adjustments to reflect the payment of sales commissions), as determined by the Company, in its sole discretion.
“Base W-2 Wages” – means, with respect to each Eligible Employee, such Eligible Employee’s respective normal W-2 base wages paid in 2026 (excluding overtime or other compensation including, without limitation, grants pursuant to the 2024 Incentive Plan of Fuel Tech, Inc., bonuses, allowances, paid leave, or vacation) or, with respect to an Eligible Employee based outside of the United States, a comparable amount as determined by the Committee in its sole discretion.
“Incentive Plan” or “CIP” – means the 2026 Corporate Incentive Plan of Fuel Tech, Inc., as amended from time to time.
“Committee” – means the Compensation Committee of the Company’s Board of Directors or such other committee as may from time to time succeed to or perform the functions of that Committee.
"Disability” – means that an applicable Eligible Employee, 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 the Employee's position, with or without a reasonable accommodation.
“Eligible Employee” – means, subject to the employee non-eligibility exceptions stated below, each regular, full-time and part-time U.S., Canadian or European based employee of the Company or the Company’s wholly-owned subsidiary, Fuel Tech S.r.L.. Notwithstanding the foregoing, the following employees of the Company are not eligible to participate in the Incentive Plan: (a) each employee of the Company or its subsidiaries who is designated by the Company to be a member of the Sales Group; and (b) any employee who has agreed to ineligibility via a separate written agreement with the Company.
“Individual Objectives” means the individual performance objectives established for applicable Eligible Employee (including the weighting given to the realization of each Individual Objective in the determination of such Eligible Employee’s “Realization Percentage” (as defined in Section 4 below)) and communicated to the applicable Eligible Employee no later than April 15, 2026.
“Realization Percentage” – means a percentage representing the extent to which, if any, an applicable Eligible Employee has achieved his or her Individual Objectives for 2026, as determined by the Company in its sole and absolute discretion and communicated to such Eligible Employee after December 31, 2026; provided, however, that notwithstanding anything to the contrary contained herein, with respect to any Eligible Employee that is serving as an executive vice president, senior vice president or has been designated as the Company’s Principal Executive Officer or Principal Financial Officer (as defined under the Securities Exchange Act of 1934, as amended), such Eligible Employee’s Realization Percentage will automatically and without further action by the Company equal 100%.
“Sales Group” – means the Senior Vice President, Sales, the National Sales Manager, APC Sales and each United States employee of the Company whom the Company selects to participate in the Company’s then current FUEL CHEM Employee Commission Plan, APC Employee Commission Plan and Aftermarket Commission Plan.
“Target Bonus Factor” – means a percentage assigned to each Eligible Employee on the basis of such Eligible Employee’s job level and contribution as determined by the Company in its sole and absolute discretion. Each Eligible Employee’s Target Bonus Factor shall be communicated to such employee no later than April 15, 2026.
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5. |
OTHER CONDITIONS |
5.1 No Alienation of Awards. Payouts under this Incentive Plan may not be assigned or alienated, except that payouts earned and payable may be assigned under the laws of descent and distribution of the employee’s domicile.
5.2 No Right of Employment. Neither the Incentive Plan nor any action taken under the Incentive Plan 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 employee.
5.3 Taxes, Withholding. The Company (or any subsidiary or affiliate of the Company) shall have the right to deduct from any payout under the Incentive Plan 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 Incentive Plan 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 Administration. The Incentive Plan shall be administered by or under the authority of the Committee which shall have the full discretionary power to administer and interpret this Incentive Plan and to establish rules for its administration. Notwithstanding anything to the contrary contained herein, the authority of the Committee under this Section 5.5 shall include, without limitation, the right at any time during the pendency of the Incentive Plan to amend or cancel the Incentive Plan, in whole or in part, to change the criteria for Eligible Employees, to change the incentive pool funding metrics or payout percentages and any other change the Committee determines advisable in its sole and absolute discretion. Any and all such actions shall not be subject to challenge by any Eligible Employee.
5.6 Effectiveness. The Incentive Plan will not be deemed effective for any fiscal year until such time, if any, as the determination of the Incentive Plan financial performance metrics and Incentive Pool allocations contemplated by Section 3 above have been released for communication to Incentive Plan participants, which date shall be no later than March 31st of each fiscal year.
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6. |
RESERVATION OF RIGHTS; GOVERNING LAW; CONTRACT DISCLAIMER. |
6.1 FOR UNITED STATES-BASED ELIGIBLE EMPLOYEES: The Company reserves the right to amend or cancel the Incentive Plan in whole or in part (including, without limitation, to change the criteria for Eligible Employees, to change the incentive pool funding metrics or payout percentages and any other change the Company determines advisable in its sole and absolute discretion) at any time without notice. There can be no guaranty that the Incentive Plan will be in effect in any subsequent fiscal year. The Company also reserves the right to decide all questions and issues arising under the Incentive Plan and its decisions are final. The Incentive Plan shall be construed in accordance with and governed by the laws of the State of Illinois. The Incentive Plan is a statement of the Company’s intentions and does not constitute a guarantee that any particular Incentive Plan 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 employee.
6.2 FOR ELIGIBLE EMPLOYEES BASED OUTSIDE THE UNITED STATES: This Incentive Plan is only valid for the year 2026. If the Company adopts a new incentive plan for 2027, the features, terms and conditions of such plan will be communicated to non-U.S. based Eligible Employees by March 31, 2026. The Company also reserves the right to decide all questions and issues arising under the Incentive Plan and its decisions are final. The Incentive Plan shall be construed in accordance with and governed by the laws applicable to the affected Eligible Employee’s place of work. The adoption of this Incentive Plan for 2026 does not constitute a guaranty that any particular Incentive Plan payout amount will be paid even if incentive compensation has previously consistently been granted for a certain period of time. It does not create a contractual relationship or any contractually enforceable rights between the Company and any Eligible Employee.
Exhibit 99.2
FUEL TECH, INC.
2026 Current Objectives Plan
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1. |
THE PLAN |
1.1 Objectives. The purpose of the Current Objectives Plan (the “Plan”) of Fuel Tech, Inc. a Delaware corporation (the “Company”), is to motivate Eligible Employees to achieve the Company’s strategic objectives by providing a cash bonus incentive (each a “Bonus Award”) based on: (a) the Company’s achievement of pre-established qualitative objectives, and (b) the Eligible Employee’s overall job contribution to achieving those results, all as further described below. Capitalized terms not otherwise defined herein shall have the meanings set forth in Section 4 of this Plan.
1.2 Effectiveness. This Plan shall be effective as of January 1, 2026 and continue in effect through December 31, 2026, subject to the terms hereof.
1.3 Plan Supersedes All Prior Annual Cash Incentive Compensation Programs. For Eligible Employees, this Plan and the Fuel Tech, Inc. 2026 Corporate Incentive Plan supersede and replace all prior annual bonus incentive compensation programs for all regular, full-time and part-time employees of the Company and its wholly-owned subsidiary, Fuel Tech, S.r.L.
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2. |
ELIGIBILITY |
2.1 Eligible Employees. Except as set forth in Section 4 below, each regular, full-time and part-time U.S., European or Canadian based employee of the Company (or its wholly-owned subsidiary, Fuel Tech S.r.L.) who is eligible for participation in the Company’s 2026 Corporate Incentive Plan is also eligible to participate in the Plan, as it may be amended or modified from time to time (“Eligible Employee”). Except as provided in Section 2.3 below, Eligible Employees must be employed by Fuel Tech at the close of business, local time, on the last day of a fiscal year (December 31) in order to be eligible for a Bonus Award. No amounts will be deemed earned or payable under this Plan by any employee whose employment with the Company ends on or before the last day of the fiscal year, whether voluntarily or involuntarily. An Eligible Employee deemed to be eligible for a Bonus Award need not be employed on the day of a bonus payout under this Plan in order to be eligible for the Bonus Award.
2.2 Minimum Acceptable Performance. Notwithstanding anything to the contrary contained in this Plan, no Eligible Employee shall be entitled to a Bonus Award unless he or she has met the minimum standard of acceptable job performance as determined by the Company in its sole discretion.
2.3 Involuntary Termination of Employment. If, during 2026, an Eligible Employee’s employment with the Company is involuntarily terminated: (a) not for cause by the Company, or (b) on account of the Eligible Employee’s death, or (c) on account of the Eligible Employee’s disability (as that term is defined below), then the affected Eligible Employee shall be eligible for a pro rata Bonus Award (or, in the case of death, to that employee’s estate) in accordance with the applicable calculations of Section 3 below; 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 Eligible Employee’s separation date from the Company shall be used in such pro rata allocations.
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3. |
BONUS AWARDS |
3.1 Bonus Pool Funding. Subject to Section 5.5, the Company will set aside the amount specified in Section 3.3.1 below upon the completion of each of the respective current objectives set forth in Section 3.3.1 below during 2026.
By way of illustration, if the Company achieves all current objectives, a total amount of $650,000 will be set aside into the Bonus Pool. If the Company fails to achieve any of the current objectives, no funds will be set aside into the Bonus Pool.
3.2 Calculation of Bonus Awards. The Bonus Pool shall be allocated among Eligible Employees in the manner set forth set forth below:
| B x C x D | ||
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Payout = A x E |
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“A” equals the total amount of the Incentive Pool. |
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“B” equals the Eligible Employee’s Base W-2 Wages (as defined in Section 4). |
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“C” equals the Eligible Employee’s Target Bonus Factor (as defined in Section 4). |
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“D” equals the Eligible Employee’s Realization Percentage (as defined in Section 4). |
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“E” equals the aggregate total sum reached by adding together the products obtained by multiplying (a) the Base W-2 Wages of each Eligible Employee times (b) such Eligible Employee’s respective Target Bonus Factor times (c) such Eligible Employee’s respective Realization Percentage. |
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For Eligible Employees based in Canada or the European Union, the determination of base wages shall be made by the Company’s Chief Executive Officer, it his sole discretion.
3.3 Current Objectives.
3.3.1 2026 Current Objectives. The objectives adopted for 2026 are as follows:
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Objective
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Deliverables to be Completed |
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Business Development (Three objectives, each valued at $66,666) |
Objective One: Leverage newly acquired intellectual property in flue gas conditioning and urea-to-ammonia systems in order to generate $1 million in revenue in 2026 through a dual-track approach of securing new project awards and capturing high-margin aftermarket sales from the existing installed base ($66,666)
Objective Two: Finalize the development of high-flow injection systems and channel injector materials together with generating $500,000 in revenue by converting current dissolved gas infusion demonstrations into long-term commercial contracts relationships alongside securing at least one additional commercial contract ($66,666).
Objective Three: In 2026, secure a minimum of $5 million in contract bookings and $1 million in revenue from newly awarded contracts arising from data centers ($66,666). |
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Business Growth – Base Businesses ($150,000) |
Develop a proposal support database and related documentation to enable Fuel Tech to participate in the global expansion in power generation driven by the need for additional electricity to power artificial intelligence (AI) and digital infrastructure, the retirement and repowering of legacy power plants and the need for grid stability. Database will include: • Process evaluation parameters with possible iterations on emissions requirements. • Equipment sizing and costing for all potential SCR components. • Utility estimates for infrastructure planning • General arrangement drawings in support of each turbine model’s system design, with various views showing SCR components. |
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Investment in Human Capital ($150,000) |
Completion of training by all members of the employee team to effectively utilize the AI tools in their actual workflows. All employees will be required to take a minimum volume of coursework, and every functional area must identify and implement an application for AI within their departments to increase efficiency and productivity. |
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Operational Execution Excellence ($150,000)
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Outline and implement a structured program to introduce AI tools for internal use, with a goal of selecting and implementing two applications for internal use, one that would provide operational benefit and the other to provide administrative benefit. The focus will be to improve productivity, operational efficiency, and decision support while maintaining appropriate governance and security. |
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4. |
DEFINITIONS |
“Base W-2 Wages” – means, with respect to each Eligible Employee, such Eligible Employee’s respective normal W-2 base wages paid in 2026 (excluding overtime or other compensation including, without limitation, bonuses, allowances, paid leave, or vacation) or, with respect to an Eligible Employee based outside of the United States, a comparable amount as determined by the Committee in its sole discretion.
“Bonus Pool” – means all amounts set aside by the Company for payment under this Plan as contemplated by Section 3.1 above.
“Committee” – means the Compensation Committee of the Company’s Board of Directors or such other committee as may from time to time succeed to or perform the functions of that Committee.
"Disability” – means that an applicable Eligible Employee, 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 the Employee's position, with or without a reasonable accommodation.
“Eligible Employee” – means, subject to the employee non-eligibility exceptions stated below, each regular, full-time and part-time employee of the Company or the Company’s wholly-owned subsidiary, Fuel Tech S.r.L. who is eligible to participate in the 2026 Corporate Incentive Plan. Notwithstanding the foregoing, the following employees are not eligible to participate in this Plan (i) the Company’s Chief Executive Officer; and (ii) any employee who has agreed by the terms of his or her employment agreement with the Company not to be eligible to participate in this Plan.
“Individual Objectives” means the individual performance objectives established for applicable Eligible Employee (including the weighting given to the realization of each Individual Objective in the determination of such Eligible Employee’s “Realization Percentage”) and communicated to the applicable Eligible Employee no later than April 15, 2026.
“Realization Percentage” – means a percentage representing the extent to which, if any, an applicable Eligible Employee has achieved his or her Individual Objectives for 2026, as determined by the Company in its sole and absolute discretion and communicated to such Eligible Employee after December 31, 2026; provided, however, that notwithstanding anything to the contrary contained herein, with respect to any Eligible Employee that is serving as an executive vice president, senior vice president or has been designated as the Company’s Principal Executive Officer or Principal Financial Officer (as defined under the Securities Exchange Act of 1934, as amended), such Eligible Employee’s Realization Percentage will automatically and without further action by the Company equal 100%.
“Target Bonus Factor” – means a percentage assigned to each Eligible Employee on the basis of such Eligible Employee’s job level and contribution as determined by the Company in its sole and absolute discretion. Each Eligible Employee’s Target Bonus Factor shall be communicated to such employee no later than April 15, 2026.
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5. |
OTHER CONDITIONS |
5.1 No Alienation of Awards. Payouts under this Plan may not be assigned or alienated, except that payouts earned and payable may be assigned under the laws of descent and distribution of the employee’s domicile.
5.2 No Right of Employment. Neither the Plan nor any action taken under the Plan 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 employee.
5.3 Taxes, Withholding. The Company (or any subsidiary or affiliate of the Company) shall have the right to deduct from any payout under the Plan 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 Plan 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 Administration. The Plan shall be administered by or under the authority of the Committee which shall have the full discretionary power to administer and interpret this Plan and to establish rules for its administration. Notwithstanding anything to the contrary contained herein, the authority of the Committee under this Section 5.5 shall include, without limitation, the right at any time during the pendency of the Plan to amend or cancel the Plan, in whole or in part, to change the criteria for Eligible Employees, to change the Bonus Pool funding metrics or payout percentages and any other change the Committee determines advisable in its sole and absolute discretion. Any and all such actions shall not be subject to challenge by any Eligible Employee.
5.6 Effectiveness. The Plan will not be deemed effective for any fiscal year until such time, if any, as the determination of the Plan performance metrics and Bonus Pool allocations contemplated by Section 3 above have been released for communication to Plan participants, which date shall be no later than March 31st of each fiscal year.
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6. |
RESERVATION OF RIGHTS; GOVERNING LAW; CONTRACT DISCLAIMER. |
6.1 FOR UNITED STATES-BASED ELIGIBLE EMPLOYEES: The Company reserves the right to amend or cancel the Plan in whole or in part (including, without limitation, to change the criteria for Eligible Employees, to change the Bonus Pool funding metrics or payout percentages and any other change the Company determines advisable in its sole and absolute discretion) at any time without notice. There can be no guaranty that the Plan will be in effect in any subsequent fiscal year. The Company also reserves the right to decide all questions and issues arising under the Plan and its decisions are final. The Plan shall be construed in accordance with and governed by the laws of the State of Illinois. The Plan is a statement of the Company’s intentions and does not constitute a guarantee that any particular Plan 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 employee.
6.2 FOR ELIGIBLE EMPLOYEES BASED OUTSIDE THE UNITED STATES: This Plan is only valid for the year 2026. If the Company adopts a new incentive plan for 2027, the features, terms and conditions of such plan will be communicated to non-U.S. based Eligible Employees by March 31, 2027. However, there is no guarantee that in 2027 or in subsequent years a Plan or similar plan shall be adopted. ) The Company also reserves the right to decide all questions and issues arising under the Plan and its decisions are final. The Plan shall be construed in accordance with and governed by the laws applicable to the affected Eligible Employee’s place of work. The adoption of this Plan for 2026 does not constitute a guaranty that any particular Plan payout amount will be paid even if incentive compensation has previously consistently been granted for a certain period of time. It does not create a contractual relationship or any contractually enforceable rights between the Company and any Eligible Employee.
FAQ
What did Fuel Tech (FTEK) disclose about its 2026 incentive compensation plans?
How does Fuel Tech’s 2026 Corporate Incentive Plan (CIP) work?
What are the key features of Fuel Tech’s 2026 Current Objectives Plan (COP)?
Which executives at Fuel Tech received 2026 RSU awards and in what amounts?
What performance thresholds must Fuel Tech meet before any 2026 bonuses are paid?
How does Fuel Tech link executive bonuses to individual and company performance in 2026?
Filing Exhibits & Attachments
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