Contract
Exhibit 10.1
2021 EXECUTIVE PERFORMANCE RSU AWARD AGREEMENT
This Executive Performance RSU Award Agreement (the “Agreement”) is hereby entered effective as of _____________, 2021 (the “Award Date”), by and between Fuel Tech, Inc. (the “Company” or “Fuel Tech” or “FTI”), and _________________ (the “Participant”). Any term capitalized but not defined in this Agreement will have the meaning set forth in the Fuel Tech, Inc. 2014 Long-Term Incentive Plan, as it may be amended, modified or restated from time to time (the “Plan”).
(i) If the Company’s Operating Income for the Performance Period is less than $1,000,000, no Executive Performance RSUs will be awarded.
(ii) If the Company’s Operating Income for the Performance Period is at least $1,000,000 and less than $2,000,000, then a number of Executive Performance RSUs equal to two-thirds of the Target RSU Amount will be awarded.
(iii) If the Company’s Operating Income for the Performance Period is at least $2,000,000 and less than $3,000,000, then a number of Executive Performance RSUs equal to 100% of the Target RSU Amount will be awarded.
(iv) If the Company’s Operating Income for the Performance Period equals or exceeds $3,000,000, then a number of Executive Performance RSUs equal to 133.33% of the Target RSU Amount will be awarded.
(v) The number of Executive Performance RSUs awarded pursuant to this Section 2(a) will be determined based on straight line interpolation if the Operating Income for the Performance Period is between the amounts listed above (e.g., if Operating Income is $1,500,000, then a number of Executive Performance RSUs equal to 83.335% of the Target RSU Amount will be awarded).
(c) Termination of Continuous Service.
(i) If the Participant’s Continuous Service terminates for any reason before the Determination Date, other than the Participant’s (A) termination by the Company without Cause, (B) death, or (C) Disability, no Executive Performance RSUs will be awarded to the Participant, except as provided in Section 2(e) below.
(ii) If, before the Determination Date, the Participant’s Continuous Service is terminated by the Company without Cause, or due to death or Disability, the Participant will be awarded a number of vested Executive Performance RSUs on the Distribution Date equal to the product obtained by multiplying “X” by “Y” where “X” equals the number of Executive Performance RSUs such Participant would have been entitled to receive had such Participant remained in Continuous Service until the Determination Date and “Y” equals a fraction, the numerator of which is the number of days of Continuous Service during the Performance Period the Participant had completed as of the date of his or her termination of Continuous Service and the denominator of which is 365.
(iii) If the Participant’s Continuous Service terminates on or after the Determination Date, but before the Executive Performance RSUs have fully vested under Section 2(d) or (e) below:
A. If the Participant’s Continuous Service is terminated by the Company for Cause, the Participant will forfeit all Executive Performance RSUs, including any Executive Performance RSUs that have vested under Section 2(d).
B. If the Participant terminates Continuous Service due to death or Disability, the Participant will vest in any Executive Performance RSUs that have not vested under Section 2(d) or (e), and the Company will distribute Shares to the Participant equal to the full number of Executive Performance RSUs that were awarded to the Participant in accordance with Section 3 below.
C. If the Participant’s Continuous Service is terminated other than (A) due to death or Disability, or (B) by the Company for Cause, the Participant will forfeit any Executive Performance RSUs that have not vested under Section 2(d) or (e), and the Company will distribute Shares to the Participant equal to the number of Executive Performance RSUs that already have vested in accordance with Section 3 below.
The Participant agrees that in the event of a breach or threatened breach of any of the covenants contained in this Section 7, in addition to any other penalties or restrictions that may apply under any employment agreement, state law, or otherwise, the Participant shall forfeit, upon written notice to such effect from the Company: (i) any rights to receive an Executive Performance RSU Award under this Agreement, (ii) any and all RSUs awarded to him or her under the Plan and this Agreement, including vested RSUs or Shares; (iii) any Shares acquired under this Award, and (iv) any profit the Participant has realized on the vesting or sale of any Shares acquired under this Award, which the Participant shall be required to repay to the Company). The forfeiture provisions of this Section 7 shall continue to apply, in accordance with their terms, after the provisions of any employment or other agreement between the Company and the Participant have lapsed. The Participant consents and agrees that if the Participant violates or threatens to violate any provisions of this Section 7, the Company or its successors in interest shall be entitled, in addition to any other remedies that they may have, including money damages, to an injunction to be issued by a court of competent jurisdiction restraining the Participant from committing or continuing any violation of this Section 7. In the event that the Participant is found to have breached any provision set forth in this Section 7 or elsewhere in this Agreement, the time period provided for in that provision shall be deemed tolled (i.e., it will not continue to run) for so long as the Participant was in violation of that provision.
00000 Xxxxx Xxxxx Xxxxxxx
Xxxxxxxxxxx, Xxxxxxxx 00000
Attention: Equity Administration Department
Notices to or with respect to the Participant will be directed to the Participant, or to the Participant’s executors, personal representatives or distributees, if the Participant is deceased, or the assignees of the Participant, at the Participant’s most recent home address on the records of the Company. The Company or the Participant may change the person and/or address to which the other party must give notice under this Section 14 by giving the other party written notice of such change, in accordance with the procedures described above.
18. Governing Law; Venue. The laws of the State of Delaware shall govern the validity, interpretation, construction, and performance of this Agreement, without regard to the conflict of laws principles thereof that would cause another jurisdiction’s laws to be applied. The Company and the Participant hereby irrevocably and unconditionally submit, for themselves and their property, to the nonexclusive jurisdiction of any Illinois State court or federal court of the United States of America sitting in the Northern District of Illinois and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or for recognition or enforcement of any judgment, and the Company and the Participant hereby irrevocably and unconditionally agree that all claims in respect of any such action or proceeding may be heard and determined in any such Illinois State court or, to the extent permitted by law, in such federal court.
(a) The Executive Performance RSU Award is intended to be exempt from Code Section 409A under the short-term deferral exception set forth in Code Section 409A or, in the alternative, to comply with the requirements of Section 409A. With respect to all or any portion of the RSU Award for which a deferral election is not in effect (i.e., which is intended to be exempt from Code Section 409A under the short-term deferral exception set forth in Code Section 409A), then notwithstanding the definition of Distribution Date or any other provision in this Agreement to the contrary, the distribution of Shares shall occur no later than the 15th day of the third month of the calendar year following the calendar year in which the Performance Period ends (e.g., in the event of the Participant’s termination due to Disability on December 15, 2021, the Performance Period, by definition, shall end on December 15, 2021 and the Shares shall be distributed no later than March 15, 2021). Also, with respect to each RSU Award, the Determination Date shall not be later than the first anniversary of the last day of the Performance Period.
(b) Notwithstanding anything in the Plan or Agreement to the contrary, if the Participant should become subject to the 6-month delay rule of Treasury Regulation Section 1.409A-1(c)(3)(v), then to the extent that the Executive Performance RSU award, in whole or in part, is subject to Section 409A and the Participant is a Specified Employee (as defined below) as of the date of Separation from Service (as defined below), distributions with respect to any RSUs that have been deferred may not be made before the date that is six (6) months after the date of Separation from Service or, if earlier, the date of the Participant’s death.
(c) Whenever a payment or distribution under this Agreement specifies a payment or distribution period with reference to a number of days (e.g., “payment shall be made within thirty (30) days following the Change in Control”), the actual date of payment within the specified period shall be within the sole discretion of the Company.
(d) Whenever a payment or distribution under this Agreement specifies a payment or distribution “as soon as practicable” following a payment or distribution event, such payment or distribution shall be made as soon as practicable after such event, but not later than the fifteenth day of the third month following the calendar year in which such event occurred, and the actual date of payment within such period shall be within the sole discretion of the Company.
(a) “Confidential Information” means any information (whether or not specifically labeled or identified as “confidential”), in any form or medium, that is disclosed to, developed, or learned by the Participant during his or her Continuous Service, that relates to the business, services, techniques, know-how, processes, methods, formulations, investments, finances, operations, plans, research or development of the Company, and that is not generally known outside of the Company. Confidential Information includes, but is not limited to: the identity and information concerning the needs and preferences of current, former, and prospective customers; performance, compensation, and other personnel data concerning employees of the Company; business plans and strategies; plans for recruiting and hiring new personnel; trade secrets; and pricing strategies and policies. Confidential Information does not include the general skills, knowledge, and experience gained during the Participant’s Continuous Service and common to others in the industry or information that is or becomes publicly available without any breach by the Participant of this Agreement.
(b) “Customer” means any Person (as defined below) who or which is or was a customer of the Company and with whom the Participant had business contact during his or her tenure as a Participant hereunder or about whom the Participant received Confidential Information; provided that a former customer will only be considered a “Customer” for twelve (12) months after the last date on which the Company provided products or services to such Person.
(c) “Determination Date” means the actual date on which the Company awards RSUs to the Participant under this Agreement, which typically shall be within one hundred and twenty (120) days following the end of the applicable Performance Period (subject to Section 19(a)). For clarification, this Section 21(c) shall not apply in circumstances in which the Participant receives RSUs pursuant to Sections 2(c) or 2(e) (e.g., in the event of the Participant’s death or termination due to Disability, or in certain instances of a termination of Continuous Service without Cause or Change in Control).
(d) “Distribution Date” means the date that is within thirty (30) days following the date on which the underlying RSUs vest; provided, that the Distribution Date for a Participant who elects to defer the distribution of his or her Shares beyond the date on which the applicable RSU vests will be the earlier of (i) the date of the Participant’s Separation from Service (subject to Section 19(b)), or (ii) the end of the deferral period specified by the Participant in his or her deferral election.
(e) “Good Reason” shall have the meaning set forth in any employment, consulting, or other written agreement between the Participant and the Company and, if there is no employment, consulting, or other written agreement between the Company and the Participant or if such agreement does not define “Good Reason” then for purposes of this Agreement, “Good Reason” shall mean the occurrence of any of the following, without the Participant’s prior written consent:
(i) Any material diminution in the Participant’s assigned duties, responsibilities and/or authority;
(ii) Any material reduction in the Participant’s base compensation;
(iii) The Company requires the Participant to be based at a location that is more than thirty-five (35) miles further from the Participant’s residence than the location of the Participant’s principal job location or office immediately prior to the Change in Control (except for required travel on Company’s business to an extent substantially consistent with the Participant’s then present business travel obligations); or
(iv) Any other action or inaction that constitutes a material breach by the Company of any agreement under which the Participant provides services to the Company.
Notwithstanding the foregoing, Good Reason shall not exist unless the Participant gives the Company written notice thereof within sixty (60) days after its occurrence and the Company shall not have remedied the action or omission within thirty (30) days after such written notice.
(f) “Operating Income” means the Company’s operating income for the Performance Period, 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.
(g) “Performance Period” means the 2021 calendar year.
(h) “Person” means an individual or any type of business entity.
(i) “Prospective Customer” means any Person, other than a Customer, toward whom or which the Company directed specific and material business development efforts, such as, but not limited to, a detailed proposal or bid, and with whom the Participant had business contact during his or her tenure as a Participant hereunder or about whom the Participant received Confidential Information; provided that such Person will only be considered a “Prospective Customer” for twelve (12) months after the last date on which such efforts were undertaken by the Company.
(j) “Protected Individual” means an individual who is or was an employee, consultant or advisor of the Company and with whom the Participant had business contact at any time during the Participant’s employment or other retention by the Company or about whom the Participant received Confidential Information; provided that such a former employee, consultant or advisor will only be considered a “Protected Individual” for six (6) months after the last date he or she was employed by or provided services to the Company.
(k) “Restricted Stock Unit” or “RSU” means a Restricted Stock Unit as defined in the Plan that is payable only in Shares.
(l) “Separation from Service” shall have the meaning given in Code Section 409A, and references to termination of Continuous Service, as they relate to any deferral election or Distribution Date, shall be deemed to refer to a Separation from Service. All references in this Agreement to “termination of employment” or “employment termination” shall be deemed to refer to a Separation from Service.
(m) “Specified Employee” has the meaning given to that term in Code Section 409A and Treasury Regulation §1.409A-1(i) (or any similar or successor provisions).
In Witness Whereof, the parties have executed this Agreement effective as of the Award Date.
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Exhibit A
to
2021 Executive Performance RSU Award Agreement
EXECUTIVE PERFORMANCE RSU DEFERRAL ELECTION FORM
Deferral election must be made within thirty (30) days of the Award Date
This Executive Performance RSU Deferral Election Form (“Deferral Election Form”) is entered into by and between Fuel Tech, Inc. (the “Company”) and Xxxxxxx X. Xxxxxx (“the Participant” or “you”), who became eligible to receive an award of RSUs under the Fuel Tech, Inc. 2014 Long-Term Incentive Plan, as amended (the “Plan”) and a 2021 Executive Performance RSU Award Agreement (the “Agreement”), which Agreement was legally effective ____________, 2021. The provisions of the Plan and the Agreement are incorporated herein by reference in their entirety and supersede any conflicting provisions contained in this Deferral Election Form. Neither this Deferral Election Form nor the Plan or the Agreement shall be construed as giving the Participant any right to continue to be employed by or perform services for the Company or any subsidiary or affiliate thereof.
1. Deferral of RSUs
Any deferral period must be expressed as a number of whole years, not less than five (5) or more than ten (10), beginning on the Award Date.
Any such deferral must apply to receipt of all Shares underlying the of RSU award. For example, if you were to elect a deferral period of seven (7) years for any Executive Performance RSUs, this would result in you receiving Shares underlying the entire Executive Performance RSUs award seven (7) years from the Award Date regardless of the fact that the Executive Performance RSUs may have vested at differing times.
All deferrals are subject to the terms of the Agreement. The Agreement generally provides for distribution of all vested Shares within thirty (30) days following your Separation From Service (subject to the six (6)-month delay described in Section 19(b) of the Agreement which applies to certain Participants in the Plan) if your Separation From Service occurs prior to the deferral date below.
If no deferral period is specified on the Deferral Election Form or if the Company does not receive from you a signed and dated Deferral Election Form within the required election period applicable to the RSUs, Shares underlying those RSUs will be issued as described in the Agreement as soon as practicable upon vesting of the RSUs.
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No deferral. I wish to receive Shares upon vesting of each installment of RSUs. |
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I wish to defer receipt of all Shares underlying Executive Performance RSUs until ___________, 20__. |
2. Deferral Election Effective Date, Revision of Election During Election Period
This Deferral Election Form must be received by the Company within thirty (30) days of the Award Date and will become irrevocable on such date. You may revise this Deferral Election with respect to the deferral period no later than this due date, by contacting the Company’s Equity Administration Department in writing in accordance with the Notice provision set forth in Section 14 of the Agreement.
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