-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
Originator-Key-Asymmetric:
 MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen
 TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
MIC-Info: RSA-MD5,RSA,
 Q9PfofoqktvPs55URo33I/ILCaJfFxs81EA46AvnQkV5CTJmUEfmDFXfK8ooXomX
 Kxes2UtjpAiEIt8olmwe/g==

<SEC-DOCUMENT>0000950123-09-047875.txt : 20100825
<SEC-HEADER>0000950123-09-047875.hdr.sgml : 20100825
<ACCEPTANCE-DATETIME>20091002111634
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0000950123-09-047875
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		3
FILED AS OF DATE:		20091002

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			FUEL TECH, INC.
		CENTRAL INDEX KEY:			0000846913
		STANDARD INDUSTRIAL CLASSIFICATION:	INDUSTRIAL & COMMERCIAL FANS & BLOWERS & AIR PURIFYING EQUIP [3564]
		IRS NUMBER:				205657551
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		27601 BELLA VISTA PARKWAY
		CITY:			WARRENVILLE
		STATE:			IL
		ZIP:			60555
		BUSINESS PHONE:		6308454433

	MAIL ADDRESS:	
		STREET 1:		27601 BELLA VISTA PARKWAY
		CITY:			WARRENVILLE
		STATE:			IL
		ZIP:			60555

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	FUEL TECH N V
		DATE OF NAME CHANGE:	19930510
</SEC-HEADER>
<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.htm
<TEXT>
<HTML>
<HEAD>
<TITLE>corresp</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<DIV style="font-family: 'Times New Roman',Times,serif">







<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><IMG src="y79530y7953001.gif" alt="(FUEL TECH LOGO)">
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Submitted via EDGAR</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 50%">October&nbsp;2, 2009

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Mr.&nbsp;Rufus Decker<BR>
Accounting Branch Chief<BR>
Division of Corporate Finance<BR>
United States Securities and Exchange Commission<BR>
Washington, D.C. 20549

</DIV>

<DIV align="left" style="margin-top: 12pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Re:</B></TD>
    <TD>&nbsp;</TD>
    <TD><B>Fuel Tech, Inc.</B><BR>
<B>Form&nbsp;10-K for the Year Ended December&nbsp;31, 2008</B><BR>
<B>Form&nbsp;10-Q for the Period Ended June&nbsp;30, 2009</B><BR>
<B>Form&nbsp;8-K filed on July&nbsp;2, 2009</B><BR>
<B>Definitive Proxy Statement on Schedule&nbsp;14A filed April&nbsp;15, 2009</B><BR>
<B>File No.&nbsp;1-33059</B></TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Dear Mr.&nbsp;Decker:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have reviewed your September&nbsp;3, 2009 letter regarding your comments on the financial
statements and disclosures contained in the above-referenced SEC filings for Fuel Tech, Inc. (the
&#147;Company&#148;) and provide the following responses to your comments. We appreciate your comments and,
as noted below where applicable, will make the recommended changes in future filings.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U>FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2008</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U>General </U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>SEC Comment</B>:

</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><I>1.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Where a comment below requests additional disclosures or other revisions to be
made, these revisions should be included in your future filings, including your interim
filings if applicable.</I></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Response: </B>Where applicable, we have shown the revisions and will include comparable disclosure in
future filings, including interim filings, in accordance with the Staff&#146;s comments.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<!--TOC-->
<!--/TOC-->


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U>Cover Page</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>SEC Comment</B>:

</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><I>2.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>We note the disclosure on the cover page that your common stock is registered
pursuant to </I><I>Section 12(g)</I><I> of the Exchange Act. However, it appears that your common
stock is actually registered pursuant to </I><I>Section 12(b)</I><I> of the Exchange Act. In this
regard, we note that your common stock is listed on the NASDAQ Stock Market and was
subject to the Commission&#146;s order set forth in Release No.&nbsp;34-54240 (July&nbsp;31, 2006).
We also note the amended </I><I>Form 8-A</I><I> you filed on October&nbsp;2, 2006. Please revise
accordingly.</I></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Response</B>: In future filings, we will indicate that our common stock is registered pursuant to
Section 12(b) of the Exchange Act which reflects that effective August&nbsp;1, 2006 NASDAQ began
operations as a national securities exchange.
</DIV>

<!-- link2 "Item&nbsp;1 &#151; Business, page 1" -->
<DIV align="left"><A NAME="000"></A></DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U>Item&nbsp;1 &#150; Business, page 1</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>SEC Comment:</B>

</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><I>3.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>We note the disclosure in risk factor (vii). Please disclose the information
required by Item&nbsp;</I><I>101(c)(1)(iii)</I><I> of Regulation&nbsp;S-K, including a description of the
material terms of the supply agreement filed as Exhibit&nbsp;10.7. Please show us in your
supplemental response what the revisions will look like.</I></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Response: </B>To the extent applicable, in our future filings, except for those portions of the supply
agreement filed as Exhibit&nbsp;10.7 that are subject to the SEC&#146;s March&nbsp;19, 2009 Order Granting
Confidential Treatment &#150; File No.&nbsp;1-33059-CF#23284, we propose to more fully describe the supply
agreement with Martin Marietta Magnesia Specialties, LLC (MMMS)&nbsp;by replacing the current disclosure
in risk factor (vii)&nbsp;with substantially the following language:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The FUEL CHEM Technology segment is dependent upon a supply of magnesium hydroxide. Any adverse
change in the availability of this chemical will likely have an adverse impact on ongoing operation
of our FUEL CHEM programs. On March&nbsp;4, 2009, we entered into a Restated Product Supply Agreement
(&#147;PSA&#148;) with Martin Marietta Magnesia Specialties, LLC (MMMS)&nbsp;in order to assure the continuance of
a stable supply from MMMS of magnesium hydroxide products for our requirements in the United States
and Canada until December&nbsp;31, 2013, the date of the expiration of the PSA. Magnesium hydroxide
products are a significant component of the FUEL CHEM programs. Pursuant to the PSA, MMMS supplies
us with magnesium hydroxide products manufactured pursuant to our specifications and we have agreed
to purchase from MMMS, and MMMS has agreed to supply, 100% of our requirements for such magnesium
hydroxide products for our customers who purchase such products for delivery in the United States
and Canada. There can be no assurance that Fuel Tech will be able to obtain a stable source of
magnesium hydroxide in markets outside the United States.
</DIV>


<P align="right" style="font-size: 10pt"><!-- Folio -->Page 2<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>SEC Comment:</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><I>4.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>We note your statement on page 39 that &#147;Fuel Tech had two customers that
individually represented greater than 10% of revenues&#148; and that &#147;&#091;i&#093;n total these two
customers represented 28% of revenues....&#148; Please disclose the information required by
Item&nbsp;</I><I>101(c)(1)(vii)</I><I> of Regulation&nbsp;S-K. Please show us in your supplemental response
what the revisions will look like.</I></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Response: </B>In our future filings, we will disclose the information required by Item&nbsp;101(c)(1)(vii).
For our Form 10-K for the year ended December&nbsp;31, 2008, such disclosure would have read as
follows: For the year ended December&nbsp;31, 2008, Fuel Tech had two customers, Kansas City Power &#038;
Light and Santee Cooper, that individually represented greater than 10% of revenues. In total
these two customers represented approximately 28% of total revenues, with Kansas City Power &#038; Light
procuring products solely from the APC technology segment and with Santee Cooper procuring products
solely from the FUEL CHEM technology segment. For each of these customers, Fuel Tech has a normal
arms length supplier-customer relationship that is governed by a supply agreement with each
customer entered into by Fuel Tech in the normal course of its business.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>SEC Comment:</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U>Intellectual Property, page 5</U>

</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><I>5.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Please disclose the duration of your intellectual property rights. See
Item&nbsp;</I><I>101(c)(1)(iv)</I><I> of Regulation&nbsp;S-K. Please show us in your supplemental response
what the revisions will look like.</I></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Response: </B>In our future filings, we will include the requested disclosure with regard to the
duration of our intellectual property rights. For our Form 10-K for the year ended December&nbsp;31,
2008, such disclosure would have read as follows: Our patents have expiration dates ranging from
July&nbsp;14, 2009 to February&nbsp;16, 2026. The average remaining duration of our patents is approximately
six and one-half years.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U>Management&#146;s Discussion and Analysis</U><BR>
<U>Critical Accounting Policies and Estimates</U><BR>
<U>Revenue Recognition, page 15</U>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>SEC Comment:</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><I>6.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>You indicate that your system start-up and optimization services combined with
the accuracy of the modeling that is performed enables revenue to be recognized prior
to the receipt of formal customer acceptance. Please tell what consideration you gave
to SAB 104 in recognizing revenue prior to the receipt of formal customer acceptance.
In doing so, please also tell us when risk of loss transfers to the customer.</I></TD>
</TR>

</TABLE>
</DIV>
<P align="right" style="font-size: 10pt"><!-- Folio -->Page 3<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Response: </B>Using the guideline that revenue should not be recognized until it is recognizable and
earned, we apply the four primary criteria to our revenue recognition policies when determining
when to recognize revenue in our two business segments. Specifically, we give consideration to the
following:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Persuasive evidence of an arrangement exists;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Delivery has occurred or services have been rendered;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The seller&#146;s price to the buyer is fixed or determinable; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Collectability is reasonably assured.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We recognize revenue in our two business segments differently, but both in accordance with the
authoritative pronouncements, including SAB 104. For the FUEL CHEM<SUP style="font-size: 85%; vertical-align: text-top"> </SUP>Technology segment,
revenues are recognized upon transfer of title for the chemicals we sell that are utilized in the
program. The chemicals are drop-shipped to the customer only after a purchase order is received
specifying, among other items, quantity, type, price and delivery date and location. The price
paid is reconciled to the sales contract we have with the customer. Title transfer can occur at
either the point of shipment or destination depending on the contractual terms with the customer.
Collectability on our FUEL CHEM customer accounts has historically been near 100%. Risk of loss
transfers to the customer at the time of title transfer.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">For the Air Pollution Control (APC)&nbsp;Technology segment, revenues are recognized using the
percentage of completion method of accounting. Under this method, revenues are recognized as work
is performed based on the relationship between actual construction costs incurred and total
estimated costs at completion. All work is performed under a master project contract with the
customer that specifies, among other items, the project scope, cost, timeline and measurable
success factors, in the form of performance guarantees, which will ultimately lead to customer
acceptance. Fuel Tech has installed over 550 units around the world and has never failed to meet a
performance guarantee when the customer has provided the required operating conditions for the
project. As part of the project implementation process, we perform system start-up and
optimization services that effectively serve as a test of actual project performance. We believe
that this test, combined with the accuracy of the modeling that is performed, enables revenue to be
recognized prior to the receipt of formal customer acceptance. In conjunction with the primary
phases of a typical APC project, we usually invoice the customer at the completion of the
engineering, equipment delivery and project completion stages and the customer will remit payment
to us for the first two stages which occur prior to project completion. As with our FUEL CHEM
Technology segment, collectability on our APC Technology segment customer accounts has historically
been near 100%. Risk of loss usually transfers to the customer at the time the equipment is
delivered to the customer job site, but in all cases prior to formal customer acceptance of the
final project, including the achievement of the performance guarantees.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U>Assessment of Potential Impairments of Goodwill and Intangible Assets, page 16</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>SEC Comment:</B>

</DIV>

<P align="right" style="font-size: 10pt"><!-- Folio -->Page 4<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><I>7.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>In the interest of providing readers with a better insight into management&#146;s
judgments in accounting for goodwill, intangible assets and property, plant and
equipment, please consider disclosing the following:</I></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Please disclose how you determine when property, plant and equipment should
be tested for impairment, including what types of events and circumstances
indicate impairment, and how frequently you evaluate for these types of events
and circumstances;</I></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>How you group long-lived assets for impairment testing and your basis for
that determination;</I></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Sufficient information to enable a reader to understand how you apply your
discounted cash flow model in estimating the fair value of your reporting units
and why management selected this method as being the most meaningful in
preparing your goodwill impairment analyses. Please also disclose the
methodology used in estimating the fair value of property, plant and equipment
or asset groups;</I></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>How you determine the appropriate discount rates to apply in your asset
impairment analysis;</I></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Please expand your discussion of the significant estimates and assumptions
used to determine future undiscounted cash flows and fair value. You should
discuss how sensitive the fair value estimates are to each of these significant
estimates and assumptions and whether certain estimates and assumptions are
more subjective than others;</I></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>If applicable, how the assumptions and methodologies used for valuing
goodwill and other intangibles and property, plant and equipment in the current
year have changed since the prior year, highlighting the impact of any changes;
and</I></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>For any asset groups for which the carrying value was close to the fair
value, please disclose the carrying value of the asset groups.</I></TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 8%"><I>We caution you that, to the extent you gather and analyze information regarding the
risks of recoverability of your assets, such information may be required to be
disclosed if it would be material and useful to investors. We believe that it is
important to provide investors with information to help them evaluate the current
assumptions underlying your impairment assessment relative to your current market
conditions and your peers to enable them to attempt to assess the likelihood of
potential future impairments. We believe that detailed rather than general
disclosures regarding these risks and exposures would provide investors with the
appropriate information to make this evaluation. In this regard, we urge you to
consider what additional quantitative disclosures can be provided to convey the risk
that additional impairment or restructuring charges may be recorded. Please show us
supplementally what your revised disclosure will look like.</I>
</DIV>

<P align="right" style="font-size: 10pt"><!-- Folio -->Page 5<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Response: </B>In our future filings, we will consider the items listed and incorporate those changes
we feel will further provide investors with the appropriate information required to help them
evaluate the current assumptions underlying our impairment assessment relative to the current
market conditions and our peers and to enable them to attempt to assess the likelihood of potential
future impairments. For our Form 10-K for the year ended December&nbsp;31, 2008, such disclosure of the
entire Assessment of Potential Impairments of Goodwill and Intangible Assets section would have
read as follows:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Goodwill</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Goodwill and indefinite-lived intangible assets are no longer amortized, but rather are reviewed
annually (in the fourth quarter) or more frequently if indicators arise, for impairment. The
Company does not have any indefinite-lived intangible assets other than goodwill. Such indicators
include a decline in expected cash flows, a significant adverse change in legal factors or in the
business climate, unanticipated competition, or slower growth rates, among others.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Goodwill is allocated among and evaluated for impairment at the reporting unit level, which is
defined as an operating segment or one level below an operating segment. Fuel Tech has two
reporting units which are reported in the FUEL CHEM segment and the APC Technology segment. As of
December&nbsp;31, 2008 and 2007, goodwill allocated to the FUEL CHEM Technology segment was $1,723 and
$1,723, respectively, while goodwill allocated to the APC Technology segment was $3,435 and 396,
respectively. The $3,039 increase in goodwill in the APC Technology segment is due to the
acquisition of substantially all of the assets of Tackticks, LLC and FlowTack, LLC on October&nbsp;3,
2008. The acquisition related goodwill totaling $16,207 related to our acquisition of substantially
all of the assets of Advanced Combustion Technology, Inc. on January&nbsp;5, 2009 will be allocated to
the APC Technology segment
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The evaluation of impairment involves comparing the current fair value of the business to the
carrying value. Fuel Tech uses a discounted cash flow (DCF)&nbsp;model to determine the current fair
value of its two reporting units as this methodology was deemed to best quantify the present values
of the Company&#146;s expected future cash flows and yield a fair value that should be in line with the
aggregate market value placed on the Company via the current stock price multiplied by the
outstanding common shares. A number of significant assumptions and estimates are involved in the
application of the DCF model to forecast operating cash flows, including markets and market share,
sales volumes and prices, costs to produce and working capital changes. Events outside the
Company&#146;s control, specifically market conditions that impact revenue growth assumptions, could
significantly impact the fair value calculated. These assumptions are, however, somewhat
insensitive to these external events in all but the most egregious situations due to the relatively
conservative nature upon which such future growth assumptions were developed. Management considers
historical experience and all available information at the time
</DIV>
<P align="right" style="font-size: 10pt"><!-- Folio -->Page 6<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">the fair values of its reporting units are estimated. However, actual fair values that could be
realized in an actual transaction may differ from those used to evaluate the impairment of
goodwill.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The application of our DCF model in estimating the fair value of each reporting segment is based on
the &#145;income&#146; approach to business valuation. In using this approach for each reportable segment,
we forecast segment revenues and expenses out to perpetuity and then discount the resulting cash
flows back using an appropriate discount rate. The forecast considers, among other items, the
current and expected business environment, expected changes in the fixed and variable cost
structure as the business grows and a revenue growth rate that we feel is both achievable and
sustainable. The discount rate used is composed of a number of identifiable risk factors,
including equity risk and small company premiums, that when added together, results in a total
return that a prudent investor would demand for an investment in our company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In the event the estimated fair value of a reporting unit per the DCF model is less than the
carrying value, additional analysis would be required. The additional analysis would compare the
carrying amount of the reporting unit&#146;s goodwill with the implied fair value of that goodwill,
which may involve the use of valuation experts. The implied fair value of goodwill is the excess
of the fair value of the reporting unit over the fair values assigned to all of the assets and
liabilities of that unit as if the reporting unit was acquired in a business combination and the
fair value of the reporting unit represented the purchase price. If the carrying value of goodwill
exceeds its implied fair value, an impairment loss equal to such excess would be recognized, which
could significantly and adversely impact reported results of operations and stockholders&#146; equity.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Based upon the nature of the goodwill recorded on the balance sheets as of December&nbsp;31, 2008 and
2007, the Company believes that, in order for an impairment to occur, a series of material
prolonged negative economic events would have to occur. These events would most likely be seen in
economic indicators such as suppressed consolidated revenues or Common Stock price, reduced cash
flows or declining APC order backlog. Management does not believe that as pertains to Fuel Tech&#146;s
business that certain negative economic events related to the global economic downturn are likely
to be prolonged.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Impairment of Long-Lived Assets and Amortizable Intangible Assets</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Long-lived assets, including property, plant and equipment (PP&#038;E) and intangible assets, are
reviewed for impairment when events and circumstances indicate that the carrying amount of the
assets (asset groups) may not be recoverable. An impairment loss is recognized when estimated
future undiscounted cash flows expected to result from the use of the asset (asset group) and its
eventual disposition are less than the carrying amount. When quoted market prices are not
available, various valuation techniques, including the discounted value of estimated future cash
flows, are utilized. This process involves examining the operating condition of individual assets
and estimating a fair value based upon its current condition, relevant market factors and remaining
estimated operational life compared to remaining depreciable life. However, due to
</DIV>
<P align="right" style="font-size: 10pt"><!-- Folio -->Page 7<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">the nature of our PP&#038;E, which is comprised mainly of assets related to our headquarters building
and equipment deployed at customer locations for our FUEL CHEM programs, and the shorter-term
duration over which FUEL CHEM equipment is depreciated, the likelihood of impairment is low. The
discontinuation of a FUEL CHEM program at a customer site would most likely result in the
re-deployment of all or most of the effected assets to another customer location rather than an
impairment.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U>2008 versus 2007, page 18</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>SEC Comment:</B>

</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><I>8.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Please expand/revise your discussion under results of operations for all
periods to:</I></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Quantify the extent to which material increases in sales are attributable to
changes in prices, volume or amount of goods being sold, or change in product
mix. For example, you explain on page 18 that the increase in revenues in the
FUEL CHEM technology segment is mainly attributable to the continued acceptance
of your patented TIFI Targeted In-Furnace Injection technology and you also
added 15 new units to your customer base. However, you do not discuss the
significance of adding 15 new units to your customer base or quantify the
impact of adding these units;</I></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Provide a more robust explanation for the changes in line items within your
statements of income. For example, you indicated that the increase in costs of
sales percentage for FUEL CHEM was due to costs associated with demonstration
periods and other start-up activities without further explanations as to the
extent of the costs associated with demonstration periods or start-up costs or
the amount of additional costs incurred per new unit added; and</I></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Quantify most of the change in your line items in the statements of income.
For example you indicate that the increase in SG&#038;A was a result of $1&nbsp;million
increase in stock compensation expense, $2&nbsp;million increase in personnel and
other costs, partially offset by a reduction in annual incentive expenses of
$1.5&nbsp;million. However, this explanation only explains why SG&#038;A increased by
$1.5&nbsp;million, not the increase of $3.1&nbsp;million as disclosed on page 18.</I></TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 8%"><I>This is not meant to represent an all-inclusive list of where your MD&#038;A should be
improved. We encourage you to provide quantification of amounts and further
clarification throughout your discussion, including your results by segment. See
Item&nbsp;</I><I>303(a)(3)</I><I> of Regulation&nbsp;S-K. Please show us supplementally what your revised
disclosure will look like.</I>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Response: </B>In our future filings, we will expand this disclosure to address both the items noted
</DIV>
<P align="right" style="font-size: 10pt"><!-- Folio -->Page 8<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">above and the related items in the results of operations discussion, giving particular attention to
Item&nbsp;303(a)(3) of Regulation&nbsp;S-K. For our Form 10-K for the year ended December&nbsp;31, 2008, relevant
sections of the disclosure would have read as follows:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Revenues for the FUEL CHEM technology segment were $36,681 for the year ended December
31, 2008, an increase of $4,134, or 13%, versus 2007. This segment&#146;s growth is indicative
of the continued market acceptance of Fuel Tech&#146;s patented TIFI Targeted In-Furnace
Injection technology, particularly on coal-fired units, which represent the largest market
opportunity for the technology, both domestically and abroad. During 2008, Fuel Tech added
15 new units to its customer base, 13 of which were coal-fired units, the largest annual
total in the Company&#146;s history. These coal-fired units, which average approximately $1,000
in annual revenues once converted to commercial status, were the primary reason for the
year-over-year increase in segment revenues. Historically, most demonstrations convert
into commercial accounts.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>During a FUEL CHEM demonstration period, the Company will typically absorb all of the
direct costs (e.g., chemicals, on-site personnel, equipment depreciation and
demonstration-related travel expenses) and indirect costs of operating the demonstration
and will offset these costs with partial billings to the customer. While each
demonstration is unique, a typical demonstration will operate for 90&nbsp;days and the Company
will accumulate future billing amounts that will usually be invoiced to the customer only
if the FUEL CHEM program converts to commercial status. These amounts may range from less
than $100 to over $1,000 depending on the quantity of chemical fed, the agreed-upon cost
sharing arrangement and the length of the demonstration program.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>During the demonstration period, the aggregate cost of all FUEL CHEM demonstration
programs will have a dilutive effect on the segment gross margin percentage as the related
revenues earned will approximate the costs incurred and result in nominal gross margin
dollars being recorded. In certain situations, the Company agrees to fully fund a
demonstration program due to the strategic importance of its success and conversion to
commercial status. In these cases, the specific program&#146;s recognized revenues will be zero
and the gross margin dollar contribution will be negative by the amount of the program&#146;s
cost, thus even further diluting the segment&#146;s gross margin percentage.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In addition to the existing discussion text related to the $3,062 fiscal 2008 increase in selling,
general and administrative expenses versus fiscal 2007, the following commentary is offered to
further highlight the underlying reasons for the year-over-year increase:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company also incurred incremental year-over-year expense increases in the following
areas: consulting services increased $486 driven by expertise required in certain foreign
countries for initial market penetration and domestic financial advisory services;
insurance expense increased $210 due to general inflation, the addition of new policies,
increased coverages on certain policies and an increase in insurable assets; recruiting
fees increased $316 due to the costs associated with adding one new member to our Board of
Directors and the hiring of a new Chief Financial Officer; and non-income</TD>
</TR>

</TABLE>
</DIV>
<P align="right" style="font-size: 10pt"><!-- Folio -->Page 9<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #textcolor#; background: #bgcolor#">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>taxes increased $199 due primarily to a foreign business tax increase and additional real
estate taxes on the Company&#146;s new headquarters facility.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U>Liquidity and Sources of Capital, page 19</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>SEC Comment:</B>

</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><I>9.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>You indicate that operating activities provided $8.0&nbsp;million of cash for the
year ended December&nbsp;31, 2008, primarily due to the favorable operating results.
However, you have not identified the components that resulted in the significant
increase in your cash flows from operations. Please expand this disclosure to discuss
the components that resulted in the increase in cash flows from operations as well as
the underlying reasons for changes in these components, with specific discussions for
accounts receivable, accounts payable and accrued liabilities and other noncurrent
liabilities. Please revise your disclosure for all periods presented. Please show us
supplementally what your revised disclosure will look like.</I></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Response: </B>In our future filings, we will expand this disclosure to include a discussion of the
components that resulted in an increase or decrease in cash flows from operations, including making
specific reference to the relevant net working capital components that had an effect on the
increase or decrease. For our Form 10-K for the year ended December&nbsp;31, 2008, such disclosure
would have read as follows: At December&nbsp;31, 2008, Fuel Tech had cash and cash equivalents and
short-term investments of $28,149 and working capital of $44,346 versus $32,471 and $45,143 at
December&nbsp;31, 2007, respectively. Operating activities provided $8,047 of cash for the year ended
December&nbsp;31, 2008, primarily due to the favorable operating results of the business segments and
that resulted in net income of $3,602, a decrease in accounts receivable of $8,491 due to the
timing of customer receipts, and the add back of non-cash items including stock compensation
expense of $5,815, depreciation expense of $2,810 and amortization expense of $184. Partially
offsetting these items were a decrease in accounts payable of $5,436 due to the timing of vendor
invoices and related payments, an increase in prepaid expense of $3,899, and a decrease in accrued
and other non-current liabilities of $3,720.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Operating activities provided $4,099 of cash for the year ended December&nbsp;31, 2007, primarily due to
the favorable operating results of the business segments that resulted in net income of $7,243, the
add back of non-cash items including stock compensation expense of $4,791, depreciation expense of
$2,353 and amortization expense of $115, an increase in accounts payable of $6,000 due to the
timing of vendor payments and invoice receipts, and an increase in deferred income taxes of $1,716.
Partially offsetting these items were an increase in accounts payable of $15,132 primarily related
to the timing of progress billings on APC projects, a decrease in accrued and other non-current
liabilities of $2,081 and an increase in prepaid expenses of $906.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">For our Form 10-Q for the quarterly period ended June&nbsp;30, 2009, such disclosure would have
</DIV>
<P align="right" style="font-size: 10pt"><!-- Folio -->Page 10<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">read as follows: Operating activities generated $4,691 of cash for the six months ended June&nbsp;30,
2009, despite a year-to-date net loss of $1,840, primarily due to the add back of non-cash items
including stock compensation expense of $3,166, depreciation expense of $1,830 and amortization
expense of $858, and decreases in accounts receivable, inventory and prepaid expenses of $1,948,
$682, and $792, respectively. Partially offsetting these items were a decrease in accounts payable
of $3,380, due to timing of vendor payments, and an increase in income tax provision of $1,157.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>SEC Comment:</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><I>10.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Please disclose whether you were in compliance with all loan covenants as of
December&nbsp;31, 2008. Please also disclose here or elsewhere in the filing the specific
terms of any material debt covenants in your credit agreements. For any material debt
covenants for which you have not met, or it is reasonably likely that you will not be
able to meet such covenants, please disclose the required amounts/ratios as well as the
actual amounts/ratios as of each reporting date. This will allow readers to understand
how much cushion there is between the required amounts/ratios and the actual
amounts/ratios. Please also consider showing the specific computations used to arrive
at the actual amounts/ratios with corresponding reconciliations to US GAAP amounts, if
necessary. See Sections&nbsp;I.D and IV.C of the SEC Interpretive Release No.&nbsp;33-8350 and
Question 10 of our FAQ Regarding the Use of Non-GAAP Financial Measures dated June&nbsp;13,
2003. Please also disclose if there are any stated events of default which would
permit the lenders to accelerate the debt if not cured within applicable grace periods
or any cross default provisions in your debt agreements. Your revised disclosure
should also address the new debt agreement disclosed in the </I><I>Form 8-K</I><I> filed July&nbsp;2,
2009. If the measure that is referred to as EBITDA in your </I><I>Form 8-K</I><I> filed on July&nbsp;2,
2009 includes other adjustments, please revise your disclosures to refer to this
measure as Adjusted EBITDA instead of EBITDA. Please show us supplementally what your
revised disclosure will look like.</I></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Response: </B>In our future filings, we will expand this disclosure to include a discussion of the
material debt covenants and their underlying calculations, making specific reference to the
required and actual amounts/ratios of each covenant. We will also make reference to any stated
events of default which would permit the lenders to accelerate debt if not cured within acceptable
grace periods or any cross default provisions in our agreements as it relates to our new domestic
and Chinese revolving credit facilities. For our Form 10-K for the year ended December&nbsp;31, 2008,
such disclosure regarding compliance would have read as follows: At December&nbsp;31, 2008, the Company
was in compliance with all loan covenants on its domestic revolving credit facility, when including
the aforementioned waiver for exceeding the allowable annual capital spending covenant and the
waiver for exceeding the annual acquisition spending covenant. The Company does not believe there
is a reasonable likelihood that future debt covenants will not be met.
</DIV>


<P align="right" style="font-size: 10pt"><!-- Folio -->Page 11<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As the revised disclosure will make reference to the new debt agreement disclosed in our Form 8-K
filed on July&nbsp;2, 2009, the balance of this response will focus solely on the Form 10-Q for the
quarterly period ended June&nbsp;30, 2009. In that document, such disclosure would have read as
follows: The JPM Chase China facility does not contain any material debt covenants. The JPM Chase
domestic facility contains several debt covenants with which the Company must comply on a quarterly
or annual basis, including: an annual capital expenditure limit of $10,000, a maximum net loss for
the quarterly period ended June&nbsp;30, 2009 of ($2,000), a minimum net income for the quarterly period
ended September&nbsp;30, 2009 of $750, a maximum funded debt to EBITDA ratio of 2.0:1 for the quarterly
period ended December&nbsp;31, 2009 and a maximum funded debt to EBITDA of 1.5:1 for all subsequent
quarterly periods until the facility expires. Maximum funded debt includes all borrowed funds,
outstanding standby letters of credit and bank guarantees. In addition, the Company must maintain
a minimum tangible net worth of $42,000, adjusted upward for 50% of net income generated and 100%
of all capital issuances. As of June&nbsp;30, 2009, the Company was in compliance with all debt
covenants of the JPM Chase domestic facility, including a year-to-date capital expenditure amount
of $1,540, an actual quarterly net loss of ($278) and a tangible net worth of $46,859.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In the event of default on either the JPM Chase domestic facility or the JPM Chase China facility,
the cross default feature in each allows the lending bank to accelerate the payments of any amounts
outstanding and may, under certain circumstances, allow the bank to cancel the facility. If the
Company were unable to obtain a waiver for a breach of covenant and the bank accelerated the
payment of any outstanding amounts, such acceleration may cause the Company&#146;s cash position to
deteriorate or, if cash on hand were insufficient to satisfy the payment due, may require the
Company to obtain alternate financing to satisfy the accelerated payment.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>SEC Comment:</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><I>11.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>On page 41, you disclose that you obtained waivers to exceed the capital
spending covenant and the allowable acquisition spending covenant. Please provide the
following in your discussion of liquidity and capital resources.</I></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Describe the exact length and terms of the waiver; and</I></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Discuss the potential impact on your liquidity and capital resources if you
do not comply with any remaining covenants and/or are unable to obtain a waiver
of compliance in the future. Specifically, you should state whether
noncompliance with any remaining covenants could lead to the acceleration of
payments due under any of your debt arrangements.</I></TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 8%"><I>Please show us supplementally what your revised disclosure will look like.</I>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Response: </B>In our future filings, we will expand the Liquidity and Sources of Capital section in
Item&nbsp;7 &#151; Management&#146;s Discussion and Analysis of Financial Condition and Results of Operations to
include a discussion of any debt waivers obtained and the impact on liquidity and
</DIV>
<P align="right" style="font-size: 10pt"><!-- Folio -->Page 12<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">capital resources in the event of a covenant breach. For our Form 10-K for the year ended December
31, 2008, disclosure would have read as follows: Fuel Tech has a domestic $25,000 revolving credit
facility expiring July&nbsp;31, 2009. The facility is unsecured and bears interest at a rate of LIBOR
plus 75 basis points. Fuel Tech can use this facility for cash advances and standby letters of
credit. The Company requested and received two separate waivers in 2007 and 2008, respectively, to
enable us to exceed the $7,500 annual capital spending covenant specified in the domestic facility
agreement to accommodate our purchase of land and building for our new corporate headquarters and
the subsequent build out and furnishing of the premises. These separate annual waivers expired at
December&nbsp;31, 2007 and 2008, respectively. During 2008, the Company also requested and received a
waiver to enable us to exceed the allowable $10,000 annual acquisition spending covenant specified
in the facility agreement to accommodate our strategic acquisitions. This waiver expired on
December&nbsp;31, 2008.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In the event of default on either the domestic revolving credit facility or the JPM Chase China
revolving credit facility, the cross default feature in each facility allows the lending bank to
accelerate the payments of any amounts outstanding and may, under certain circumstances, allow the
bank to cancel the facility. If the Company were unable to obtain a waiver for a breach of
covenant and the bank accelerated the payment of any outstanding amounts, such acceleration may
cause the Company&#146;s cash position to deteriorate or, if cash on hand were insufficient to satisfy
the payment due, may require the Company to obtain alternate financing to satisfy the accelerated
payment.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">For our Form 10-Q for the quarterly period ended June&nbsp;30, 2009, such disclosure would have read as
follows as no such waivers were in existence during that reporting period: In the event of default
on either the domestic revolving credit facility or the JPM Chase China revolving credit facility,
the cross default feature in each facility allows the lending bank to accelerate the payments of
any amounts outstanding and may, under certain circumstances, allow the bank to cancel the
facility. If the Company were unable to obtain a waiver for a breach of covenant and the bank
accelerated the payment of any outstanding amounts, such acceleration may cause the Company&#146;s cash
position to deteriorate or, if cash on hand were insufficient to satisfy the payment due, may
require the Company to obtain alternate financing to satisfy the accelerated payment.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U>Contractual Obligations and Commitments, page 20</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>SEC Comment:</B>

</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><I>12.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Please revise your contractual obligations table to include a totals line item
for each column of the table. See the illustration in Item&nbsp;</I><I>303(a)(5)</I><I> of Regulation
S-K. Please show us supplementally what your revised disclosure will look like.</I></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Response: </B>In our future filings, we will disclose the information required by Item&nbsp;303(a)(5) of
Regulation&nbsp;S-K using the illustration referenced. For our Form 10-K for the year ended December
31, 2008, such disclosure table would have appeared as follows:
</DIV>


<P align="right" style="font-size: 10pt"><!-- Folio -->Page 13<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="11" style="border-bottom: 1px solid #000000"><B>Payments due by period</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Less than 1</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Contractual obligations</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Total</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>year</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>1&#150;3 years</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>3&#150;5 years</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>More than 5 years</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Long-Term Debt Obligations*</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,188</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,188</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Operating Lease Obligations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,720</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">663</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">527</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">468</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">62</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">3,908</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,851</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">527</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">468</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">62</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">*</TD>
    <TD>&nbsp;</TD>
    <TD>Excludes interest.</TD>
</TR>

</TABLE>



<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U>Financial Statements</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U>1. Organization and Significant Accounting Policies, page 29</U>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>SEC Comment:</B>

</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><I>13.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Please disclose the types of expenses that you include in the cost of sales
line item and the types of expenses that you include in the selling, general and
administrative expense line item. In doing so, please also disclose whether you
include inbound freight charges, purchasing and receiving costs, inspection costs,
warehousing costs, internal transfer costs, and the other costs of your distribution
network in the cost of sales line item. With the exception of warehousing costs, if
you currently exclude a portion of these costs from cost of sales, please disclose:</I></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>in a footnote the line items that these excluded costs are included in and
the amounts included in each line item for each period presented; and</I></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>in MD&#038;A that your gross margins may not be comparable to those of other
entities, since some entities include all of the costs related to their
distribution network in cost of sales and others like you exclude a portion of
them from gross profit, including them instead in a line item, such as selling,
general and administrative expense.</I></TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 8%"><I>Please show us supplementally what your revised disclosure will look like.</I>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Response: </B>In our future filings, we will expand our discussion of the Organization and Significant
Policies section to address the specific components of our cost of sales line item and our selling,
general and administrative expense line item. For our Form 10-K for the year ended December&nbsp;31,
2008, such disclosure would have read as follows: Cost of sales includes all internal and external
engineering costs, equipment and chemical charges, inbound and outbound freight expenses, internal
and site transfer costs, installation charges, purchasing and receiving costs, inspection costs,
warehousing costs, project personnel travel expenses and other direct and indirect expenses
specifically identified as project- or product line-related, as appropriate (e.g., test equipment
depreciation and certain insurance expenses).
</DIV>


<P align="right" style="font-size: 10pt"><!-- Folio -->Page 14<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Selling, general and administrative expenses primarily include the following categories except
where an allocation to the cost of sales line item is warranted due to the project- or product-line
nature of a portion of the expense category: salaries and wages, employee benefits, non-project
travel, insurance, legal, rent, accounting and auditing, recruiting, telephony, employee training,
Board of Directors&#146; fees, auto rental, office supplies, dues and subscriptions, utilities, real
estate taxes, commissions and bonuses, marketing materials, postage and business taxes.
Departments comprising the selling, general and administrative line item primarily include the
functions of executive management, finance and accounting, investor relations, regulatory affairs,
marketing, business development, information technology, human resources, sales, legal and general
administration.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">For our Form 10-Q for the quarterly period ended June&nbsp;30, 2009, such disclosure would have read as
follows: Cost of sales includes all internal and external engineering costs, equipment and
chemical charges, inbound and outbound freight expenses, internal and site transfer costs,
installation charges, purchasing and receiving costs, inspection costs, warehousing costs, project
personnel travel expenses and other direct and indirect expenses specifically identified as
project- or product line-related, as appropriate (e.g., test equipment depreciation and certain
insurance expenses).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Selling, general and administrative expenses primarily include the following categories except
where an allocation to the cost of sales line item is warranted due to the project- or product-line
nature of a portion of the expense category: salaries and wages, employee benefits, non-project
travel, insurance, legal, rent, accounting and auditing, recruiting, telephony, employee training,
Board of Directors&#146; fees, auto rental, office supplies, dues and subscriptions, utilities, real
estate taxes, commissions and bonuses, marketing materials, postage and business taxes.
Departments comprising the selling, general and administrative line item primarily include the
functions of executive management, finance and accounting, investor relations, regulatory affairs,
marketing, business development, information technology, human resources, sales, legal and general
administration.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U>Goodwill and Other Intangibles, page 30</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>SEC Comment:</B>

</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><I>14.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>You indicate that you allocate goodwill to reporting units based on the
relative excess of fair value of carrying value of the reporting units. The ratio of
each reporting unit&#146;s excess fair value over carrying value to the total excess of fair
value over carrying value is used as the basis for the allocation of the goodwill
balance. Please tell us how you determined that this is an appropriate method to
allocate goodwill to your reporting units. Please tell us what consideration you gave
to paragraph 34 and 35 of SFAS 142 in assigning goodwill to your reporting units.</I></TD>
</TR>

</TABLE>
</DIV>


<P align="right" style="font-size: 10pt"><!-- Folio -->Page 15<!-- /Folio -->
</DIV>



<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Response: </B>In accordance with paragraphs 34 and 35 of, and within the spirit and intent of SFAS
142, we allocate goodwill between our two reporting units only after giving consideration to the
expected benefits each segment will enjoy from the net assets acquired. Prior to completing three
acquisitions in late 2008 and early 2009, the only goodwill on our balance sheet was $2,119 which
was generated from a transaction in 1998 whereby Fuel Tech, Inc. purchased the remaining 50% of the
Nalco Fuel Tech Joint Venture. We assigned the goodwill balance of $2,119 to each of the reporting
units based on the relative excess of the fair value over the carrying value of the reporting
units, based on a current determination of fair value of each of the reporting units. The
determination of fair value was made as of December&nbsp;31, 2004, as this was the date that Fuel Tech
made the decision to use two reportable segments to reflect its business activities and a ratio of
each reporting unit&#146;s excess fair value over carrying value to the total excess of fair value over
carrying value is used as the basis for the allocation of the goodwill balance. As discounted cash
flow projections and other records related to the business transaction were not readily available
from that date, the high-level allocation methodology employed was determined to provide the most
reasonable allocation of goodwill between the two reporting segments.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In connection with our October&nbsp;2008 acquisitions of substantially all of the assets of Tackticks,
LLC and FlowTack, LLC and our January&nbsp;2009 acquisition of substantially all of the assets of
Advanced Combustion Technology, Inc., goodwill was allocated to the reporting segment that would
enjoy the benefits and synergies of the net assets acquired. For all three transactions, the
goodwill was allocated to the APC Technology segment.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our disclosure in the Form 10-K for the year ended December&nbsp;31, 2009 will make reference to the
methodologies utilized to allocate goodwill to individual reporting segments.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>SEC Comment:</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><I>15.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Please revise your goodwill and other intangibles disclosure to provide the
following:</I></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Disclose the dollar amount of goodwill that relates to each reportable
segment as of each balance sheet date; and</I></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Disclose any significant changes in the allocation of goodwill by reportable
segment.</I></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><I>&nbsp;</I></TD>
    <TD width="1%"><I>&nbsp;</I></TD>
    <TD><I>See paragraph 45 of SFAS 142. Please show us supplementally what your revised
disclosure will look like.</I></TD>
</TR>

</TABLE>
</DIV>
<P align="right" style="font-size: 10pt"><!-- Folio --> Page 16<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Response: </B>In our future filings, we will expand our discussion of Goodwill and Other Intangibles
to include the dollar amount of goodwill per each reportable segment and any significant changes in
the allocation of goodwill by reportable segment. For our Form 10-K for the year ended December
31, 2008, such disclosure would have read as follows: Goodwill is allocated among and evaluated
for impairment at the reporting unit level, which is defined as an operating segment or one level
below an operating segment. Fuel Tech has two reporting units which are reported in the FUEL CHEM
segment and the APC Technology segment. As of December&nbsp;31, 2008 and 2007, goodwill allocated to
the FUEL CHEM Technology segment was $1,723 and $1,723, respectively, while goodwill allocated to
the APC Technology segment was $3,435 and 396, respectively. The $3,039 increase in goodwill in
the APC Technology segment is due to the acquisition of substantially all of the assets of
Tackticks, LLC and FlowTack, LLC on October&nbsp;3, 2008. The acquisition related goodwill totaling
$16,207 related to our acquisition of substantially all of the assets of Advanced Combustion
Technology, Inc. on January&nbsp;5, 2009 will be allocated to the APC Technology segment
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">For our Form 10-Q for the quarterly period ended June&nbsp;30, 2009, such disclosure would have read as
follows: As of June&nbsp;30, 2009 and December&nbsp;31, 2008, goodwill allocated to the FUEL CHEM Technology
segment was $1,723 and $1,723, respectively, while goodwill allocated to the APC Technology segment
was $19,642 and $3,435, respectively. The $16,207 increase in goodwill allocated to the APC
Technology segment is solely due to goodwill resulting from the acquisition of substantially all of
the assets of Advanced Combustion Technology, Inc. on January&nbsp;5, 2009.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U>Property and Equipment, page 31</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>SEC Comment:</B>

</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><I>16.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Please disclose whether you allocate a portion of your depreciation and
amortization to cost of sales. If you do not allocate depreciation and amortization to
cost of sales, please revise your presentation on the face of your statements of
earnings and throughout the filing to comply with SAB Topic 11:B. Please show us
supplementally what your revised disclosure will look like.</I></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Response: </B>In our future filings, we will disclose that a portion of our depreciation and
amortization expenses are allocated to cost of sales. For our Form 10-K for the year ended
December&nbsp;31, 2008, such disclosure would have read as follows: Certain depreciation and
amortization expenses related to tangible and intangible assets, respectively, are allocated to
cost of sales.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">For our Form 10-Q for the quarterly period ended June&nbsp;30, 2009, such disclosure would have read as
follows: Certain depreciation and amortization expenses related to tangible and intangible assets,
respectively, are allocated to cost of sales.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U>3. Taxation, page 34</U>
</DIV>


<P align="right" style="font-size: 10pt"><!-- Folio --> Page 17<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>SEC Comment:</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><I>17.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Your disclosure indicates that you had a valuation allowance for deferred tax
assets of $260,000 as of December&nbsp;31, 2008 and 2007. However, on page 36, you indicate
that at December&nbsp;31, 2008 a valuation allowance of $3,699,000 is recorded against your
foreign loss carryforwards. Please tell us and disclose whether this valuation
allowance was considered in your disclosure on page 35 or whether this amount was
netted in another line item. Please show us supplementally what your revised
disclosure will look like.</I></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Response: </B>At December&nbsp;31, 2008, Fuel Tech had total foreign tax losses of $4,035 available to
offset future foreign income against which a valuation allowance of $3,699 was recorded. This
valuation allowance amount relates to losses at our Italian subsidiary for which the future benefit
may not be realized. Ever since start-up operations began in on January&nbsp;31, 2000, the Italian
subsidiary has never generated taxable income. Rather than gross up the deferred tax inventory and
show the valuation allowance for deferred tax assets as an offset, we chose to disclose this amount
separately in the text. However, in order to be consistent in our presentation we will modify our
table disclosure and eliminate the text reference in future filings. For our Form 10-K for the
year ended December&nbsp;31, 2008, such disclosure would have read as follows:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The deferred tax assets and liabilities at December&nbsp;31 are as follows:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">2008</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">2007</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Deferred tax assets:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Stock compensation expense</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">4,238</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,306</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Research and development credit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">492</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,302</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Equipment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">648</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Alternative minimum tax credit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">275</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">275</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Warranty reserve</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">101</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">176</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Accounts receivable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">57</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Vacation accrual</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">45</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">40</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Deferred rent liability</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">49</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">33</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Effect of FIN 48 adoption</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Intangible assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Net operating loss carryforwards</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,245</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">958</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Total deferred tax assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,499</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,802</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Deferred tax liabilities:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Equipment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(975</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Prepaid expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(361</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Patents</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(94</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(76</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Goodwill</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(469</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(367</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" nowrap align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Total deferred tax liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,899</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(443</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" nowrap align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net deferred tax asset before valuation allowance</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">4,600</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">5,359</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<P align="right" style="font-size: 10pt"><!-- Folio --> Page 18<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">2008</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">2007</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Valuation allowances for deferred tax assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,421</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,218</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" nowrap align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net deferred tax asset</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">3,179</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">4,141</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD colspan="9" align="left">Net deferred tax assets and liabilities are recorded as follows within the
consolidated balance sheets:</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Current assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">767</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,589</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Long-term assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,412</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,552</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net deferred tax asset</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">3,179</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">4,141</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U>7. Commitments</U><BR>
<U>Product Warranties, page 41</U>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>SEC Comment:</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><I>18.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Your disclosure currently presents net aggregate accruals related to product
warranties. Please tell us what this net aggregate amount represents and show us the
amounts for each period presented included in this net amount. Please also revise your
table to present the aggregate changes in the liability for accruals related to product
warranties issued during the reporting period separately from the aggregate changes in
the liability for accruals to preexisting warranties (including adjustments related to
changes in estimates). Refer to paragraph 14b of FIN 45. Please show us
supplementally what your revised disclosure will look like.</I></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Response: </B>The Net Aggregate Accruals Related to Product Warranties amount shown in our disclosure
table represents the current period provision necessary to adjust the Aggregate Product Warranty
Liability at the end of the reporting period to the amount we calculate necessary to properly
reflect our product warranty exposure at that time. In the calculation of our required end of
period warranty reserve, we do not segregate required warranty reserves between those related to
projects completed in the current reporting period versus those completed prior to the current
reporting period. Rather, we base the calculation of our required end of period warranty reserve
on historical claims experience in the preceding years using a weighted average historical warranty
utilization percentage multiplied by the appropriate reporting period&#146;s APC Technology segment
revenues to arrive at the required end of reporting period warranty reserve. This methodology has
proven to provide an end of period warranty reserve amount that is better aligned with and more
reflective of actual warranty claims incurred. We record a current period Net Aggregate Accruals
Related to Product Warranties amount that, when taken in consideration with the Aggregate
Reductions for Payments amount, arithmetically yields the required Aggregate Product Warranty
Liability at the end of the reporting period. As such, the disclosure table we include to satisfy
FIN 45, paragraph 14(b) contains all of the segregated component data we use in the calculation of
our end of period warranty reserve. We believe that by leaving the
</DIV>
<P align="right" style="font-size: 10pt"><!-- Folio --> Page 19<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">disclosure table in its current format achieves the spirit and intent of FIN 45, paragraph 14(b)
while providing the reader with information sufficient to understand the nature and components of
our warranty accounting and exposure.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In our future filings, we will expand our discussion of this table to provide additional
information as to the calculation of the end of period warranty reserve. For our Form 10-K for the
year ended December&nbsp;31, 2008, such disclosure would have read as follows: Our recognition of
warranty liability is based primarily on analyses of warranty claims experienced in the preceding
years as the nature of our historical product sales for which we offer a warranty are substantially
unchanged. This approach provides an aggregate warranty accrual that is historically aligned with
actual warranty claims experienced.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">For our Form 10-Q for the quarterly period ended June&nbsp;30, 2009, such disclosure would have read as
follows: Our recognition of warranty liability is based primarily on analyses of warranty claims
experienced in the preceding years as the nature of our historical product sales for which we offer
a warranty are substantially unchanged. This approach has proven to provide an aggregate warranty
accrual that is historical aligned with actual warranty claims experienced.
</DIV>

<!-- link2 "Item&nbsp;15 &#151; Exhibits and Financial Statement Schedules, page 44" -->

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U>Item&nbsp;15 &#151; Exhibits and Financial Statement Schedules, page 44</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>SEC Comment:</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><I>19.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>We note that you have entered into agreements with certain officers. We also
note that you have only filed the agreement with Mr.&nbsp;Norris as an exhibit to the Form
10-K. Please file or incorporate by reference these agreements as exhibits to the Form
10-K or explain to us why you are not required to do so. See Item&nbsp;</I><I>601(b)(10)</I><I> of
Regulation&nbsp;S-K. Please show us in your supplemental response what the revisions will
look like.</I></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Response: </B>We will file the aforementioned employment agreements for our remaining employed Named
Executive Officers (Graham, Brady and Rummenhohl) with our next filing on Form 10-Q and, to the
extent then applicable, incorporate such agreements by reference in our next filing on Form 10-K.
Such exhibits will be appropriately numbered as set forth below. Please note that because Michael
P. Maley, our former Senior Vice President International Business Development and Project
Execution, resigned effective February&nbsp;13, 2009, we do not believe it is appropriate to file his
employment agreement as that agreement is no longer in effect.
</DIV>


<P align="right" style="font-size: 10pt"><!-- Folio --> Page 20<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="28%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="14" style="border-bottom: 1px solid #000000">Incorporated by reference</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Filed</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Period</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Exhibit</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Description</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">herewith</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Form</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">ending</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Exhibit</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Filing date</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="left" valign="top">10.9*</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px">Employment
Agreement, dated
April&nbsp;30, 2008,
between John P.
Graham and Fuel
Tech, Inc.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD nowrap align="right" valign="top">10-Q</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="center">XX</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">11/__/09</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="left" valign="top">10.10*</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px">Employment
Agreement, dated
February&nbsp;1, 1998,
between Stephen P.
Brady and Fuel
Tech, Inc.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD nowrap align="right" valign="top">10-Q</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="center">XX</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">11/__/09</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="left" valign="top">10.11*</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px">Employment
Agreement, dated
October&nbsp;2, 2008,
between Volker
Rummenhohl and Fuel
Tech, Inc.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD nowrap align="right" valign="top">10-Q</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="center">XX</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">11/__/09</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">*</TD>
    <TD>&nbsp;</TD>
    <TD>Indicates a management contract or compensatory plan or arrangement</TD>
</TR>

</TABLE>



<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>SEC Comment:</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><I>20.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>It appears that you have a number of director and executive compensation plans.
We also note that you have only filed the incentive plan as an exhibit to the Form
10-K. We further note the plans filed as exhibits to a </I><I>Form 8-K</I><I> filed on March&nbsp;19,
2009, as amended on May&nbsp;27, 2009. Please file or incorporate by reference these plans
as exhibits to the </I><I>Form 10-K</I><I> or explain to us why you are not required to do so. See
Item&nbsp;</I><I>601(b)(10)</I><I> of Regulation&nbsp;S-K. Please show us in your supplemental response what
the revisions will look like.</I></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Response: </B>In our future filings on Form 10-K, we will incorporate by reference the plans filed as
exhibits to our Form 8-K referenced above as exhibits to our Form 10-K. These plans will be filed
under the &#147;10&#148; series of exhibits in our Form 10-K and will be appropriately numbered as follows:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="28%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="14" style="border-bottom: 1px solid #000000">Incorporated by reference</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Filed</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Period</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Exhibit</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Description</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">herewith</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Form</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">ending</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Exhibit</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Filing date</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="left" valign="top">10.12*</TD>
    <TD>&nbsp;</TD>
    <TD nowrap><DIV style="margin-left:15px; text-indent:-15px">Corporate Incentive Plan of Fuel Tech, Inc.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD nowrap align="right" valign="top">8-K</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">99.1</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">03/19/09</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="left" valign="top">10.13*</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px">Fuel Tech, Inc. Senior Vice President
<BR>
Sales &#151; FUEL CHEM Sales Commission Plan</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD nowrap align="right" valign="top">8-K</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">99.2</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">03/19/09</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">*</TD>
    <TD>&nbsp;</TD>
    <TD>Indicates a management contract or compensatory plan or arrangement</TD>
</TR>

</TABLE>



<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>SEC Comment:</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><I>21.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>It appears that you have several agreements with related parties. In this
regard, we refer to note 9 to the annual financial statements. Please file or
incorporate by reference these agreements as exhibits to the </I><I>Form 10-K</I><I> or explain to us
why you are not required to do so. See Item&nbsp;</I><I>601(b)(10)</I><I> of Regulation&nbsp;S-K. Please show
us in your supplemental response what the revisions will look like.</I></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Response: </B>We will file the Sublease Agreement with American Bailey Company with our next filing on
Form 10-Q. In our future filings on Form 10-K, we will incorporate by reference the
Sublease Agreement. With regard to this agreement, our exhibit index to our Form 10-K will
</DIV>


<P align="right" style="font-size: 10pt"><!-- Folio --> Page 21<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">look
substantially as follows (with the appropriate blanks filled in):
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="28%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="14" style="border-bottom: 1px solid #000000">Incorporated by reference</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Filed</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Period</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Exhibit</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Description</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">herewith</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Form</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">ending</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Exhibit</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Filing date</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="left" valign="top">10.14</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px">Sublease Agreement with American Bailey Company</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD nowrap align="right" valign="top">10-Q</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.__</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Management and Services Agreement with Clean Diesel Technologies, Inc. signed on August&nbsp;3,
1995, was terminated effective January&nbsp;31, 2009. On January&nbsp;1, 2004, the management and consulting
services agreement with American Bailey Corporation (ABC)&nbsp;was terminated pursuant to a letter
agreement that provided for a salary cost allocation between Fuel Tech and ABC for services
provided to ABC by initially two, then one of Fuel Tech employees at Fuel Tech&#146;s Stamford,
Connecticut location. The salary cost allocation arrangement is not material to Fuel Tech. The
assignment agreement with Clean Diesel Technologies, Inc., including the royalty obligations
thereunder, expired in 2008. As the aforementioned agreements have been terminated, have expired,
or, in the case of the letter agreement, are not material in either amount or significance to Fuel
Tech, we do not intend to file them as exhibits to our future filings.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>SEC Comment:</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><I>22.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Please file exhibits 4.4 thru 4.8 under the &#147;10&#148; series of exhibits. See Item
601 of Regulation&nbsp;S-K.</I></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Response: </B>In future filings, we will include exhibits 4.4 through 4.8 (and any amendments thereto)
under the &#147;10&#148; series of exhibits.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>SEC Comment:</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><I>23.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Please revise to clearly identify the exhibits that are the subject of a
confidential treatment order or request.</I></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Response: </B>In future filings, we will clearly identify the exhibits that are the subject of a
confidential treatment order or request with a double asterisk directing the reader to footnote
that states that portions of such document have been omitted pursuant to a request for confidential
treatment and that the omitted information has been filed separately with the Securities and
Exchange Commission.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>SEC Comment:</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><I>24.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Please be advised that no document on file with the Commission for more than
five years may be incorporated by reference, subject to certain limited exceptions.
See </I><I>Item 10(d)</I><I> of Regulation&nbsp;S-K. We note that the documents you incorporate by
reference in Exhibits 4.1, 4.2, 4.3 and 10.1 have been on file with the Commission</I></TD>
</TR>

</TABLE>
</DIV>


<P align="right" style="font-size: 10pt"><!-- Folio --> Page 22<!-- /Folio -->
</DIV>




<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><I>&nbsp;</I></TD>
    <TD width="1%"><I>&nbsp;</I></TD>
    <TD><I>for more than five years and do not appear to satisfy any of the exceptions listed
in Item&nbsp;</I><I>10(d)</I><I>. Please advise or revise accordingly.</I></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Response: </B>We will re-file the aforementioned exhibits with our next filing on Form 10-Q.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>SEC Comment:</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><I>25.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>We note the following:</I></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Incorporated exhibit 4.4 does not appear to be filed as exhibit 4.5 to the
Form&nbsp;S-8 filed on October&nbsp;10, 2006.</I></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Incorporated exhibit 4.8 does not appear to be filed as exhibit 99.1 to the
Form&nbsp;8-K filed on August&nbsp;10, 2006.</I></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Incorporated exhibit 10.3 does not appear to be filed as exhibit 3.29 to the
Form&nbsp;10-K filed on March&nbsp;30, 2000.</I></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><I>&nbsp;</I></TD>
    <TD width="1%"><I>&nbsp;</I></TD>
    <TD><I>Please advise or revise accordingly.</I></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Response:</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Incorporated Exhibit&nbsp;4.4 is filed as Exhibit&nbsp;4.1 to Form S-8 filed on October&nbsp;2, 2006.<BR>
Incorporated Exhibit&nbsp;4.8 is filed as Exhibit&nbsp;10.1 to Form 8-K filed on August&nbsp;10, 2006.<BR>
Incorporated Exhibit&nbsp;10.3 is filed as Exhibit&nbsp;3.30 to Form 10-K filed on March&nbsp;30, 2000.

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">With regard to the above referenced exhibits, the exhibit index in our future filings on Form 10-K
(taking into account your comment in 22 above) will look substantially as follows:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="28%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="10" style="border-bottom: 1px solid #ffffff">Incorporated by reference</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Filed</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Period</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" colspan="1">Exhibit</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">Description</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">herewith</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Form</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">ending</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Exhibit</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Filing date</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top" align="left">10.3**</TD>
    <TD valign="top" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Amendment No.&nbsp;1,
dated February&nbsp;28,
2000, to License
Agreement dated
November&nbsp;18, 1998
between The Gas
Technology
Institute and Fuel
Tech, Inc. relating
to the FLGR Process</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">10-K</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3.30</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">03/30/00</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">10.12*</TD>
    <TD valign="top" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Fuel Tech, Inc.
Incentive Plan as
amended through
June&nbsp;3, 2004</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">S-8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10/02/06</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">10.15</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Business Loan
Agreement, dated as
of July&nbsp;31, 2006,
between Wachovia
Bank N.A. and Fuel
Tech, Inc.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">8-K</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">08/10/06</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">*</TD>
    <TD>&nbsp;</TD>
    <TD>Indicates a management contract or compensatory plan or arrangement.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">**</TD>
    <TD>&nbsp;</TD>
    <TD>Portions of this document have been omitted pursuant to a request for confidential treatment</TD>
</TR>

</TABLE>


<P align="right" style="font-size: 10pt"><!-- Folio -->Page 23<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">and
the omitted information has been filed separately with the Securities and Exchange Commission.</DIV>




<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U>Exhibits 31.1 and 31.2</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>SEC Comment:</B>

</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><I>26.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Please file your certifications exactly as set forth in Item&nbsp;</I><I>601(b)(31)(i)</I><I> of
Regulation&nbsp;S-K, which should include the phrase &#147;(or persons performing the equivalent
functions)&#148; in paragraph 5. Please also comply with this comment in your future
quarterly reports on </I><I>Form 10-Q</I><I>.</I></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Response: </B>In our future filings, we will file our certifications exactly as set forth in Item
601(b)(31)(i) of Regulation&nbsp;S-K, including the phrase &#147;(or persons performing the equivalent
functions)&#148; in paragraph 5.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U>FORM 10-Q FOR THE PERIOD ENDED JUNE 30, 2009</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U>General</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>SEC Comment:</B>

</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><I>27.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Please address the comments above in your interim filings as well.</I></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Response: </B>We will address the above comments, where applicable, in our future interim filings.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U>Note L: Business Acquisitions, page 10</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>SEC Comment:</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><I>28.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Please disclose the amounts recognized as of the acquisition date for each
major class of assets acquired and liabilities assumed. See paragraphs </I><I>68(i)</I><I> and A107
of SFAS 141(R).</I></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Response: </B>In our future filings, we will disclose the breakdown of amounts recognized as of the
acquisition date for each major class of assets acquired and liabilities assumed as a result of the
Company&#146;s acquisition of substantially all of the assets of Advanced Combustion Technology, Inc.
(ACT)&nbsp;on January&nbsp;5, 2009, as prescribed by FAS 141(R), paragraphs 68(i) and A107, as follows:
</DIV>


<P align="right" style="font-size: 10pt"><!-- Folio -->Page 24<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Recognized amounts of identifiable
assets acquired and</B> <B>liabilities assumed</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="1" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD colspan="4" align="left" style="border-top: 0px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Accounts receivable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">5,928</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Identifiable intangible assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,817</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">247</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Contingent consideration</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD align="right" style="border-bottom: 1px solid #000000">2,307</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Accounts payable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(2,673</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other current liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(402</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total identifiable net assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">8,917</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Goodwill</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15,880</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total net assets recorded</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">24,797</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>SEC Comment:</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><I>29.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Please revise your business acquisition note to provide the following:</I></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Provide a description of your contingent consideration arrangement and the
basis for determining the amount of payment. Please also disclose an estimate
of the range of outcomes or explain why a range cannot be estimated. If the
maximum amount of the payment is unlimited, please disclose that fact. See
paragraphs </I><I>68(g)(2)</I><I> and (3)&nbsp;of SFAS 141(R);</I></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Disclose the total amount of goodwill related to the ACT acquisition that is
expected to be deductible for tax purposes. See paragraph </I><I>68(k)</I><I> of SFAS
141(R);</I></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Disclose the amount of goodwill related to the ACT acquisition that is
allocated to each reportable segment. See paragraph 68(1) of SFAS 141(R); and</I></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Disclose the amount of acquisition related costs, the amount recognized as
an expense and the line item(s) in the income statement in which those expenses
are recognized. Please also disclose the amount of any issuance costs not
recognized as an expense and how those issuance costs were recognized. See
paragraphs </I><I>68(m)</I><I>, (n)&nbsp;and A107 of SFAS 141(R).</I></TD>
</TR>


</TABLE>
</DIV>
<P align="right" style="font-size: 10pt"><!-- Folio -->Page 25<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><I>&nbsp;</I></TD>
    <TD width="1%"><I>&nbsp;</I></TD>
    <TD><I>Please show us supplementally what the revised disclosure will look like.</I></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Response: </B>The contingent consideration arrangement and its basis for determination were disclosed
in our Form 10-Q for the quarterly period ended March&nbsp;31, 2009. In our business acquisition note
in that document, the disclosure read:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>The contingent consideration arrangement requires the Company to pay ACT a pro rata amount of up to
$4&nbsp;million annually for the achievement of a minimum annual gross margin dollar level (the
&#147;Hurdle&#148;) of $10&nbsp;million, $11&nbsp;million and $12&nbsp;million in fiscal 2009, 2010 and 2011, respectively.
In addition, the Company is required to pay ACT thirty-five percent (35%) of all qualifying gross
margin dollars above the annual Hurdle rate for each of the three years. The potential
undiscounted amount of all future payments that the Company could be required to make under the
contingent consideration arrangement is between $0 and $4&nbsp;million in any one year, and $0 and $12
million in total, not including the amount related to the thirty-five percent (35%) sharing of
qualifying gross margin dollars above the pre-determined Hurdle. The fair value of the contingent
consideration arrangement of $2,307 was calculated using a probability of payout for each of the
three years and included only twenty-five percent (25%) of the weighted-average, probable
three-year aggregate payout as up to seventy-five percent (75%) of the contingent consideration is
subject to forfeiture. As of March&nbsp;31, 2009, the amount recognized for the contingent
consideration arrangement, the range of outcomes, and assumptions used to develop the estimates had
not changed.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We also disclosed in our Form 10-Q for the quarterly period ended June&nbsp;30, 2009 that the amount
recognized for the contingent consideration arrangement, the range of outcomes, and assumptions
used to develop the estimates had not changed. The reference to the 35% sharing of all qualifying
gross margin dollars above the pre-determined Hurdle amount for each of the three years does
indicate that the maximum amount of the payment is unlimited. As it relates to the first bullet
point of comment 29, the Company believes that these public disclosures have already been made.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">With respect to the remaining points related to the ACT acquisition, in our future filings we will
expand this disclosure to include a discussion of the amount of goodwill expected to be deductible
for tax purposes, the allocation of goodwill to each reportable segment and the accounting
treatment of acquisition costs. For our Form 10-Q for the quarterly period ended March&nbsp;31, 2009 or
June&nbsp;30, 2009, as appropriate, such disclosure would have read as follows: All of the goodwill
recognized is expected to be deductible for income tax purposes. Operating results related to the
acquisition of substantially all of the assets of ACT and all of the related goodwill are reported
as part of the APC Technology segment. Acquisition related costs, including out-of-pocket expenses
related to the transaction, were insignificant.
</DIV>

<!-- link2 "Item&nbsp;4. Controls and Procedures, page 14" -->

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U>Item&nbsp;4. Controls and Procedures, page 14</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>SEC Comment:</B>

</DIV>

<P align="right" style="font-size: 10pt"><!-- Folio -->Page 26<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><I>30.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>We note the description of the definition of disclosure controls and procedures
in the first sentence of the first paragraph. This description appears to be based on
the definition of disclosure controls and procedures set forth in Rules&nbsp;13a-</I><I>15(e)</I><I> and
15d-</I><I>15(e)</I><I> under the Exchange Act. As described, however, this description does not
fully conform to the definition set forth in those rules. In this regard, we note that
the description does not indicate that the disclosure controls and procedures are
designed to ensure that information is accumulated and communicated to management,
including the principal executive and financial officers, as appropriate to allow
timely decisions regarding required disclosure. Please confirm this to us and revise
accordingly.</I></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Response: </B>We confirm that the Company&#146;s disclosure controls and procedures are designed to ensure
that relevant information is accumulated and communicated to management, including the principal
executive and financial officer, as appropriate to allow timely decisions regarding required
disclosure. Accordingly, in our future filings we will revise the first sentence of Item&nbsp;4 to the
Management Discussion and Analysis to read as follows: Fuel Tech maintains disclosure controls and
procedures and internal controls designed to ensure (a)&nbsp;that information required to be disclosed
in Fuel Tech&#146;s filings under the Securities Exchange Act of 1934 is recorded, processed, summarized
and reported within the time periods specified in the Securities and Exchange Commission&#146;s rules
and forms, and (b)&nbsp;that such information is accumulated and communicated to management, including
the principal executive and financial officer, as appropriate to allow timely decisions regarding
required disclosure.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U>FORM 8-K FILED JULY 2, 2009</U>
</DIV>

<!-- link2 "Item&nbsp;9.01 Financial Statements and Exhibits" -->

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U>Item&nbsp;9.01 Financial Statements and Exhibits</U><BR>
<U>(d)&nbsp;Exhibits</U><BR>
<U>Exhibit&nbsp;10.1</U>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>SEC Comment:</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><I>31.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>It appears that you have omitted the schedules and exhibits referenced in your
credit agreement dated June&nbsp;30, 2009. Please advise. Refer to Item&nbsp;</I><I>601(b)(10)</I><I> of
Regulation&nbsp;S-K.</I></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Response: </B>We will file a complete copy of the credit agreement, including all schedules and
exhibits to the credit agreement, with our next filing on Form 10-Q.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U>DEFINITIVE PROXY STATEMENT ON SCHEDULE 14A FILED APRIL 15, 2009</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U>Committees of the Board, page 4</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>SEC Comment:</B>

</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><I>32.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>We note your statement that &#147;Mr.&nbsp;Espinosa is an audit committee member who</I></TD>
</TR>

</TABLE>
</DIV>
<P align="right" style="font-size: 10pt"><!-- Folio -->Page 27<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><I>&nbsp;</I></TD>
    <TD width="1%"><I>&nbsp;</I></TD>
    <TD><I>possesses &#145;financial sophistication&#146; as described in NASD Rule&nbsp;</I><I>3450(d)(2)</I><I>(A).&#148;
Please confirm, and disclose, if true, that you have determined Mr.&nbsp;Espinosa to be
an audit committee financial expert as such term is defined under Item&nbsp;</I><I>407(d)(5)(ii)</I><I>
of Regulation&nbsp;S-K.</I></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Response: </B>We confirm that the Board has determined that Mr.&nbsp;Espinosa is an audit committee
financial expert as such term is defined under Item&nbsp;407(d)(5)(ii) of Regulation&nbsp;S-K. In making
such determination, the Board examined Mr.&nbsp;Espinosa&#146;s professional work experiences, other board
and audit committee experiences and prior Audit Committee experience with the Company. We will
reflect this determination and provide the basis for the Board&#146;s determination in our future
filings.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U>Principal Stockholders and Stock Ownership of Management, page 7</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>SEC Comment:</B>

</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><I>33.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>We note your disclosure that &#147;Kevin R. Douglas and related group&#148; beneficially
owned 6.32% of your outstanding common stock as of March&nbsp;12, 2009. Please identify the
members of the related group and disclose who has voting and/or dispositive authority
over the shares. Please show us in your supplemental response what the revisions will
look like.</I></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Response: </B>In our future filings, we will include a footnote reference immediately following &#147;Kevin
Douglas and related group&#148; in the table of beneficial ownership and include in such footnote the
requested information regarding the related group, based on the then current information contained
in the most recent Schedule&nbsp;13G or 13D filed by Mr.&nbsp;Douglas and his group. For our definitive
proxy statement filed on April&nbsp;15, 2009, such footnote would have read as follows: According to
Amendment No.&nbsp;1 to Schedule&nbsp;13G dated February&nbsp;17, 2009, the members of the related group are: (i)
Kevin Douglas, (ii)&nbsp;Michelle Douglas, (iii)&nbsp;K&#038;M Douglas Trust, (iv)&nbsp;James E. Douglas, III, (v)
Douglas Family Trust, and (vi)&nbsp;James Douglas and Jean Douglas Irrevocable Descendants&#146; Trust.
According to Amendment No.&nbsp;1 to Schedule&nbsp;13G dated February&nbsp;17, 2009, Kevin Douglas has (i)&nbsp;shared
voting and shared dispositive power with respect to all 676,749 shares he holds jointly with his
wife, Michelle Douglas, as the beneficiaries and co-trustees of the K&#038;M Douglas Trust; (ii)&nbsp;shared
dispositive power with respect to all 159,335 shares held directly by James E. Douglas, III and all
275,406 shares held directly by the Douglas Family Trust pursuant to written authorizations; and
(iii)&nbsp;shared voting and shared dispositive power, in his capacity as co-trustee, with respect to
all 411,507 shares held directly by the James Douglas and Jean Douglas Irrevocable Descendants&#146;
Trust. Michelle Douglas has (i)&nbsp;shared voting and shared dispositive power with respect to all
676,749 shares she holds jointly with her husband, Kevin Douglas, as the beneficiaries and
co-trustees of the K&#038;M Douglas Trust and (ii)&nbsp;shared voting and shared dispositive power, in her
capacity as co-trustee, with respect to all 411,507 shares held directly by the James Douglas and
Jean Douglas Irrevocable Descendants&#146; Trust. James E. Douglas, III has sole voting power with
respect to all 159,335 shares he holds directly and has shared dispositive power along with Kevin
Douglas
</DIV>


<P align="right" style="font-size: 10pt"><!-- Folio -->Page 28<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">with respect to all of such shares. The Douglas Family Trust has sole voting power with respect to
all 275,406 shares it holds directly and has shared dispositive power with Kevin Douglas with
respect to all of such shares. The James Douglas and Jean Douglas Irrevocable Descendants&#146; Trust
has sole voting and sole dispositive power with respect to all 411,507 shares it holds directly.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U>Compensation Discussion and Analysis, page 8</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>SEC Comment:</B>

</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><I>34.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>The general discussions of base salary, corporate incentive plan compensation,
and long-term incentives on pages 8-10 do not explain how actual compensation amounts
were determined. In this regard, we note that readers are merely provided the amounts
in the compensation tables. Please clearly explain how each element of compensation
for each named executive officer was determined. In this regard, please clearly
explain how the performance measurements or targets translated into the amounts
awarded. Please show us in your supplemental response what the revisions will look
like.</I></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Response: </B>In our future filings, we will explain in more detail how actual compensation amounts
were determined. For our definitive proxy statement filed on April&nbsp;15, 2009, such additional
disclosure would have appeared as set forth in the revised Compensation Discussion and Analysis
section attached as <U>Exhibit&nbsp;A</U> to this letter.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U>CIP Structure, page 9</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>SEC Comment:</B>

</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><I>35.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>We note your statement in the last bullet pointed paragraph on page 10 that
&#147;Fuel Tech does not disclose the specific...performance targets...as this information
is highly confidential and disclosure would cause competitive harm.&#148; Please provide us
with a detailed supplemental analysis supporting your conclusion that disclosure of
this information would result in competitive harm such that you may exclude it under
Instruction 4 to </I><I>Item 402(b)</I><I> of Regulation&nbsp;S-K. Alternatively, please disclose all
specific performance targets and measures and describe in further detail the
relationship between achievement of targets and the actual amounts, if any, that are
allocated to your incentive pools. Also, disclose the actual results for each
performance target. Please show us in your supplemental response what the revisions
will look like. Please also comply with this comment with respect to the targets
discussed under &#147;FUEL CHEM Officer Sales Commission Plan&#148; on page 10.</I></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Response:</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We respectfully submit the detailed supplemental analysis below, which we performed in
</DIV>

<P align="right" style="font-size: 10pt"><!-- Folio -->Page 29<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">connection with our disclosures, in concluding that disclosure of the requested information
would result in competitive harm and that we may exclude it under Instruction 4 to Item 402(b) of
Regulation&nbsp;S-K.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U>Legal Authority Regarding Confidential Treatment</U>: The SEC has adopted regulations to afford
confidential treatment to any information that would be exempt from mandatory disclosure under the
Freedom of Information Act (&#147;FOIA&#148;). Exemption 4 of the FOIA exempts from the class of materials
which public agencies must publicly disclose &#147;&#091;t&#093;rade secrets and commercial or financial
information obtained from a person and privileged or confidential.&#148; 5 U.S.C. &#167;552(b)(4) and 17
C.F.R. &#167;200.80(b)(4). The test set forth in Exemption 4 has two principal parts.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>First, in order for the exemption to be available, information for which confidential
treatment is sought must constitute &#147;trade secrets&#148; and/or &#147;commercial or financial
information.&#148; See, <I>e.g.</I>, <U>Nat&#146;l Parks and Conservation Ass&#146;n v. Morton</U>, 498 F.2d 765
(D.C. Cir. 1974). Applicable precedent confirms that these terms should be given their
ordinary meanings. For instance, &#147;commercial&#148; information is not confined to records that
&#147;reveal basic commercial operations,&#148; but rather, includes records so long as the submitter
has a &#147;commercial interest&#148; in them. <U>Public Citizen Health Research Group v. Food and
Drug Administration</U>, 704 F.2d 1280, 1290 (D.C. Cir. 1983).</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Second, the information must be &#147;privileged&#148; or &#147;confidential.&#148; Applicable precedent
indicates commercial or financial information will be deemed &#147;confidential&#148; if disclosure
thereof would be likely &#147;to cause substantial harm to the competitive position of the
person from whom the information was obtained.&#148; <U>Nat&#146;l Parks and Conservation Ass&#146;n. v.
Morton</U>, 498 F.2d 765, 770 (D.C. Cir. 1974); see also <U>Critical Mass Energy Report v.
Nuclear Regulatory Comm&#146;n.</U>, 975 F.2d 871 (D.C. Cir. 1992); <U>McDonnell Douglas Corp.
v. National Aeronautics &#038; Space Admin.</U>, 180 F.3d 303, 306-07 (D.C. Cir. 1999) (court
found that where information &#147;would be to the competitor&#146;s advantage . . . it follows that
appellant will be competitively harmed by that disclosure,&#148; and held such information to be
confidential).</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Importantly, in determining whether information is &#147;privileged or confidential&#148; for the
purposes of satisfying Exemption 4 of the FOIA, courts have held that it is not necessary to show
actual competitive harm. Instead, applicable legal precedent makes clear that in order to
demonstrate the requisite level of competitive harm to justify nondisclosure, &#147;&#091;A&#093;ctual competition
and the likelihood of substantial competitive injury is all that need be shown.&#148; <U>Gulf &#038; Western
Indus. Inc. v. United States</U>, 615 F.2d 527, 530 (D.C. Cir. 1979).
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U>Likelihood of Competitive Harm to the Company</U>: Based on the legal authority discussed
above, we have determined not to disclose the corporate performance targets under the Corporate
Incentive Plan (&#147;CIP&#148;) (the &#147;CIP Targets&#148;) and commission rate under the Officer Sales Commission
Plan (&#147;Commission Rate&#148;) for the reasons set forth below.
</DIV>



<P align="right" style="font-size: 10pt"><!-- Folio -->Page 30<!-- /Folio -->
</DIV>



<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Fuel Tech&#146;s business is highly competitive and is characterized by intense competition
on a national and international basis. Disclosure of the CIP Targets or the Commission Rate
would provide current or future competitors with important insights into forward-looking
financial metrics from Fuel Tech&#146;s confidential operating plan and would expose Fuel Tech
to substantial harm from competitors in a variety of ways. By gaining knowledge of Fuel
Tech&#146;s goals with respect to EBIT, revenues and APC backlog under the CIP or Commission
Rate under the Officer Sales Commission Plan, competitors could use this information to
make strategic decisions about how best to compete with Fuel Tech. In particular,
competitors could use such information to strategically underbid Fuel Tech&#146;s pricing, to
focus resources on customers or product lines targeted by Fuel Tech for expansion and to
compete with Fuel Tech for acquisition opportunities.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Because the market in which Fuel Tech competes for talent is highly competitive, both
the CIP Targets and the Commission Rate could be used by Fuel Tech&#146;s competitors or
executive recruiters to offer competing employment packages to executives of Fuel Tech, and
accordingly, place Fuel Tech at a significant competitive disadvantage for executive
talent.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The terms for which confidential treatment is asserted are as narrowly tailored and
circumscribed as possible, and substantially all of the other terms of the CIP and the
Officer Sales Commission Plan will be available for public review. Such disclosure is
sufficient, taken together with the other information in Fuel Tech&#146;s proxy statement and
other public filings, to enable stockholders and potential investors to reasonably evaluate
Fuel Tech&#146;s executive compensation program and decisions (especially with respect to the
CIP and Officer Sales Commission Plan) and make a decision as to whether to invest or trade
in Fuel Tech&#146;s common stock.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The CIP Targets have never been disclosed to the public. Disclosing the CIP Targets,
even with accompanying cautionary warnings, could cause stockholders, analysts, competitors
and customers to misinterpret the goals as projections or expectations. Disclosing the
specific CIP Targets would not necessarily provide appropriate projections or guidance, but
nevertheless could be construed as such by analysts, stockholders and the investing public.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>SEC Comment:</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><I>36.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>We note that your compensation committee and, in the case of your &#147;FUEL CHEM
Officer Sales Commission Plan,&#148; your CEO may exercise discretion to award incentive
compensation notwithstanding a failure to meet specific performance goals. Please
disclose whether and to what extent discretion was exercised by your compensation
committee and/or CEO to adjust incentive payout amounts. See Item&nbsp;</I><I>402(b)(2)(vi)</I><I> of
Regulation&nbsp;S-K.</I></TD>
</TR>

</TABLE>
</DIV>
<P align="right" style="font-size: 10pt"><!-- Folio -->Page 31<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Response: </B>We will include in our future filings disclosure as to whether and to what extent any
discretion has been exercised by our compensation committee, or in the case of our FUEL CHEM
Officer Sales Commission Plan, our Chief Executive Officer, to adjust incentive payout amounts. We
note that there were no incentive payouts made under the CIP or FUEL CHEM plans for the 2008
period.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>SEC Comment:</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><I>37.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>We note from the second bulleted paragraph on page 10 that each employee&#146;s
bonus award is determined in part by &#147;the employee&#146;s performance relative to specific
goals established.&#148; Please discuss the elements of individual performance that are
considered when determining bonus amounts. See Item&nbsp;</I><I>402(b)(2)(vii)</I><I> of Regulation&nbsp;S-K.
Please show us in your supplemental response what the revisions will look like.</I></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Response: </B>Like other firms, both external and internal factors affecting Fuel Tech&#146;s business do
not remain static over time. To the extent that an individual goal is established for an employee,
evaluating goal completion for a CIP bonus amount determination involves business judgment
regarding what Fuel Tech may consider important to its business at the time the evaluation occurs
and can include both qualitative and quantitative factors. The elements of evaluation may include:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Percentage of completion of goals established in the individual&#146;s operational area;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Exceptional and innovative performance;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Providing effective leadership; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Embodying teamwork.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Additional disclosure reflecting these elements has been included under the heading &#147;<I>Corporate
Incentive Plan</I>&#148; in the revised Compensation Discussion and Analysis section attached as <U>Exhibit
A</U> to this letter.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U>Long-Term Incentives, page 10</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>SEC Comment:</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><I>38.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>We note from your Grants of Plan-Based Awards table on page 15 that you award
stock options to each of your named executive officers in 2008. Please tell us how you
determined the number of options to award each executive. See Item&nbsp;</I><I>401(b)(1)(v)</I><I> of
Regulation&nbsp;S-K.</I></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Response: </B>In our future filings, we will explain in more detail the determinations of the grant of
stock options. For our definitive proxy statement filed on April&nbsp;15, 2009, such additional
disclosure would have appeared as set forth in the revised Compensation Discussion and
</DIV>

<P align="right" style="font-size: 10pt"><!-- Folio -->Page 32<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Analysis section attached as <U>Exhibit&nbsp;A</U> to this letter.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U>Material Compensation Actions for 2008, page 11</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>SEC Comment:</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><I>39.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Please explain in reasonable detail the reasons for the additional stock option
award to Mr.&nbsp;Bailey.</I></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Response: </B>In our future filings, we will explain in more detail, to the extent applicable, the
reasoning behind any director&#146;s receipt of additional stock options. As to the additional stock
option award to Mr.&nbsp;R. E. Bailey, the Company&#146;s Executive Chairman, the Compensation and Nominating
Committee(Committee) performed a review of what was then the current compensation of the Chairman
of the Board of the Company for the Chairman&#146;s services. The review included, among other things,
evaluation of comparable market information from an independent compensation consultant, regarding
compensation for chairman services by other comparable companies. Following that review, the
Committee, after discussion at its regularly scheduled February&nbsp;28, 2008 Committee meeting, agreed,
based in part on recommendation from the independent compensation consultant retained by the
Committee, that the total annual options for Mr.&nbsp;R.E. Bailey should be for a total of 20,000 shares
rather than 10,000 shares issued to other directors of the Company. Thus, the Committee decided
that an additional 10,000 share stock option award be granted to Mr.&nbsp;R.E. Bailey, Executive
Chairman, concurrent with his non-employee director award to occur after the Company&#146;s annual
stockholder meeting in May, 2008.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U>Benchmarking, Consultants and the Use of Peer Groups, page 11</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>SEC Comment:</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><I>40.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>We note that you use peer group data to help guide your compensation policy and
procedure. Please discuss in more detail how your use of peer group data influences
your compensation decisions, including whether you engage in benchmarking. If so,
please discuss where you target your executives&#146; compensation relative to the peer
group data you collect (e.g., at the 50</I><SUP style="font-size: 85%; vertical-align: text-top"><I>th</I></SUP><I> percentile of the peer group
data), and state where your executives&#146; compensation actually fell with respect to that
target. See Item&nbsp;</I><I>402(b)(2)(xiv)</I><I> of Regulation&nbsp;S-K. Please show us in your
supplemental response what the revisions will look like.</I></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Response: </B>In our future filings, to the extent applicable, we will expand our disclosure regarding
use of peer group data and benchmarking by adding additional language immediately following the
listing of our peer group companies. For our definitive proxy statement filed on April&nbsp;15, 2009,
such disclosure would have read as follows: From time to time, the Committee may supplement its
business judgment pertaining to its consideration of Fuel Tech compensation matters with a variety
of market information obtained from a number of different sources
</DIV>

<P align="right" style="font-size: 10pt"><!-- Folio -->Page 33<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">including, among other things, the Committee&#146;s general knowledge regarding compensation matters,
information from an independent compensation consultant, peer company data, benchmarking related to
that data, information obtained from independent search firms, and historical and current Fuel Tech
compensation data. In 2008, the Committee did not engage in benchmarking based on the use of its
then existing peer group data.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U>Summary Compensation Table, page 14</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>SEC Comment:</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><I>41.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>We note that your executives&#146; base salary amounts have increased each year.
Please discuss the factors you considered in deciding to increase your executives&#146;
salaries. See Item&nbsp;</I><I>402(b)(2)(ix)</I><I> of Regulation&nbsp;S-K. Please show us in your
supplemental response what the revisions will look like.</I></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Response: </B>In our future filings, we will explain in more detail the factors considered in
increasing any Named Executive Officer&#146;s salary. For our definitive proxy statement filed on April
15, 2009, such additional disclosure would have appeared as set forth in the revised Compensation
Discussion and Analysis section attached as <U>Exhibit&nbsp;A</U> to this letter.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U>Certain Relationships and Related Transactions, page 18</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>SEC Comment:</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><I>42.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>We note the list of factors that your audit committee may consider in its
review and approval of related party transactions. Please describe the standard
applied by your audit committee in determining whether related party transactions
should be approved, ratified, or rejected. See Item&nbsp;</I><I>401(b)(1)(ii)</I><I> of Regulation&nbsp;S-K.
Please show us in your supplemental response what the revisions will look like.</I></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Response: </B>In our future filings, we will add the following paragraph to the section regarding
&#147;Certain Relationships and Related Transactions&#148; of our Proxy Statement: Although our Audit
Committee has not adopted a written policy for the review and approval of related party
transactions, in determining whether to approve or ratify any such transaction, the Audit Committee
considers, in addition to such other factors it may deem appropriate in the circumstances, whether
(i)&nbsp;the transaction is fair and reasonable to the Company, (ii)&nbsp;under all of the circumstances the
transaction is in, or not inconsistent with, the Company&#146;s best interests, and (iii)&nbsp;the
transaction will be on terms no less favorable to the Company than could have been obtained in an
arms&#146; length transaction with an unrelated third party. The Audit Committee, in its discretion,
may request information from any party to facilitate its consideration of a matter. However, the
Audit Committee does not allow a director to participate in any review, approval or ratification of
any transaction if he or she, or his or her immediate family member, has a direct or indirect
material interest in the transaction.
</DIV>

<P align="right" style="font-size: 10pt"><!-- Folio -->Page 34<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U>Section&nbsp;16(a) Beneficial Ownership Reporting Compliance, page 19</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>SEC Comment:</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><I>43.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>In addition to the number of late </I><I>Section 16(a)</I><I> reports, please indicate the
number of transactions that were not reported on a timely basis. See Item&nbsp;</I><I>405(a)(2)</I><I> of
Regulation&nbsp;S-K.</I></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Response: </B>In our future proxy statements, we will indicate the number of transactions that were
not reported on a timely basis.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In responding to your comments, we acknowledge that the Company is responsible for the adequacy and
accuracy of the disclosures in its SEC filings; SEC staff comments or changes to disclosure in
response to SEC staff comments do not foreclose the SEC from taking any action with respect to the
filing; and the Company may not assert SEC staff comments as a defense in any proceeding initiated
by the SEC or any person under federal securities laws of the United States.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Very Truly yours,
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="62%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">By:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ John P. Graham
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">John P. Graham</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chief Financial Officer</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">cc:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">John F. Norris Jr.,</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chief Executive Officer</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="right" style="font-size: 10pt"><!-- Folio -->Page 35<!-- /Folio -->
</DIV>



<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>EXHIBIT A</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>Compensation Discussion and Analysis</B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>The</U>
Compensation <strike><I>Program Objectives</I></strike><U>and Nominating Committee (the &#147;Committee&#148;) is
responsible for approving in advance of implementation Fuel Tech&#146;s proposed compensation program
for its existing officers and employees who have base salaries in excess of $100,000 per year
(including the Named Executive Officers (NEOs) listed in the Summary Compensation Table below).
The Committee periodically reviews Fuel Tech compensation practices, including the methodologies
for setting total compensation for those employees, including NEOs. As discussed below, from time
to time the Committee may also supplement its exercise of business judgment in compensation matters
with market information pertaining to Fuel Tech&#146;s compensation levels against comparable companies
in its industry and across multiple industries. However, the Committee exercises its independent
judgment when making decisions on compensation matters, including when rewarding individual
performance. The responsibilities of the Committee are described more fully in its charter at
www.ftek.com.</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><strike>&nbsp;</strike><U><B>Compensation Philosophy and Objectives</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Fuel Tech&#146;s compensation philosophy is to promote long-term, sustainable stockholder value
by incentivizing individual performance, as well as promoting overall financial performance on an
annualized and long-term basis.</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>With that compensation philosophy in mind,</U> Fuel Tech&#146;s compensation programs are
designed to achieve the following objectives:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to ensure that Fuel Tech remains a market leader in the development of innovative
solutions;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to attract, engage, and retain top talent that ensures the achievement of business goals,
strategies and objectives;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to support an integrated team-oriented philosophy; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to provide stockholders with a superior rate of return.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Compensation Elements</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fuel Tech&#146;s executive compensation program has as a primary purpose to attract, retain and
motivate the highly talented individuals whose enterprise will enable Fuel Tech to succeed. The
key components of that program include <strike>the following:</strike><U>three elements: base salary, short-term
incentives and long-term incentives, as more fully described below.</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Base Salary </U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Base salaries are approved by the Compensation and Nominating Committee on recommendation of
the Chief Executive Officer, except that the base salary of the Chief Executive Officer is fixed by
the Committee itself. In approving or fixing base salaries, the Committee acts in its business
judgment on what it understands to be fair, reasonable and equitable compensation in view of Fuel
Tech&#146;s requirements for recruiting and retention in a highly competitive market. To assist in that
determination, the Committee may refer to compensation consultant reports as to general market
information and also:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the executive&#146;s compensation relative to other officers;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>recent and expected performance of the executive;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Fuel Tech&#146;s recent and expected overall performance; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Fuel Tech&#146;s overall budget for base salary increases.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Short Term Incentives</U>
</DIV>

<P align="right" style="font-size: 10pt"><!-- Folio -->Page 36<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><I>Corporate Incentive Plan Compensation</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Beginning in 2006, the Compensation and Nominating Committee adopted a Corporate Incentive
Plan (CIP)&nbsp;to provide Fuel Tech employees the opportunity to earn an annual cash bonus based upon
employee performance and Fuel Tech&#146;s achievement of certain financial performance thresholds
discussed below. Potential cash awards under the CIP are designed to focus employees on the
achievement of Fuel Tech&#146;s internal financial targets for a particular year, as well as on
individual performance objectives established for employees.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><strike><I>CIP Structure</I></strike> </DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The CIP is structured as follows:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B> Participation in the CIP is not limited to executive officers. All Fuel Tech employees
were eligible for participation in the CIP in 2008, and, in 2009, all Fuel Tech employees will be
eligible to participate in the CIP with the exception of certain sales personnel and other
executive officers who agreed contractually not to participate in the CIP as part of Fuel Tech&#146;s
acquisition of substantially all the assets of their respective businesses. For 2008, employees
participating in the CIP were broken out into four separate groups (Officers, Sales, MBO Employees
and All Other), while for 2009, employees have been broken into three separate groups (Officers,
MBO Employees and Core Group). The CIP is Fuel Tech&#146;s only annual cash incentive plan <strike>of its type</strike>
for participating employees. Commencing in 2009, Fuel Tech compensates sales personnel in the
United States and Canada (Sales Group) pursuant to sales commission plans covering its Air
Pollution Control (APC)&nbsp;and FUEL CHEM<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> lines of business, and such employees will not be eligible
to participate in the CIP.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B> Fuel Tech&#146;s financial performance is measured under the CIP based upon three critical
financial metrics. These financial metrics, which are measured as of the end of each fiscal year,
include EBIT, revenues, and backlog in Fuel Tech&#146;s APC line of business. Specifically, &#147;EBIT&#148;
refers to earnings before interest expense, taxes, profit sharing contributions, sales commissions
and incentive pay, &#147;revenues&#148; refers to net sales, and &#147;backlog&#148; refers to customer orders for air
pollution control equipment construction projects that have not been recognized under the
percentage of completion method of accounting for revenue recognition in Fuel Tech&#146;s consolidated
statement of income. <U> These financial metrics provide an objective measure of Fuel Tech&#146;s
financial performance. The CIP is directly tied to the overall financial performance of Fuel Tech
across all business lines. This aligns the interests of all CIP participants with the overall
financial performance of Fuel Tech.</U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B> On an annual basis, performance targets are assigned to each financial metric by the
Compensation and Nominating Committee. The achievement of the performance targets for EBIT,
revenues, and backlog each result in a percentage of EBIT being contributed to an incentive pool.
However, regardless of Fuel Tech&#146;s performance for the revenue or backlog metrics, if the Committee
determines that the minimum level of EBIT has not been achieved during the year under review, the
incentive pool is not funded and, consequently, no incentive bonuses are paid. If the minimum level
of EBIT is achieved for the year in review, then the percentage of EBIT set aside to fund the
incentive pool is based upon Fuel Tech&#146;s performance against the pre-established performance
targets in each of the EBIT, revenues, and backlog categories
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B> When the CIP performance targets are set on an annual basis, the minimum and target
incentive pool amounts and the percentage of the pool to be allocated to each employee group is
also established. The aggregate size of the potential incentive pool is restricted only by the
level of Fuel Tech&#146;s financial performance for the applicable fiscal year.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">-</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>For 2009, the minimum and target incentive pool amounts have
been established at $400,000 and $2,640,000. (No incentive pool amounts were
established for the Sales Group.)<strike>.</strike> If the minimum EBIT performance target is
met for 2009, <U>and thus,</U> the incentive pool <U>is funded, it</U> will
be allocated among employees as follows: Officers, 45.5%; MBO Employees 47.5%
and Core Group, 7%. </TD>
</TR>

</TABLE>
</DIV>


<P align="right" style="font-size: 10pt"><!-- Folio -->Page 37<!-- /Folio -->
</DIV>



<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">-</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>For 2008, the minimum and target incentive pool amounts were
established at $600,000 and $4,410,000, to be allocated among employee groups
as follows: Officers, 29%, MBO Employees, 18.5%, Sales, 46.5% and All Others,
6%. The Committee determined that the minimum EBIT performance target for 2008
had not been met by Fuel Tech, and accordingly, no incentive pool had been
earned for 2008.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">-</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>For 2007, the minimum and target incentive pool amounts were
established at $750,000 and $5,300,000. The Committee determined that the 2007
incentive pool equaled $1,500,000, and it was allocated as follows: Officers,
33.5%; MBO Employees, 15.0%; Sales, 46.5%; and All Others, 5%.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp; No individual bonus payments were made to the Named Executive Officers with respect to
2008. Individual bonus payments to the Named Executive Officers for 2007 are set out below in the
&#147;Non-Equity Incentive Plan Compensation&#148; column of the Summary Compensation Table.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp; The CIP contemplates that incentive payments to individual employees will be based on the
amount funded for the employee group to which the employee belongs; the employee&#146;s eligible base
salary; the employee&#146;s payout target percentage (i.e.,
percentage of base salary) and<U>, for the
Officer and MBO Employee Groups,</U> the employee&#146;s performance <U>evaluation</U> relative to
<U>any individual</U> specific goals <U> that may be </U> established<strike>. Performance </strike><U> for the employee. If
established, performance</U> goals are  <strike>specific</strike><U>unique</U> to <strike>each employee. Except for </strike>the
<strike>Chief Executive Officer, whose goals are approved and
evaluated by the Committee, </strike>employee <strike>
goals are approved and achievement evaluated by the
participants&#146; supervisors</strike><U>. Evaluating goal
completion for a CIP bonus amount determination involves business judgment regarding what Fuel Tech
may consider important to its business at the time the evaluation occurs and can include both
qualitative and quantitative factors. The elements of evaluation may include: percentage of
completion of goals established in the individual&#146;s operational area; exceptional and innovative
performance; providing effective leadership; and embodying teamwork.</U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp; The Committee reserves the right to make adjustments as necessary to account for corporate,
business unit and individual performance.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp; Fuel Tech does not disclose the specific EBIT, revenues and backlog performance targets
established by the Committee, as this information is highly confidential and disclosure would cause
competitive harm. Historically, the Committee determined that Fuel Tech met the minimum EBIT
performance targets for 2006 and 2007, but not in 2008. The Committee believes that the
performance targets set for 2008 were appropriately aggressive, and that the 2009 performance
targets require Fuel Tech to improve its financial results in comparison to its 2008 financial
results in order for the minimum EBIT performance target to be met.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><I>FUEL CHEM Officer Sales Commission Plan</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The FUEL CHEM Officer Sales Commission Plan (Officer Commission Plan) provides for sales
commission payments to be made to Fuel Tech&#146;s Sr. Vice President, Fuel Chem Sales. Under the
Officer Commission Plan, Fuel Tech will pay to such officer a commission equal to a specified
percentage of all commission payments made by Fuel Tech under the employee sales commission plan
relating to its FUEL CHEM line of business. Mr.&nbsp;Brady is the Registrant&#146;s Sr. Vice President, Fuel
Chem Sales.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;An amount equal to one-third of all commission otherwise payable to the officer under the
Officer Commission Plan (Contingent Commission) is withheld and only paid if predetermined
performance targets are met. The predetermined performance target is based upon revenues
recognized in the applicable fiscal year from FUEL CHEM sales in the United States, Puerto Rico,
Jamaica and Canada. Notwithstanding the foregoing, all or a portion of the officer&#146;s Contingent
Commission may be paid if approved in writing at the sole discretion of Fuel Tech&#146;s Chief Executive
Officer, and the annual FUEL CHEM revenue performance target has been substantially, but not fully,
achieved. The Contingent Commission is payable on or before March&nbsp;31 of the following year in
which the Contingent Commission is earned.
</DIV>


<P align="right" style="font-size: 10pt"><!-- Folio -->Page 38<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Long-Term Incentives </U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fuel Tech has one equity-based employee compensation plan,
<strike>referred to as</strike><U>formally titled</U> the Fuel
Tech, Inc. Incentive Plan<strike>, under which</strike> <U>(FTIP). The FTIP allows for a variety of types of</U> awards
<U>that</U> may be granted to participants in the form of non-qualified stock options, incentive
stock options, stock appreciation rights, restricted stock, performance awards, bonuses or other
forms of share-based or non-share-based awards or combinations thereof. Participants in the <strike>Fuel Tech, Inc. Incentive Plan</strike>
<U>FTIP</U> may be Fuel Tech&#146;s directors, officers, employees, consultants or advisors (except
consultants or advisors in capital-raising transactions) as the directors determine are key to the
success of Fuel Tech&#146;s business.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Historically,</U> Fuel <strike>Tech&#146;s</strike><U> Tech&#146;s
overall</U> long-term equity incentives <strike>are</strike><u>approach has
been to use the FTIP to award</u> stock options, principally non-qualified options, <strike>and</strike><u>which</u> are designed
to focus management on Fuel Tech&#146;s long-term success as evidenced by appreciation of Fuel Tech&#146;s
stock price over several years, by growth in its earnings per share and other elements.<U> Except
for option awards to the CEO, option awards are determined by the Committee based upon
recommendations from Fuel Tech&#146;s CEO. Option awards for the CEO are determined by the Committee
with no participation of the CEO. The determination and approval of proposed option awards is
based on a variety of factors that may include:</U>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>historical option grants, by employee, by year; </U></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>intrinsic (Black-Scholes) values for each option grant; </U></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>the number of options available for issuance under the FTIP; </U></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>supervisor recommendations for employee option grants; </U></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>the estimate of expected intrinsic value (e.g., stock compensation expense) of the
aggregate option grant; </U></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Fuel Tech&#146;s financial performance in light of market conditions and operational
considerations, which may be quantitative, qualitative or both;</U></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>achievement of individual or company operational objectives;</U></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>exceptional and innovative individual performance;</U></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>individual contribution to a strategic goal;</U></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>leadership accomplishments; and</U></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>(Also see <B>Equity Grant Practices </B>below)</U></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Material Compensation Actions for 2008</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On December&nbsp;7, 2007, the Board met and reviewed the 2008 Business Plan. The Board then
received the recommendation of the Chief Executive Officer as to the metrics of the CIP for fiscal
2008, and, after an executive session, approved that recommendation.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On February&nbsp;28, 2008, the Compensation and Nominating Committee met and reviewed the Company&#146;s
progress in 2007 against the metrics of the 2007 CIP and determined that an incentive pool of
$1,500,000 had been earned for 2007 participants in that CIP. The Committee also approved the
grant to Mr.&nbsp;Ralph E. Bailey of an award of 10,000 share options in addition to the 10,000 share
options Mr.&nbsp;Bailey received as a non-employee director. <U>Such additional share options were
granted by the Committee following a review of the Chairman&#146;s salary for his services provided to
Fuel Tech, which review included, among other things, evaluation of comparable market information
from an independent compensation consultant, regarding compensation for chairman services by other
comparable companies. Following that review, the Committee agreed, based in part on recommendation
from the independent compensation consultant retained by the Committee, that the total annual
options for Mr.&nbsp;Bailey should be for a total of 20,000 shares rather than 10,000 shares issued to
other directors of the Company. </U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On April&nbsp;2, 2008, the Compensation and Nominating Committee met and determined that, effective
May&nbsp;1, 2008, Mr.&nbsp;Norris&#146; base salary would be increased from $443,000 to $500,000 per year, and,
following May&nbsp;1, 2008, Fuel Tech would no longer reimburse Mr.&nbsp;Norris for personal lodging and
commuting expenses.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On May&nbsp;22, 2008, the Board approved an increase in the annual retainer paid to Fuel Tech&#146;s
non-employee
</DIV>


<P align="right" style="font-size: 10pt"><!-- Folio -->Page 39<!-- /Folio -->
</DIV>



<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">directors from $20,000 to $25,000 per year.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On December&nbsp;10, 2008, the Compensation and Nominating Committee reviewed the recommendations
of the Chief Executive Officer regarding the metrics of the CIP for fiscal 2009, and the proposed
form of Officer Commission Plan. The Committee then recessed for the meeting of the Board where
the 2009 Business Plan was reviewed. On December&nbsp;11, 2008, the Committee reconvened and approved
the metrics of the CIP for fiscal 2009 subject to the Committee&#146;s final approval at its meeting in
February, 2009 and the Officer Commission Plan.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On February&nbsp;25, 2009, the Compensation and Nominating Committee approved amendments to the
CIP, including (a)&nbsp;establishing the performance targets and employee group allocation percentages
for potential annual incentive awards for fiscal 2009 under the CIP, and (b)&nbsp;establishing the
effective date of the 2009 CIP to be the earlier of the date the 2009 CIP document is distributed
to eligible employees or March&nbsp;15, 2009. In addition, the Committee reviewed Fuel Tech&#146;s financial
performance in 2008 against the metrics of the 2008 CIP and determined that no incentive pool had
been earned by Fuel Tech for fiscal 2008.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Benchmarking, Consultants and the Use of Peer Groups</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fuel Tech has from time to time made
use of Frederick <strike>J.</strike> <u>W.</u> Cook <strike>and Associates</strike><u>&#038; Co.</u>, a compensation
consultant, to address matters of compensation and benefits, and to identify peer group companies
based on industry, markets and size. Fuel Tech recognizes that compensation practices must be
competitive in the marketplace and marketplace information is one of the many factors that are
considered in assessing the reasonableness of compensation programs. The Compensation and
Nominating Committee retains the discretion to make all final decisions relative to matters of
compensation and benefits.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<strike>Fuel Tech has used peer companies to guide</strike><u>At</u>  the <strike>establishment</strike><u>time</u> of <strike>compensation policy and procedure. The</strike><u>their selection, the</u> companies listed below were chosen as peer group companies
based on market capitalization, revenues and global industry classification standard codes.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="48%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="48%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">American Ecology
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Layne Christensen</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Avalon Holdings
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Mitcham Industries</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Connecticut Water Services
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">MFRI</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Dawson Geophysical
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Omni Energy Services</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Duratek
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Perma-Fix Environmental Services</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Ecology and Environment
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Synagro Technologies</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Englobal
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Team</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Flanders
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">TRC</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Integral Systems
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Versar</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Waste Industries USA</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;From time to time, the Committee may supplement its business judgment pertaining to its
consideration of Fuel Tech compensation matters with a variety of market information obtained from
a number of different sources including, among other things, the Committee&#146;s general knowledge
regarding compensation matters, information from an independent compensation consultant, peer
company data, benchmarking related to that data, information obtained from independent search
firms, and historical and current Fuel Tech compensation data.&nbsp; In 2008, the Committee did not
engage in benchmarking based on the use of its then existing peer group data. &nbsp;</u>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Ownership Guidelines</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fuel Tech does not have a stock ownership policy for its executive officers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Hedging and Insider Trading Policies</B>
</DIV>


<P align="right" style="font-size: 10pt"><!-- Folio -->Page 40 <!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fuel Tech does not have a formal policy on hedging. Fuel Tech does prohibit all employees
from speculating in Fuel Tech securities, which includes, but is not
limited to<strike>,</strike><U>:</U> short selling<U>;</U> and
the purchase <U>and sale </U>or sale <strike>within six months of a
sale or</strike><u>and</u> purchase<U>, in non-exempt transactions, of
 Common Stock within
periods</u> of <strike>a Fuel Tech security.</strike><U>less than six
months.</U>
 Fuel Tech prohibits trading in <strike>Fuel
 Tech securities</strike><u>Common Stock</U> during closed periods
from the end of a quarterly period until the third day following the announcement of earnings for
that quarterly period.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Equity Grant Practices</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As discussed under <U>Long-Term Incentives</U> above, long-term incentives in the form of
stock options are issued by Fuel Tech under the <strike>Fuel Tech,
Inc. Incentive Plan </strike><U>FTIP</U> in accordance with compensation policy as
determined by the Committee from time to time.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under current policy, new employee stock options may be granted at the first Committee meeting
following employment. However, from time to time, an option may be authorized by the Committee to
be granted and effective on a specified later date or event, such as on the first date of
employment. The price of all options granted is the mean of the high and low stock prices reported
on the NASDAQ Stock Market, Inc. for the effective date of grant. Also, under the current policies
of the Committee, all employees&#146; options have a term of ten years and are subject to a four-year
vesting schedule as follows: 50% of the options vest two years from the grant date and 25% vest on
each subsequent year on that date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Committee may grant options to existing employees on a periodic basis based on the level
of the employee position and <strike>employee performance.</strike><u>as well as certain of the
 factors enumerated in the Long-Term Incentives portion of the <B>Compensation Elements </B>section
above.</u> While there are no mandatory
levels established for the quantity of options to be granted, Fuel Tech does use historical
practice as  <strike>guidance</strike><u>one of the factors it considers</u>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Retirement Benefits</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fuel Tech has no defined benefit pension plan. Fuel Tech has a 401(k) Plan covering
substantially all employees. The 401(k) Plan is an important factor in attracting and retaining
employees as it provides an opportunity to accumulate retirement funds. Fuel Tech&#146;s 401(k) Plan
provides for annual deferral of up to $16,500 for individuals until age 50, $22,000 for individuals
50 and older, or as allowed by the Internal Revenue Code. Fuel Tech annually matches 50% of
employee contributions up to 6% of the employee&#146;s salary, or a maximum annual match of $7,350.
Fuel Tech may also make discretionary profit sharing contributions to the 401(k) Plan on an annual
basis. Matching and profit sharing contributions vest over a three-year period.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Welfare Benefits</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In order to attract and retain employees, Fuel Tech provides certain welfare benefit plans to
its employees, which include medical and dental insurance benefits, group term life insurance,
voluntary life and accidental death and dismemberment insurance and personal accident insurance.
These benefits are not provided to non-employee directors.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Employment Agreements; and Change in Control Severance Arrangement</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Messrs.&nbsp;Brady, Graham, Maley, Norris and Rummenhohl have employment agreements with Fuel Tech
as follows: effective February&nbsp;1, 1998 for Mr.&nbsp;Brady; April&nbsp;30, 2008 for Mr.&nbsp;Graham; April&nbsp;27, 2006
for Mr.&nbsp;Maley; February&nbsp;28, 2006 for Mr.&nbsp;Norris; and October&nbsp;2, 2008 for Mr.&nbsp;Rummenhohl. These
agreements are for indefinite terms, provide for disclosure and assignment of inventions to Fuel
Tech, protection of Fuel Tech proprietary data, covenants against certain competition and
arbitration of disputes. These employment agreements are for terms of employment &#147;at will&#148; and do
not provide for severance payments. Under the agreements for Messrs.&nbsp;Norris and Graham, however,
each executive is entitled to continuation of base salary and benefits, and incentive bonus amounts
earned under the plan for the year of termination, for up to one year or, sooner, on finding
comparable
</DIV>


<P align="right" style="font-size: 10pt"><!-- Folio -->Page 41 <!-- /Folio -->
</DIV>



<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">employment, after involuntary termination not for cause within one year of a &#147;Change in Control&#148; as
described below under the caption &#147;Options Vesting on Change in Control.&#148; Until April&nbsp;30, 2008,
Fuel Tech also reimbursed Mr.&nbsp;Norris pursuant to his agreement for personal lodging and commuting
expenses and a tax gross-up of those costs.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Options Vesting on Change in Control</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under the <strike>Fuel Tech, Inc. Incentive Plan</strike><U>FTIP</U>, all outstanding options shown in the table below &#147;Outstanding Equity Awards at
Fiscal Year-End&#148; for the Named Executive Officers that are not vested will become immediately
exercisable in the event that there is with respect to Fuel Tech, a &#147;Change in Control.&#148; A Change
in Control takes place if (a)&nbsp;any person or affiliated group becomes the beneficial owner of 51% or
more of Fuel Tech&#146;s outstanding securities, (b)&nbsp;in any two-year period, persons in the majority of
the board of directors cease being so unless the nomination of the new directors was approved by a
majority of the directors then still in office who were directors at the beginning of such period,
(c)&nbsp;a business combination takes place where the shares of Fuel Tech are converted to cash,
securities or other property, but not in a transaction in which the stockholders of Fuel Tech have
proportionately the same share ownership before and after the transaction, or (d)&nbsp;the stockholders
of Fuel Tech approve of a plan of liquidation or dissolution of Fuel Tech.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Indemnification and Insurance</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under the Fuel Tech Certificate of Incorporation and the terms of individual indemnity
agreements with the directors and executive officers, indemnification is afforded Fuel Tech&#146;s
directors and executive officers to the fullest extent permitted by Delaware law. Such
indemnification also includes payment of any costs that an indemnitee incurs because of claims
against the indemnitee and provides for advancement to the indemnitee of those costs, including
legal fees. Fuel Tech is not, however, obligated to provide indemnity and costs where it is
adjudicated that the indemnitee did not act in good faith in the reasonable belief that the
indemnitee&#146;s actions were in the best interests of Fuel Tech, or, in the case of a settlement of a
claim, such determination is made by the Board.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fuel Tech carries insurance providing indemnification, under certain circumstances, to all of
its directors and officers for claims against them by reason of, among other things, any act or
failure to act in their capacities as directors or officers. The current annual premium for this
policy is $358,688.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No payments have been made for such indemnification to any past or present director or officer
by Fuel Tech or under any insurance policy.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Compensation Recovery Policies</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fuel Tech&#146;s Board maintains a policy that it will evaluate in appropriate circumstances
whether to seek the reimbursement of certain compensation awards paid to an executive officer, if
such executive engages in misconduct that caused or partially caused a restatement of financial
results, in accordance with section 304 of the Sarbanes-Oxley Act of 2002. If the Board determines
that circumstances warrant, Fuel Tech will seek to recover appropriate portions of the executive
officer&#146;s compensation for the relevant period, as provided by law.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Tax Deductibility of Executive Compensation</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fuel Tech reviews and considers the deductibility of executive compensation under the
requirements of Internal Revenue Code Section&nbsp;162(m), which provides that the Company may not
deduct compensation of more than $1,000,000 that is paid to certain individuals. The Company
believes that compensation paid under the Company&#146;s incentive plans is generally fully deductible
for federal income tax purposes.
</DIV>





<P align="right" style="font-size: 10pt"><!-- Folio -->Page 42<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Accounting for Equity-Based Compensation</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On January&nbsp;1, 2006, Fuel Tech began accounting for the equity-based compensation issued under
the <STRIKE>Fuel Tech, Inc. Incentive Plan</STRIKE><U>FTIP</U> in accordance with the requirements of FASB Statement 123(R).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Summary of NEO Compensation</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>It has been Fuel Tech&#146;s practice that overall NEO compensation consists of three primary
elements: base salary, short-term incentive compensation based on financial performance, whether
under the CIP or the Officer Commission Plan, and long-term incentives. The elements of overall
compensation paid by Fuel Tech to its NEOs are reflected in the following chart.</U>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><IMG src="y79530y7953002.gif" alt="(FLOW CHART)">
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>The Committee determined the amounts to be paid to each NEO for fiscal 2008 as follows:</U>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U><I>John F. Norris Jr., President and Chief Executive Officer: </I>Mr.&nbsp;Norris&#146; compensation for
2008 consisted primarily of the following:</U></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">-</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Base Salary<I>: </I>Mr.&nbsp;Norris&#146; base salary for 2008 was
$475,917, representing an increase of $69,667 from his base salary for 2007.
Approximately $50,000 of the increase to Mr.&nbsp;Norris&#146; base salary was approved
by the Committee to compensate Mr.&nbsp;Norris for continued commuting expenses,
local temporary living expenses and a tax gross up relating to such expenses
that, prior to May&nbsp;1, 2008, were reimbursed to Mr.&nbsp;Norris on an expense basis.
The remainder of such increase was awarded by the Committee due to Fuel Tech&#146;s
overall performance in 2007, including a record fourth quarter in sales.</U></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">-</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Short Term Incentives<I>: </I>Because Fuel Tech failed to
achieve the minimum EBIT financial metric in 2008 under the CIP, no CIP bonus
payments were made to Mr.&nbsp;Norris for 2008.</U></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">-</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Long Term Incentives<I>: </I>On March&nbsp;7, 2008, Mr.&nbsp;Norris was
granted 70,000 options to purchase Common Stock under the FTIP at an exercise
price of $17.82 per share. The Committee determined to award Mr.&nbsp;Norris such
options in light of Fuel Tech&#146;s overall performance in 2007, including a record
fourth quarter in sales.</U></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U><I>John P. Graham, Senior Vice President, Chief Financial Officer and Treasurer: </I>Mr.
Graham&#146;s compensation for 2008 consisted primarily of the following:</U></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">-</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Base Salary<I>: </I>Mr.&nbsp;Graham joined Fuel Tech on April&nbsp;30,
2008. The $201,153 of base salary paid to Mr.&nbsp;Graham in 2008 as reflected in
the Summary Compensation Table below represents payments due under his
employment agreement with Fuel Tech which provides for an annual salary of $300,000. The Committee approved Mr.&nbsp;Graham&#146;s annual salary
based upon historical salary</U></TD>
</TR>

</TABLE>
</DIV>


<P align="right" style="font-size: 10pt"><!-- Folio -->Page 43<!-- /Folio -->
</DIV>



<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>levels paid to Fuel Tech&#146;s Chief Financial Officer,
compensation survey data received from the independent search firm retained to
consult regarding his hire, and then current market conditions for similar
positions.</U></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>-</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Short Term Incentives</U><I>: </I><U>Because Fuel Tech failed to
achieve the minimum EBIT financial metric in 2008 under the CIP, no bonus
payments were made to Mr.&nbsp;Graham for 2008.</U></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>-</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Long Term Incentives</U><I>: </I><U>In connection with his accepting
employment with Fuel Tech, Mr.&nbsp;Graham was granted 50,000 options to purchase
Common Stock under the FTIP at an exercise price of $22.60 per share on May&nbsp;8,
2008. The Committee determined to make such grant in light of its review of
the data noted under the discussion of Mr.&nbsp;Graham&#146;s base salary above as well
as certain of the factors enumerated in the </U><U>Long-Term
Incentives </U><U>portion of the <B>Compensation Elements </B>section above,</U></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U><I>Stephen P. Brady, Senior Vice President-Fuel Chem Sales: </I>Mr.&nbsp;Brady&#146;s compensation for
2008 consisted primarily of the following:</U></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>-</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Base Salary</U><I>: </I><U>Mr.&nbsp;Brady&#146;s base salary for 2008 was
$225,833, representing an increase of $13,333 from his base salary for 2007.
The Committee&#146;s decision to increase Mr.&nbsp;Brady&#146;s base salary was upon the
recommendation of the Chief Executive Officer, and was made primarily to
reflect Mr.&nbsp;Brady&#146;s leadership in growing the FUEL CHEM line of business in
2007, both in terms of market penetration, as reflected by record new
demonstration and commercial contract awards, and top line performance, as
reflected by record annual revenues for that line of business.</U></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>-</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Short Term Incentives</U><I>: </I><U>Because Fuel Tech failed to
achieve the minimum EBIT financial metric for 2008 under the CIP, no bonus
payments were made to Mr.&nbsp;Brady for 2008. In 2009, Mr.&nbsp;Brady will not be
eligible for participation in the CIP, and instead will be eligible for
commission compensation under the Officer Sales Commission Plan described
above.</U></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>-</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Long Term Incentives</U><I>: </I><U>On March&nbsp;7, 2008, Mr.&nbsp;Brady was
granted 30,000 options to purchase Common Stock under the FTIP at an exercise
price of $17.82 per share. The Committee determined to award Mr.&nbsp;Brady such
options upon the recommendation of the Chief Executive Officer in light of Mr.
Brady&#146;s performance noted in the discussion of Mr.&nbsp;Brady&#146;s base salary above as
well as certain of the stock option award factors enumerated in the</U>
<U>Long-Term Incentives</U> <U>portion of the <B>Compensation Elements </B>section
above<I>.</I></U></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U><I>Michael P. Maley, Senior Vice President International Business Development and Project
Execution: </I>Mr.&nbsp;Maley&#146;s compensation for 2008 consisted primarily of the following:</U></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>-</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Base Salary</U><I>: </I><U>Mr.&nbsp;Maley&#146;s base salary for 2008 was
$264,833, representing an increase of $9,583 from his base salary for 2007.
The Committee&#146;s decision to increase Mr.&nbsp;Maley&#146;s base salary was upon the
recommendation of the Chief Executive Officer, and was made primarily to
reflect Mr.&nbsp;Maley&#146;s leadership in 2007 in opening desired new international
markets for Fuel Tech&#146;s business, as reflected by the establishment of
demonstration contracts for the FUEL CHEM line of business in India and Mexico.</U></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>-</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Short Term Incentives</U><I>: </I><U>Because Fuel Tech failed to
achieve the minimum EBIT financial metric for 2008 under the CIP, no bonus
payments were made to Mr.&nbsp;Maley for 2008.</U></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>-</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Long Term Incentives</U><I>: </I><U>On March&nbsp;7, 2008, Mr.&nbsp;Maley was
granted 30,000 options to purchase Common Stock under the FTIP at an exercise
price of $17.82 per share. The Committee determined to award Mr.&nbsp;Maley such options upon the</U></TD>
</TR>

</TABLE>
</DIV>

<P align="right" style="font-size: 10pt"><!-- Folio -->Page 44<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>recommendation of
the Chief Executive Officer in light of Mr.&nbsp;Maley&#146;s performance noted in the
discussion of Mr.&nbsp;Maley&#146;s base salary above as well as certain of the stock
option award factors enumerated in the <U>Long-Term Incentives</U> portion of
the <B>Compensation Elements </B>section above<I>. </I>Mr.&nbsp;Maley resigned from Fuel Tech
effective February&nbsp;13, 2009, at which time all of Mr.&nbsp;Maley&#146;s unvested stock
options expired (including the 30,000 options granted in March, 2008).</U></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U><I>Volker Rummenhohl, Vice President, Catalyst Technology: </I>Mr.&nbsp;Rummenhohl&#146;s compensation
for 2008 consisted primarily of the following:</U></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>-</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Base Salary</U><I>: </I><U>Mr.&nbsp;Rummenhohl joined Fuel Tech on
October&nbsp;2, 2008 following Fuel Tech&#146;s acquisition of substantially all the
assets of Tackticks, LLC. The $43,750 of base salary paid to Mr.&nbsp;Rummenhohl in
2008 as reflected in the Summary Compensation Table below represents payments
due under his employment agreement with Fuel Tech which provides for an annual
salary of $175,000. The Committee approved Mr.&nbsp;Rummenhohl&#146;s annual salary
based upon the negotiated terms of Fuel Tech&#146;s acquisition of substantially all
of the assets of Tackticks, LLC.</U></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>-</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Short Term Incentives</U><I>: </I><U>As part of the acquisition of
substantially all of the assets of Tackticks, LLC (a)&nbsp;on October&nbsp;2, 2008, Fuel
Tech made a one-time payment of prepaid sales commission to Mr.&nbsp;Rummenhohl in
the amount of $1,000,000 to be debited against actual sales of certain Fuel
Tech products in the APC line of business; and (b)&nbsp;Mr.&nbsp;Rummenhohl agreed that
he would not be eligible for participation in the CIP.</U></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>-</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Long Term Incentives</U><I>: </I><U>Consistent with Fuel Tech&#146;s
philosophy and objectives for <U>Long Term Incentives</U> described in that
portion of the <B>Compensation Elements </B>section above and in light of certain of
the stock option award factors enumerated therein, in connection with his
accepting employment with Fuel Tech, Mr.&nbsp;Rummenhohl was granted 10,000 options
to purchase Common Stock under the FTIP at an exercise price of $10.01 per
share on December&nbsp;10, 2008.</U></TD>
</TR>

</TABLE>
</DIV>


<P align="right" style="font-size: 10pt"><!-- Folio -->Page 45<!-- /Folio -->
</DIV>



</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>GRAPHIC
<SEQUENCE>2
<FILENAME>y79530y7953001.gif
<DESCRIPTION>GRAPHIC
<TEXT>
begin 644 y79530y7953001.gif
M1TE&.#EAJ``V`.8``-;CZ8VGN:>GI\K<Y&^LS/3Y^>OS]?S]^5&&KOCZ^J7&
MVA9<G?+T]-;8V+?7Y"MGF9:VR9?$VHJRS35OG\C(R$1XHK:WN*2YQ?CY]=CK
M\,75W?CWZ/O\_/[^_OK\_!1=H?3W]K+*UH.LQV>6M^KKZ^7R],OBZ^3N\>#J
M[?KY\'NCO1M7B]_BXOK[^8:XT1M;DB5>D!=?G'2<M_[^^V*)J;O1W2J)O/+W
M^!5@HEBGR_S\]E*7O_S^_CJ=Q^SGWG67K9.\T*.PN*.IL+?%S/S^_!=:EQA=
MF>WV]OC[^VJ1K6:?PH>?KZ;`S_OZ]A=4D_O[^/K[]L+.U*NEHNKP\>CHYUV-
MLK_?ZM/+R&N'G=/3TK"II1A7DBQ;@I2PP/?W\:#0X158FN/EYN?DXL+"POS]
M_=WO\>[N[5:!H*NKJW>1H_K[\.3IZOW]^ZJ>H*.@F_O[\_#W^/S\]/O[^Z&B
MI/[]_:W/WKV]O=O>WZZOL"-BGL[/SAM3A>_Q\;.SLO?X^/___R'Y!```````
M+`````"H`#8```?_@'^"@X2%AH>(B80'<3HS'!X>/#.4A!T=9')DEW]D"62;
MG)<<EYB;?QV"'*NL3SJO.@<S@AV4,YR*N;J[O+V^N3..'3S$?S.RB1T<<I>@
M'*#.M+B%PX-DD:MD@C-LM]._X.'BXX;<LZ7<R(.8SQUL"2!F)"1\(/`M"2V@
MHJ?KI9=$B&"ZU$T@N8,($^XJM2X='4*G_)"XH\=.'SMZLNBA,&8>%3^9-#73
MALJ6R5FA#G1`XN&?PI<P8;KCP(9-*5!FLE@0P!//'3%V!,P1@(>!'!`-&ICA
MPR#5JDO<:K(A<LSFLV!(X)SX1(9'JIA@P_X:J"R4'SUX>/*D0(4"&@%O_P58
M"-6"(A4J#:AD(W(@%INN''C\05)`3M\")4),\8/DV3JQD"-O\Y;)`QD.=?L,
M%8HG+X7-/.=0V+3O#@4S#)(R^$.$S8$G"0AC>),B%I04;PQ\B7`C-DC!WR0+
M/]B!*B5,'@K<0.+GCAT*T"G8:<!`#YJXH>_(>4:FQ=DQ()!F(<&FR0$Y#%"<
M.%(@7X(F.IIDR/%%.9($DDI^'<Y?7+H#!Y!!&!Q'&)`%'FA80$$6+.CCAQEA
M4#2&'7CT0<4?RSAEA@4-<)!`%G:8P89W*-2@@`)?6%%&"4?XD8`5-EAQ0V\%
MY%?+?OWE2$TMJ'0S`QFM/1''&U`D<$0&=8B0AO]:;\UA`0AWC*%'`V&@!D(+
M)%B@8!9W4(%:`P*884\8?9!PC9$&6!%!#CN,X(("5A!@PQ=U,'%!%)89AZ..
M?&:BPQ\>0/'&&P6\`4(!:FR`@0DN])!#!%VHU5,8#.S$9(52<F0!'E)(H44?
M>,PQ!I<D#$'!#9((Z04(95CQ10XVQ!IK#RX``,(JKQ#!YZ[K$#%)+)[\\<8&
M&^B6PZ,9^#$&DT)E(8<>H$DJ6F5D>`%A`SH)8(=%?4B110HI',`#!Q@H:@"C
MLN:0P1%0/`%*2V0\Q"N?!T"!Q`Q$>B!'$QB4X(`+!"B0`1Q>4"&$$)+B004#
M?3")G0`-_/%),QXD4`#_!0)X20(565A(6PI0^,&`"6O&ZH(+5=110@)0',"&
M!YWL.>]P![R!!!M0M+#O$[HI04`91V#P!!30(JP6!2"P,,?#DEYXDQSW(7&'
M&V%@P$8*7N"A!P9>8'#D%TKDT(,-/Y<A`@$FW(`!@*3T,W-_-7.`Q-PM8&!`
M!$HX8(`?33SQ!`-X&"T4&BR<-4>T:N&1@$BTM-`"!V*X<4<!U;ZQ[10E9`#$
M#O1%8$,$)7AQ0QD1`#%%8S010=/;.08S0P%(U%T`$$ID0`PD]ZTA!!X4)-4`
M!7[P8<'ADJHU%X:/:T-'7U-G83,<"30P'0$]$&!%!E_8X``#!\!1`!QE:#`%
M_RG;Q'$`Z_W-A`04.AP1P0X9+,>!#FK4+\8<!^-A@1Z%)\``'RRX0Q:DLRD!
MC"8;H&"##@;%`HB!X`E$T%P/>A`!%&"``778@0..H))]]>T)-3,?^OCD#C(H
ML``FH(\!,("$#@"H72QP@Q:D<#0.A&$,%-##'5@0!BKTD`49N4,82(`:#&"@
M"6P80!<&P`=&$8``2JC!#>1@``<0P`&A2P`'4H`!#VF"?G^Z#$E&*!DZL($#
M;VA!"?"FMMH`RC)D$$,;I#`4-(B*`UF`BZ30H+_>20=!>*B0@C2@``FX@$T"
M8P$>LJ`<*]3*"WQP&;F$I@\.R.(6.#O?V\B"B3_8Y/\?H#1%*'`!%:B<)!-]
M2T`)1``$([8,4"V`0A-\,$>X"&$.66"#'GA"0Y[$Q0)\X,`3O,,'*MPA"DQ0
M0140,`(5=,$.8QB#3XXP@`AD``EO.$#RD%"OV+BC&YC(63>D88B;R`PB;G-)
M2:3Q%0%YY3(=T($S6$'/522/(<,P(26D`J`#8*8)'"B``53@`B]X`8E\T8&@
MS#!#`1Q,-#JX`B][J18[7(E??CA"&?Y%@!R,0`0`8$$#-@(J``"@#B<X@"1J
ML@H/O(PE7CF.W%H0BU20DA/$`(57;EJ*;-SB#\0H1G%L@@JO]`AFR.'`&R/!
MU*8*2BI?^>1Q:#$N2)!B?D?_`$(.2K`!<,6!&]OQ@P6$\):#V6$&T/(E&K3`
M5BE<00<)\!\`UI0#%SB`!6@8`@,P`(LQ`%,]((C#,#`!SAGXBA:V2(4YIE$*
MP5BB)KHRAE1^JD"B-N2<J+"D^8Z1`C4$"!J@)<,"@Z&#%C1&)86X!E/G%A@U
MP,$$%"S!<J+FC`:X`3L6\$`##F:T3@D@"#4PP1<(L(,=U*HP(*!`&\1@'I=Y
M00M7\,.^`#2#<0&I$43]!C<L5B.ON$8'C?!`8+X"E<OTJ":SX($^J5J2PY8S
MGG$P;0+\21.IV/<=(+B!`DWK`?IJXQ\\<$TD+G$`/U1Q!Q$H0P+*P]<S\J$/
MO(6+_QG$,$,T""$(73A;<7>@@B^8H`QPJ-\;J(`'.S`@OS<H0![%``(7>>^J
MN/HJ5,!YF;:!0B"CP`<<;P()?07&&`%1!E/'R].23+4F.L!`&100@1,Y^<E0
M5@`90#:W)WB`)<:(2CS?H(,GN`9`!3B"":`8`165P``W`$D#\#"J.S3@!"@8
M0A=D,((J++,*>0-:"4S$Y`A$0`1)D,")_`P$&8C@R4P8`#?I&XQ/*E`6JMU$
M:RC1FAZ;$$"N6<5]Q+NZFICBRBUI#7J5(0B7'>,)WSS`#2+P@#RX^M6PAC4,
M*N"!-P`4"4^0&\R^O`IP-:$)+4"B*Y[P-8`1X$UU<(`5K/\0@"4$``)```+`
MCN6""-2A#B&H`0OH<0(:P"#6+\A#JV,MZP`40*%R(P.`0-&76%0L=H8!D)?[
MR1<`P2<6<F-)33ZQG6^V0+SN>`T2,:$ZE['!;R!QQPU$8`0<?,#A,8BXQ"=>
M!`3`P1,6T^*_/4D$,J38#ZJ30SX\P1(X0$&@*'!`!)XHM@FZO`=*`(("GIF%
M!FS[!`/`@Q8L,(0)X``'1@BZ$6)@A"(8?>@3C_@*+G`#(C#&/@+"SR7>+0>_
MO:;'S%G<4UQ!&T?P0.1(2'%LZ$";-WCZ&JS5(@?\<&6+@00)52]`$HJ`@P7$
MP.X27X#>]QX#%0!!`M%V@02B@(3_G2*A!`J0-K0A$`(R#,"0)X,`M*--><IK
M@`00L#.>4;:$6W;*#0T@@0\T`(05;`$,'TC]`L"P@`_87>^I=WW0)Q`")@"^
M\KB/M@0@<((6I&`#;SA!#410A0I,8`(50(`*-'""`K0`A$\``!`F#X$E7@TW
M''B\M*?/^P2$(=$:&,`1"+^O(U0`]:EG_=[7K_<'N.`!6S#""V*PAS04H!8\
MN($#)N`$)VRA""_P`W*@!%L0`R^P`$)7!%NP!2^P@$:P!2(P!2JP!_)W>ERP
M!(?3*7.P!G6S:@>X`$5@=W7W`40G<0[G>GIW!@H`?UNP`J8'!@L8@_%7!#``
M`(2Q9!4`_P-%$'M@H'Y<@``U<`3WP082T(`*N`(PP`0%\`2T40`JL`)%`(,K
MP`5I<P)+8`(2T`4`@`4LDP!E\``-]W-$5P$J4(9F6(:"Y@2I%P,XL`5=T!+*
ML&IYX'JIEP<7,`45T'I1&'LXD'=VMP4"@P`DN'<3$`4(\Q9%(0=L4`!,0`,T
M4`%G0`-5\`!UAW<X``,(X(A5X(@0H``OT(<Q\'!&P(<_]P%@,`%'P`!64`6F
M]W,G^'`_9P0K,`%UD`\W(`.LEWI%,`$#P'9)5@!Y2(<+,`&R!0!=8`#5!P$!
MT`)O\"(O$(8("`,!P``,8`#4:`#6R`=,@'IV]P$O$`+@]`0%(/\"H=AZ'U"(
M`#`!1<"&:HB`\O<"1E<$*[`'U^-S0X<#+U`!42!-AV,'6H0)?'`'0W`!#;`&
M)G!^?1A[O$@":X`"*$`"4]`%(6@$K2>+#QB/1K<"9W`#)G`&0^=Z,0"`KK:.
M.,!Z3H```T!L"`!['U`$9Y!2"3`T!C"'(9EZ-.`]83``-]``49`%49``<8`$
M$4"!/P>"#S`$!<825P8";'`#*L"-K?<``(!C<G`#(]!P"U!W%<`"&I`'K^<$
M"X``23"69#F6/X!S<_B16Y`&F;(3%"`'VQ&0>J`!:\``+*``$X""#K<`9W`$
MUP`[`?4#4;AZ"_``97F8$)`!(T"!=Z?_@!,P`EF(`#!`=`Z7!UV`!`8P`2`X
M="LP`C?`12\#`"_P<'2W`.8V-W&5`'X@,O,%!P08<76W!1,@`2%0F[59`U$P
M.C3P<'?W`150`LS0"3=0`3O(AEN``(PXBJ[W`O0(=W^98NN#`4P0@GBW!2$@
M,F9@!CNDG=C"`L:4!5=P!RM(@J!H!"I0`&QS#"7@D:Q7=SO@/8W1`04PGV'G
M`O,GAGM0!3H95W```2OPD;LH9C"`@@OP`@2P-X1A`"'@!'N)CR%`$P=`!"#T
M&@57`@CPC&S8>C&0!T@(`]\V:R=PD'5W=V!``P9`"AV@1F#X<`NP`C*`!"K0
M>@YG!'EP/1EP_Z,XR@`GIP);0()W]P(H``(=H`F7T6*KZ0<&Q5<W4(2NUX<+
MX`0*L#8N$PL'N7</5SME4`89H*49L!@&D(=@$'%;\``F$#N=Y04#,`%<L`?S
MR`5FH`!JF(MAJ00C4*=*4`%J&'LP,`!2,:$&MPSI&'019XY9^8I&@``&4`-S
M^'I@(`(%L`H%9@4K`)LM"@%PL))Z5W=.D`<>VJDPP`4:X`$&0`/K2)%&\``W
MT`)L@`K!"4]_L$"Q<(L]FJ$%"@!6$Z&Q\`4/0)V5Z:E<X*%8L`8:X`1AJG3G
MJ5EJ\`9^<`(X:@(H@`0BT(XL*8\+Z`18&7L/D`&M\4VNT0%>Q@$:\/\`$R>C
MKYAZ+R`"!@`$.[AWUHD?AC$[6Z!W$0<#(5`"$X!^=0<&ZQB*IMB"95H&>8B`
M(4EKP8D(C``@EUJ<=[<`>7`$JLH,P^0"=Q=QJ0=TYHAZ6Z`"4\`$8"EQ]+I@
MKA$'*2!L3W`H.@`'.Z!^F1I[L*AZL5<!!A!*-^$!"D"1%">/"NA_8+`"(7`$
M3SF("`@`A:&J<#`"\2JO$Z`!)M"#=>=P+_"?2%<$>S`!!@`"^V=W0_<"(S`0
MB=`7!V`D#U"1H0@&M!8@[>`'(X!W$=>#6>EZI_<"$7`$$EFL-#H`E#,,?/$&
M3_![7:4&&5`!>TFHYMBD+3FV(W!_096XX^+_`4I@LT-7F"+`!)([N4PP!4=`
M`ZA'D>>HFA[`-R60AQ)G!#2``B&`>B&)C\UTAF4(`8L3`7G0AQ29!Q#P&ICU
M!_@0&QFP`JD7=*M7!?NE"6P`!Q5`H$5`AF4H`TNP!"JP!$([MQ+W`%;@!ZO:
M$@D```X0?@.@`2PP`)08>TY0`9LHB<6GBWKG!!=@-8A@6L%8@A^``"8``JN2
M7][C!5.PFQ^@N1.P#/>A`VD*DG>'KD&PA@<X`29P!'!PP$=0($>0`#J@`@T7
M<;M8![2;"%<VGW6@N_=KJBHP*!BP.)@9MEFY`!E[9@F<P-A8-R$0KPGY`@K@
M!^+"$HIY?,=7`5T0_P(P8(XQL`+65`(GD#DJL(,AV)(:L`$Z(+,=D``&`(81
M%W1%,`*]UPCM0@I-<`1)`)4,ZP`S<@,&4(2A2'0KH``&(`.J5P1&4`$#TQ[?
MD\`WP``)0*H^6KQ?@*-R/#";H`D=*`(]*K"%>0'LT\&08`(WS*(O(`%'P`<&
M[#TI5@`@```#ZHI.4`5ED&(WL$IYL(.F>)1`\($DV)Q2<01I6Y)Z]P(GX`6:
M9`@H-']$5W1.(`%^T`'-)0O*4``0\(D.AP-.\``JP`29]W^KUX83H*6"2*YY
M$+Z:N(E8L`0`NWX+R)Q[P*8K\+1<P`0@4&"N\00EL`-@:71VE[1(P&XN$_\!
MQ-IZ8)"/-)`$XDL#6(#.0V"5##JQWWMH$G`&>T#&);D%(U`"2F"M=!<#7%`"
M)<0!98``K,=Z,3`!5S9&A5``(0"%>0>(<(FB3E$Q`X"0J(<#\OC,\'AW)0D#
M0``'W&N*%4O&_Z?-3[H'9V`"#\"RINB._T>11?``&H!-HL8!?ZMW`#AT"(`"
MV7!P'*`$01Q[1^@$1A>#>W`!!3#13L"&#^<$&*W-6_!S%:`R>(J`%ET!?MD!
MD6`"FJEW8/"]=.!EB``'(M"R#K<%5@!3-K6X'``"-3`!!4BNL*AW1N`$,-`%
M<,`!(3!_19=^(=EZ+.FB#@"%ZY=^N5B4"```@^+_3]?PT1!GBE6`1LL@!SK`
M``@0CW[MU^5ZCAKP;Q/-T*7X<*!-?TE;`!DPAR$M`S?@,LI0!Y1X@C'PHAP@
M+X80QEG[C"\``QE`&G*`"J70N8DZ`F`8@@HXF"]]!A!@`"T`!UQ<@G:7!_<(
MFSG\=WH]J'T(BJBLM2<@LA&J4C4@KDML@"IP`"D`#7)``A6`RK!9RQ&'H2]P
MT@IU`P.@`N?=@+S<@T8P`3^@`48T`#`@J#$``Q"`GBZ#`1#@W'GPC`\``2R!
MT(3``"$@`1`>X0$N$'+0`IYT=O"`&$E2?,:'?`@@`P)3`&>4`!H@`A$.X7]W
MXB<.`#6@XA!NXA%NXB)0_P/3G$UB!``N+@$:P"_?Z@$,``$Y?N(P+F@&H%"'
M<@0X/@(58'Q+'FAZ\QX8``!##N$`T`)LTP0:(`%##@$`\`Q*=0A(]#UI]GP+
M1J%L(+W?U&(NDQ4*?`0MIL5PL!S<0`9#DP"NK&LVH0FD$'8W0`9O$`G_2!9A
M%><SHG$M\V\JI1QNW@+S.1L>T#=RPP&]T<W?5`I$0!CWP1B&<49RX`?)72`&
M<`0W(.JV:!ER\#V>[@<I)EZ>X`>08!^W2P9-,`.>[N5C9![X@49=A40`0@?*
MH`D#KE)R<!LIT`CQ@4JHY@[N,C?=?&M(8#XZ\PRQT<U@=QZC0`;!P&6_5QM-
M8/]";5,WQ@ZK`*(#*?"H_H2>KB$0K?$*+@,*?L"$*7!&*>$R(E<Q4EIVFL`7
MD#`;7K9/&,<7!^<%(MLWG]0,TR"0DJL!?,`)ET$8RG$'()`)6#V?-!5&;X`!
M`T`"[<X!M]`>WL%77G8;38`"4>`#`-4$X#*$L:`ZPM0$;Q`'[9)-S6!:]N`!
M^!`UJ$D*BWAE?@`'<8!J:]=#C&!V!WT)B\-IPU0`=\`'?T"D[9$/!S`W+N]Q
MG;N:5W5E`((!;#>?;`P/#``A#&!"8]0`3$##40``=S`^";`&=W`"'BT$:%\`
M#'`"(65$*#``%F0`2U0"(<4`;R`'`\`"?&``:]!BBQ'_O`$@`B1P]VL@-"@`
M``S@.%-P!P!@`![/!VL0!@:`]GP`!>EQ!VLPZ@&T-V:``7S`!W(P!0PP^0"0
M`B"`<P```1K@?`>P!@,P/B"``@'T]4^``21P`D-`#UYR`Y1O`/YS]R<0/"AP
M!YL?!ML1(<UG`">P0P:@`4%P.DBZ,4*Z'8,``AEP!AD0`ET0``&P9^1_E@I`
M`Q>0!"P>`$'P`P`P`.2O`BB0`?0O`LW&!%#`!.0/"`%1(AD#%U,'`&<B`TL!
M`0`H/P%K+3<!74LA-PE(03]#$8\7($R/2R@*`4M,)$M371<G0@-=JQHE`2HB
M9P`%"0.8`2@:/UUI41`,*%T:_Q`&2TNACTPE%T)=$``!%S*/22`UCR(WI@$_
M&3]I861/!P<=?_+S?P4A:66+=6<:20YP5C($B'!#B0D50`H.H!&B@`LF3"0,
M46+`B@@--$YD2`)@1R,%2%*4D:%A!``#`2`H^'&"`X8I3/9!N'$`#I8!&2JH
M''$'`4X5`"8P42"#2A4'-$1`N."BB@(12X`\<W#FB`<`-"2$P!*B2X02/T*H
M*"&CAM@!9TK4V,&@#)8:2NZ4@+#6@)(()G:LJ0`$R(X31P&,.)%D0((9\.@I
MOE0M29T:0,JD`1#F@A\L&A@@,)$D,X(,-!R<&%%#180+$HXH4!)"QI$Z!,RX
M$!%@"O^&`PX"<"Y3(HFJ&@EX%(`@P@&"&@609)"!8D`%!PJ^*"KQU'F-Z`9&
MT*@S0L6-$705#/A1X\:%`"#\8*VAX8*5*@9ZF^@FPD`7)E$N%`BB`HZ)L%4<
M8<5]8VU6PPC..5"'"XH84!(*-!PAQQ,=L!&/8O(8`,$4<`3QR!!'=*&""AJ<
M(`L)*AP1Q`DD!&#`>:R4$`0``.P2``LHNH"`"!LH4,$)(.AP0`@:'#&$"JQD
M`(0?36#@1Q0RN/"#!AW(845#**D00`T-7'##$"%D&8`&!5QPP38#M&""-P'<
M,)X$0&'P!@-,$$"`>!#(D4$U#3!G`!,`A#!``2BH`"<`[<'*44,40T2!PA(&
MY#<%!(^$`(!E&C"Q1AHF-'$`&PE<B*$7*#R1@`%AK/&+`0"<X`4#?&#@!9!\
M(`&"&7X<@0(`("`QQ2^[`JF!!!*0!(`20WAQ@Q]O3'$$!@68P((?-YS@!P9-
MW@!`!B<8\(071\"1``BLH@`"K"TP``<&!@RPAA>OWE``D!OH&H:K(*"`P@D%
MW(:!MAG`P8`/!13`QZM`(F'`!D`Z>4*K7O#!0`%'W`!K`E.,R\>ID10`AP%0
/\&'M29^2(0<9&,H3"``[
`
end
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>GRAPHIC
<SEQUENCE>3
<FILENAME>y79530y7953002.gif
<DESCRIPTION>GRAPHIC
<TEXT>
begin 644 y79530y7953002.gif
M1TE&.#EA%`*B`,00`("`@,#`P$!`0/#P\.#@X+"PL*"@H)"0D-#0T&!@8#`P
M,'!P<!`0$"`@(%!04````/___P``````````````````````````````````
M`````````````````````````"'Y!`$``!``+``````4`J(```7_("2.9&F>
M:*JN;.N^<"S/(W$D0J[O?.__P*!P2"P:CSQ`@<9L.I_0J'1*K5JOV!9"\'``
M`N"P>$PNF\_HM'K-;KO%!8""`1AD[_B\?L_O^_4`='9_A(4L`0(-"(:,C8Z/
MD)%W"0J+DI=]!PR6F)V>GZ"A5`L*@Z*G40:;J*RMKJ^.`0P$L+4P<K:YNKN\
M+@T'O<$D#0;"QL?(GP@-R;T&"LW1TM-Z"PO4N0^TV-S=WC`"2]^M`@'CY^CC
MBNFG"P#L\/'(#_*@`._U^?JO]/N7]_X""NS4;Z`C@`83*OQ3<"$AA`XC2JS2
M<.(>B!8S:HQ1<6,6C!Y#BB31<205D"93_V8LJ1(*RI8P%;*,R>0ES9O[9N*,
M87.G3W8Z?[;H*;1HMZ`0RIAB,>!`L1%@MD$@``8!&:DVE*1`<`\!)T<)7.(S
M2G8<4@5@'AP(D,"<B:4U$HR%,"#!K!$%E@Q0"^8`/@,.:!D0`!="@@1V5#4R
M);4)T;*0Y[&P],#<@*\CKIT`&4!!*1%@1%2&FI2!*5PD4(LPX+:09BF/(\ON
MA73$Z!H`#M@I4%DP@*><"R@(F]3M[6T"B(M`<%L$`V`D:#4%L*T`U3H$OH`F
M8("Z"!NZ(5C-[C:`$NE^S?$.0&#`TZ2_OQ=H^CY%[-GX;=46W3K`-5E4];9`
M,0(4PQE[#!03&O\$?/DGVEP,CA5`<R,,X,``!#205P,)%(##`07,4@"'<9A&
M`&+/;%%@B`2<"(%V"K0WRX3L'="/4R^6DL`OG=6W&83Y!;G+?@RV)H`E"X35
MCW?NO`AA:!-:9=Q:#D98P@,24BA";B*,"$$Y20D@`IA@?FG`8?=4AE`Y",0X
ME6$BH,6@;70Q$R=K8CJYPGU"]BD*D<T],,A@<]+EEQ=ZDK"@)@48Y]8VPY&P
MESA3/4#I".%\1P^8B(QI3IGWE+DE/F".B-A4]\A9$#V=C2!7IXG:!Z2?M+("
M:&L:KJ;DF(L`=*"K##A:PP``V+F:L6,J]UT"FF7XI3FPDNG6;PXTRQ7_J0$,
MDL"%GX&Y:J7:XCGJGK/6:BXHMXYP0)X)T"(H`0\@0(`7UY:P(%UR,BB.BX8U
M6TD)!#RGKGBF00#BLV%Z^B4P`Q#&VQ?7K`E&,04X$$`#`W1FW;N%(FIAPK&B
MP.>Y)#=2VP!Q&"#5F0!8<H`#"`RF!,P''("5`2K7@(![]_3<F@'N+-!8A4G&
M!YI<2W"E<G=>_=:P.]Y!4$!R+=9,@-+^`;"`'0N$H[7!,,>AE]9U\"ROU2J,
M7/+:#,4C*B9JLRVW'D1&H\"E_Y0[]]Y^U)V,E(5!$C??A%/A-V2#%Z[X$X>7
ME?CBD,_0.%F/1VZY"Y,;5?GEG*>0>5&;=RXZ_TELAS[ZZ)\+9?KIG:?^T^JL
M7^ZZ3[#''OGL.]5N^^*XXZ3[[H7W?M/OP/,M/$W$%S_W\3$EKSS;S,/D_/,E
M1]_2]-2?:[U*V&=?Z_8I=>^]G^";)/[X0JY3<I/H*_^VN>^W'[LU:VLC?_$7
ME_S,_<H30[+__`.>+`*7']4$<'>4(*!L5(&9`\:.$D.;C0$>X",'VFX!@L`/
M`02P"@L^#Q$,2`"5WD#"$IKPA"A$H1PRZ,'LV<`!2(BA#(N@@`<\@`$SS*$.
M>["`^;3PAZ"8T`/R!,0BID2(1#2B$CV"Q"4Z<2--?*(4)1+%*5HQ(56\HA;]
MD<4M>E$>7?RB&-$1QO\QFK$;93RC&J61QC6Z\1AM?*,<>1''.=JQ%G6\HQY9
MD<<]^C&(-DSB'P>)BCX2\I"/,"0B%UD(13+RD7QP)"0G>0=)4O*25;`D)C<)
M!4UR<AXV#*4H1TG*4IKRE*A,I2I7R<I6NO*5L(RE+&=)RUK:\I:XK*7>A)3+
M7OKRE\`,IC"'2<QB&I.6NPS2,9?)S&8Z\YG0C*8SDYF?4"K/DWP#@`VIB1]K
MXB^0RM,FENIGPVN"LWCBY.9LO"G`<P(OG=0(@%]Z1L]ZVO.>^,RG/O=9SU#R
M\Y\`#6A`#]#`2@KTH`A%:`)LV("$.O2A^<S9'E`&T8I:E`M#M*A&'2I1%1#_
MBP$<VJA(1TK2D@+``2"M8!4&@$$%0,VD,(VI3/.)4@6HE`HG>H!+9\K3GL:4
M"_&#"@Y;$QD#-.!?5U!%`@IJ%*,2!@O:;-=L/GHA$ZCBIHCKX"B"):2Z:'4*
ME&!J62ST&;Q\-4BJB*`3&$@K32B0!J1X*V0H42$&X$U(79L"<\0Z&QQ,@47F
M4@`^#O,_K,I``.H<:P.(Z@0`U@I>[;'?N?8'!004;`;3N5I2E(79,C@A8U&A
M0E[R\+(H>(EDS`),_=0J`P!P]@4;;`\`Q#2A&,"%+?*L3*N<`*^[,F$0`Y!K
M%/8BW!:(L&07D\O:,O4$YK;V-?BH6Z-*8(G:)@4*_UKZ;6*E$%09++9^W>W3
MZO(E`U7L2S00,$!X4!4>]Q#+J`0]@77QHAWWMLPZYL&0=JYD#@+,!T>@V:_4
MZEL,]08W.>:P"FAIH>`!E^<\-%`NX]B6`\;6:G6?`RHGL,26__QG%C;ZC7#B
M:X+Y0F`!V;I;B+M#H@\!EB39VM%:;'KB^>0*Q0-0,8</<Z*V;.$=IT4`,'!\
M-Q<)F"?;]1R%PRLD#*^5`11$;\*.)((D%0IA\BU(AD(EIH)P*D_O&PVL[D$`
M:$A-7@V=;9=!(R:$2,Q@4TES#MI$"]:RP,G+97*0\(Q9$;#4?OWHE*!6LV:%
MB9.(\X45G106+<:*.4_W4/\TR!;=*3?_)2SOD+34.%3<'V%WR1:F%9]E`)TX
MF2/08LI5>G>EL"R/@#F#6(*7H05F1]-Z5+`&3:ZE5JA*XP,B=&#PH*6F+0?0
M8-3GJO#:D'T+XC1,RIU:EPBDZF7KN'H$GBF``62-J5MCV3;>!H@`T+)M"&2[
MW*A^T=:(-98%&#M.=]MV`"CV[M8F&07E&XFR2\;L%P0@#EK;C1+,MNJ6#?@I
MB+@K=P;N9QQ0+#Y*6WC3#`#<.!"4:>!IC\,;7J`!SP?C7LBX?"JT<00$K=,F
MZ#>M]DTRE?O)Y7UB^;E@WN1[GR#?(I&YN6B^9YN;`.<AT?F%?7ZETA&=='D.
M]<O_C[YH?C-=RB43>B<R)IT36"49*J=45N9SM3"`-K1,L'AC7K@(#RG!MR_@
M&<7Y*H/LL&"T2/XT#;YN9]MZM@ET%RW:K2#U3C8`L>XN]0S.9)[X_1CK3[]R
M:@;EILZ8@ZYT48MP7MN"AA5C7N\)"V#RDN-L,6$9_474%.KN9Y2/@.<>C7(4
M<&LC,)BY";V5`G!-[X2^0P&Q?K8K$Q@P`M9X&AG,!O"$&/..V8*[4H9%`>YS
MGS0B6NP)`]"]JTZ!>A5D]_.@"31VE2X#8OW!]LT=R_(;3)=L`=?S)*##J[_#
MGG&!IC7MX;XHF'U9!]3[.R\BXFW&28+NN,4J!5!J$](8_S!D`VB1,0H07U>'
M*N^A-%UB`Y2B"0#S';EA!^Z17L!@'M)18!D8-?ZU&EJ17B&X@-G17AP(%]7G
M.19F'D]Q@0;V?C=E8@Y&%Q1W7]>A7Q8V&BZX7MG1@MVQ@1AX8&TA'MD26@T6
M!P]F;30`?K6'#YI`"PFP;:9A(0'P?-TQ(E^A3:("-!=C#@!A(7%`&`[04##4
M`'565O.7>!61/P^R&?IG#C;R%4ME(0NP!2IV>A6A3098A`GH%;A7`-=0+0/6
M+R/B`'#W)8($&A]F`QPV'.K%#"'6&5%X`,Q0%V*",Q^#B<9V>`X"()%(6*FA
MADZ@)3B""Y\8%@&87HX%%0U!9/\!B"4LUB$N=A<P9C`[AHJ!&(A78X:GV&,!
M<'A!-F0I9AV8)G\KP(1-D`-:PVD08"?E4(5TL3-HP1;WMVD/H!DPHR<`@0#O
MQBIF%GUVP!VL@&S&UX8IIW_N\'Q0\6Y[D1T0HDTE`(^*!BKO@#'BL01IME#?
M-B:)^"5(PFH(T0]+$EUL9C"(00LW@"'C0F4GQFJ:EH+X1E0#8"PTEFYE4A+S
MM65J=F5?UFK'UVNI9@<(H&V(52SOD&Z6IC#`H)%SYB:DIP+(R`3+EV-YPF+F
ML`#^XWA5\1;:A`^%5WSX,!VL0D2N]2*M0(Y$U`"OD1ION!FOL5@@P1N-00J3
M1H^*=Y7_[P-Y5S(HA1:04N:5(&.26])0XS)LA))NH2AW3$`ANV48)UF0QY5C
MUS9I4->1^U@DT%9H[D=I;?9KEV:4FF8JM$<",;F$8P&/5%8F989BO+<<_==[
M8C(@VO@.&V0'0UE77'&4HD@"TC:6$UB.>&E5KV>&(!%]]9&31&25TF<.TK<$
M[S.`T=&,XG`FA0*6`YF7=($O[96`>J)JM(F6I[>9:]D?PS=MQ9!N8-A1BE(0
MN\9MC%9K_(6;JWD`K^><OK:7P28>P^9#AE&-X*!GR1B42MDJG5<`B]`I(80A
M]5%6W<$@=B`7[*9NX")IQ3*8C(!LED4"PQ%KM`":US>1"18Q_T"R#-M0E%+S
M>G<S+H&0%T.6(*D8/Z2P#5?7F=3F?@)IH0497PM0,XNPH7I"H>Y2D&DY84U@
M*<L"`1[3C07Y4NNUG/H9;\Z),(T6G2#Y(G85@`%C,=Z!DNL&$>Z&;3`Z;U+C
MG2]0F#)0,5XP6PSC&2=EB(B5C<OP`*?B*D$S6"%U-]9P-0S@`*JPH>I(%Y1G
M#\(Y`F;(F5X0'D(V<"FC5B?")5D10000-$^1%>KQ&U5C,_E7!UN"6)=1@290
M,;G!"2Q3=N=A-6(C-ADG-F8#B`#!J)2)-H/J<007G&K9?0#G,W1!-@+W<??5
M,U86'5<(7!N7,N)AITRC-!67&_XU</],DZ<B:7]URJGR$G)H,Q648HG%8'(!
M)Y/@*0S*27UC&F#0AP9LMP\0.5QSD7C28*2ZD!?*V@?]9IZ\I4_)9ZS!F@<9
M(A>N99_>P*RYD(JOH'+%"CK7J@?CL1#>ZCCE*FKKZB?I2CGM*E[Q*B3OJCGS
M>@D4=0\4]R+(H@*_&*[W&@/R(C5[QP(E>!DP0!\J<"WC^B(O>0(%.P/U2JZ5
MB@J541>?020D-HX!^P(Q4WHTX"$8(GK%U:8I`)_$$J9^AG^8]:R(:(P%U+&2
MH(-J<94>]7JH<*P>U8^')0Y-464N8!.@^25+20+3M5:"5WN].ALZZP@T"PS]
MP%+;&J>%1RG_S@6L%=L$!_`:"U@#-2-7885_I.!Y+%@A7ZLG5O$5JB<"-C(5
M8*`=RQ!?2EBV-!B$AK(6N<==2RL;36LRCW<7_?!\(M0F6Y.?55:TH="W)]!Q
MXK%\R^(>.'L"&2*E%DB=V5**T#`O30$-`*%>RTE4$[(N!:(*O]B'(P*'!@(-
MIV@8+:(<WW5[>QL9BFL(U^BGA<)UB'*1I\>SGC"[-!HR:*)-QD@L-W2>8C*1
MV'8F>@$,]["QV0>Z:O)K85$FY8"\=U*C#K"2F**L$ZLZ,AL)6M(/)@<T[Z"[
M>ZJ963N<E-IM+C`(&\0,G=*6<O$VLW59%;*V4B,H"-$IU.MZKO*6_PE3%ZKV
M)=P;NXCSO9`0OB)@C^)F'*>GLIW@N^G7&A@AB%/!5Z6V%PD#+^%BP2VBKVB8
M+"1`6/L[O6Y1#AQLG#4JDATD`$G+JS"+'Q+L!Y,B*8/V'(#1%@E*7&-2K9(P
MPR*0O90:7/D+,?B7,27`N)V8N2F:%'PAH"=6C3DF#IUA!R<5Q(L0#K0`)DU<
MHUMC;I9P5C"\;`B\&&$@%6%0JK](4&#P=0O,K84`Q*OV'88J#E,C56XW-8*G
M;3WC*HA!+.X0:U23<>:!-TUA#>MU4I'&9N;I-("LIXK*-%O;0]_1K\EHP.J:
MOM%0;NA+HE%050(;L7>0/$>FM#',M&6<"_\C";":/'<OO`)=2PCT0P6KK+>G
MS+>I;`MP?)^YG`(*B0I4T7YZ107=^SJ]3+&>3#+%3#O'[+VM''.8#*_/7'/3
M'"3+G#O-;,S5G!_7[#N)1XLME\T^(0!<NC9"W%RW'!E7NWL/.QMT`,%!HCY.
M(&$D`\[)Z,.R$3"&>RZR8%J6[">G]02EU7+&YL(D(WI0\+KPHZS1U["*!2WV
MW"<#)`5&M<LW4=&PP;LR3$1Q12N6)<HQ0,ZU8EGIW`*10BMI19@AC!^6A;C0
MIP"@'"2R@,\P$##P3!83=%=V0=,W0;RO#`4-H]"R\5$\G;">4=(Q,2]<!;$-
M,)[MG!+^A4$,B05%1I6`Z%<4(VD7`O#4QX9#>$L6\[904YH"@,A!TG36TH1#
F=;@''H)1:/W6S?1W48,'[N$`-037>'U,?X>GG]37?OW7T1`"`#L_
`
end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
