<SEC-DOCUMENT>0000950123-11-047520.txt : 20110509
<SEC-HEADER>0000950123-11-047520.hdr.sgml : 20110509
<ACCEPTANCE-DATETIME>20110509171921
ACCESSION NUMBER:		0000950123-11-047520
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		5
CONFORMED PERIOD OF REPORT:	20110331
FILED AS OF DATE:		20110509
DATE AS OF CHANGE:		20110509

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:		10-Q
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-33059
		FILM NUMBER:		11824495

	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>10-Q
<SEQUENCE>1
<FILENAME>y91195e10vq.htm
<DESCRIPTION>FORM 10-Q
<TEXT>
<HTML>
<HEAD>
<TITLE>e10vq</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always"><A HREF="#Y91195tocpage">Table of Contents</A></H5><P>

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


<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 1pt solid black; font-size: 1pt">&nbsp;</DIV>




<DIV align="center" style="font-size: 14pt; margin-top: 12pt"><B>UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION</B>
</DIV>

<DIV align="center" style="font-size: 12pt"><B>Washington, D.C. 20549</B>
</DIV>

<DIV align="center" style="font-size: 18pt; margin-top: 12pt"><B>FORM 10-Q</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>(Mark One)</B>

</DIV>

<DIV align="center">
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%" style="font-size: 12pt">
<TR style="font-size: 6pt">
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="88%">&nbsp;</TD>
</TR>
<TR valign="top">
    <TD align="center"><FONT style="font-family: Wingdings">&#254;</FONT> </TD>
    <TD>&nbsp;</TD>
    <TD><B>QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</B></TD>
</TR>
</TABLE>
</DIV>


<!-- xbrl,dc -->
<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 12%"><B>For the quarterly period ended March&nbsp;31, 2011</B></DIV>
<!-- /xbrl,dc -->

<DIV align="center" style="font-size: 10pt; margin-top: 6pt"><B>or</B></DIV>


<DIV align="center">
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%" style="font-size: 12pt">
<TR style="font-size: 6pt">
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="88%">&nbsp;</TD>
</TR>
<TR valign="top">
    <TD align="center"><FONT style="font-family: Wingdings">&#111;</FONT> </TD>
    <TD>&nbsp;</TD>
    <TD><B>TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</B></TD>
</TR>
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 12%"><B>For the transition period from <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> to <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></B></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>
Commission file number: 001-33059</B>
</DIV>

<DIV align="center" style="font-size: 24pt; margin-top: 12pt"><B>FUEL TECH, INC.</B>
</DIV>

<DIV align="center" style="font-size: 10pt">
(Exact name of registrant as specified in its charter)</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="3%">&nbsp;</TD>
    <TD width="48%">&nbsp;</TD>
</TR>
<TR></TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top">Delaware
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">20-5657551</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">(State or other jurisdiction of incorporation of organization)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(I.R.S. Employer Identification Number)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt">Fuel Tech, Inc.<BR>
27601 Bella Vista Parkway<BR>
Warrenville, IL 60555-1617<BR>
630-845-4500<BR>
<U>www.ftek.com</U></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt">(Address and telephone number of principal executive offices)</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Indicate by check mark whether the registrant: (1)&nbsp;has filed all reports required to be filed
by Section&nbsp;13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12&nbsp;months
(or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90&nbsp;days.
Yes <FONT style="font-family: Wingdings">&#254;</FONT> No <FONT style="font-family: Wingdings">&#111;</FONT>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Indicate by check mark whether the registrant has submitted electronically and posted on its
corporate Web site, if any, every Interactive Data File required to be submitted and posted
pursuant to Rule&nbsp;405 of Regulation&nbsp;S-T (&#167;232.405 of this chapter) during the preceding 12
months (or for such shorter period that the registrant was required to submit and post such
files). Yes <FONT style="font-family: Wingdings">&#111;</FONT> No <FONT style="font-family: Wingdings">&#111;</FONT>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Indicate by check mark whether the registrant is a large accelerated filer, an accelerated
filer, a non-accelerated filer or a smaller reporting company. See definition of &#147;accelerated
filer&#148;, &#147;large accelerated filer&#148; and &#147;smaller reporting company&#148; in Rule&nbsp;12b-2 of the Exchange
Act. (Check one):
</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="22%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="22%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="22%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="22%">&nbsp;</TD>
</TR>
<TR></TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top">Large accelerated filer <FONT style="font-family: Wingdings">&#111;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Accelerated filer <FONT style="font-family: Wingdings">&#254;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Non-accelerated filer <FONT style="font-family: Wingdings">&#111;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Smaller reporting company <FONT style="font-family: Wingdings">&#111;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="5" valign="top" align="center">(Do not check if a smaller reporting company)<BR></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Indicate by check mark whether the registrant is a shell company (as defined in Rule&nbsp;12b-2 of
the Exchange Act). Yes <FONT style="font-family: Wingdings">&#111;</FONT> No <FONT style="font-family: Wingdings">&#254;</FONT>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On May&nbsp;6, 2011 there were outstanding 24,223,467 shares of Common Stock, par value $0.01 per
share, of the registrant.
</DIV>


<DIV style="width: 100%; border-bottom: 1pt solid black; margin-top: 10pt; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</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">
<DIV align="left">
<!-- TOC -->
</DIV>
<DIV align="left">
<A name="Y91195tocpage"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>FUEL TECH, INC.</B><BR>
Form&nbsp;10-Q for the three-month period ended March&nbsp;31, 2011
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>INDEX</B>
</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="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>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">Page</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#Y91195101">PART I. FINANCIAL INFORMATION</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</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"><A href="#Y91195102">Item&nbsp;1. Financial Statements (Unaudited)</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</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:30px; text-indent:-15px"><A href="#Y91195103">Condensed Consolidated Balance Sheets as of March&nbsp;31, 2011
and December&nbsp;31, 2010</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</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:30px; text-indent:-15px"><A href="#Y91195104">Condensed Consolidated Statements of Operations for the Three-
Month Periods Ended March&nbsp;31, 2011 and 2010</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</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:30px; text-indent:-15px"><A href="#Y91195105">Consolidated Statements of Cash Flows for the Three-
Month Periods Ended March&nbsp;31, 2011 and 2010</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</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:30px; text-indent:-15px"><A href="#Y91195106">Notes to Condensed Consolidated Financial Statements</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4</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"><A href="#Y91195107">Item&nbsp;2. Management&#146;s Discussion and Analysis of
Financial Condition and Results of Operations</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13</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"><A href="#Y91195108">Item&nbsp;3. Quantitative and Qualitative Disclosures about Market Risk</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16</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"><A href="#Y91195109">Item&nbsp;4. Controls and Procedures</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16</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"><A href="#Y91195110">PART II. OTHER INFORMATION</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD style="font-size: 10pt">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#Y91195111">Item&nbsp;1. Legal Proceedings</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#Y91195112">Item&nbsp;1A. Risk Factors</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#Y91195113">Item&nbsp;2. Unregistered Sales of Equity Securities and Use of Proceeds</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#Y91195114">Item&nbsp;6. Exhibits</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17</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"><A href="#Y91195115">SIGNATURES</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="y91195exv4w1.htm">EX-4.1</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="y91195exv31w1.htm">EX-31.1</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="y91195exv31w2.htm">EX-31.2</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="y91195exv32.htm">EX-32</A></FONT></TD></TR>
</TABLE>
</DIV>

<DIV align="left">
<!-- /TOC -->
</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"><A HREF="#Y91195tocpage">Table of Contents</A></H5><P>

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



<DIV align="left">
<A name="Y91195101"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>PART I. FINANCIAL INFORMATION</B>
</DIV>

<DIV align="left">
<A name="Y91195102"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Item&nbsp;1. Financial Statements

</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>FUEL TECH, INC.</B>
</DIV>

<DIV align="left">
<A name="Y91195103"></A>
</DIV>

<!-- xbrl,bs -->
<DIV align="center" style="font-size: 10pt; margin-top: 0pt">CONDENSED CONSOLIDATED BALANCE SHEETS<BR>
<!-- xbrl,body -->
(in thousands, except share and per share data)
</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="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 nowrap align="center" colspan="2">March 31,</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">December 31,</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2011</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2010</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" colspan="2">(Unaudited)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Assets</B></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>&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:30px; text-indent:-15px">Cash and cash equivalents</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">27,865</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">30,524</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Accounts receivable, net of allowance for doubtful
accounts of $82 and $82, respectively</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,292</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21,175</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Inventories</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">993</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">807</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Deferred income taxes</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">89</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Prepaid expenses and other current assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,206</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,861</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total current assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">53,356</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">54,456</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>
    <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">Property and equipment, net of accumulated
depreciation of $16,547 and $15,767, respectively</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,380</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,384</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">21,051</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21,051</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other intangible assets, net of accumulated
amortization of $3,426 and $3,203, respectively</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,926</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,050</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Deferred income taxes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,796</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,169</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,262</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">101,678</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">103,203</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Liabilities and Shareholders&#146; Equity</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Current liabilities:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Short-term debt</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2,290</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2,269</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Accounts payable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,178</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,516</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Accrued 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">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Employee compensation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,791</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,863</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Income taxes payable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">737</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,857</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Other accrued liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,345</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,306</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total current liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,341</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,811</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>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Other liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,509</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,482</TD>
    <TD>&nbsp;</TD>
</TR>


<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15,850</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,293</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Shareholders&#146; equity:</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:15px; text-indent:-15px">Common stock, $.01 par value, 40,000,000 shares
authorized, 24,223,467 and 24,213,467 shares issued
and outstanding</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">242</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">242</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Additional paid-in capital</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">129,942</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">129,424</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Accumulated deficit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(44,736</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(46,075</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Accumulated other comprehensive income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">304</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">243</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Nil coupon perpetual loan notes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">76</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">76</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total shareholders&#146; equity</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">85,828</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">83,910</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total liabilities and shareholders&#146; equity</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">101,678</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">103,203</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="center" style="font-size: 10pt; margin-top: 18pt">See notes to condensed consolidated financial statements.
</DIV>
<!-- /xbrl,bs -->


<P align="right" style="font-size: 10pt"><!-- Folio -->1<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#Y91195tocpage">Table of Contents</A></H5><P>

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




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>FUEL TECH, INC.</B><BR>
<DIV align="left">
<A name="Y91195104"></A>
</DIV>
<!-- xbrl,op -->
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS<BR>
<!-- xbrl,body -->
(Unaudited)
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 0pt">(in thousands, except share and per-share data)
</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="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 nowrap align="center" colspan="6">Three Months Ended</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000">March 31</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2011</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2010</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Revenues</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">22,622</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">17,617</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>
    <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"><B>Costs and expenses:</B></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:30px; text-indent:-15px">Cost of sales</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,466</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,500</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Selling, general and administrative</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,951</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,480</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Research and development</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">402</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">146</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,819</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,126</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</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>
    <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"><B>Operating income</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,803</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">491</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>
    <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">Interest expense</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(40</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(44</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Interest income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other expense</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(40</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(92</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Income before income taxes</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,724</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">356</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>
    <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">Income tax expense</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,385</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(142</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</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>
    <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"><B>Net income</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,339</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">214</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</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>
    <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"><B>Net income per common share:</B></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:30px; text-indent:-15px">Basic</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.06</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.01</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Diluted</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.05</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.01</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</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>
    <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"><B>Weighted-average number of common shares
outstanding:</B></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">Basic</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24,214,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24,212,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Diluted</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24,669,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24,431,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="center" style="font-size: 10pt; margin-top: 18pt">See notes to condensed consolidated financial statements.
</DIV>
<!-- /xbrl,op -->


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

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#Y91195tocpage">Table of Contents</A></H5><P>

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




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>FUEL TECH, INC.</B>
</DIV>

<DIV align="left">
<A name="Y91195105"></A>
</DIV>

<!-- xbrl,cf -->
<DIV align="center" style="font-size: 10pt; margin-top: 0pt">CONSOLIDATED STATEMENTS OF CASH FLOWS<BR>
<!-- xbrl,body -->
(Unaudited)<BR>
(in thousands)
</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="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 nowrap align="center" colspan="6">Three Months Ended</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000">March 31</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2011</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2010</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Operating Activities</B></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">Net income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,339</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">214</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Adjustments to reconcile net income to net cash provided
by
operating activities:</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:30px; text-indent:-15px">Depreciation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">760</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">939</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Amortization</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">223</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">219</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Loss on equipment disposals</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">6</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Deferred income tax</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">120</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(476</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Stock based compensation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">617</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,352</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Deferred director fees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20</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:30px; text-indent:-15px">Changes in operating assets and 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">Accounts receivable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(938</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(2,041</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Inventories</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(177</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(355</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Prepaid expenses, other current assets and other
noncurrent assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(239</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(116</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Accounts payable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,380</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(153</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Accrued liabilities and other noncurrent liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(2,274</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,096</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net cash (used in) provided by operating activities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,929</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">685</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>
    <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"><B>Investing Activities</B></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:30px; text-indent:-15px">Decrease in restricted cash</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">125</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Purchases of property, equipment and patents</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(841</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(307</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net cash used in investing activities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(841</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(182</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>
    <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"><B>Financing Activities</B></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:30px; text-indent:-15px">Issuance of deferred shares</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">28</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Proceeds from exercise of stock options</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">54</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:30px; text-indent:-15px">Redemption of nil coupon loan note</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(5</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net cash provided by financing activities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">54</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23</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>
    <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">Effect of exchange rate fluctuations on cash</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">57</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(59</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</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>
    <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"><B>Net (decrease)&nbsp;increase in cash and cash equivalents</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(2,659</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">467</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>
    <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">Cash and cash equivalents at beginning of period</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30,524</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20,965</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</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>
    <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"><B>Cash and cash equivalents at end of period</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">27,865</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">21,432</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="center" style="font-size: 10pt; margin-top: 18pt">See notes to condensed consolidated financial statements.
</DIV>
<!-- /xbrl,cf -->


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

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#Y91195tocpage">Table of Contents</A></H5><P>
<!-- xbrl,ns -->

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


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>FUEL TECH, INC.</B>
</DIV>

<DIV align="left">
<A name="Y91195106"></A>
</DIV>
<DIV align="center" style="font-size: 10pt">NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</DIV>

<DIV align="center" style="font-size: 10pt">March&nbsp;31, 2011</DIV>

<DIV align="center" style="font-size: 10pt">(Unaudited)</DIV>

<DIV align="center" style="font-size: 10pt">(in thousands, except share and per-share data)</DIV>


<!-- xbrl,n -->
<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Note A: Nature of Business</I></B>
</DIV>

<!-- xbrl,body -->
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Fuel Tech, Inc. (Fuel Tech or the Company or &#147;we&#148;, &#147;us&#148;, or &#147;our&#148;) is a fully integrated company
that uses a suite of advanced technologies to provide boiler optimization, efficiency improvement
and air pollution reduction and control solutions to utility and industrial customers worldwide.
Originally incorporated in 1987 under the laws of the Netherlands Antilles as Fuel-Tech N.V., Fuel
Tech became domesticated in the United States on September&nbsp;30, 2006, and continues as a Delaware
corporation with its corporate headquarters at 27601 Bella Vista Parkway, Warrenville, Illinois,
60555-1617. Fuel Tech maintains an Internet website at <U>www.ftek.com</U>. Fuel Tech&#146;s annual
report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments
to those reports filed or furnished pursuant to Section 13(a) of the Securities Exchange Act of
1934 as amended (Exchange Act), are made available through our website as soon as reasonably
practical after electronically filed or furnished to the Securities and Exchange Commission. Also
available on Fuel Tech&#146;s website are the Company&#146;s Corporate Governance Guidelines and Code of
Ethics and Business Conduct, as well as the charters of the Audit and Compensation &#038; Nominating
committees of the Board of Directors. All of these documents are available in print without charge
to stockholders who request them. Information on our website is not incorporated into this report.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Fuel Tech&#146;s special focus is the worldwide marketing of its nitrogen oxide (NOx) reduction and FUEL
CHEM<SUP style="FONT-size: 85%; vertical-align: text-top">&#174;</SUP> processes. The Air Pollution Control (APC)&nbsp;technology segment reduces NOx
emissions in flue gas from boilers, incinerators, furnaces and other stationary combustion sources
by utilizing combustion optimization techniques and Low NOx and Ultra Low NOx Burners; Over-Fire
Air systems, NOxOUT<SUP style="FONT-size: 85%; vertical-align: text-top"><SUP style="FONT-size: 85%; vertical-align: text-top">&#174;</SUP> </SUP>and HERT<SUP style="FONT-size: 85%; vertical-align: text-top">&#153;</SUP> High Energy Reagent Technology&#153; SNCR systems;
systems that incorporate ASCR<SUP style="FONT-size: 85%; vertical-align: text-top">&#153;</SUP> (Advanced Selective Catalytic Reduction) technologies
including CASCADE<SUP style="FONT-size: 85%; vertical-align: text-top">&#153;</SUP>, ULTRA<SUP style="FONT-size: 85%; vertical-align: text-top">&#153; </SUP>and NOxOUT-SCR<SUP style="FONT-size: 85%; vertical-align: text-top"><SUP style="FONT-size: 85%; vertical-align: text-top">&#174;</SUP> </SUP>processes, Ammonia
Injection Grid (AIG)&nbsp;and Graduated Straightening Grid (GSG&#153;). The FUEL CHEM<SUP style="FONT-size: 85%; vertical-align: text-top">&#174;</SUP> technology
segment improves the efficiency, reliability and environmental status of combustion units by
controlling slagging, fouling and corrosion, as well as the formation of sulfur trioxide, ammonium
bisulfate, particulate matter (PM<SUB style="FONT-size: 85%; vertical-align: text-bottom">2.5</SUB>), carbon dioxide, NOx and unburned carbon in fly
ash through the addition of chemicals into the fuel or via TIFI<SUP style="FONT-size: 85%; vertical-align: text-top">&#174;</SUP> Targeted In-Furnace
Injection&#153; programs. Fuel Tech has other technologies, both commercially available and in the
development stage, all of which are related to APC and FUEL CHEM technology segments or are similar
in their technological base. We have expended significant resources in the research and
development of new technologies in building our proprietary portfolio of air pollution control,
fuel and boiler treatment chemicals, computer modeling and advanced visualization technologies.
Fuel Tech&#146;s business is materially dependent on the continued existence and enforcement of
worldwide air quality regulations.
</DIV>


<!-- xbrl,n -->
<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Note B: Basis of Presentation</I></B>
</DIV>

<!-- xbrl,body -->
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The accompanying unaudited, condensed consolidated financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial information and with
the instructions to Form 10-Q and Article&nbsp;10 of Regulation&nbsp;S-X of the Exchange Act. Accordingly,
they do not include all of the information and footnotes required by accounting principles
generally accepted in the United States for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals) considered necessary for a
fair presentation of the balance sheet and results of operations for the periods covered have been
included and all significant intercompany transactions and balances have been eliminated. The
results of operations of all acquired businesses have been consolidated for all periods subsequent
to the date of acquisition.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The balance sheet at December&nbsp;31, 2010 has been derived from the audited financial statements at
that date, but does not include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">For further information, refer to the consolidated financial statements and footnotes thereto
included in Fuel Tech&#146;s Annual Report on Form 10-K for the year ended December&nbsp;31, 2010 as filed
with the Securities and Exchange Commission.
</DIV>


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

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#Y91195tocpage">Table of Contents</A></H5><P>
<!-- xbrl -->

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




<!-- xbrl,n -->
<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Note C: Revenue Recognition Policy</I></B>
</DIV>

<!-- xbrl,body -->
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Revenues from the sales of chemical products are recorded when title transfers, either at the point
of shipment or at the point of destination, depending on the contract with the customer.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Fuel Tech uses the percentage of completion method of accounting for equipment construction and
license contracts that are sold within the Air Pollution Control technology segment. Under the
percentage of completion method, revenues are recognized as work is performed based on the
relationship between actual construction costs incurred and total estimated costs at completion.
Construction costs include all direct costs such as materials, labor, and subcontracting costs, and
indirect costs allocable to the particular contract such as indirect labor, tools and equipment,
supplies, and depreciation. Revisions in completion estimates and contract values are made in the
period in which the facts giving rise to the revisions become known and can influence the timing of
when revenues are recognized under the percentage of completion method of accounting. The
completed contract method is used for certain contracts when reasonably dependable estimates of the
percentage of completion cannot be made. When the completed contract method is used, revenue and
costs are deferred until the contract is substantially complete, which usually occurs upon customer
acceptance of the installed product. Provisions are made for estimated losses on uncompleted
contracts in the period in which such losses are determined. As of March&nbsp;31, 2011, the Company had
no contracts in progress that were identified as loss contracts.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Fuel Tech&#146;s APC contracts are typically eight to sixteen months in length. A typical contract will
have three or four critical operational measurements that, when achieved, serve as the basis for us
to invoice the customer via progress billings. At a minimum, these measurements will include the
generation of engineering drawings, the shipment of equipment and the completion of a system
performance test.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As part of most of its contractual APC project agreements, Fuel Tech will agree to
customer-specific acceptance criteria that relate to the operational performance of the system that
is being sold. These criteria are determined based on mathematical modeling that is performed by
Fuel Tech personnel, which is based on operational inputs that are provided by the customer. The
customer will warrant that these operational inputs are accurate as they are specified in the
binding contractual agreement. Further, the customer is solely responsible for the accuracy of the
operating condition information; all performance guarantees and equipment warranties granted by us
are void if the operating condition information is inaccurate or is not met.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Accounts receivable includes unbilled receivables, representing revenues recognized in excess of
billings on uncompleted contracts under the percentage of completion method of accounting. At March
31, 2011 and December&nbsp;31, 2010, unbilled receivables were approximately $10,398 and $6,800,
respectively, and are included in accounts receivable on the consolidated balance sheets. Billings
in excess of costs and estimated earnings on uncompleted contracts were $314 and $650, at March&nbsp;31,
2011 and December&nbsp;31, 2010, respectively. Such amounts are included in other accrued liabilities on
the consolidated balance sheets.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Fuel Tech has installed over 640 units with APC technology and normally provides performance
guarantees to our customers based on the 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.
</DIV>


<!-- xbrl,n -->
<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Note D: Cost of Sales</I></B>
</DIV>

<!-- xbrl,body -->
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">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).
Certain depreciation and amortization expenses related to tangible and intangible assets,
respectively, are also allocated to cost of sales.
</DIV>


<!-- xbrl,n -->
<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Note E: Selling, General and Administrative Expenses</I></B>
</DIV>

<!-- xbrl,body -->
<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
</DIV>

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

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#Y91195tocpage">Table of Contents</A></H5><P>
<!-- xbrl -->

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



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


<!-- xbrl,n -->
<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Note F: Earnings per Share Data</I></B>
</DIV>

<!-- xbrl,body -->
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Basic earnings per share excludes the dilutive effects of stock options, restricted stock units
(&#147;RSUs&#148;), and the nil coupon non-redeemable convertible unsecured loan notes. Diluted earnings per
share includes the dilutive effect of stock options, restricted stock units, and of the nil coupon
non-redeemable convertible unsecured loan notes. The following table sets forth the
weighted-average shares used in calculating the earnings per share for the three month periods
ended March&nbsp;31, 2011 and 2011.
</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="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 nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000">Three Months Ended March 31:</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2011</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2010</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Basic weighted-average shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24,214,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24,212,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Conversion of unsecured loan notes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Unexercised options and RSUs</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">448,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">212,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Diluted weighted-average shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24,669,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24,431,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<!-- xbrl,n -->
<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Note G: Total Comprehensive Income</I></B>
</DIV>

<!-- xbrl,body -->
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Total comprehensive income for Fuel Tech is comprised of net income and the impact of foreign
currency translation 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="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 nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000">Three Months Ended March 31:</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2011</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2010</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Comprehensive income:</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:30px; text-indent:-15px">Net income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,339</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">214</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Foreign currency translation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">61</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(59</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:30px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,400</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">155</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<!-- xbrl,n -->
<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Note H: Stock-Based Compensation</I></B>
</DIV>

<!-- xbrl,body -->
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Fuel Tech has a stock-based employee compensation plan, referred to as the Fuel Tech, Inc.
Incentive Plan (Incentive Plan), under which awards may be granted to participants in the form of
Non-Qualified Stock Options, Incentive Stock Options, Stock Appreciation Rights, Restricted Stock,
Restricted Stock Units (&#147;RSUs&#148;), Performance Awards, Bonuses or other forms of share-based or
non-share-based awards or combinations thereof. Participants in the Incentive Plan 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. The amount of shares that may be issued or reserved for awards to participants under a
2004 amendment to the Incentive Plan is 12.5% of outstanding shares calculated on a diluted basis.
No options were granted in the three month periods ending March&nbsp;31, 2011 and 2010. At March&nbsp;31,
2011, Fuel Tech had approximately 448,000 and equity awards available for issuance under the
Incentive Plan.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Stock-based compensation is included in selling, general, and administrative costs in our
consolidated statements of operations. The components of stock-based compensation for the three
month periods ended March&nbsp;31, 2011 and 2010 were 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="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 nowrap align="center" colspan="6"><B>For the Three Months</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>Ended March 31:</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2011</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2010</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Stock options</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">536</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,352</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Restricted stock units</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">81</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Total stock-based compensation expense</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">617</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,352</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Tax benefit of stock-based compensation expense</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(195</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(465</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">After-tax effect of stock based compensation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">422</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">887</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>




<P align="right" style="font-size: 10pt"><!-- Folio -->6<!-- /Folio -->
</DIV>



<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#Y91195tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">

<!-- xbrl -->

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">
As of March&nbsp;31, 2011, there was $4,818 of total unrecognized compensation cost related
to all non-vested share-based compensation arrangements granted under the Incentive Plan.
</div>

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


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The stock options granted to employees under the Incentive Plan have a 10-year life and they vest
as follows: 50% after the second anniversary of the award date, 25% after the third anniversary,
and the final 25% after the fourth anniversary of the award date. Fuel Tech calculates stock
compensation expense for employee option awards based on the grant date fair value of the award,
less expected annual forfeitures, and recognizes expense on a straight-line basis over the
four-year service period of the award. Stock options granted to members of our board of directors
vest immediately. Stock compensation for these awards is based on the grant date fair value of the
award and is recognized in expense immediately.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Fuel Tech uses the Black-Scholes option pricing model to estimate the grant date fair value of
employee stock options. The principal variable assumptions utilized in valuing options and the
methodology for estimating such model inputs include: (1)&nbsp;risk-free interest rate &#150; an estimate
based on the yield of zero-coupon treasury securities with a maturity equal to the expected life
of the option; (2)&nbsp;expected volatility &#150; an estimate based on the historical volatility of Fuel
Tech&#146;s Common Stock for a period equal to the expected life of the option; and (3)&nbsp;expected life of
the option &#150; an estimate based on historical experience including the effect of employee
terminations.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Stock option activity for Fuel Tech&#146;s Incentive Plan for the three months ended March&nbsp;31, 2011 was
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="52%">&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>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Weighted-</B></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>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Average</B></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 nowrap align="center" colspan="2"><B>Number</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Weighted-</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Remaining</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Aggregate</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>of</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Average</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Contractual</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Intrinsic</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Options</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Exercise Price</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Term</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Value</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Outstanding on January&nbsp;1, 2011</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,856,125</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">14.68</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><DIV style="margin-left:15px; text-indent:-15px">Granted</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">&#151;</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" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Exercised</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(10,000</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.40</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><DIV style="margin-left:15px; text-indent:-15px">Expired or forfeited</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(46,750</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22.62</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 style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&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" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Outstanding on March&nbsp;31, 2011</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,799,375</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">14.58</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">5.6 years</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2,736</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Exercisable on March&nbsp;31, 2011</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,322,125</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">14.93</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">5.2 years</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2,625</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Non-vested stock option activity for the three months ended March&nbsp;31, 2011 was 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="70%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&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 nowrap align="center" colspan="2"><B>Non-Vested Stock</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Weighted-Average</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Options</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Grant Date</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Outstanding</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Fair Value</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Outstanding on January&nbsp;1, 2011</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">578,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">7.50</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Granted</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Vested</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(89,500</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9.18</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Forfeited</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(11,750</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.95</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Outstanding on March&nbsp;31, 2011</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">477,250</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">7.23</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As of March&nbsp;31, 2011, there was $2,731 of total unrecognized compensation cost related to
non-vested stock options granted under the Incentive Plan. That cost is expected to be recognized
over a weighted average period of 1.5&nbsp;years.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Fuel Tech received proceeds from the exercise of stock options of $54 in the three month period
ended March&nbsp;31, 2011. The intrinsic value of options exercised in the three month period ended
March&nbsp;31, 2011 was $34. It is our policy to issue new shares upon option exercises, loan
conversions, and vesting of restricted stock units. We have not used cash and do not anticipate
any future use of cash to settle equity instruments granted under share-based payment arrangements.
</DIV>


<P align="right" style="font-size: 10pt"><!-- Folio -->7<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#Y91195tocpage">Table of Contents</A></H5><P>
<!-- xbrl -->

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




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


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Restricted stock units (&#147;RSUs&#148;) granted to employees vest over time based on continued service
(typically vesting over a period between two and four years). Such time-vested RSUs are valued at
the date of grant using the intrinsic value method. Compensation cost, adjusted for estimated
forfeitures, is amortized on a straight-line basis over the requisite service period.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In addition to the time vested RSUs described above, in March&nbsp;2011 the Company entered into a
performance-based RSU agreement (the &#147;Agreement&#148;) with its executive management team. The Agreement
includes three types of awards with each award type specifying a targeted number of RSUs that may
be granted to each executive based on either the individual performance of the executive or the
Company&#146;s relative performance compared to a peer group, as determined by the award type. The
Compensation and Nominating Committee of our Board of Directors (the &#147;Committee&#148;) determines the
extent to which, if any, RSUs will be granted based on the achievement of the applicable
performance criteria specified in the Agreement. This determination will be made following the
completion of the applicable performance period (each a &#147;Determination Date&#148;). Such performance
based awards include 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"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The first type of award is based on individual performance during the 2011 calendar year
as determined by the Committee based on performance criteria specified in the Agreement.
These awards will vest over a three year period beginning on the Determination Date. We
estimated the fair value of these performance-based RSU awards on the date of the Agreement
using the intrinsic value method and our estimate of the probability that the specified
performance criteria will be met. The fair value measurement and probability estimate will
be re-measured each reporting date until the Determination Date, at which time the final
award amount will be known. For these job performance-based awards, we amortize
compensation costs over the requisite service period, adjusted for estimated forfeitures,
for each separately vesting tranche of the award.</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>The second type of RSU award contains a targeted number of RSUs to be granted based on
the Company&#146;s revenue growth relative to a specified peer group during the 2011 and 2012
calendar years. These awards vest 67% on the second anniversary of the Agreement date and
33% on the third anniversary of the Agreement date. We estimated the fair value of these
performance-based RSU awards on the Agreement date using the intrinsic value method and our
estimate of the probability that the specified performance criteria will be met. For these
revenue growth performance-based awards, we amortize compensation costs over the requisite
service period, adjusted for estimated forfeitures, for each separately vesting tranche of
the award.</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>The third type of RSU award contains a targeted number of RSUs to be granted based on
the total shareholder return (&#147;TSR&#148;) of the Company&#146;s common stock relative to a specified
peer group during the 2011 and 2012 calendar years. These awards vest 67% on the second
anniversary of the Agreement date and 33% on the third anniversary of the Agreement date.
We estimated the fair value of these market-based RSU awards on the Agreement date using a
Monte Carlo valuation methodology and amortize the fair value over the requisite service
period for each separately vesting tranche of the award.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">At March&nbsp;31, 2011 there is $2,087 of unrecognized compensation costs related to restricted stock
unit awards to be recognized over a weighted average period of 4&nbsp;years.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">A summary of restricted stock unit activity for the three month period ended March&nbsp;31, 2011 is 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="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 nowrap align="center" colspan="2"><B>Weighted Average</B></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>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Grant Date</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Shares</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Fair Value</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Unvested
restricted stock
units at December
31, 2010</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">149,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">8.63</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Granted</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Forfeited</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Vested</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Unvested
restricted stock
units at March&nbsp;31,
2011</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">149,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">8.63</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

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


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In addition to the Incentive Plan, Fuel Tech has a Deferred Compensation Plan for Directors
(Deferred Plan). Under the terms of the Deferred Plan, Directors can elect to defer Directors&#146;
fees for shares of Fuel Tech Common Stock that are issuable at a future
date as defined in the agreement. In accordance with ASC 718, Fuel Tech accounts for these awards
as equity awards as
</DIV>

<P align="right" style="font-size: 10pt"><!-- Folio -->8<!-- /Folio -->
</DIV>

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



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">opposed to liability awards. In the periods ended March&nbsp;31, 2011 and 2010, Fuel Tech recorded $20
and $28, respectively, of stock-based compensation expense under the Deferred Plan.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">At March&nbsp;31, 2011, Fuel Tech had 1,924,000 weighted average stock awards outstanding that were not
dilutive for the purpose of inclusion in the calculation of diluted earnings per share but could
potentially become dilutive in future periods.
</DIV>


<!-- xbrl,n -->
<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Note I: Debt</I></B>
</DIV>

<!-- xbrl,body -->
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On June&nbsp;30, 2009, Fuel Tech entered into a $25,000 revolving credit facility (the &#147;Facility&#148;) with
JPMorgan Chase Bank, N.A (JPM Chase). The Facility has a term of two years through June&nbsp;30, 2011,
is unsecured, bears interest at a rate of LIBOR plus a spread range of 250 basis points to 375
basis points, as determined under a formula related to the Company&#146;s leverage ratio, and has the
Company&#146;s Italian subsidiary, Fuel Tech S.r.l., as a guarantor. Fuel Tech can use this Facility
for cash advances and standby letters of credit. As of March&nbsp;31, 2011 and December&nbsp;31, 2010, there
were no outstanding borrowings on this Facility. The Credit Agreement dated as of June&nbsp;30, 2009 by
and between Fuel Tech, Inc. and JPM Chase and the Revolving Credit Note dated June&nbsp;30, 2009 from
Fuel Tech, Inc. to JPM Chase were included in their entirety as exhibits to the Company&#146;s Form 8-K
filed with the Securities and Exchange Commission on July&nbsp;2, 2009.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">At its inception, the Facility contained 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 minimum
tangible net worth of $42,000, adjusted upward for 50% of net income generated and 100% of all
capital issuances, a minimum net income for the quarterly period ended June&nbsp;30, 2009 of ($2,000),
and minimum net income for the quarterly period ended September&nbsp;30, 2009 of $750. There was not a
minimum net income requirement for any periods subsequent to September&nbsp;30, 2009. In addition, the
original Facility covenants included a maximum Funded Debt to EBITDA Ratio (or &#147;Leverage Ratio&#148;, as
defined in the Facility) of 2.0:1.0 based on the four trailing quarterly periods ended December&nbsp;31,
2009 and a maximum Leverage Ratio of 1.5:1.0 based on the four trailing quarterly periods ending
March&nbsp;31, 2010 and all succeeding quarterly periods until the facility expires. Maximum funded debt
is defined as all borrowed funds, outstanding standby letters of credit and bank guarantees. EBITDA
includes after tax earnings with add backs for interest expense, income taxes, and depreciation and
amortization expenses. Due to the Company&#146;s quarterly net loss of ($698) for the three-month period
ended September&nbsp;30, 2009, however, the Company was in breach of its minimum quarterly net income
covenant that was in effect at that time. The Company amended the Facility to obtain a waiver of
this covenant breach from JPM Chase for the quarterly period ended September&nbsp;30, 2009 and revised
certain financial covenants as follows: for the three-month period ended December&nbsp;31, 2009 the
Company shall achieve a Minimum Net Income of ($2,000), for the three-month period ended March&nbsp;31,
2010 the Company&#146;s Leverage Ratio shall not exceed 2.75:1.0, and for the three month period ended
June&nbsp;30, 2010 and each subsequent quarterly period, the Leverage Ratio shall not exceed 1.5:1.0.
The purchase price for allowable acquisitions made during any fiscal year was also lowered to
$5,000 in the aggregate if Leverage Ratio is greater than 2.75:1.0. The Company&#146;s spread matrix for
rates and fees paid on its revolving credit facility and standby letters of credit was adjusted
upward to include additional tiers tied to the quarterly calculated Leverage Ratio. No other
Facility covenants were modified for any other period.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">At March&nbsp;31, 2011, the Company was in compliance with all financial covenants on the Facility,
including a year-to-date capital expenditure amount of $841, a tangible net worth amount of
$58,851, which was above the required amount of $53,762 by $5,090, and a Leverage Ratio of
0.33:1.0, which was well below the maximum requirement of 1.5:1.0.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Beijing Fuel Tech Environmental Technologies Company, Ltd. (Beijing Fuel Tech), a wholly-owned
subsidiary of Fuel Tech, has a revolving credit facility (the &#147;China Facility&#148;) agreement with JPM
Chase for RMB 45&nbsp;million (approximately $6,900), which expires on June&nbsp;30, 2011. The facility is
unsecured, bears interest at a rate of 120% of the People&#146;s Bank of China (PBOC)&nbsp;Base Rate
(approximately 6.4% and 5.8% at March&nbsp;31, 2011 and December&nbsp;31, 2010, respectively) and does not
contain any material debt covenants. Beijing Fuel Tech can use this facility for cash advances and
bank guarantees. As of March&nbsp;31, 2011 and December&nbsp;31, 2010, Beijing Fuel Tech has borrowings
outstanding in the amount of $2,290 and $2,269, respectively.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">At March&nbsp;31, 2011 and December&nbsp;31, 2010, the Company had outstanding standby letters of credit and
bank guarantees, predominantly to customers, totaling approximately $1,045 and $1,265,
respectively, in connection with contracts in process. Fuel Tech is committed to reimbursing the
issuing bank for any payments made by the bank under these instruments. At March&nbsp;31, 2011 and
December&nbsp;31, 2010, there were no cash borrowings under the revolving credit facility and
approximately $23,955 and $23,735, respectively, was available for future borrowings. The Company
pays a commitment fee of 0.25% per year on the unused portion of the revolving credit facility.
Management has met with the Company&#146;s lending institutions and, during the course of those
meetings, was not made aware of any information indicating that they will not be able to perform
their obligations for any letters of credit or guarantees issued, nor be unable to supply funds to
Fuel Tech if the Company chooses to borrow funds under its two revolving credit facilities.
</DIV>


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

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<!-- xbrl -->

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




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In the event of default on either the domestic facility or the 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: 6pt">Interest payments in the amount of $40 and $44 were made during the three month periods ended March
31, 2011 and 2010, respectively.
</DIV>


<!-- xbrl,n -->
<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Note J: Business Segment and Geographic Disclosures</I></B>
</DIV>

<!-- xbrl,body -->
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Fuel Tech segregates its financial results into two reportable segments representing two broad
technology segments 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">-</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Air Pollution Control technology segment includes technologies to reduce NOx
emissions in flue gas from boilers, incinerators, furnaces and other stationary
combustion sources. These include Low and Ultra Low NOx Burners (LNB and ULNB),
Over-Fire Air (OFA)&nbsp;systems, NOxOUT<SUP style="FONT-size: 85%; vertical-align: text-top">&#174;</SUP> and HERT<SUP style="FONT-size: 85%; vertical-align: text-top">&#153;</SUP> Selective
Non-Catalytic Reduction (SNCR)&nbsp;systems, and Advanced Selective Catalytic Reduction
(ASCR<SUP style="FONT-size: 85%; vertical-align: text-top">TM</SUP>) systems. The ASCR system includes ULNB, OFA, and SNCR components,
along with a downsized SCR catalyst, Ammonia Injection Grid (AIG), and Graduated
Straightening Grid<SUP style="FONT-size: 85%; vertical-align: text-top">&#153;</SUP> (GSG)&nbsp;systems to provide high NOx reductions at
significantly lower capital and operating costs than conventional SCR systems. The
CASCADE<SUP style="FONT-size: 85%; vertical-align: text-top">&#153;</SUP> and NOxOUT-SCR<SUP style="FONT-size: 85%; vertical-align: text-top">&#174;</SUP> processes are basic types of ASCR systems,
using just SNCR and SCR catalyst components. ULTRA&#153; technology creates ammonia at a
plant site using safe urea for use with any SCR application. Flue Gas Conditioning
systems are chemical injection systems offered in markets outside the U.S. and Canada to
enhance electrostatic precipitator and fabric filter performance in controlling
particulate emissions.</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">-</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The FUEL CHEM<SUP style="FONT-size: 85%; vertical-align: text-top">&#174;</SUP> technology segment, which uses chemical processes in
combination with advanced Computational Fluid Dynamics (CFD)&nbsp;and Chemical Kinetics
Modeling (CKM)&nbsp;boiler modeling, for the control of slagging, fouling, corrosion, opacity
and other sulfur trioxide-related issues in furnaces and boilers through the addition of
chemicals into the furnace using TIFI<SUP style="FONT-size: 85%; vertical-align: text-top"><SUP style="FONT-size: 85%; vertical-align: text-top">&#174;</SUP> </SUP>Targeted In-Furnace Injection&#153;
technology.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The &#147;Other&#148; classification includes those profit and loss items not allocated by Fuel Tech to each
reportable segment. Further, there are no intersegment sales that require elimination.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Fuel Tech evaluates performance and allocates resources based on reviewing gross margin by
reportable segment. The accounting policies of the reportable segments are the same as those
described in the summary of significant accounting policies (Note 1 in our annual report on Form
10-K). Fuel Tech does not review assets by reportable segment, but rather, in aggregate for Fuel
Tech as a whole.
</DIV>


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

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<H5 align="left" style="page-break-before:always"><A HREF="#Y91195tocpage">Table of Contents</A></H5><P>
<!-- xbrl -->

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




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Information about reporting segment net sales and gross margin are provided below:
</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="52%">&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 nowrap align="left"><B>Three months ended</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Air Pollution Control</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">FUEL CHEM</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="left"><B>March 31, 2011</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Segment</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Segment</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Other</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Total</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="17" 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">Revenues from external customers</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">11,092</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">11,530</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">22,622</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cost of sales</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(5,553</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(5,913</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(11,466</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="15" nowrap align="left" style="border-top: 1px solid #000000">&nbsp; &nbsp; &nbsp; &nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Gross margin</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,539</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,617</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,156</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Selling, general and administrative</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">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(7,951</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(7,951</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Research and development</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">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(402</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(402</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="15" nowrap align="left" style="border-top: 1px solid #000000">&nbsp; &nbsp; &nbsp; &nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Operating income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">5,539</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">5,617</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(8,353</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,803</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="15" align="left" style="border-top: 3px double #000000">&nbsp; &nbsp; &nbsp; &nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</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="52%">&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 nowrap align="left">Three months ended</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Air Pollution Control</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">FUEL CHEM</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="left">March 31, 2010</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Segment</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Segment</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Other</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Total</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="17" 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">Revenues from external customers</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">8,214</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">9,403</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">17,617</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cost of sales</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(5,258</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(4,242</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(9,500</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="15" nowrap align="left" style="border-top: 1px solid #000000">&nbsp; &nbsp; &nbsp; &nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Gross margin</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,956</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,161</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,117</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Selling, general and administrative</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">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(7,480</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(7,480</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Research and development</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">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(146</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(146</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="15" nowrap align="left" style="border-top: 1px solid #000000">&nbsp; &nbsp; &nbsp; &nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Operating income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,956</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">5,161</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(7,626</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">491</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="15" align="left" style="border-top: 3px double #000000">&nbsp; &nbsp; &nbsp; &nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Information concerning Fuel Tech&#146;s operations by geographic area is provided below. Revenues
are attributed to countries based on the location of the customer. Assets are those directly
associated with operations of the geographic area.
</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="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 nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000">Three months ended March 31:</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2011</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2010</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Revenues:</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:30px; text-indent:-15px">United States</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">19,618</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">15,041</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Foreign</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,576</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">22,622</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">17,617</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</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="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 nowrap align="center" colspan="2">March 31,</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">December 31,</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2011</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2010</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">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:30px; text-indent:-15px">United States</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">90,818</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">92,485</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Foreign</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,860</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,718</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">101,678</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">103,203</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<!-- xbrl,n -->
<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Note K: Contingencies</I></B>
</DIV>

<!-- xbrl,body -->
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Fuel Tech issues a standard product warranty with the sale of its products to customers. 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>


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

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#Y91195tocpage">Table of Contents</A></H5><P>
<!-- xbrl -->

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




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Changes in the warranty liability for the three months ended March&nbsp;31, 2011 and 2010 are summarized
below:
</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="7" style="border-bottom: 1px solid #000000">Three Months Ended March 31:</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">2011</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">2010</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; &nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Aggregate product warranty liability at
beginning of period</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">215</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">199</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net aggregate expense related to product
warranties</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">30</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Aggregate reductions for payments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(33</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(35</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; &nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Aggregate product warranty liability at end of
period</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">212</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">194</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; &nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<!-- xbrl,n -->
<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Note L: Income Taxes</I></B>
</DIV>

<!-- xbrl,body -->
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The
Company&#146;s effective tax rates of 50.8% and 39.8% for the three month periods ended March&nbsp;31,
2011 and 2010, respectively, differ from the statutory federal tax rate due primarily to state
taxes, stock based compensation, differences between U.S. and foreign tax rates, foreign losses
incurred with no related tax benefit, and non-deductible meals and entertainment expenses.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Fuel Tech had unrecognized tax benefits as of December&nbsp;31, 2010 in the amount of $870 all of which,
if ultimately recognized, will reduce Fuel Tech&#146;s annual effective tax rate. There have been no
material changes in unrecognized tax benefits during the three months ended March&nbsp;31, 2011.
</DIV>


<!-- xbrl,n -->
<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Note M: Goodwill and Other Intangibles</I></B>
</DIV>

<!-- xbrl,body -->
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Goodwill and indefinite-lived intangible assets are not amortized, but are reviewed annually or
more frequently if indicators arise, for impairment. The evaluation of impairment involves
comparing the current fair value of our reporting units to their carrying values. Fuel Tech uses a
discounted cash flow (DCF)&nbsp;model to determine the current fair value of its two reporting units. 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. Management considers historical experience and all
available information at the time 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">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 technology segment and the APC technology
segment. At March&nbsp;31, 2011 and December&nbsp;31, 2010, goodwill allocated to the FUEL CHEM technology
segment was $1,723 while goodwill allocated to the APC technology segment was $19,328.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Goodwill is allocated to each of our reporting units after considering the nature of the net assets
giving rise to the goodwill and how each reporting unit would enjoy the benefits and synergies of
the net assets acquired. Our last fair value measurement test, performed annually as of October&nbsp;1,
revealed no indications of impairment. There were no indications of goodwill impairment in the
three month period ended March&nbsp;31, 2011.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Fuel Tech reviews other intangible assets, which include customer lists and relationships,
covenants not to compete, patent assets, tradenames, and acquired technologies, for impairment on a
recurring basis or when events or changes in circumstances indicate the carrying amount of an asset
may not be recoverable. In the event that impairment indicators exist, a further analysis is
performed and if the sum of the expected undiscounted future cash flows resulting from the use of
the asset is less than the carrying amount of the asset, an impairment loss equal to the excess of
the asset&#146;s carrying value over its fair value is recorded. Management considers historical
experience and all available information at the time the estimates of future cash flows are made,
however, the actual cash values that could be realized may differ from those that are estimated.
There were no indications of intangible asset impairment in the three month period ended March&nbsp;31,
2011.
</DIV>

<!-- /xbrl,ns -->


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</DIV>

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




<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>FUEL TECH, INC.</B>
</DIV>

<DIV align="left">
<A name="Y91195107"></A>
</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">Item&nbsp;2.</TD>
    <TD>&nbsp;</TD>
    <TD>Management&#146;s Discussion and Analysis of Financial Condition and Results of Operations</TD>
</TR>
</TABLE>
</DIV>

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


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Revenues for the three months ended March&nbsp;31, 2011 and 2010 were $22,622 and $17,617, respectively.
The 28% increase versus the prior year is due to both the Air Pollution Control and FUEL CHEM
technology segment.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Air Pollution Control (APC)&nbsp;technology segment generated revenues of $11,092 for the three
months ended March&nbsp;31, 2011, an increase of $2,878, or 35%, from the prior year due to the timing
of recognition of prior period bookings and work progress on construction projects. This segment
remains uniquely positioned to capitalize on the next phase of increasingly stringent U.S. air
quality standards, specifically on NOx control. Interest in Fuel Tech&#146;s suite of pollution control
technologies, on both a new and retrofit basis, remains strong, both domestically and abroad. The
Company expects demand for its APC products to remain strong throughout the remainder of 2011.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Consolidated APC backlog at March&nbsp;31, 2011 was $14,500 versus backlog at March&nbsp;31, 2010 of
approximately $21,000. Substantially all of the backlog as of March&nbsp;31, 2011 should be recognized
as revenue in fiscal 2011, although the timing of such revenue recognition in 2011 is subject to
the timing of the expenses incurred on existing projects.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The FUEL CHEM technology segment generated revenues of $11,530 for the three months ended March&nbsp;31,
2011, an increase of $2,127, or 23%, versus the prior year. This increase is primarily attributed
to the addition of new accounts. We believe the marketplace acceptance for Fuel Tech&#146;s patented
TIFI<SUP style="FONT-size: 85%; vertical-align: text-top">&#174;</SUP> Targeted In-Furnace Injection&#153; technology remains strong, particularly on
coal-fired units, which represents the largest market opportunity for the technology.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Cost of sales as a percentage of revenue for the quarters ended March&nbsp;31, 2011 and 2010 was 51% and
54%, respectively. The cost of sales percentage for the APC technology segment decreased to 50%
from 64% in the comparable prior-year period, primarily due to an increase in higher margin project
mix. For the FUEL CHEM technology segment, the cost of sales percentage increased to 51% from 45%
in the comparable prior-year quarter primarily due to the recognition in the first quarter of 2010
of $2,000 in contingent risk share revenue from a successful demonstration program for which the
associated costs were recognized in prior periods.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Selling, general and administrative expenses (SG&#038;A) for the quarters ended March&nbsp;31, 2011 and 2010
were $7,951 and $7,480, respectively. Of the $471 increase in SG&#038;A for the quarter versus the
prior year, $860 is due to employee related expenses including incentive compensation, and $470 is
due to an increase in fees to outside service providers. Partially offsetting these amounts was
$120 in depreciation expense and a decrease of $750 in stock compensation expense due to the
vesting of options granted in earlier periods with a comparatively higher grant date fair value
than more recent grants.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Research and development expenses for the quarters ended March&nbsp;31, 2011 and 2010 were $402 and
$146, respectively. The Company has increased its R&#038;D efforts in the pursuit of commercial
applications for its technologies outside of its traditional markets, and in the development and
analysis of new technologies that could represent incremental market opportunities.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Interest expense for the three month periods ended March&nbsp;31, 2011 and 2010 totaled $40 and $44,
respectively, and relates to borrowings for the Beijing Fuel Tech Facility.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Income tax expense for the quarters ended March&nbsp;31, 2011 and 2010 was $1,385 and $142,
respectively, and reflective of the Company&#146;s net income for the respective quarters. The Company
is projecting a consolidated effective tax rate of 51% for 2011.
</DIV>


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


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">At March&nbsp;31, 2011, Fuel Tech had cash and cash equivalents and short-term investments on hand of
$27,865 and working capital of $39,015 versus $30,524 and $36,645 at December&nbsp;31, 2010,
respectively.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Operating activities used cash of $1,929 during the three-month period ended March&nbsp;31, 2011,
primarily due to payments made during the quarter related to the following: insurance and other
assets of $239; accounts payable, accrued liabilities, and income taxes of $3,654; inventory
purchases of $177; and a decrease in our accounts receivable balance of $938. Partially offsetting
these items was cash generated by our net income of $1,339 plus other non-cash items such as
stock-based compensation of $617, depreciation and amortization of $983, and deferred income taxes
of $120.
</DIV>


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




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Investing activities used cash of $841 during the three month period ended March&nbsp;31, 2011 due to
purchases of property, equipment, and patent expenditures.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Financing activities generated cash of $54 related to proceeds received from the exercise of stock
options during the period.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On June&nbsp;30, 2009, Fuel Tech entered into a $25,000 revolving credit facility (the &#147;Facility&#148;) with
JPMorgan Chase Bank, N.A (JPM Chase). The Facility has a term of two years through June&nbsp;30, 2011,
is unsecured, bears interest at a rate of LIBOR plus a spread range of 250 basis points to 375
basis points, as determined under a formula related to the Company&#146;s leverage ratio, and has the
Company&#146;s Italian subsidiary, Fuel Tech S.r.l., as a guarantor. Fuel Tech can use this Facility
for cash advances and standby letters of credit. As of March&nbsp;31, 2011 and December&nbsp;31, 2010, there
were no outstanding borrowings on this Facility. The Credit Agreement dated as of June&nbsp;30, 2009 by
and between Fuel Tech, Inc. and JPM Chase and the Revolving Credit Note dated June&nbsp;30, 2009 from
Fuel Tech, Inc. to JPM Chase were included in their entirety as exhibits to the Company&#146;s Form 8-K
filed with the Securities and Exchange Commission on July&nbsp;2, 2009.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">At its inception, the Facility contained 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 minimum
tangible net worth of $42,000, adjusted upward for 50% of net income generated and 100% of all
capital issuances, a minimum net income for the quarterly period ended June&nbsp;30, 2009 of ($2,000),
and minimum net income for the quarterly period ended September&nbsp;30, 2009 of $750. There was not a
minimum net income requirement for any periods subsequent to September&nbsp;30, 2009. In addition, the
original Facility covenants included a maximum Funded Debt to EBITDA Ratio (or &#147;Leverage Ratio&#148;, as
defined in the Facility) of 2.0:1.0 based on the four trailing quarterly periods ended December&nbsp;31,
2009 and a maximum Leverage Ratio of 1.5:1.0 based on the four trailing quarterly periods ending
March&nbsp;31, 2010 and all succeeding quarterly periods until the facility expires. Maximum funded debt
is defined as all borrowed funds, outstanding standby letters of credit and bank guarantees. EBITDA
includes after tax earnings with add backs for interest expense, income taxes, and depreciation and
amortization expenses. Due to the Company&#146;s quarterly net loss of ($698) for the three-month period
ended September&nbsp;30, 2009, however, the Company was in breach of its minimum quarterly net income
covenant that was in effect at that time. The Company amended the Facility to obtain a waiver of
this covenant breach from JPM Chase for the quarterly period ended September&nbsp;30, 2009 and revised
certain financial covenants as follows: for the three-month period ended December&nbsp;31, 2009 the
Company shall achieve a Minimum Net Income of ($2,000), for the three-month period ended March&nbsp;31,
2010 the Company&#146;s Leverage Ratio shall not exceed 2.75:1.0, and for the three month period ended
June&nbsp;30, 2010 and each subsequent quarterly period, the Leverage Ratio shall not exceed 1.5:1.0.
The purchase price for allowable acquisitions made during any fiscal year was also lowered to
$5,000 in the aggregate if Leverage Ratio is greater than 2.75:1.0. The Company&#146;s spread matrix for
rates and fees paid on its revolving credit facility and standby letters of credit was adjusted
upward to include additional tiers tied to the quarterly calculated Leverage Ratio. No other
Facility covenants were modified for any other period.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">At March&nbsp;31, 2011, the Company was in compliance with all financial covenants on the Facility,
including a year-to-date capital expenditure amount of $841, a tangible net worth amount of
$58,851, which was above the required amount of $53,762 by $5,090, and a Leverage Ratio of
0.33:1.0, which was well below the maximum requirement of 1.5:1.0.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Beijing Fuel Tech Environmental Technologies Company, Ltd. (Beijing Fuel Tech), a wholly-owned
subsidiary of Fuel Tech, has a revolving credit facility (the &#147;China Facility&#148;) agreement with JPM
Chase for RMB 45&nbsp;million (approximately $6,900), which expires on June&nbsp;30, 2011. The facility is
unsecured, bears interest at a rate of 120% of the People&#146;s Bank of China (PBOC)&nbsp;Base Rate
(approximately 6.4% and 5.8% at March&nbsp;31, 2011 and December&nbsp;31, 2010, respectively) and does not
contain any material debt covenants. Beijing Fuel Tech can use this facility for cash advances and
bank guarantees. As of March&nbsp;31, 2011 and December&nbsp;31, 2010, Beijing Fuel Tech has borrowings
outstanding in the amount of $2,290 and $2,269, respectively.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">At March&nbsp;31, 2011 and December&nbsp;31, 2010, the Company had outstanding standby letters of credit and
bank guarantees, predominantly to customers, totaling approximately $1,045 and $1,265,
respectively, in connection with contracts in process. Fuel Tech is committed to reimbursing the
issuing bank for any payments made by the bank under these instruments. At March&nbsp;31, 2011 and
December&nbsp;31, 2010, there were no cash borrowings under the revolving credit facility and
approximately $23,955 and $23,735, respectively, was available. The Company pays a commitment fee
of 0.25% per year on the unused portion of the revolving credit facility. Management has met with
the Company&#146;s lending institutions and, during the course of those meetings, was not made aware of
any information indicating that they will not be able to perform their obligations for any letters
of credit or guarantees issued, nor be unable to supply funds to Fuel Tech if the Company chooses
to borrow funds under its two revolving credit facilities.
</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
</DIV>


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




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">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">In the opinion of management, Fuel Tech&#146;s expected near-term revenue growth will be driven by the
timing of penetration of the utility marketplace via utilization of its TIFI technology, by utility
and industrial entities&#146; adherence to the NOx reduction requirements of the various domestic
environmental regulations, and by the expansion of both business segments in non-U.S. geographies.
Fuel Tech expects its liquidity requirements to be met by the operating results generated from
these activities.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Contingencies and Contractual Obligations</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Fuel Tech issues a standard product warranty with the sale of its products to customers as
discussed in Note K. The change in the warranty liability balance during the three months ended
March&nbsp;31, 2011 was not significant.
</DIV>



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</DIV>



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


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

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This Quarterly Report on Form 10-Q contains &#147;forward-looking statements,&#148; as defined in Section&nbsp;21E
of the Securities Exchange Act of 1934, as amended, which are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995 and reflect Fuel Tech&#146;s current
expectations regarding future growth, results of operations, cash flows, performance and business
prospects, and opportunities, as well as assumptions made by, and information currently available
to, our management. Fuel Tech has tried to identify forward-looking statements by using words such
as &#147;anticipate,&#148; &#147;believe,&#148; &#147;plan,&#148; &#147;expect,&#148; &#147;estimate,&#148; &#147;intend,&#148; &#147;will,&#148; and similar
expressions, but these words are not the exclusive means of identifying forward-looking statements.
These statements are based on information currently available to Fuel Tech and are subject to
various risks, uncertainties, and other factors, including, but not limited to, those discussed in
Fuel Tech&#146;s Annual Report on Form 10-K for the year ended December&nbsp;31, 2010 in Item&nbsp;1A under the
caption &#147;Risk Factors,&#148; which could cause Fuel Tech&#146;s actual growth, results of operations,
financial condition, cash flows, performance and business prospects and opportunities to differ
materially from those expressed in, or implied by, these statements. Fuel Tech undertakes no
obligation to update such factors or to publicly announce the results of any of the forward-looking
statements contained herein to reflect future events, developments, or changed circumstances or for
any other reason. Investors are cautioned that all forward-looking statements involve risks and
uncertainties, including those detailed in Fuel Tech&#146;s filings with the Securities and Exchange
Commission.
</DIV>

<DIV align="left">
<A name="Y91195108"></A>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Item&nbsp;3. Quantitative and Qualitative Disclosures about Market Risk
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Foreign Currency Risk Management</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Fuel Tech&#146;s earnings and cash flow are subject to fluctuations due to changes in foreign currency
exchange rates. We do not enter into foreign currency forward contracts nor into foreign currency
option contracts to manage this risk due to the immaterial nature of the transactions involved.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Fuel Tech is also exposed to changes in interest rates primarily due to its long-term debt
arrangement (refer to Note I to the consolidated financial statements). A hypothetical 100 basis
point adverse move in interest rates along the entire interest rate yield curve would not have a
materially adverse effect on interest expense during the upcoming year ended December&nbsp;31, 2011.
</DIV>

<DIV align="left">
<A name="Y91195109"></A>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Item&nbsp;4. Controls and Procedures
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Evaluation of Disclosure Controls and Procedures</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Fuel Tech maintains disclosure controls and procedures and internal controls designed to ensure (a)
that information required to be disclosed in Fuel Tech&#146;s filings under the Exchange Act 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. Fuel Tech&#146;s Chief Executive Officer and
Chief Financial Officer have evaluated the Company&#146;s disclosure controls and procedures, as defined
in Rules&nbsp;13a &#151; 15(e) and 15d -15(e) of the Exchange Act,, as of the end of the period covered by
this report, and they have concluded that these controls and procedures are effective.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Changes in Internal Control over Financial Reporting</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">There has been no change in the Company&#146;s internal control over financial reporting during the
quarter covered by this report that has materially affected, or is reasonably likely to materially
affect, its internal control over financial reporting.
</DIV>





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</DIV>

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



<DIV align="left">
<A name="Y91195110"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>PART II. OTHER INFORMATION</B>
</DIV>

<DIV align="left">
<A name="Y91195111"></A>
</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">Item&nbsp;1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD> Legal Proceedings</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">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>None</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left">
<A name="Y91195112"></A>
</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">Item&nbsp;1A.&nbsp;</TD>
    <TD> Risk Factors</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD>The risk factors included in our Annual Report on Form 10-K for fiscal year ended December
31, 2010 have not materially changed.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left">
<A name="Y91195113"></A>
</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">Item&nbsp;2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD> Unregistered Sales of Equity Securities and Use of Proceeds</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">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>None</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left">
<A name="Y91195114"></A>
</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">Item&nbsp;6.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD> Exhibits</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"></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>a.&nbsp;Exhibits (all filed herewith)</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="5%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">4.1</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Fuel Tech, Inc. Form of 2011 Executive Performance RSU Award Agreement</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">31.1</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Certification of CEO pursuant to Section&nbsp;302 of Sarbanes-Oxley Act of 2002</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">31.2</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Certification of CFO pursuant to Section&nbsp;302 of Sarbanes-Oxley Act of 2002</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">32</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Certification of CEO and CFO pursuant to Section&nbsp;906 of Sarbanes-Oxley Act of 2002</TD>
</TR>






</TABLE>
</DIV>
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<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>FUEL TECH, INC.</B>
</DIV>

<DIV align="left">
<A name="Y91195115"></A>
</DIV>

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

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned thereunto duly authorized.
</DIV>


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">Date:  May 9, 2011&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ Douglas G. Bailey
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Douglas G. Bailey     &nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">President and Chief Executive Officer<br>
(Principal Executive Officer)&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">Date:   May 9, 2011&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ David S. Collins
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">David S. Collins     &nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Senior Vice President and Chief Financial Officer<br>
(Principal Financial Officer)&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

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<DOCUMENT>
<TYPE>EX-4.1
<SEQUENCE>2
<FILENAME>y91195exv4w1.htm
<DESCRIPTION>EX-4.1
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<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Exhibit&nbsp;4.1</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U><B>2011 EXECUTIVE PERFORMANCE RSU AWARD AGREEMENT</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Executive Performance RSU Award Agreement (the &#147;Agreement&#148;) is hereby entered effective
as of &#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;, 2011 (the &#147;Effective Date&#148;), by and between Fuel Tech, Inc. (the
&#147;Company&#148; or &#147;Fuel Tech&#148; or &#147;FTI&#148;), and &#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95; (the &#147;Participant&#148;). Any term
capitalized but not defined in this Agreement will have the meaning set forth in the Fuel Tech,
Inc. Incentive Plan, as amended (the &#147;Plan&#148;).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;<U>Purpose</U>. The purpose of this Agreement is, among other things, to align the
Participant&#146;s interests with the interests of the Company and its stockholders in the long-term
growth of the Company and to reward the Participant for his continued employment and service to the
Company in the future and his compliance with the Company&#146;s policies (including, without
limitation, the Company&#146;s Code of Business Ethics and Conduct), to protect the Company&#146;s interests
in non-public, confidential and/or proprietary information, products, trade secrets, customer
relationships, and other legitimate business interests. In view of these purposes, this Agreement,
issued pursuant to Section&nbsp;6.6 of the Plan, provides the Participant the opportunity to receive an
executive performance RSU award in the manner and on the terms, conditions and amounts set forth in
this Agreement (&#147;Executive Performance RSU&#148;).
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">2. <U>Executive Performance RSU Award</U>. For purposes of the Executive Performance RSU Award
calculations set forth below in this Agreement, the Company&#146;s Compensation and Nominating Committee
(the &#147;Committee&#148;), in the exercise of its business judgment under the Plan, approved a total target
number of executive performance RSUs made up of three target RSU amount components. The three
components of the Executive Performance RSU Award (each of them an Award under the Plan) are:
Look-Back RSUs, Revenue Growth RSUs, and TSR Performance RSUs (as each of those terms are defined
below).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;<U>Look-Back RSUs</U>. For purposes of this Agreement, the Committee approved a Target
Look-Back RSU Amount of &#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95; RSUs. No later than ninety (90)&nbsp;days after the end of the
Performance Period, the Committee, in its sole discretion, shall award the Participant a number of
RSUs of between zero and the Target Look-Back RSU Amount (&#147;Look-Back RSUs&#148;), on the Determination
Date (as defined below).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <U>Performance Assessment</U>. The Committee, in its business judgment, may
approve the Company awarding none, some or all of the Target Look-Back RSU Amount to the
Participant based on the Committee&#146;s subjective, qualitative assessment of the Participant&#146;s
overall performance during the Performance Period. The determination and approval by the
Committee of what portion, if any, of the Target Look-Back RSU Amount shall be awarded to
the Participant may include a variety of factors considered by the Committee in its sole
discretion, including one or more of the equity award determination factors listed in
Exhibit&nbsp;A to this Agreement.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <U>Determination Date</U>. All Look-Back RSU Awards will be made on the
Determination Date, subject to the terms and conditions of the Plan and this Agreement,
including the vesting schedule set forth in Section 3(d) below, provided that the
Participant&#146;s status as a Participant under this Agreement has not terminated before the
Determination Date.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <U>Employment Termination</U>. If the Participant&#146;s status as a Participant under
this Agreement (<I>e.g</I>., termination of employment with the Company) terminates for any reason
before the Determination Date, other than death or becoming Totally Disabled, no Look-Back
RSUs will be awarded to the Participant, except as provided in Section 3(e) below. If the
Participant&#146;s status as a Participant under this Agreement terminates before the
Determination Date due to death or becoming Totally Disabled, the Committee shall determine,
in its sole discretion, whether to award none, some or all of the Target Look-Back RSUs to
the Participant. If the Participant&#146;s status as a Participant under this Agreement
terminates on or after the Determination Date, but before the Look-Back RSUs have fully
vested under Section 3(d) or (e)&nbsp;below:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) If the Participant&#146;s employment is terminated by the Company for Cause (as
defined below), the Participant will forfeit all Look-Back RSUs, including any
Look-Back RSUs that have vested under Section&nbsp;3(d);
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) If the Participant terminates employment due to death or becoming Totally
Disabled, the Participant will vest in any Look-Back RSUs that have not vested under
Section 3(d) or (e), and on a date within thirty (30)&nbsp;days of the employment
termination, determined by the Committee or Board, as applicable, the Company will
distribute Shares to the Participant equal to the full number of Look-Back RSUs that
were awarded to the Participant, regardless of whether or not the Participant had
elected to defer under Section 3(f) below;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) If the Participant&#146;s employment is terminated other than (A)&nbsp;due to death
or becoming Totally Disabled, or (B)&nbsp;by the Company for Cause, the Participant will
forfeit any Look-Back RSUs that have not vested under Section 3(d) or (e), and on a
date within thirty (30)&nbsp;days of the employment termination, determined by the
Committee or Board, as applicable, the Company will distribute Shares to the
Participant equal to the number of Look-Back RSUs that already have vested,
regardless of whether or not the Participant had elected to defer under Section 3(f)
below.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <U>Installment Vesting</U>. Any Look-Back RSUs awarded on the Determination Date
shall vest in three installments, as follows: (i)&nbsp;one-third of the total Look-Back RSUs
awarded shall vest thirteen (13)&nbsp;months after the Determination Date, (ii)&nbsp;one-third shall
vest on the second anniversary of the Determination Date, and (iii)&nbsp;the remaining one-third
shall vest on the third anniversary of the Determination Date, in each case, provided that
the Participant&#146;s status as a Participant under this Agreement has not terminated before the
applicable vesting date.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <U>Change in Control</U>. In the event of a Change of Control before the
Determination Date for Look-Back RSUs, the Committee shall determine, in its sole
discretion, whether to award none, some or all the Target Look-Back RSUs to the Participant
under this Agreement and whether to accelerate the vesting of those Look-Back RSUs it so
awards. In the event of a Change of Control on or after the Determination Date for
Look-Back RSUs, but before the Look-Back RSUs awarded to the Participant, if any, have fully
vested under Sections 3(c) or (d), if the Participant&#146;s status as a Participant under this
Agreement has not terminated before the effective date
</DIV>

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


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">of the Change in Control, the Look-Back RSUs awarded to the Participant will fully vest
on a date before the effective date of the Change in Control, determined by the Committee or
Board, as applicable, unless (i)&nbsp;the Company is the surviving entity and any adjustments
necessary to preserve the value of the Participant&#146;s outstanding Look-Back RSUs have been
made, or (ii)&nbsp;the Company&#146;s successor at the time of the Change in Control irrevocably
assumes the Company&#146;s obligations under the Plan and this Agreement or replaces the
Participant&#146;s outstanding Look-Back RSUs with an award of equal or greater value and having
terms and conditions no less favorable to the Participant than those applicable to the
Participant&#146;s Look-Back RSUs immediately prior to the Change in Control; <U>provided</U>,
<U>that</U>, if the Participant&#146;s status as a Participant under this Agreement has not
terminated before the effective date of the Change in Control and the Participant&#146;s
Look-Back RSUs do not become fully vested upon the Change of Control because of the
foregoing provisions of this paragraph (e), the Participant&#146;s Look-Back RSUs nonetheless
will become fully vested if, within two years after the effective date of the Change of
Control, the Company or its successor terminates the Participant&#146;s employment other than for
Cause or the Participant terminates his employment for Good Reason (as defined below). If
the Participant terminates employment following a Change in Control due to death or becoming
Totally Disabled, the Participant will vest in any Look-Back RSUs that have not previously
vested. On a date determined by the Committee or Board, as applicable, within thirty (30)
days of the Change of Control, the Company will distribute Shares to the Participant equal
to the number of any Look-Back RSUs that are or have become vested, regardless of whether or
not the Participant had elected to defer under Section 3(f) below.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <U>Deferral of Share Distribution</U>. The Participant may elect to defer the
receipt of Shares beyond the vesting date of the underlying Look-Back RSUs in Section 3(d)
above, by written election on the Company&#146;s then-current Deferral Election Form, filed no
earlier than the Determination Date and no later than thirty (30)&nbsp;days after the
Determination Date for the Look-Back RSUs. Any deferral period must be expressed as a
number of whole years, not less than five (5)&nbsp;or more than ten (10), beginning on the
Determination Date. Any such deferral election shall apply to the receipt of all Shares
underlying the Look-Back RSUs under this Agreement; for example, a deferral period of seven
(7)&nbsp;years would result in the Participant receiving all Shares underlying the vested
Look-Back RSUs seven (7)&nbsp;years from the Determination Date regardless of the fact that the
Look-Back RSUs under this Agreement may have vested at differing times. If a Participant
elects a deferral period but thereafter the Participant&#146;s status as a Participant terminates
after the Look-Back RSUs vest but before the elected deferral period expires, then, subject
to the forfeiture provisions of Sections&nbsp;7 and 10, distribution of the Participant&#146;s Shares
underlying the Look-Back RSUs will occur within thirty (30)&nbsp;days after the date the
Participant&#146;s status as such terminates. If a Participant elects a deferral period but
thereafter a Change in Control occurs after the Look-Back RSUs vest but before the elected
deferral period expires, then, subject to the forfeiture provisions of Sections&nbsp;7 and 10,
distribution of the Participant&#146;s Shares underlying the Look-Back RSUs will occur on a date
to be determined by the Committee or the Board, as applicable, immediately prior to the
effective time of the Change in Control.
</DIV>

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

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;<U>Revenue Growth RSUs</U>. For purposes of this Agreement, the Committee approved a
Target Revenue Growth RSU Amount of &#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95; RSUs. After the completion of the Performance
Period the Committee shall award the Participant a number of RSUs of between zero and up to 150% of
the Target Revenue Growth RSU Amount (&#147;Revenue Growth RSUs&#148;), on the Determination Date.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <U>Revenue Growth Measurement</U>. During the Performance Period, the Company&#146;s
Revenue Growth will be measured against the Revenue Growth of the Peer Group Companies. As
soon as practicable after the Peer Group Companies have reported their Revenue Growth for
the Performance Period, the Committee shall compare the Company&#146;s Revenue Growth for the
Performance Period with that of the Peer Group Companies. The Peer Group Companies will be
ranked by Revenue Growth and then divided into four quartiles. The Committee will evaluate
the Company&#146;s Revenue Growth performance in light of those rankings and shall approve the
issuance to the Participant a number of Revenue Growth RSUs determined as follows:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) if the Company&#146;s Revenue Growth performance places it in the fourth
(lowest)&nbsp;quartile of the Peer Group Companies, no RSUs will be awarded;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) if the Company&#146;s Revenue Growth performance places it in the third
quartile of the Peer Group Companies, then a number of RSUs equal to 50% of the
Target Revenue Growth RSU Amount will be awarded;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) if the Company&#146;s Revenue Growth performance places it in the second
quartile of the Peer Group Companies, then a number of RSUs equal to 100% of the
Target Revenue Growth RSU Amount will be awarded; and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) if the Company&#146;s Revenue Growth performance places it in the first
(highest)&nbsp;quartile of the Peer Group Companies, then a number of RSUs equal to 150%
of the Target Revenue Growth RSU Amount will be awarded.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <U>Determination Date</U>. Any Revenue Growth RSU awards made as a result of the
Company&#146;s Revenue Growth performance will be made on the Determination Date, subject to the
terms and conditions of the Plan and this Agreement, including the vesting schedule set
forth in Section 4(d) below, provided that the Participant&#146;s status as a Participant under
this Agreement has not terminated before the Determination Date.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <U>Employment Termination</U>. If the Participant&#146;s status as a Participant under
this Agreement terminates for any reason before the Determination Date, other than the
Participant&#146;s (i)&nbsp;termination by the Company without Cause, (ii)&nbsp;death, or (iii)&nbsp;becoming
Totally Disabled, no Revenue Growth RSUs will be awarded to the Participant, except as
provided in Section 4(e) below. If, before the Determination Date, the Participant&#146;s status
as a Participant under this Agreement is terminated by the Company without Cause, or due to
death or becoming Totally Disabled, the Participant will be awarded a number of vested
Revenue Growth RSUs, determined as follows: (A)&nbsp;the Company shall determine the number of
Revenue Growth RSUs that would have been awarded to the Participant as a percentage of the
Target Revenue Growth RSU Amount, based on the Company&#146;s Revenue Growth as of his employment
termination measured against the Revenue
</DIV>

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


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Growth of the Peer Group Companies on that date, according to the metrics of Section
4(a) above, then (B)&nbsp;the Company shall multiply that number by a fraction, the numerator of
which is the number of months of employment during the Performance Period the Participant
had completed as of the date of his employment termination and the denominator of which is
thirty-six (36). If the Participant&#146;s status as a Participant under this Agreement
terminates on or after the Determination Date, but before the Revenue Growth RSUs have fully
vested under Section 4(d) or (e)&nbsp;below:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) If the Participant&#146;s employment is terminated by the Company for Cause, the
Participant will forfeit all Revenue Growth RSUs, including any Revenue Growth RSUs
that have vested under Section&nbsp;4(d);
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) If the Participant terminates employment due to death or becoming Totally
Disabled, the Participant will vest in any Revenue Growth RSUs that have not vested
under Section 4(d) or (e), and on a date within thirty (30)&nbsp;days of the employment
termination, determined by the Committee or Board, as applicable, the Company will
distribute Shares to the Participant equal to the full number of Revenue Growth RSUs
that were awarded to the Participant, regardless of whether or not the Participant
had elected to defer under Section 4(f) below;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) If the Participant&#146;s employment is terminated other than (A)&nbsp;due to death
or becoming Totally Disabled, or (B)&nbsp;by the Company for Cause, the Participant will
forfeit any Revenue Growth RSUs that have not vested under Section 4(d) or (e), and
on a date within thirty (30)&nbsp;days of the employment termination, determined by the
Committee or Board, as applicable, the Company will distribute Shares to the
Participant equal to the number of Revenue Growth RSUs that already have vested,
regardless of whether or not the Participant had elected to defer under Section 4(f)
below.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <U>Installment Vesting</U>. Any Revenue Growth RSUs awarded on the Determination
Date shall vest in two installments, as follows: (i)&nbsp;two-thirds of the total Revenue Growth
RSUs awarded shall immediately vest on the Determination Date, and (ii)&nbsp;the remaining
one-third shall vest on the first anniversary of the Determination Date, in each case
provided that the Participant&#146;s status as a Participant under this Agreement has not
terminated before the applicable vesting date.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <U>Change in Control</U>. In the event of a Change of Control before the
Determination Date for Revenue Growth RSUs, the Committee shall determine, in its sole
discretion, whether to award none, some or all of the Target Revenue Growth RSU Amount to
the Participant under this Agreement and whether to accelerate the vesting of those Revenue
Growth RSUs it so awards; provided that, in no event shall the Participant be awarded a
number of vested Revenue Growth RSUs that is less than the number determined as follows:
(A)&nbsp;the Company shall determine the number of Revenue Growth RSUs that would have been
awarded to the Participant as a percentage of the Target Revenue Growth RSU Amount, based on
the Company&#146;s Revenue Growth as of the date of the Change in Control measured against the
Revenue Growth of the Peer Group Companies on that date, according to the metrics of Section
4(a) above, then (B)&nbsp;the Company shall multiply that number by a fraction, the numerator of
which is the number
</DIV>

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


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">of months of employment during the Performance Period the Participant had completed as
of the date of the Change in Control and the denominator of which is thirty-six (36). In
the event of a Change of Control on or after the Determination Date, but before the Revenue
Growth RSUs awarded to the Participant, if any, have fully vested under Sections 4(c) or
(d), if the Participant&#146;s status as a Participant under this Agreement has not terminated
before the effective date of the Change in Control, the Revenue Growth RSUs awarded to the
Participant will fully vest on a date before the effective date of the Change in Control,
determined by the Committee or Board, as applicable, unless (i)&nbsp;the Company is the surviving
entity and any adjustments necessary to preserve the value of the Participant&#146;s outstanding
Revenue Growth RSUs have been made, or (ii)&nbsp;the Company&#146;s successor at the time of the
Change in Control irrevocably assumes the Company&#146;s obligations under the Plan and this
Agreement or replaces the Participant&#146;s outstanding Revenue Growth RSUs with an award of
equal or greater value and having terms and conditions no less favorable to the Participant
than those applicable to the Participant&#146;s Revenue Growth RSUs immediately prior to the
Change in Control; <U>provided</U>, <U>that</U>, if the Participant&#146;s status as a
Participant under this Agreement has not terminated before the effective date of the Change
in Control and the Participant&#146;s Revenue Growth RSUs do not become fully vested upon the
Change of Control because of the foregoing provisions of this paragraph (e), the
Participant&#146;s Revenue Growth RSUs nonetheless will become fully vested if, within two years
after the effective date of the Change of Control, the Company or its successor terminates
the Participant&#146;s employment other than for Cause or the Participant terminates his
employment for Good Reason (as defined below). If the Participant terminates employment
following a Change in Control due to death or becoming Totally Disabled, the Participant
will vest in any Revenue Growth RSUs that have not previously vested.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <U>Deferral of Share Distribution</U>. The Participant may elect to defer the
receipt of Shares beyond the vesting date of the underlying Revenue Growth RSUs in Section
4(d) above, by written election on the Company&#146;s then-current Deferral Election Form, filed
no earlier than the Determination Date and no later than thirty (30)&nbsp;days after the
Determination Date for the Revenue Growth RSUs. Any deferral period must be expressed as a
number of whole years, not less than five (5)&nbsp;or more than ten (10), beginning on the
Determination Date. Any such deferral election shall apply to the receipt of all Shares
underlying the Revenue Growth RSUs under this Agreement; for example, a deferral period of
seven (7)&nbsp;years would result in the Participant receiving all Shares underlying the vested
Revenue Growth RSUs seven (7)&nbsp;years from the Determination Date regardless of the fact that
the Revenue Growth RSUs under this Agreement may have vested at differing times. If a
Participant elects a deferral period but thereafter the Participant&#146;s status as a
Participant terminates after the Revenue Growth RSUs vest but before the elected deferral
period expires, then, subject to the forfeiture provisions of Sections&nbsp;7 and 10,
distribution of the Participant&#146;s Shares underlying the Revenue Growth RSUs will occur
within thirty (30)&nbsp;days after the date the Participant&#146;s status as such terminates. If a
Participant elects a deferral period but thereafter a Change in Control occurs after the
Revenue Growth RSUs vest but before the elected deferral period expires, then, subject to
the forfeiture provisions of Sections&nbsp;7 and 10, distribution of the Participant&#146;s Shares
underlying the Revenue Growth RSUs will occur on a date to
</DIV>

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


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">be determined by the Committee or the Board, as applicable, immediately prior to the
effective time of the Change in Control.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;<U>TSR Performance RSUs</U>. For purposes of this Agreement, the Committee approved a
Target TSR Performance RSU Amount of &#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95; RSUs. After the completion of the Performance
Period the Committee shall award the Participant a number of RSUs of between zero and up to 150% of
the Target TSR Performance RSU Amount (&#147;TSR Performance RSUs&#148;), on the Determination Date (as
defined below).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <U>TSR Performance Measurement</U>. During the Performance Period, the Company&#146;s
TSR performance will be measured against the TSR performance of the Peer Group Companies.
As soon as practicable after the Peer Group Companies have reported their TSR performance
for the Performance Period, the Committee shall compare the Company&#146;s TSR performance for
the Performance Period with that of the Peer Group Companies. The Peer Group Companies will
be ranked by TSR performance, and then divided into four quartiles. The Committee will
evaluate the Company&#146;s TSR performance in light of those rankings and shall approve the
issuance to the Participant a number of TSR performance RSUs determined as follows:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) if the Company&#146;s TSR performance places it in the fourth (lowest)&nbsp;quartile
of the Peer Group Companies, no RSUs will be awarded;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) if the Company&#146;s TSR performance places it in the third quartile of the
Peer Group Companies, then a number of RSUs equal to 50% of the Target TSR
Performance RSU Amount will be awarded;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) if the Company&#146;s TSR performance places it in the second quartile of the
Peer Group Companies, then a number of RSUs equal to 100% of the Target TSR
Performance RSU Amount will be awarded; and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) if the Company&#146;s TSR performance places it in the first (highest)&nbsp;quartile
of the Peer Group Companies, then a number of RSUs equal to 150% of the Target TSR
Performance RSU Amount will be awarded.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <U>Determination Date</U>. Any TSR Performance RSU awards made as a result of the
Company&#146;s TSR performance will be made on the Determination Date, subject to the terms and
conditions of the Plan and this Agreement, including the vesting schedule set forth in
Section 5(d) below, provided that the Participant&#146;s status as a Participant under this
Agreement has not terminated before the Determination Date.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <U>Employment Termination</U>. If the Participant&#146;s status as a Participant under
this Agreement terminates for any reason before the Determination Date, other than the
Participant&#146;s (i)&nbsp;termination by the Company without Cause, (ii)&nbsp;death, or (iii)&nbsp;becoming
Totally Disabled, no TSR Performance RSUs will be awarded to the Participant, except as
provided in Section 5(e) below. If, before the Determination Date, the Participant&#146;s status
as a Participant under this Agreement is terminated by the Company without Cause, or due to
death or becoming Totally Disabled, the Participant will be awarded a number of vested TSR
Performance RSUs, determined as follows: (A)&nbsp;the Company shall determine the number of RSUs
that would have been awarded to the Participant as a
</DIV>

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</DIV>

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


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">percentage of the Target TSR Performance RSU Amount, based on the Company&#146;s TSR
Performance as of his employment termination measured against the TSR Performance of the
Peer Group Companies on that date, according to the metrics of Section 5(a) above, then (B)
the Company shall multiply that number by a fraction, the numerator of which is the number
of months of employment during the Performance Period the Participant had completed as of
the date of his employment termination and the denominator of which is thirty-six (36). If
the Participant&#146;s status as a Participant under this Agreement terminates on or after the
Determination Date, but before the TSR Performance RSUs have fully vested under Section 5(d)
or (e)&nbsp;below:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) If the Participant&#146;s employment is terminated by the Company for Cause, the
Participant will forfeit all TSR Performance RSUs, including any TSR Performance
RSUs that have vested under Section&nbsp;5(d);
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) If the Participant terminates employment due to death or becoming Totally
Disabled, the Participant will vest in any TSR Performance RSUs that have not vested
under Section 5(d) or (e), and on a date within thirty (30)&nbsp;days of the employment
termination, determined by the Committee or Board, as applicable, the Company will
distribute Shares to the Participant equal to the full number of TSR Performance
RSUs that were awarded to the Participant, regardless of whether or not the
Participant had elected to defer under Section 5(f) below;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) If the Participant&#146;s employment is terminated other than (A)&nbsp;due to death
or becoming Totally Disabled, or (B)&nbsp;by the Company for Cause, the Participant will
forfeit any TSR Performance RSUs that have not vested under Section 5(d) or (e), and
on a date within thirty (30)&nbsp;days of the employment termination, determined by the
Committee or Board, as applicable, the Company will distribute Shares to the
Participant equal to the number of TSR Performance RSUs that already have vested,
regardless of whether or not the Participant had elected to defer under Section 5(f)
below.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <U>Installment Vesting</U>. Any TSR Performance RSUs awarded on the Determination
Date shall vest in two installments, as follows: (i)&nbsp;two-thirds of the total TSR
Performance RSUs awarded shall immediately vest on the Determination Date, and (ii)&nbsp;the
remaining one-third shall vest on the first anniversary of the Determination Date, in each
case, provided that the Participant&#146;s status as a Participant under this Agreement has not
terminated before the applicable vesting date.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <U>Change in Control</U>. In the event of a Change of Control before the
Determination Date for TSR Performance RSUs, the Committee shall determine, in its sole
discretion, whether to award none, some or all of the Target TSR Performance RSU Amount to
the Participant under this Agreement, and whether to accelerate the vesting of those TSR
Performance RSUs it so awards; provide that, in no event shall the Participant be awarded a
number of vested TSR Performance RSUs that is less than the number determined as follows:
(A)&nbsp;the Company shall determine the number of TSR Performance RSUs that would have been
awarded to the Participant as a percentage of the Target TSR Performance RSU Amount, based
on the Company&#146;s TSR Performance as
</DIV>


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</DIV>



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



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">of the date of the Change in Control measured against the TSR Performance of the Peer
Group Companies on that date, according to the metrics of Section 5(a) above, then (B)&nbsp;the
Company shall multiply that number by a fraction, the numerator of which is the number of
months of employment during the Performance Period the Participant had completed as of the
date of the Change in Control and the denominator of which is thirty-six (36). In the event
of a Change of Control on or after the Determination Date, but before the TSR Performance
RSUs awarded to the Participant, if any, have fully vested under Sections 5(c) or (d), if
the Participant&#146;s status as a Participant under this Agreement has not terminated before the
effective date of the Change in Control, the TSR Performance RSUs awarded to the Participant
will fully vest on a date before the effective date of the Change in Control, determined by
the Committee or Board, as applicable, unless (i)&nbsp;the Company is the surviving entity and
any adjustments necessary to preserve the value of the Participant&#146;s outstanding TSR
Performance RSUs have been made, or (ii)&nbsp;the Company&#146;s successor at the time of the Change
in Control irrevocably assumes the Company&#146;s obligations under the Plan and this Agreement
or replaces the Participant&#146;s outstanding TSR Performance RSUs with an award of equal or
greater value and having terms and conditions no less favorable to the Participant than
those applicable to the Participant&#146;s TSR Performance RSUs immediately prior to the Change
in Control; <U>provided</U>, <U>that</U>, if the Participant&#146;s status as a Participant
under this Agreement has not terminated before the effective date of the Change in Control
and the Participant&#146;s TSR Performance RSUs do not become fully vested upon the Change of
Control because of the foregoing provisions of this paragraph (e), the Participant&#146;s TSR
Performance RSUs nonetheless will become fully vested if, within two years after the
effective date of the Change of Control, the Company or its successor terminates the
Participant&#146;s employment other than for Cause or the Participant terminates his employment
for Good Reason. If the Participant terminates employment following a Change in Control due
to death or becoming Totally Disabled, the Participant will vest in any TSR Performance RSUs
that have not previously vested.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <U>Deferral of Share Distribution</U>. The Participant may elect to defer the
receipt of Shares beyond the vesting date of the underlying TSR Performance RSUs in Section
5(d) above, by written election on the Company&#146;s then-current Deferral Election Form, filed
no earlier than the Determination Date and no later than thirty (30)&nbsp;days after the
Determination Date for the TSR Performance RSUs. Any deferral period must be expressed as a
number of whole years, not less than five (5)&nbsp;or more than ten (10), beginning on the
Determination Date. Any such deferral election shall apply to the receipt of all Shares
underlying the TSR Performance RSUs under this Agreement; for example, a deferral period of
seven (7)&nbsp;years would result in the Participant receiving all Shares underlying the vested
TSR Performance RSUs seven (7)&nbsp;years from the Determination Date regardless of the fact that
the TSR Performance RSUs under this Agreement may have vested at differing times. If a
Participant elects a deferral period but thereafter the Participant&#146;s status as a
Participant terminates after the TSR Performance RSUs vest but before the elected deferral
period expires, then, subject to the forfeiture provisions of Sections&nbsp;7 and 10,
distribution of the Participant&#146;s Shares underlying the TSR Performance RSUs will occur
within thirty (30)&nbsp;days after the date the Participant&#146;s status as such terminates. If a
Participant elects a deferral period but thereafter a Change in Control occurs after the TSR
Performance RSUs vest but before
</DIV>

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</DIV>

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



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">the elected deferral period expires, then, subject to the forfeiture provisions of
Sections&nbsp;7 and 10, distribution of the Participant&#146;s Shares underlying the TSR Performance
RSUs will occur on a date to be determined by the Committee or the Board, as applicable,
immediately prior to the effective time of the Change in Control.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.&nbsp;<U>Distribution of Shares</U>. As soon as practicable after the Participant&#146;s
Distribution Date, the Company may either (i)&nbsp;issue to the Participant or the Participant&#146;s
personal representative a Share certificate, (ii)&nbsp;deposit Shares with an online broker or other
service provider contracted by the Company for such purpose, or (iii)&nbsp;handle such Shares according
to the terms of a Change in Control, subject to Sections&nbsp;7 and 10 below, but each such issuance
subject to compliance to the satisfaction of the Committee with all requirements under applicable
laws or regulations in connection with such issuance, and with the requirements hereof and of the
Plan. Until Shares have been issued to the Participant under this Section, the Participant shall
not have any rights as a holder of the Shares underlying any component of this Executive
Performance RSU Award including but not limited to voting rights or dividends, if and when the
Company declares same.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.&nbsp;<U>Adjustment of Executive Performance RSU Award</U>. In the event that the Company or
one or more of the Peer Group Companies is required to prepare an accounting restatement due to the
material noncompliance with any financial reporting requirement under the federal securities laws
the Committee, in good faith and subject to its sole discretion, may reduce or increase the number
of RSUs awarded to the Participant under this Agreement to reflect the number of RSUs that would
have been awarded to the Participant under the accounting restatement. At all times and regardless
of the date of adoption any RSU target amounts established, RSUs awarded and Shares distributed
under this Agreement shall be subject to any compensation recovery policy adopted by the Company to
comply with applicable law or to comport with good corporate governances practices as determined by
the Committee in its sole discretion, as such policy may be amended from time to time. The
Company&#146;s remedies and rights under this Section&nbsp;7 shall be in addition to any other remedies or
rights that the Company shall have, and any penalties or restrictions that may apply, under state
or federal law, or any employment or other agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.&nbsp;<U>Changes in Capital or Corporate Structure</U>. In the event of any change in the
outstanding shares of common stock of the Company by reason of a recapitalization,
reclassification, reorganization, stock split, reverse stock split, combination of shares, stock
dividend or similar transaction the Committee or Board, as applicable, shall proportionately
adjust, in a manner deemed equitable by the Committee or Board, as applicable, in its sole
discretion, the number of RSUs held by the Participant under this Agreement, in accordance with the
Plan.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.&nbsp;<U>Nontransferability</U>. A Participant&#146;s rights under this Agreement, RSUs awarded
under this Agreement and any rights and privileges pertaining to either of them, may not be
transferred, assigned, pledged or hypothecated in any manner, by operation of law or otherwise,
other than by will or by the laws of descent and distribution, and shall not be subject to
execution, attachment or similar process.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.&nbsp;<U>Non-Competition and Non-Solicitation Restrictive Covenants</U>. In order to protect
the Confidential Information (as defined below), customer relationships, and other legitimate
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">business interests of the Company, during the Participant&#146;s status as such under this
Agreement and for twelve (12)&nbsp;months following the termination of his or her status as a
Participant under this Agreement (<I>e.g.</I>, termination of employment with the Company) the Participant
will not, directly or indirectly, as an employee, agent, member, director, partner, consultant or
contractor or in any other individual or representative capacity: (a)&nbsp;solicit any Protected
Individual (as defined below) for other employment or engagement, induce or attempt to induce any
Protected Individual to terminate his or her employment, hire or engage any Protected Individual,
or otherwise interfere or attempt to interfere in any way in the relationship between the Company
and such Protected Individual; or (b)&nbsp;solicit or provide competitive products or services to any
Customer (as defined below) or Prospective Customer (as defined below) or otherwise interfere or
attempt to interfere in any way in the relationship between the Company and any Customer or
Prospective Customer. Because the Company&#146;s business is global in scope, the Participant
understands and agrees that these restrictions apply worldwide.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Participant agrees that in the event of a breach or threatened breach of any of the
covenants contained in this Section&nbsp;10, in addition to any other penalties or restrictions that may
apply under any employment agreement, state law, or otherwise the Participant shall forfeit, upon
written notice to such effect from the Company: (i)&nbsp;any rights to receive an Executive Performance
RSU Award under this Agreement, (ii)&nbsp;any and all RSUs awarded to him or her under the Plan and this
Agreement, including vested RSUs or Shares; (iii)&nbsp;any Shares acquired under this Award, and (iv)
any profit the Participant has realized on the vesting or sale of any Shares acquired under this
Award, which the Participant may be required to repay to the Company). The forfeiture provisions
of this Section&nbsp;10 shall continue to apply, in accordance with their terms, after the provisions of
any employment or other agreement between the Company and the Participant have lapsed. The
Participant consents and agrees that if the Participant violates or threatens to violate any
provisions of this Section&nbsp;10, the Company or its successors in interest shall be entitled, in
addition to any other remedies that they may have, including money damages, to an injunction to be
issued by a court of competent jurisdiction restraining the Participant from committing or
continuing any violation of this Section&nbsp;10. In the event that the Participant is found to have
breached any provision set forth in this Section&nbsp;10 or elsewhere in this Agreement, the time period
provided for in that provision shall be deemed tolled (<I>i.e., </I>it will not begin to run) for so long
as the Participant was in violation of that provision.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.&nbsp;<U>Binding Effect</U>. This Agreement shall inure to the benefit of and be binding upon
the parties hereto and their respective heirs, executors, administrators, successors and permitted
assigns.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.&nbsp;<U>Tax Consequences and Withholding</U>. Nothing contained herein shall be construed as
a promise, guarantee, or other representation by the Company of any particular tax effect nor shall
the Company be liable for any taxes, penalties, or other amounts incurred by the Participant. The
Company may withhold from any Shares that it is required to deliver under this Agreement the number
of Shares sufficient to satisfy applicable withholding requirements under any applicable federal,
state, local or foreign law, rule or regulation if any. The Participant acknowledges that he/she
has had sufficient opportunity to review with his/her own tax advisors the federal, state, local,
and foreign tax consequences of the transactions contemplated by this Agreement. The Participant
acknowledges he/she must rely solely on such advisors and not on
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">any statement or representations of the Company or any of its agents. The Participant
understands that he/she (and not the Company) shall be responsible for any tax liability that may
arise as a result of the transactions contemplated by the Agreement.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.&nbsp;<U>No Limitation on the Company&#146;s Rights</U>. The awarding of RSUs shall not in any way
affect the Company&#146;s right or power to make adjustments, reclassifications or changes in its
capital or business structure or to merge, consolidate, reincorporate, dissolve, liquidate or sell
or transfer all or any part of its business or assets. The terms and provisions of this Agreement
that provide for the Participant to forfeit Executive Performance RSUs in the event of a
termination for Cause, shall be in addition to any other remedies or rights that the Company shall
have, and any penalties or restrictions that may apply, under state or federal law, or any
employment or other agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.&nbsp;<U>Plan and Agreement Not a Contract of Employment or Service</U>. Neither the Plan nor
this Agreement is a contract of employment or service, and no terms of the Participant&#146;s employment
or service will be affected in any way by the Plan, this Agreement or related instruments, except
to the extent specifically expressed therein. Neither the Plan nor this Agreement will be
construed as conferring any legal rights to the Participant to continue in the employment or
service with the Company or any subsidiary or affiliate thereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.&nbsp;<U>Entire Agreement and Amendment</U>. This Agreement is the entire Agreement between
the parties to it, and all prior oral and written representations are merged in this Agreement.
This Agreement may be amended, modified or terminated only by written agreement between the
Participant and the Company, provided, that the Company may amend this Agreement without further
action by the Participant if such amendment is deemed by the Company to be advisable or necessary
to comply with Code Section&nbsp;409A. The headings in this Agreement are inserted for convenience and
identification only and are not intended to describe, interpret, define or limit the scope, extent,
or intent of this Agreement or any provision hereof. Each party has cooperated in the preparation
of this Agreement. As a result, this Agreement shall not be construed against any party on the
basis that the party was the draftsperson.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.&nbsp;<U>Notices</U>. Notices given pursuant to this Agreement shall be in writing and shall
be deemed received when personally delivered, or on the date of written confirmation of receipt by
(i)&nbsp;overnight carrier, (ii)&nbsp;facsimile, (iii)&nbsp;registered or certified mail, return receipt
requested, addressee only, postage prepaid, or (iv)&nbsp;such other method of delivery that provides a
written confirmation of delivery. Notice to the Company shall be directed to:
</DIV>
<DIV align="left" style="font-size: 10pt; margin-left: 9%; margin-top: 6pt">Fuel Tech, Inc.<BR>
27601 Bella Vista Parkway<BR>
Warrenville, Illinois 60555<BR>
Attention: Equity Administration Department, Attn: Assistant Controller
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company may change the person and/or address to which the Participant must give notice under
this Section&nbsp;16 by giving the Participant written notice of such change, in accordance with the
procedures described above. Notices to or with respect to the Participant will be directed to the
Participant, or to the Participant&#146;s executors, personal representatives or distributees, if the
Participant is deceased, or the assignees of the Participant, at the Participant&#146;s most recent home
address on the records of the Company.
</DIV>





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</DIV>

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




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.&nbsp;<U>Compliance with Laws</U>. No certificate for Shares distributable pursuant to the
Plan or this Agreement shall be issued and delivered unless the issuance of such certificate
complies with all applicable legal requirements including, without limitation, compliance with the
provisions of applicable state securities laws, the Securities Act of 1933, as amended from time to
time or any successor statute, the Exchange Act and the requirements of the exchanges on which
Shares may, at the time, be listed, and the provisions of any foreign securities laws or the rules
of foreign securities exchanges, where applicable.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18.&nbsp;<U>Failure to Enforce Not a Waiver</U>. The failure of the Company to enforce at any
time any provision of the Agreement shall in no way be construed to be a waiver of such provision
or of any other provision hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.&nbsp;<U>Incorporation of the Plan</U>. The Plan, as it exists on the date of the Agreement
and as amended from time to time, is hereby incorporated by reference and made a part hereof, and
the Executive Performance RSU Award and the Agreement shall be subject to all terms and conditions
of the Plan. In the event of any conflict between the provisions of the Agreement and the
provisions of the Plan, the terms of the Plan shall control, except as expressly stated otherwise.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20.&nbsp;<U>Governing Law</U>. The laws of the State of New York shall govern the validity,
interpretation, construction, and performance of this Agreement, without regard to the conflict of
laws principles thereof. Any dispute concerning the interpretation or effect of this Agreement or
of the Plan or the rights of the Participant under the Agreement (other than the Company&#146;s right to
seek an injunction under Section&nbsp;10 above) shall be resolved according to the arbitration rules
under Section&nbsp;14.5 of the Plan.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21.&nbsp;<U>Code Section&nbsp;409A</U>. It is intended that this Agreement and the Plan be designed
and operated within the requirements of Code Section&nbsp;409A (including any applicable exemptions)
and, in the event of any inconsistency between any provision of the Plan or this Agreement and
Section&nbsp;409A, the provisions of Section&nbsp;409A shall control. Any provision in the Plan or Agreement
that is determined to violate the requirements of Section&nbsp;409A shall be void and without effect.
Any provision that is required by Section&nbsp;409A to appear in the Plan or Agreement that is not
expressly set forth therein shall be deemed to be set forth therein, and the Plan shall be
administered in all respects as if such provision was expressly set forth herein. Any reference in
the Plan or Agreement to Section&nbsp;409A or a Treasury Regulation&nbsp;Section shall be deemed to include
any similar or successor provisions thereto.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Executive Performance RSU Award including each component RSU Award part thereof
is intended to be exempt from Code Section&nbsp;409A under the short-term deferral exception set
forth in Code Section or, in the alternative, to comply with the requirements of Section
409A.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Notwithstanding anything in the Plan or Agreement to the contrary, if the
Participant should become subject to the 6-month delay rule of Treasury Regulation&nbsp;Section
1.409A-1(c)(3)(v), then to the extent that the Executive Performance RSU award, in whole or
in part, is subject to Section&nbsp;409A and the Participant is a Specified Employee (as defined
below) as of the date of Separation from Service (as defined below), distributions with
respect to any RSUs that have been deferred may not be made
</DIV>

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

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



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">before the date that is six (6)&nbsp;months after the date of Separation from Service or, if
earlier, the date of the Participant&#146;s death.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22.&nbsp;<U>Counterparts</U>. This Agreement may be executed in one or more counterparts, all of
which together shall constitute but one Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23.&nbsp;<U>Definitions</U>. Where used in this Agreement, the following capitalized terms shall
have the following meanings:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) &#147;Cause&#148; shall have the meaning set forth in any employment, consulting, or other
written agreement between the Participant and the Company. In addition, if there is no
employment, consulting, or other written agreement between the Company and the Participant
or if such agreement does not define &#147;Cause&#148; to the extent provided for below then for
purposes of this Agreement, &#147;Cause&#148; both thereunder and under this Agreement shall mean, as
determined by the Committee in its sole judgment, conviction of the Participant under, or a
plea of guilty by the Participant to any state or federal felony charge (or the equivalent
thereof outside of the United States); any instance of fraud, embezzlement, self-dealing,
insider trading or similar malfeasance with respect to the Company or its affiliates
regardless of amount; substance or alcohol abuse; or other conduct for which dismissal has
been identified in the Company&#146;s Code of Business Ethics and Conduct or the applicable
Employee Handbook of the Company or its affiliates, or any successor manual, as a potential
disciplinary measure.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, the Participant&#146;s employment or service shall be deemed to have terminated
for Cause if, after the Participant&#146;s employment or service has terminated, facts and
circumstances are discovered that would have justified a termination for Cause. For
purposes of this Plan, no act or failure to act on the Participant&#146;s part shall be
considered &#147;willful&#148; unless it is done, or omitted to be done, by him or her in bad faith or
without reasonable belief that his or her action or omission was in the best interests of
the Company.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) &#147;Confidential Information&#148; means any information (whether or not specifically
labeled or identified as &#147;confidential&#148;), in any form or medium, that is disclosed to,
developed, or learned by the Participant during his/her status as a Participant, that
relates to the business, services, techniques, know-how, processes, methods, formulations,
investments, finances, operations, plans, research or development of the Company, and that
is not generally known outside of the Company. Confidential Information includes, but is
not limited to: the identity and information concerning the needs and preferences of
current, former, and prospective customers; performance, compensation, and other personnel
data concerning employees of the Company; business plans and strategies; plans for
recruiting and hiring new personnel; trade secrets; and pricing strategies and policies.
Confidential Information does not include the general skills, knowledge, and experience
gained during the Participant&#146;s status as a Participant and common to others in the industry
or information that is or becomes publicly available without any breach by the Participant
of this Agreement. the Participant agrees that at all times both during this Agreement and
after his/her status as a Participant under this Agreement terminates, the Participant will
not, without the Company&#146;s express written permission, use Confidential Information for the
Participant&#146;s own benefit or the benefit
</DIV>

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

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



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">of any other person or entity or disclose Confidential Information to any person other
than (i)&nbsp;in the case of disclosures made while the Participant maintained his/her status as
such hereunder, to persons to whom disclosure is required in connection with the performance
of the Participant&#146;s duties for the Company or (ii)&nbsp;any disclosure requested by a court or
regulatory authority with jurisdiction over the subject matter, in which event the
Participant agrees promptly to notify the Company in advance of and cooperate with the
Company in any efforts to suppress or limit such disclosure.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) &#147;Customer&#148; means any Person (as defined below) who or which is or was a customer of
the Company and with whom the Participant had business contact during his or her tenure as a
Participant hereunder or about whom the Participant received Confidential Information;
provided that a former customer will only be considered a &#147;Customer&#148; for twelve (12)&nbsp;months
after the last date on which the Company provided products or services (including, without
limitation, marketing services, as determined by the Company in its sole discretion) to such
Person.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) &#147;Determination Date&#148; means the actual date on which the Company awards RSUs to the
Participant under this Agreement after completion of the applicable Performance Period.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) &#147;Distribution Date&#148; means the date on which the Shares represented by vested RSUs
shall be deemed to be distributed to the Participant, which is the date on which a RSU
vests; provided that, the Distribution Date for a Participant who elects to defer the
distribution of his or her Shares beyond the date on which the applicable RSU vests will be
the earliest of (i)&nbsp;the date the Participant&#146;s status as a Participant under this Agreement
terminates, or (ii)&nbsp;the end of the deferral period specified by the Participant.
Additionally, if the Participant elects to defer the distribution of his Shares beyond the
date on which the applicable RSUs vests, but a Change in Control occurs after the applicable
RSUs vest, but before the elected deferral period expires, then, subject to the forfeiture
provisions of Sections&nbsp;7 and 10, the Participant&#146;s Distribution Date will occur on a date to
be determined by the Committee or Board, as applicable, immediately prior to the effective
time of the Change in Control.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) &#147;Good Reason&#148; shall have the meaning set forth in any employment, consulting, or
other written agreement between the Participant and the Company and, if there is no
employment, consulting, or other written agreement between the Company and the Participant
or if such agreement does not define &#147;Good Reason&#148; then for purposes of this Agreement,
&#147;Good Reason&#148; shall mean the occurrence of any of the following, without the Participant&#146;s
prior written consent:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Any material diminution in the Participant&#146;s assigned duties,
responsibilities and/or authority;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Any material reduction in the Participant&#146;s base compensation;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) The Company requires the Participant to be based at a location that is
more than thirty-five (35)&nbsp;miles further from the Participant&#146;s residence than the
location of the Participant&#146;s principal job location or office immediately prior to
</DIV>


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




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



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">the Change in Control (except for required travel on Company&#146;s business to an
extent substantially consistent with the Participant&#146;s then present business travel
obligations); or
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) Any other action or inaction that constitutes a material breach by the
Company of any agreement under which the Participant provides services to the
Company.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding the foregoing, Good Reason shall not exist unless the Participant gives
the Company written notice thereof within sixty (60)&nbsp;days after its occurrence and the
Company shall not have remedied the action or omission within thirty (30)&nbsp;days after such
written notice.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) &#147;Peer Group Companies&#148; means, as of the first day of the Performance Period, the
following companies:
</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="2%">&nbsp;</TD>
    <TD width="50%">&nbsp;</TD>
</TR>
<TR></TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:15px; text-indent:-0px">A123 Systems
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">FuelCell Energy</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:15px; text-indent:-0px">Active Power
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Met-Pro</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:15px; text-indent:-0px">American Superconductor
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Peerless Manufacturing</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:15px; text-indent:-0px">Amerigon
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Plug Power</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:15px; text-indent:-0px">Ballard Power Systems
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Power Integrations</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:15px; text-indent:-0px">Capstone Turbine
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Quantum Fuel Systems</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:15px; text-indent:-0px">Clean Energy Fuels
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">RenTech</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:15px; text-indent:-0px">Energy Conversion Devices
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Syntroleum</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:15px; text-indent:-0px">Evergreen Solar
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Fuel Systems Solutions</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the Performance Period, the Committee shall review the companies in the Peer
Group Companies and the Committee may remove any company from the category of Peer Group
Companies if the Committee determines, in good faith and subject to its sole discretion,
that such company should no longer be part of the Peer Group Companies due to merger,
acquisition, disposition, change in ownership, growth, contraction, or any other event or
circumstance affecting the Company or one of the Peer Group Companies, which the Committee
determines, in good faith and subject to its sole discretion, is appropriate.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) &#147;Performance Period&#148; means, for the Look-Back RSUs, the 2011 calendar year, and for
the Revenue Growth RSUs and the TSR Performance RSUs, the two-year period commencing January
1, 2011 and ending December&nbsp;31, 2012.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) &#147;Person&#148; means an individual or any type of business entity.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) &#147;Prospective Customer&#148; means any Person, other than a Customer, toward whom or
which the Company directed specific and material business development efforts, such as, but
not limited to, a detailed proposal or bid, and with whom the Participant had business
contact during his or her tenure as a Participant hereunder or about whom the Participant
received Confidential Information; provided that such Person will only be considered a
&#147;Prospective Customer&#148; for twelve (12)&nbsp;months after the last date on which such efforts were
undertaken by the Company.
</DIV>

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

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


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) &#147;Protected Individual&#148; means an individual who is or was an employee, consultant or
advisor of the Company and with whom the Participant had business contact at any time during
the Participant&#146;s employment or other retention by the Company or about whom the Participant
received Confidential Information ; provided that such a former employee, consultant or
advisor will only be considered a &#147;Protected Individual&#148; for six (6)&nbsp;months after the last
date he or she was employed by or provided services to the Company.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) &#147;Restricted Stock Unit&#148; or &#147;RSU&#148; means a notional account established pursuant to
an Award granted to a Participant under this Agreement, which is (i)&nbsp;valued solely by
reference to Shares, (ii)&nbsp;subject to restrictions specified in the Agreement, and (iii)
payable only in Shares.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) &#147;Revenue Growth&#148; means, with respect to the Company and each of the Peer Group
Companies, the Revenue Growth reported on Form 10-K for the Company and each of the Peer
Group Companies, respectively, coinciding with the Performance Period.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) &#147;Separation from Service&#148; shall have the meaning given in Code Section&nbsp;409A, and
references to termination of employment shall be deemed to refer to a Separation from
Service. In accordance with Treasury Regulation &#167;1.409A-1(h)(1)(ii) (or any similar or
successor provisions), a Separation from Service shall be deemed to occur, without
limitation, if the Company and the Participant reasonably anticipate that the level of bona
fide services the Participant will perform after a certain date (whether as an employee or
as an independent contractor) will permanently decrease to less than fifty percent (50%) of
the average level of bona fide services provided in the immediately preceding thirty-six
(36)&nbsp;months. All references in this Agreement to &#147;termination of employment&#148; or &#147;employment
termination&#148; or &#147;termination of status as a Participant under this Agreement&#148; shall be
deemed to refer to a Separation from Service.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) &#147;Specified Employee&#148; has the meaning given to that term in Code Section&nbsp;409A and
Treasury Regulation &#167;1.409A-1(i) (or any similar or successor provisions).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) &#147;Total Shareholder Return&#148; or &#147;TSR&#148; means, with respect to the Company and each of
the Peer Group Companies, the reporting company&#146;s total return to stockholders per share of
stock as reported on Form 10-K for the Company and each of the Peer Group Companies,
respectively, coinciding with the Performance Period.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT style="FONT-variant: SMALL-CAPS"><B>In Witness Whereof, </B></FONT>the parties have executed this Agreement effective as of the
Effective Date.
</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="35%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="14%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="13%">&nbsp;</TD>
</TR>
<TR></TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left"><FONT style="FONT-variant: SMALL-CAPS"><B>Fuel Tech, Inc.</B></FONT></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>
    <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">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By:</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">
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
<B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;P<FONT style="font-variant: SMALL-CAPS">articipant</FONT></B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
Its:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
</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">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


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

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

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Exhibit&nbsp;A<BR>
to<BR>
2011 Executive Performance RSU Award Agreement</B><BR>
<U><B>Equity Award Factors</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The determination and approval of proposed equity awards by the Company&#146;s Compensation and
Nominating Committee are based on a variety of factors that 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>historical equity awards, by employee, by year;</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>intrinsic values for each equity award, or, when applicable, the fair value of each
equity award using the Black-Scholes option pricing model;</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 number of equity award units available for issuance under the Plan;</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>supervisor recommendations for employee equity awards;</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 estimate of expected intrinsic value (<I>e.g., </I>equity award compensation expense) of
the aggregate equity award;</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>Fuel Tech&#146;s financial performance in light of market conditions and operational
considerations, which may be quantitative, qualitative or both;</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>achievement of individual or company operational 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="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 individual 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>individual contribution to a strategic goal;</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>teamwork;</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>leadership accomplishments; 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>employee job level</TD>
</TR>

</TABLE>
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->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" style="font-size: 10pt; margin-top: 18pt"><U><B>EXECUTIVE PERFORMANCE RSU DEFERRAL ELECTION FORM</B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This Executive Performance RSU Deferral Election Form (&#147;Deferral Election Form&#148;) is entered into by
and between Fuel Tech, Inc. (the &#147;Company&#148;) and &#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95; ( &#147;the Participant&#148; or &#147;you&#148;),
who became eligible to receive an award of Look-Back RSUs, Revenue Growth RSUs and/or TSR
Performance RSUs under the Fuel Tech, Inc. Incentive Plan, as amended (the &#147;Plan&#148;) and a 2011
Executive Performance RSU Award Agreement (the &#147;Agreement&#148;), which Agreement was legally effective
&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;, 2011. The provisions of the Plan and the Agreement are incorporated herein by
reference in their entirety and supersede any conflicting provisions contained in this Deferral
Election Form. Neither this Deferral Election Form nor the Plan or the Agreement shall be
construed as giving the Participant any right to continue to be employed by or perform services for
the Company or any subsidiary or affiliate thereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>1. </B><U><B>Deferral of RSUs</B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">You may file a separate deferral election with respect to each form of RSUs you may be awarded
under the Agreement; that is, a deferral election for any Look-Back RSUs, a deferral election for
any Revenue Growth RSUs, and/or a deferral election for any TSR Performance RSUs.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Any deferral period must be expressed as a number of whole years, not less than five (5)&nbsp;or more
than ten (10), beginning on the Determination Date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Deferral election must be made no earlier than the Determination Date for the form of RSUs involved
and no later than thirty (30)&nbsp;days after the Determination Date applicable to the form a RSUs you
are electing to defer</B>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Any such deferral must apply to receipt of all Shares underlying that form of RSU award</B>; for
example, if you were to elect a deferral period of seven (7)&nbsp;years for any Revenue Growth RSUs,
this would result in you receiving Shares underlying the entire Revenue Growth RSUs award seven (7)
years from the Determination Date regardless of the fact that the Revenue Growth RSUs may have
vested at differing times.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>If no deferral period is specified on the Deferral Election Form or if the Company does not receive
from you, a signed and dated Deferral Election Form within the required election period applicable
to any form of RSUs, Shares underlying those RSUs will be issued as described in the Agreement as
soon as practicable upon vesting of the RSUs.</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"><FONT style="font-family: Wingdings">&#111;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD> No deferral. I wish to receive Shares upon vesting of each installment of RSUs.</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"><FONT style="font-family: Wingdings">&#111;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD> I wish to defer receipt of <U>all</U> Shares underlying any Look-Back RSUs until &#95;&#95;&#95;&#95;
years (minimum of 5) after the Determination Date.</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"><FONT style="font-family: Wingdings">&#111;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>I wish to defer receipt of <U>all</U> Shares underlying any Revenue Growth RSUs until
&#95;&#95;&#95;&#95; years (minimum of 5) after the Determination Date.</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"><FONT style="font-family: Wingdings">&#111;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD> I wish to defer receipt of <U>all</U> Shares underlying any TSR Performance RSUs until
&#95;&#95;&#95;&#95; years (minimum of 5) after the Determination Date.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>2. </B><U><B>Deferral Election Effective Date, Revision of Election During Election Period</B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This Deferral Election Form must be received by the Company no later than thirty (30)&nbsp;days after
the Determination Date applicable to the form a RSUs you are electing to defer and will become
irrevocable on such date. You may revise this Deferral Election with respect to the deferral
period no later than this due date, by contacting the Company&#146;s Equity Administration Department,
Attn: Assistant Controller in writing in accordance with the Notice provision set forth in Section
16 of the Agreement.
</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="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="50%">&nbsp;</TD>
</TR>
<TR></TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
<B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Participant</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Date:<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 201<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->19<!-- /Folio -->
</DIV>



</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>3
<FILENAME>y91195exv31w1.htm
<DESCRIPTION>EX-31.1
<TEXT>
<HTML>
<HEAD>
<TITLE>exv31w1</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->

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


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Exhibit&nbsp;31.1</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">I, Douglas G. Bailey, certify that:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">1. I have reviewed this quarterly report on Form 10-Q of Fuel Tech, Inc.;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">2. Based on my knowledge, this report does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to the period covered by this
report;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">3. Based on my knowledge, the financial statements, and other financial information included in
this report, fairly present in all material respects the financial condition, results of operations
and cash flows of the registrant as of, and for, the periods presented in this report;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">4. The registrant&#146;s other certifying officers and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules&nbsp;13a-15 (e)&nbsp;and
15d-15 (e)) and internal control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and have:
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) designed such disclosure controls and procedures, or caused such disclosure controls and
procedures to be designed under our supervision, to ensure that material information relating to
the registrant, including its consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being prepared;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) designed such internal control over financial reporting, or caused such internal control
over financial reporting to be designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) evaluated the effectiveness of the registrant&#146;s disclosure controls and procedures and
presented in this report our conclusions about the effectiveness of the disclosure controls and
procedures, as of the end of the period covered by this report based on such evaluation; and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d) disclosed in this report any change in the registrant&#146;s internal control over financial
reporting that occurred during the registrant&#146;s most recent fiscal quarter (the registrant&#146;s fourth
fiscal quarter in the case of an annual report) that has materially affected, or is reasonably
likely to materially affect, the registrant&#146;s internal control over financial reporting; and
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">5. The registrant&#146;s other certifying officers and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the registrant&#146;s auditors and the audit
committee of registrant&#146;s board of directors (or persons performing the equivalent functions):
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) all significant deficiencies and material weaknesses in the design or operation of internal
control over financial reporting which are reasonably likely to adversely affect the registrant&#146;s
ability to record, process, summarize and report financial information; and
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;b) any fraud, whether or not material, that involves management or other employees who have a
significant role in the registrant&#146;s internal control over financial reporting.
</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="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR></TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Date: May&nbsp;9, 2011
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Douglas G. Bailey
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
</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">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Douglas G. Bailey</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">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">President and Chief Executive Officer</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">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">(Principal 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 -->&nbsp;<!-- /Folio -->
</DIV>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>4
<FILENAME>y91195exv31w2.htm
<DESCRIPTION>EX-31.2
<TEXT>
<HTML>
<HEAD>
<TITLE>exv31w2</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->

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


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Exhibit&nbsp;31.2</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">I, David S. Collins, certify that:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">1. I have reviewed this quarterly report on Form 10-Q of Fuel Tech, Inc.;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">2. Based on my knowledge, this report does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to the period covered by this
report;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">3. Based on my knowledge, the financial statements, and other financial information included in
this report, fairly present in all material respects the financial condition, results of operations
and cash flows of the registrant as of, and for, the periods presented in this report;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">4. The registrant&#146;s other certifying officers and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules&nbsp;13a-15 (e)&nbsp;and
15d-15 (e)) and internal control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and have:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that material information
relating to the registrant, including its consolidated subsidiaries, is made known to us by others
within those entities, particularly during the period in which this report is being prepared;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) designed such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted accounting principles;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) evaluated the effectiveness of the registrant&#146;s disclosure controls and
procedures and presented in this report our conclusions about the effectiveness of the disclosure
controls and procedures, as of the end of the period covered by this report based on such
evaluation; and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d) disclosed in this report any change in the registrant&#146;s internal control over
financial reporting that occurred during the registrant&#146;s most recent fiscal quarter (the
registrant&#146;s fourth fiscal quarter in the case of an annual report) that has materially affected,
or is reasonably likely to materially affect, the registrant&#146;s internal control over financial
reporting; and
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">5. The registrant&#146;s other certifying officers and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the registrant&#146;s auditors and the audit
committee of registrant&#146;s board of directors (or persons performing the equivalent functions):
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) all significant deficiencies and material weaknesses in the design or operation of internal
control over financial reporting which are reasonably likely to adversely affect the registrant&#146;s
ability to record, process, summarize and report financial information; and
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;b) any fraud, whether or not material, that involves management or other employees
who have a significant role
in the registrant&#146;s internal control over financial reporting.
</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="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Date: May&nbsp;9, 2011
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ David S. Collins
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
</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">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">David S. Collins</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">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Senior Vice President and Chief Financial Officer</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">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">(Principal Financial 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 -->&nbsp;<!-- /Folio -->
</DIV>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32
<SEQUENCE>5
<FILENAME>y91195exv32.htm
<DESCRIPTION>EX-32
<TEXT>
<HTML>
<HEAD>
<TITLE>exv32</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->

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


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Exhibit&nbsp;32</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned in their capacities as Chief Executive Officer and Principal Financial Officer
of the Registrant do hereby certify that:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;this report fully complies with the requirements of Section 13(a) or 15(d) of the
Securities Exchange Act of 1934; and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;information contained in the report fairly presents, in all material respects, the
financial condition and results of operations of the Registrant as of, and for, the periods
presented in the report.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
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    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR></TR>
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<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Date: May&nbsp;9, 2011
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Douglas G. Bailey
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
</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">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Douglas G. Bailey</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">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">President and Chief Executive Officer</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">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">(Principal Executive 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>
    <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">Date: May&nbsp;9, 2011
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ David S. Collins
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
</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">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">David S. Collins</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">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>Senior Vice President, Treasurer and Chief Financial Officer</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">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">(Principal Financial Officer)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Pursuant to Section&nbsp;906 of the Sarbanes-Oxley Act of 2002 (the &#147;Act&#148;) this certification
accompanies the Report and shall not, except to the extent required by the Act, be deemed filed by
the Registrant for purposes of Section&nbsp;18 of the Securities Exchange Act of 1934, as amended.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">A signed original of this written statement required by Section&nbsp;906, or other document
authenticating, acknowledging or otherwise adopting the signature that appears in typed form within
the electronic version of this written statement required by Section&nbsp;906, has been provided to Fuel
Tech, Inc. and will be retained by Fuel Tech, Inc. and furnished to the Securities and Exchange
Commission or its staff upon request.
</DIV>



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