Compensation Committee Charter
The purpose of the Compensation Committee (the “Committee“) of the Board of Directors (the “Board“) of Fuel Tech, Inc. (the “Company“) is to review and, as applicable, approve executive compensation, short-term incentive award programs and long-term incentive award programs including equity-based awards, and adoption or revision of benefit, welfare, and executive compensation plans for the Company in accordance with provisions of the charter set forth below (“Charter“).
The Committee shall consist of no fewer than three members of the Board. Each member of the Committee shall meet the independence requirements of the Nasdaq Stock Market, Inc. (“Nasdaq”) and the U.S. Securities and Exchange Commission (“SEC”) that from time to time are in effect. The members of the Committee shall be appointed and replaced by the Board, shall be independent of the Company and its subsidiaries and shall have no relationship to the Company or its subsidiaries or the Committee’s consultants counsel or advisers (as defined in Line Item 8 in the “Responsibilities and Duties” section below) that may interfere with the exercise of their independence. Appointment to the Committee shall not signify that the appointee has a higher degree of liability than other directors of the Board. The Board will designate one member of the Committee to serve as the Chair of the Committee.
At all meetings of the Committee, one-half of the members of the Committee, but in no event less than two members of the Committee, shall constitute a quorum. As the Chair deems necessary, the Chair of the Committee may request members of the Company’s management, non-Committee member directors, internal or external counsel, and expert advisors retained by the Committee to be present at meetings.
The Committee shall meet as frequently as the Chair of the Committee deems advisable to fulfill the Committee’s responsibilities but not less often than twice per year. The Committee will report its actions to the next following meeting of the Board. The Committee will cause minutes to be kept of its meetings, copies of which will be furnished to Committee and other Board members. Except where otherwise expressly provided in the Company’s governing documents, the Committee shall be governed by the same rules regarding meetings as are applicable to the Board. The Committee may form and delegate authority to subcommittees when appropriate. The Committee shall annually review this Charter and recommend revisions to the Board, where appropriate. In addition to the responsibilities and duties enumerated below, the Committee shall perform such other duties as may be required by law, the Company’s governing documents, or the resolutions of the Board.
The Committee shall have the resources and authority necessary to discharge its responsibilities, including the authority to obtain, at the Company’s expense, advice, reports or opinions from internal or external counsel and expert advisors including compensation consultants.
Responsibilities and Duties:
- Review in advance and recommend to the Board all salary actions and bonuses for those who are Vice President level and above officers of the Company or new or incumbent employees that have base salaries in excess of $175,000 per year.
- Review and approve in advance all grants of stock options or other equity-based awards and all performance awards exceeding 10% of base salary.
- Review and approve in advance all significant changes or revisions in benefit, welfare and executive compensation plans and all profit sharing contributions to benefit plans.
- Review and approve in advance the annual salary budget, percentage increases therein, all incentive plans, and all employee sales commission plans (including intra-calendar year changes to sales commission plans that are not expressly provided for in the already approved plans and, in the aggregate, would exceed $125,000 in additional commission expense to the Company).
- Annually review and approve a Committee report for inclusion in the Company’s proxy statement.
- Periodically review and make recommendations to the Board regarding non-Company employee Board director compensation matters.
- Ensure that the Company’s Chief Executive Officer (“CEO”) is not present during voting or decisional deliberations by the Committee regarding CEO compensation.
- The earlier of annually or before selecting consultants, legal counsel (except for in-house legal counsel) or advisers whose role is not limited to activities for which no disclosure would be required under Item 407(e)(3)(iii) of Regulation S-K, the Committee shall consider potential conflicts of interest by taking into consideration the following factors:
- The provision of other services to the Company by the firm that employs the compensation consultant, legal counsel or other adviser (the “firm”);
- The amount of fees received from the Company by the firm as a percentage of total firm revenue;
- The firm’s policies and procedures designed to prevent conflicts of interest;
- Any business or personal relationship of the compensation consultant, legal counsel or other adviser with a member of the committee;
- Any Company stock owned by the consultant, legal counsel or adviser; and
- Any business or personal relationship of the consultant, counsel or adviser of the firm with an executive officer of the Company.
Revised October 4, 2013