FUEL TECH, INC. EMPLOYMENT AGREEMENT - GENERAL

Exhibit 10.1 - Employment Agreement for John P. Graham

FUEL TECH, INC.

EMPLOYMENT AGREEMENT - GENERAL

Agreement made as of the  30^th day of April, 2008 between Fuel Tech, Inc., a Delaware Corporation (the "Company") with its principal place of business at 512 Kingsland Drive, Batavia, IL 60510-2299, and John P. Graham of 1330 Stonegate Road, Algonquin IL 60102 ("Employee").

In consideration of the Company's employment of Employee and the compensation to be paid to the Employee, the Company and the Employee agree, as follows:

1. Employment Status. (a) Employment with the Company is contingent on Employee signing this agreement, subject to the provisions regarding legal advice and rescission in Section 13 below. Employee shall also be entitled to participate in such benefits as the Company provides to its employees generally.

No statement in this Employment Agreement shall be construed to grant any Employee an employment contract of fixed duration. Nothing contained in any provision of this Employment Agreement shall be interpreted as altering the at-will employment relationship or as a limitation, either express or implied, on the Company’s right to discipline or discharge an Employee. Either the Employee or the Company may terminate the employment relationship at any time, for any reason, with or without notice and with or without cause.

 (b) Position. The employee is employed initially as a Senior Vice President until June 1, 2008 when he shall be employed as Senior Vice President, Treasurer and Chief Financial Officer.

(c) Base Salary. The employee shall initially have a base salary of $300,000 prorated from commencement of employment and payable in two monthly installments.

(d) Annual Bonus. The Employee shall be entitled to participate in the Company’s Corporate Incentive Plan (the “CIP Plan”) with an initial Target Participation Percentage of 40% of base salary, subject to the terms of each annual plan as approved by the Compensation and Nominating Committee of the Board of Directors of the Company.

(e) Stock Options. You shall receive a non-qualified stock option award under the Company’s Incentive Plan (the “Plan”) to acquire 50,000 Company common shares effective as of, and at an exercise price determined at the fair market value under the Plan on the date of your commencement of employment, or, if such date shall be in a closed period prior to the release of Company earnings, then on the third day following the Company’s earnings release thereafter.

(f) Vacation. Employee shall be entitled to four weeks (20 days) of vacation commencing in the first year of employment.

(g) Benefit Plans. Employee shall be entitled to participate in the Company’s 401(k) and Profit Sharing Plan and such other benefit and health and welfare plans as are extended by the Company to employees generally.

(h) Salary Continuation/Change of Control. If Employee’s employment is involuntarily terminated not for cause within a year after an event of “Change of Control” as defined in the Plan, Employee shall be entitled to continuation of base salary and benefits for up to one year after such termination or until Employee shall attain comparable employment with an equivalent salary. “Benefits” for this purpose shall include Medical and Dental coverage, 401(k) participation and other plans and programs in which the officers of the Company generally are entitled to participate, and, with respect to CIP payouts, such amount for a prior year as is earned but unpaid under the terms of that prior year plan and, for a current year, such amount as the Compensation Committee of the Board of Directors of the Company, or any successor company, shall approve. “Cause” shall mean conviction of Employee under or a plea of guilty by Employee to, any state or Federal felony charge (or the equivalent thereof outside the United States) ; any instance of fraud, embezzlement, self-dealing, insider trading or similar malfeasance with respect to the Company regardless of amount; substance or alcohol abuse; or other conduct for which dismissal has been identified in the Fuel Tech, Inc. Employee Handbook, or any successor manual, or the Company’s Code of Business Conduct and Ethics, all as from time to time in effect, as a potential disciplinary measure.

2. Best Efforts. The Employee while employed by the Company shall devote all of Employee's best efforts, and all of Employee's time and attention to the interests of the Company during reasonable business hours and shall faithfully perform all duties from time to time assigned to Employee and shall conform to all of the Company's requirements for proper business conduct.

3. Disclosure. Employee shall disclose promptly and completely to the Company in writing, and shall respond to all inquiries made by the Company whether during or after employment about, all inventions, programs, processes, software, data, formulae, trade secrets, ideas, concepts, discoveries and developments ("Developments"), whether patentable or not, which during employment the Empl