MFRI INC (Form: 8-K, Received: 03/20/2017 09:32:31)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

________________

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): March 17, 2017

PERMA-PIPE INTERNATIONAL HOLDINGS, INC.

(exact name of registrant as specified in charter)



Delaware (State or other jurisdiction of incorporation)	0-18370 (Commission File Number)	36-3922969 (IRS Employer Identification No.)

6410 West Howard Street, Niles, Illinois 60714

(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (847) 966-1000

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):



o	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)



o	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)



o	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))



o	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

In order to formally document his current compensation and the terms of his continued employment, effective March 17, 2017, Karl J. Schmidt, Vice President and Chief Financial Officer, and Perma-Pipe International Holdings, Inc. (formerly known as MFRI, Inc.) (the "Company") entered into an employment agreement (the "Employment Agreement"), pursuant to which Mr. Schmidt will receive compensation of $326,800 per year and will be eligible for incentive compensation determined in accordance with normal Company practices. Mr. Schmidt will also receive an annual cash bonus opportunity with a target incentive set at 55% of his base salary and restricted stock with a target annual award of 80% of his base salary vesting over three years. Mr. Schmidt will participate in all standard Company benefits and is also entitled to up to one year’s base salary and short-term incentive compensation and continuation of benefits if his employment is terminated under certain conditions. The Employment Agreement has a one-year term and automatically renews for successive one-year terms. The Employment Agreement is filed as Exhibit 10.1 to this Current Report on Form 8-K, and the foregoing description of the Employment Agreement is qualified in its entirety by reference to the full text of this agreement, which is incorporated herein by reference.

Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

On March 17, 2017, (1) the Company filed a Certificate of Amendment to the Certificate of Incorporation of the Company with the Secretary of State of the State of Delaware to change the name of the Company from MFRI, Inc. to Perma-Pipe International Holdings, Inc. effective 12:01 a.m. on March 20, 2017; and (2) the Board amended and restated the Second Amended and Restated By-laws of the Company to reflect the name change of the Company and make certain capitalization and spelling conventions consistent throughout the document. The text of the Certificate of Amendment and the Third Amended and Restated By-laws are filed as Exhibits 3.1 and 3.2, respectively, to this report and incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits. The following Exhibits are included with this Current Report on Form 8-K.



Exhibit Number		Description
3.1		Certificate of Amendment to Certificate of Incorporation of Perma-Pipe International Holdings, Inc.
3.2		Third Amended and Restated By-laws of Perma-Pipe International Holdings, Inc.
10.1		Employment Agreement dated as of March 17, 2017 by and between Karl J. Schmidt and Perma-Pipe International Holdings, Inc.

SIGNATURES

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, hereunto duly authorized.



Date: March 20, 2017		Perma-Pipe International Holdings, Inc. (Registrant) By: /s/ Karl J. Schmidt
		Karl J. Schmidt
		Vice President and Chief Financial Officer

EXHIBIT INDEX



Exhibit No.		Description
3.1		Certificate of Amendment to Certificate of Incorporation of Perma-Pipe International Holdings, Inc.
3.2		Third Amended and Restated By-laws of Perma-Pipe International Holdings, Inc.
10.1		Employment Agreement dated as of March 17, 2017 by and between Karl J. Schmidt and Perma-Pipe International Holdings, Inc.

Exhibit 3.1

Certificate of Amendment to Certificate of Incorporation of Perma-Pipe International Holdings, Inc.

( Under Section 242 of the Delaware General Corporation Law)

It is hereby certified that:

1. The name of the corporation is MFRI, Inc. (the "Corporation").

2. The Certificate of Incorporation of the Corporation was filed with the Secretary of State on October 12, 1993.

3. A Certificate of Amendment of Certificate of Incorporation of the Corporation was filed with the Secretary of State on January 26, 1994.

4. A Certificate of Merger of the Corporation was filed with the Secretary of State on December 30, 1996.

5. A Certificate of Amendment to Certificate of Incorporation of the Corporation was filed with the Secretary of State on June 30, 2000.

6. The Certificate of Incorporation of the Corporation is hereby amended by striking out Article FIRST thereof and by substituting in lieu of said Article the following new Article:

"FIRST: The name of the corporation is Perma-Pipe International Holdings, Inc. (hereinafter the "Corporation")."

7. The amendment will be effective at 12:01 a.m. Eastern Time on March 20, 2017.

8. The amendment of the Certificate of Incorporation herein certified has been duly adopted, pursuant to the provisions of Sections 141(f) and 242 of the General Corporation Law of the State of Delaware, by resolution of its Board of Directors.

Dated: March 17, 2017

By : /s/ Karl J. Schmidt

Name: Karl J. Schmidt

Title: Vice President and Chief Financial Officer

Exhibit 3.2

Third Amended and Restated By-laws of Perma-Pipe International Holdings, Inc.

ARTICLE I

OFFICES

SECTION 1. REGISTERED OFFICE. The registered office shall be established and maintained at the office of the Prentice‑Hall Corporation Systems, Inc., in the City of Dover, in the County of Kent, in the State of Delaware, and said corporation shall be the registered agent of this corporation in charge thereof.

SECTION 2. OTHER OFFICES. The corporation may have other offices, either within or without the State of Delaware, at such place or places as the Board of Directors may from time to time appoint or the business of the corporation may require.

ARTICLE II

MEETINGS OF STOCKHOLDERS

SECTION 1. BUSINESS. No business may be transacted at an annual meeting or special meeting of stockholders, other than business that is either (a) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors (or any duly authorized committee thereof), (b) otherwise properly brought before the meeting by or at the direction of the Board of Directors (or any duly authorized committee thereof) or (c) otherwise properly brought before the meeting by any stockholder of record on the date of the giving of the notice provided for in Section 9 of this Article II and on the record date for the determination of stockholders entitled to vote at such meeting.

SECTION 2. ANNUAL MEETINGS. Annual meetings of stockholders for the election of directors and for such other business as may be stated in the notice of the meeting, shall be held at such place, either within or without the State of Delaware, and at such time and date as the Board of Directors, by resolution, shall determine and as set forth in the notice of the meeting. If the date of the annual meeting shall fall upon a legal holiday, the meeting shall be held on the next succeeding business day. At each annual meeting, the stockholders entitled to vote shall elect a Board of Directors and they may transact such other corporate business as shall be stated in the notice of the meeting.

SECTION 3. OTHER MEETINGS. Meetings of stockholders for any purpose other than the election of directors may be held at such time and place, within or without the State of Delaware, as shall be stated in the notice of the meeting.

SECTION 4. VOTING. Each stockholder entitled to vote in accordance with the terms of the Certificate of Incorporation and in accordance with the provisions of these By‑Laws shall be entitled to one vote, in person or by proxy, for each share of stock entitled to vote held by such stockholder, but no proxy shall be voted after three years from its date unless such proxy provides for a longer period. Upon the demand of any stockholder, the vote for directors and the vote upon any question before the meeting, shall be by ballot. All elections for directors shall be decided by plurality vote; all other questions shall be elected by majority vote except as otherwise provided by the Certificate of Incorporation or the laws of the State of Delaware. A complete list of the stockholders entitled to vote at the ensuing election, arranged in alphabetical order, with the address of each, and the number of shares held by each, shall be open to the examination of

any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.

SECTION 5. QUORUM. Except as otherwise required by Law, by the Certificate of Incorporation or by these By‑Laws, the presence, in person or by proxy, of stockholders holding a majority of the stock of the corporation entitled to vote shall constitute a quorum at all meetings of the stockholders. At any adjourned meeting at which the requisite amount of stock entitled to vote shall be represented, any business may be transacted which might have been transacted at the meeting as originally noticed; but only those stockholders entitled to vote at the meeting as originally noticed shall be entitled to vote at any adjournment or adjournments thereof.

SECTION 6. SPECIAL MEETINGS. Special meetings of the stockholders may be held whenever and wherever called for by the Chairperson of the Board of Directors, the President or the Board of Directors, or by the written demand of the stockholders of record of no fewer than one‑tenth of all the shares of Common Stock entitled to vote at the meeting. The business which may be conducted at any such special meeting will be confined to the purposes stated in the notice thereof, including the election and/or removal of directors. Unless requested by the stockholders entitled to cast a majority of all of the votes entitled to be cast at a meeting called at the request of stockholders of this corporation for such purpose, a special meeting shall not be called by the Board of Directors to consider any matter which is substantially the same as a matter voted on at any special meeting of the stockholders held during the preceding 12 months unless such matter received the affirmative vote of at least one‑third of the shares of common stock of the corporation eligible to vote at such meeting.

SECTION 7. NOTICE OF MEETINGS. Written notice, stating the place, date and time of the meeting, and the general nature of the business to be considered, shall be given to each stockholder entitled to vote thereat at his or her address as it appears on the records of the corporation, not less than ten nor more than sixty days before the date of the meeting. No business other than that stated in the notice shall be transacted at any meeting without the unanimous consent of all the stockholders entitled to vote thereat.

SECTION 8. ACTION WITHOUT MEETING. Unless otherwise provided by the Certificate of Incorporation, any action required to be taken at any annual or special meeting of stockholders, or any action which may be taken at any annual or special meeting, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.

SECTION 9. NOMINATIONS AND STOCKHOLDER BUSINESS.

(a) Stockholder Proposals Relating to Nominations for and Election of Directors.

(i) Nominations by a stockholder of candidates for election to the Board of Directors by stockholders at any annual or special meeting of stockholders or upon written consent without a meeting may be made only if the stockholder making the nomination or the stockholders executing the consent comply with the procedures set forth in this Section 9

(a), and any candidate proposed by a stockholder not nominated in accordance with such provisions shall not be considered or acted upon at such meeting of stockholders. If the provisions of this Section 9 differ from any other provisions of these By-laws, the provisions of this Section 9 shall govern and control.

(ii) A proposal by a stockholder for the nomination of a candidate for election by stockholders as a director at any annual or special meeting of stockholders at which directors are to be elected or upon written consent without a meeting may be made only by notice in writing, delivered in person or by first class United States mail postage prepaid or by reputable overnight delivery service, to the Board of Directors of the corporation to the attention of the Secretary of the corporation at the principal office of the corporation, within the time limits specified herein.

(iii) In the case of an annual meeting of stockholders, any such written proposal of nomination must be received by the Board of Directors not less than 90 calendar days nor more than 120 calendar days before the first anniversary of the date on which the corporation held its annual meeting in the immediately preceding year; provided, however, that in the case of an annual meeting of stockholders that is called for a date that is not within 30 calendar days before or after the first anniversary date of the annual meeting of stockholders in the immediately preceding year, any such written proposal of nomination must be received by the Board of Directors not less than five business days after the date the corporation shall have mailed notice to its stockholders that an annual meeting of stockholders will be held or shall have issued a press release, filed a periodic report with the Securities and Exchange Commission or otherwise publicly disseminated notice that an annual meeting of stockholders will be held.

(iv) In the case of a special meeting of stockholders, any such written proposal of nomination must be received by the Board of Directors not less than five business days after the earlier of the date that the corporation shall have mailed notice to its stockholders that a special meeting of stockholders will be held or shall have issued a press release, filed a periodic report with the Securities and Exchange Commission or otherwise publicly disseminated notice that a special meeting of stockholders will be held.

(v) In the case of stockholder action by written consent with respect to the election by stockholders of a person or persons as director, the stockholder seeking to have the stockholders elect such person or persons by written consent shall, by written notice to the Board of Directors, set forth the information prescribed in clause (vi) of this Section (a) and request the Board of Directors to fix a record date for determining stockholders entitled to consent to corporate action in writing without a meeting. The Board of Directors shall promptly, but in no event later than the tenth day after the date on which such notice is received, adopt a resolution fixing such record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which date shall not be more than ten days after the date upon which the resolution fixing the record date is adopted by the Board of Directors. If no record date is fixed by the Board of Directors within such time period, such record date shall be determined in accordance with the provisions of Section 213(b) of the Delaware General Corporation Law, or any successor provision.

(vi) A written proposal of nomination provided pursuant to this Section (a) shall set forth as to each person whom the stockholder proposes to nominate for election as a director

and as to the stockholders giving the proposal (the "Nominating Stockholder") and each Stockholder Associated Person, if any (which, for purposes of these By-laws, shall mean (i) any person acting in concert, directly or indirectly, with such stockholder and (ii) any person controlling, controlled by, or under common control with such stockholder or any Stockholder Associated Person): (A) all information relating to such person that would be required to be disclosed in a proxy statement or otherwise in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the rules and regulations promulgated thereunder, (B) the name and address of such person (C) the class or series and number of shares of capital stock of the corporation which are owned beneficially or of record by such person, (D) the nominee holder for, and number of, shares beneficially owned but not owned of record by such person, (E) whether and the extent to which any hedging or other transaction or series of transactions has been entered into by or on behalf of, or any other agreement, arrangement or understanding (including, but not limited to, any derivative, swap or short positions, profit interests, options or borrowed or loaned shares) has been made, the intent or effect of which is to mitigate loss to or manage risk or benefit of share price changes for, or to increase or decrease the voting power of, such person with respect to any share of stock of the corporation (F) to the extent known by the stockholder making such proposal, the name and address of any other stockholder supporting the nominee for elections as a director on the date of such stockholder’s proposal, (G) a description of all arrangements or understandings between or among such persons pursuant to which the nomination(s) are to be made by the stockholder and any relationship between or among the stockholder making the proposal and any Stockholder Associated Person, on the one hand, and each proposed nominee, on the other hand, (H) whether such person intends to solicit proxies in connection with the nomination(s), and (I) a representation that the stockholder intends to appear in person or by proxy at the meeting to nominate the person named in the proposal. The proposal must be accompanied by the written consent of each person so proposed to serve as a director if nominated and elected as a director. Each proposed nominee shall furnish such other information as may be reasonably required by the corporation to determine the eligibility of such proposed nominee to serve as an independent director (as defined in Rule 5605 of the NASDAQ Stock Market Rules, any NASDAQ interpretations thereof, and any successor rules) of the corporation or that could be material to a reasonable stockholder’s understanding of the independence, or lack thereof, of such nominee, and shall represent in writing that he or she does not, and will not, have any undisclosed voting commitments or other arrangements with respect to his or her actions as a director of the corporation.

(vii) If a written proposal of nomination submitted to the Board of Directors fails, in the reasonable judgment of the Board of Directors or a nominating committee established by it, to contain the information specified in clause (vi) of this Section (a) or is otherwise deficient, the Board of Directors shall, as promptly as is practicable under the circumstances, provide written notice to the stockholder(s) making such nomination of such failure or deficiency in the written proposal of nomination and such nominating stockholder shall have five business days from receipt of such notice to submit a revised written proposal of nomination that corrects such failure or deficiency in all material respects.

(b) Stockholder Proposals Relating to Matters Other Than Nominations for and Elections of Directors.

(i) stockholder of the corporation may bring a matter (other than a nomination of a candidate for election as a director, which is covered by Section (a)) (a "Stockholder Matter") before a meeting of stockholders or for action by written consent without a meeting only if such Stockholder Matter is a proper matter for stockholder action and such stockholder shall have provided notice in writing, delivered in person or by first class United States mail postage prepaid or by reputable overnight delivery service, to the Board of Directors of the corporation to the attention of the Secretary of the corporation at the principal office of the corporation, within the time limits specified in this Section (b); provided, however, that a proposal submitted by a stockholder for inclusion in the corporation's proxy statement for an annual meeting that is appropriate for inclusion therein and otherwise complies with the provisions of Rule 14a‑8 under the Exchange Act (including timeliness) shall be deemed to have also been submitted on a timely basis pursuant to this Section (b).

(ii) In the case of an annual meeting of stockholders, any such written notice of a proposal of a Stockholder Matter must be received by the Board of Directors not less than 90 calendar days nor more than 120 calendar days before the first anniversary of the date on which the corporation held its annual meeting of stockholders in the immediately preceding year; provided, however, that in the case of an annual meeting of stockholders that is called for a date which is not within 30 calendar days before or after the first anniversary date of the annual meeting of stockholders in the immediately preceding year, any such written notice of a proposal of a Stockholder Matter must be received by the Board of Directors not less than five business days after the date the corporation shall have mailed notice to its stockholders that an annual meeting of stockholders will be held, issued a press release, filed a periodic report with the Securities and Exchange Commission or otherwise publicly disseminated notice that an annual meeting of stockholders will be held.

(iii) In the case of a special meeting of stockholders called upon the written demand of stockholders of the corporation pursuant to Article II, Section 6 of these By-laws, any such written notice of a proposal of a Stockholder Matter must be received by the Board of Directors not less than five business days after the earlier of the date the corporation shall have mailed notice to its stockholders that a special meeting of stockholders will be held, issued a press release, filed a periodic report with the Securities and Exchange Commission or otherwise publicly disseminated notice that a special meeting of stockholders will be held.

(iv) In the case of stockholder action by written consent, the stockholder seeking to have the stockholders authorize or take corporate action by written consent shall, by written notice to the Board of Directors, set forth the written proposal and request the Board of Directors to fix a record date for determining stockholders entitled to consent to corporate action in writing without a meeting. The Board of Directors shall promptly, but in no event later than the tenth day after the date on which such notice is received, adopt a resolution fixing such record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which date shall not be more than ten days after the date upon which the resolution fixing the record date is adopted by the Board of Directors. If no record date is fixed by the Board of Directors within such time period, such record date shall be determined in accordance with the provisions of Section 213(b) of the Delaware General Corporation Law, or any successor provision.

(v) Such written notice of a proposal of a Stockholder Matter shall set forth as to each Stockholder Matter a brief description of the Stockholder Matter and the reasons for

consideration thereof at such meeting, as well as all information relating to such Stockholder Matter that would be required to be disclosed in a proxy statement or otherwise in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Exchange Act, and the rules and regulations promulgated thereunder, and, as to any stockholder giving the proposal and each Stockholder Associated Person, if any: (A) the name and address of such person (B) the class or series and number of shares of capital stock of the corporation which are owned beneficially or of record by such person, (C) the nominee holder for, and number of, shares beneficially owned but not owned of record by such person, (D) whether and the extent to which any hedging or other transaction or series of transactions has been entered into by or on behalf of, or any other agreement, arrangement or understanding (including, but not limited to, any derivative, swap or short positions, profit interests, options or borrowed or loaned shares) has been made, the intent or effect of which is to mitigate loss to or manage risk or benefit of share price changes for, or to increase or decrease the voting power of, such person with respect to any share of stock of the corporation (E) to the extent known by the stockholder making such proposal, the name and address of any other stockholder supporting such proposal on the date of such stockholder’s proposal, (F) a description of all arrangements or understandings between or among such persons, (G) whether such person intends to solicit proxies in connection with such Stockholder Matter, and (H) a representation that the stockholder intends to appear in person or by proxy at the meeting to bring such Stockholder Matter before the meeting.

(vi) If a written notice of a proposal of a Stockholder Matter submitted to the Board of Directors fails, in the reasonable judgment of the Board of Directors, to contain the information specified in clause (v) hereof or is otherwise deficient, the Board of Directors shall, as promptly as is practicable under the circumstances, provide written notice to the stockholder who submitted the written notice of presentation of a Stockholder Matter of such failure or deficiency in the written notice of presentation of a Stockholder Matter and such stockholder shall have five business days from receipt of such notice to submit a revised written notice of presentation of a matter that corrects such failure or deficiency in all material respects.

(vii) Only Stockholder Matters submitted in accordance with the foregoing provisions of this Section (b) shall be eligible for presentation at such meeting of stockholders or for action by written consent without a meeting, and any Stockholder Matter not submitted to the Board of Directors in accordance with such provisions shall not be considered or acted upon at such meeting of stockholders or by written consent without a meeting.

(c) Stockholders of Record. A person who is not a stockholder of record shall not have any right to nominate a director or bring a matter before the stockholders at any meeting of stockholders or by written consent.

ARTICLE III

DIRECTORS

SECTION 1. NUMBER OF DIRECTORS. The number of directors which shall constitute the whole board of directors of the corporation shall be such number as may be determined by the board of directors from time to time, but in no event shall such number be less than three nor more than twenty‑five; provided, however, that the number of directors constituting the whole board shall not be decreased by the board of directors below the number then in office unless such decrease shall become effective at any annual

meeting of stockholders. Vacancies created by an increase in the number of directors may be filled as provided in Section 4 of this Article III. Additional directors so chosen shall hold office until the next annual meeting of the stockholders and until their respective successors are elected and qualified or until their earlier resignation or removal.

SECTION 2. ELECTION OF DIRECTORS: TERMS OF OFFICE. At all meetings of the stockholders for the election of directors at which a quorum is present, the persons receiving the greatest number of votes shall be the directors. Each director of the corporation shall hold office until the next annual meeting of the stockholders and, subject to Section 1 of this Article III, until his or her successor is elected or qualified or until his or her earlier resignation or removal.

SECTION 3. RESIGNATIONS. Any director, member of a committee or other officer may resign at any time. Such resignation shall be made in writing, and shall take effect at the time specified therein, and if no time be specified, at the time of its receipt by the Chairperson of the Board of Directors, President or Secretary. The acceptance of a resignation shall not be necessary to make it effective.

SECTION 4. VACANCIES. If the office of any director, member of a committee or other officer becomes vacant, the remaining directors in office, though less than a quorum by a majority vote, shall have the exclusive power to appoint any qualified person to fill such vacancy, who shall hold office for the unexpired term and until his or her successor shall be duly chosen.

SECTION 5. REMOVAL. Any director or directors may be removed either for or without cause at any time by the affirmative vote of the holders of a majority of all the shares of stock outstanding and entitled to vote, at a special meeting of the stockholders called for the purpose and the vacancies thus created may be filled, at the meeting held for the purpose of removal, by the affirmative vote of a majority in interest of the stockholders entitled to vote.

SECTION 6. POWERS. The Board of Directors shall exercise all of the powers of the corporation except such as are by law, or by the Certificate of Incorporation of the corporation or by these By‑Laws conferred upon or reserved to the stockholders.

SECTION 7. COMMITTEES. The Board of Directors may, by resolution or resolutions passed by a majority of the whole board, designate one or more committees, each committee to consist of two or more of the directors of the corporation. The board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of any member of such committee or committees, the member or members thereof present at any meeting and not disqualified from voting, whether or not he, she or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board of Directors, or in these By‑Laws, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to amending the Certificate of Incorporation, adopting an agreement of merger or consolidation, recommending to the stockholders the sale, lease or exchange of all or substantially all of the corporation's property and assets, recommending to the stockholders a dissolution of the corporation or a revocation of a dissolution, or amending the By‑Laws of the corporation; and, unless the resolution, these By‑Laws, or the Certificate of Incorporation expressly so provide, no such committee shall have the power or authority to declare a dividend or to authorize the issuance of stock.

SECTION 8. MEETINGS. The newly elected directors may hold their first meeting for the purpose of organization and the transaction of business, if a quorum be present, immediately after the annual meeting of the stockholders; or the time and place of such meeting may be fixed by consent in writing of all the directors.

Regular meetings of the directors may be held without notice at such places and times as shall be determined from time to time by resolution of the directors.

Special meetings of the board may be called by the President or by the Secretary on the written request of any two directors on at least two day's notice to each director and shall be held at such place or places as may be determined by the directors, or as shall be stated in the call of the meeting.

Unless otherwise restricted by the Certificate of Incorporation or these By‑Laws, members of the Board of Directors, or any committee designated by the Board of Directors, may participate in a meeting of the Board of Directors, or any committee, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting.

In the absence of the Chairperson of the Board of Directors and the President, the Lead Director designated by the Board of Directors shall preside at all meetings of directors and stockholders of the corporation.

SECTION 9. QUORUM. A majority of the directors shall constitute a quorum for the transaction of business. If at any meeting of the board there shall be less than a quorum present, a majority of those present may adjourn the meeting from time to time until a quorum is obtained, and no further notice thereof need be given other than by announcement at the meeting which shall be so adjourned.

SECTION 10. COMPENSATION. Directors shall not receive any stated salary for their services as directors or as members of committees, but by resolution of the board a fixed fee, or hourly rate and expenses of attendance may be allowed for attendance at each meeting or engagement or activity on behalf of this corporation. Nothing herein contained shall be construed to preclude any director from serving the corporation in any other capacity as an officer, agent or otherwise, and receiving compensation therefor.

SECTION 11. ACTION WITHOUT MEETING. Any action required or permitted to be taken at any meeting of the Board of Directors, or of any committee thereof, may be taken without a meeting, if prior to such action a written consent thereto is signed by all members of the board, or of such committee as the case may be, and such written consent is filed with the minutes of proceedings of the board or committee.

ARTICLE IV

OFFICERS

SECTION 1. OFFICERS. The officers of the corporation shall include a Chairperson of the Board of Directors, a President, a Treasurer, and a Secretary, all of whom shall be elected by the Board of Directors and who shall hold office until their successors are elected and qualified. In addition, the Board of Directors may elect one or more Vice‑Presidents and such Assistant Secretaries and Assistant Treasurers as they may deem proper. None of the officers (other than the Chairperson of the Board of Directors) of the corporation need be directors. The officers shall be elected at the first meeting of the Board of Directors after each annual meeting. More than two offices may be held by the same person.

SECTION 2. REMOVAL OF OFFICERS. Any officer may be removed, either with or without cause, by the vote of a majority of the directors then in office at any meeting of the Board of Directors, but such removal shall be without prejudice to the contract rights, if any, of the person so removed.

SECTION 3. OTHER OFFICERS AND AGENTS. The Board of Directors may elect such other officers and agents as it may deem advisable, who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board of Directors or the President.

SECTION 4. CHAIRPERSON OF THE BOARD OF DIRECTORS. The Chairperson of the Board of Directors shall be a member of the Board of Directors, shall preside at all meetings of directors and stockholders of the corporation and may call meetings of the Board of Directors. The Chairperson of the Board of Directors shall also have and perform such other duties as may be assigned to him or her by the Board of Directors.

SECTION 5. PRESIDENT. The President shall be the chief executive officer of the corporation and shall have the general powers and duties of supervision, direction and management of the corporation, subject to the control and direction of the Board of Directors. In the absence of the Chairperson of the Board of Directors, the President shall preside at meetings of directors and stockholders of the corporation. The President shall also perform such other duties as may be assigned to him or her by the Board of Directors. Except as the Board of Directors shall authorize the execution thereof in some other manner, the President shall be authorized to execute bonds, mortgages and other contracts on behalf of the corporation, to cause the corporation's seal to be affixed to any instrument requiring such seal, and when so affixed such seal shall be attested by the signatures of the Secretary or the Treasurer or an Assistant Secretary or an Assistant Treasurer.

SECTION 6. VICE‑PRESIDENT. Each Vice‑President, if any, shall have such powers and shall perform such duties as shall be assigned to such person by the Board of Directors or the President.

SECTION 7. TREASURER. The Treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate account of receipts and disbursements in books belonging to the corporation. Such person shall deposit all moneys and other valuables in the name and to the credit of the corporation in such depositories as may be designated by the Board of Directors or the President.

The Treasurer shall disburse the funds of the corporation as may be ordered by the Board of Directors, the Chairperson of the Board of Directors or the President, taking proper vouchers for such disbursements. Such person shall render to the Chairperson of the Board of Directors or the President and Board of Directors at the regular meetings of the Board of Directors, or whenever they may request it, an account of all the transactions as Treasurer and of the financial condition of the corporation. If required by the Board of Directors, the Treasurer shall give the corporation a bond for the faithful discharge of his or her duties in such amount and with such surety as the board shall prescribe.

SECTION 8. SECRETARY. The Secretary shall give, or cause to be given, notice of all meetings of stockholders and directors, and all other notices required by law or by these By‑Laws, and in case of such person’s absence or refusal or neglect so to do, any such notice may be given by any person thereunto directed by the Chairperson of the Board of Directors or the President, or by the directors, or stockholders, upon whose requisition the meeting is called as provided in these By‑Laws. The Secretary shall record all the proceedings of the meetings of the corporation and of the directors in a book to be kept for that purpose, and shall perform such other duties as may be assigned by the Board of Directors, the Chairperson of the Board

of Directors or the President. The Secretary shall have the custody of the seal of the corporation and shall affix the same to all instruments requiring it, when authorized by the directors or the Chairperson of the Board of Directors or the President, and attest the same.

SECTION 9. ASSISTANT TREASURERS AND ASSISTANT SECRETARIES. Assistant Treasurers and Assistant Secretaries, if any, shall be elected and shall have such powers and shall perform such duties as shall be assigned to them, respectively, by the Board of Directors or the President.

ARTICLE V

MISCELLANEOUS

SECTION 1. CERTIFICATES. Any or all of the corporation’s classes or series of shares of capital stock may be represented by certificates or may be issued without certificates, as determined by the Board of Directors. Every holder of stock represented by certificates, and every holder of uncertificated shares of a class or series of stock at least some of which is represented by certificates, shall be entitled to have a certificate signed by, or in the name of the corporation by, the Chairperson of the Board of Directors or the President or Vice President, and by the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary of the corporation representing the number of shares registered in certificate form. Any or all of the signatures on any such certificate may be a facsimile.

SECTION 2. LOST CERTIFICATES. A new certificate of stock may be issued in the place of any certificate theretofore issued by the corporation, alleged to have been lost or destroyed, and the directors may, in their discretion, require the owner of the lost or destroyed certificate, or his or her legal representatives, to give the corporation a bond, in such sum as they may direct, not exceeding double the value of the stock, to indemnify the corporation against any claim that may be made against it on account of the alleged loss of any such certificate, or the issuance of any such new certificate.

SECTION 3. TRANSFER OF SHARES. The shares of stock of the corporation shall be transferable only upon its books by the holders thereof in person or by their duly authorized attorneys or legal representatives, and upon such transfer the old certificates, if such shares are represented by certificates, shall be surrendered to the corporation by the delivery thereof to the person in charge of the stock and transfer books and ledgers, or to such other person as the directors may designate, by whom they shall be cancelled, and new certificates shall thereupon be issued, unless such shares have become uncertificated. A record shall be made of each transfer and whenever a transfer shall be made for collateral security, and not absolutely, it shall be so expressed in the entry of the transfer.

SECTION 4. RECORD DATE. In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than sixty nor less than ten days before the date of such meeting, nor more than sixty days prior to any other action. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

SECTION 5. DIVIDENDS. Subject to the provisions of the Certificate of Incorporation, the Board of Directors may, out of funds legally available therefor at any regular or special meeting, declare dividends

upon the capital stock of the corporation as and when they deem expedient. Before declaring any dividend there may be set apart out of any funds of the corporation available for dividends, such sum or sums as the directors from time to time in their discretion deem proper for working capital or as a reserve fund to meet contingencies or for equalizing dividends or for such other purposes as the directors shall deem conducive to the interests of the corporation.

SECTION 6. SEAL. The corporate seal shall be circular in form and shall contain the name of the corporation, the year of its creation and the words "CORPORATE SEAL DELAWARE". Said seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.

SECTION 7. FISCAL YEAR. The fiscal year of the corporation shall be determined by resolution of the Board of Directors.

SECTION 8. CHECKS. All checks, drafts or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the corporation shall be signed by such officer or officers, agent or agents of the corporation, and in such manner as shall be determined from time to time by resolution of the Board of Directors.

SECTION 9. NOTICE AND WAIVER OF NOTICE. Whenever any notice is required by these By‑Laws to be given, personal notice is not meant unless expressly so stated, and any notice so required shall be deemed to be sufficient if given by depositing the same in the United States mail, postage prepaid, addressed to the person entitled thereto at his or her address as it appears on the records of the corporation, and such notice shall be deemed to have been given on the day of such mailing. Stockholders not entitled to vote shall not be entitled to receive notice of any meetings except as otherwise provided by Statute. Whenever any notice whatever is required to be given under the provisions of any law, or under the provisions of the Certificate of Incorporation of the corporation or these By‑Laws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto.

ARTICLE VI

AMENDMENTS

These By‑Laws may be altered or repealed and By‑Laws may be made at any annual meeting of the stockholders or at any special meeting thereof if notice of the proposed alteration or repeal or By‑Law or By‑Laws to be made be contained in the notice of such special meeting, by the affirmative vote of a majority of the stock issued and outstanding and entitled to vote thereat, or by the affirmative vote of a majority of the Board of Directors then in office, at any regular meeting of the Board of Directors, or at any special meeting of the Board of Directors, if notice of the proposed alteration or repeal, or By-Law or By-Laws to be made, be contained in the notice of such special meeting.

ARTICLE VII

INDEMNIFICATION OF OFFICERS,

DIRECTORS, EMPLOYEES AND AGENTS

SECTION 1. The corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the

fact that he or she is or was a director, officer, employee or agent of the corporation, or who is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with such action, suit or proceeding if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the corporation, and with respect to any criminal action or proceeding, had reasonable cause to believe that his or her conduct was unlawful.

SECTION 2. The corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he or she is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees) actually and reasonably incurred by him or her in connection with the defense or settlement of such action or suit if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable for negligence or misconduct in the performance of his or her duty to the corporation unless and only to the extent that the court in which such action or suit was brought shall determine upon application, that despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the court shall deem proper.

SECTION 3. To the extent that a director, officer, employee or agent of the corporation has been successful on the merits or otherwise in the defense of any action, suit or proceeding referred to in Sections 1 and 2, or in defense of any claim, issue or matter therein, he or she shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him or her in connection therewith.

SECTION 4. Any indemnification under Sections 1 and 2 (unless ordered by a court) shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances because he or she has met the applicable standard of conduct set forth in Sections 1 and 2. Such determination shall be made (a) by the board of directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (b) if such a quorum is not obtainable, or, even if obtainable, a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or (c) by the Stockholders.

SECTION 5. Expenses incurred in defending a civil or criminal action, suit or proceeding may be paid by the corporation in advance of the final disposition of such action, suit or proceeding, as authorized by the Board of Directors in the specific case, upon receipt of an undertaking by or on behalf of the director, officer, employee or agent to repay such amount, unless it shall ultimately be determined that he or she is entitled to be indemnified by the corporation authorized in this Article.

SECTION 6. The indemnification provided by this article shall not be deemed exclusive of any other rights to which those indemnified may be entitled under any contract, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his or her official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director,

officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.

SECTION 7. The corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or who is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him or her and incurred by him or her in any such capacity, or arising out of his or her status as such, whether or not the corporation would have the power to indemnify him or her against such liability under the provisions of this Article.

Exhibit 10.1

Employment Agreement dated as of March 17, 2017 by and between Karl J. Schmidt and Perma-Pipe International Holdings, Inc.

This Employment Agreement is entered into as of the date on the signature page affixed hereto, by and between MFRI, Inc., a Delaware corporation ("MFRI" or "the Company"), and Karl J. Schmidt ("Employee").

In consideration of the mutual promises and covenants set forth herein, and other good and valuable consideration, the sufficiency of which is hereby acknowledged, MFRI and Employee hereby agree as follows:

Position of Employment. The Employee will continue to serve as the Chief Financial Officer (CFO), MFRI, Inc, and, in that position, Employee will report to the President and CEO of MFRI. MFRI retains the right to change Employee's title, duties, and reporting relationships as may be determined to be in the best interests of the Company; provided, however, that any such change in Employee's duties shall be consistent with Employee's training, experience, and qualifications. The Company may also change the name of the Company from "MFRI" to "Perma Pipe" which will result in no changes to the Employee’s position or responsibilities as outlined in this agreement.

The terms and conditions of the Employee's employment shall, to the extent not addressed or described in this Employment Agreement, be governed by MFRI Company's Policies and Procedures and existing practices. In the event of a conflict between this Employment Agreement and the Policies and Procedures or existing practices, the terms of this Agreement shall govern.


2.	Term of Employment. Employee's employment agreement with MFRI shall begin as of February 01, 2017 and shall continue for a period of one (1) year, and then automatically renew annually for successive one year terms unless either party gives the other party notice otherwise at least sixty (60) days before the end of the initial term or a renewal period; or:


a.	Employee's employment is terminated by either party in accordance with the terms of Section 5 of this Employment Agreement; or


b.	Such term of employment is extended or shortened by a subsequent agreement duly executed by each of the parties to this Employment Agreement, in which case such employment shall be subject to the terms and conditions contained in the subsequent written agreement.


3.	Compensation and Benefits.

Base Salary. Employee shall be paid a base salary of no less than $12,569.23 bi-weekly, which is $326,800 annually ("Base Salary"), subject to applicable federal, state, and local withholding, such Base Salary to be paid to Employee in the same manner and on the same payroll schedule in which all exempt MFRI employees receive payment. Salary will be reviewed annually and adjusted by the President and CEO and approved by the Board of Directors based on performance and external benchmarking of market compensation for equivalent positions. Timing of any adjustments will be aligned to overall Corporate annual salary review.

Incentive Compensation. Employee shall be eligible to participate in all incentive compensation programs available to other executives or officers of MFRI, such participation to be in the same form, under the same general terms, and to the same extent that such programs are made available to other such executives or officers. Nothing in this Employment Agreement shall be deemed to require the payment of bonuses, awards, or incentive compensation to Employee if such payment would not otherwise be required under the terms of MFRI Company's incentive compensation programs.

Short Term Incentive (STI). Employee will receive Short Term Incentive in the form of an annual cash bonus opportunity with a target incentive set at 55% of base salary. Performance measures applicable to STI will be based on objective Company Performance Metrics aligned to financial

and strategic plans approved by the Board. Bonus payment award and timing will align with Corporate annual bonus payouts following completion of annual financial calendar.

Long Term Incentive (LTI). Employee will receive Long Term Incentive in the form of Restricted Stock (RS) with a target annual award of 80% of Base Salary. These RS will vest over a 3-year period, with 1/3 vesting at the end of each anniversary of the grant. The actual award may be adjusted up or down based on compensation benchmarking and/or performance as -determined in good faith by the Board. For your upcoming LTI grant in 2017, the Board has authorized an award of $263,400. The Board reserves the right to amend the program as deemed necessary.


d.	Employee Benefits. Employee shall be eligible to participate in all employee benefit plans, policies, programs, or perquisites in which other MFRI’s executive or officers participate. The terms and conditions of Employee's participation in MFRI's employee benefit plans, policies, programs, or perquisites shall be governed by the terms of each such plan, policy, or program.

e. Vacation. Employee will be entitled to 4 weeks of paid vacation annually.

Duties and Performance. The Employee acknowledges and agrees that he is being offered a position of employment by MFRI with the understanding that the Employee possesses a unique set of skills, abilities, and experiences which will benefit the Company, and he agrees that his continued employment with the Company, whether during the term of this Employment Agreement or thereafter, is contingent upon his successful performance of his duties in his position as noted above, or in such other position to which he may be assigned.


a.	General Duties.


1.	Employee shall render to the very best of Employee's ability, on behalf of the Company, services to and on behalf of the Company, and shall undertake diligently all duties assigned to him by the Company.

Employee shall devote his full time, energy and skill to the performance of the services in which the Company is engaged, at such time and place as the Company may direct. Employee shall not undertake, either as an owner, director, shareholder, employee or otherwise, the performance of services for compensation (actual or expected) for any other entity without the express written consent of the President and CEO or Board of Directors. Such consent will not be unreasonably withheld for a paid Board of Directors position offered to Employee as long as such role is not in concrete and open conflict with Employee’s role and position in the Company.


3.	Employee shall faithfully and industriously assume and perform with skill, care, diligence and attention all responsibilities and duties connected with his employment on behalf of the Company.


4.	Employee shall have no authority to enter into any contracts binding upon the Company, or to deliberately create any obligations on the part of the Company, except as may be specifically authorized by the President and CEO or Board of Directors of MFRI.


b.	Specific Duties.


1.	Oversee the organization’s capital structure with a focus on minimizing the cost of capital.


2.	Evaluate and participate in strategic business development opportunities resulting in top line growth and mitigation of the effect of economic volatility


3.	Raise capital to support Company growth, including negotiating and finalizing financing agreements, and monitor, assess and manage Company risk.


4.	Serve as the Corporate Secretary and/or Treasurer, or have a direct report or reports in those roles.


5.	Serve as the Principal Financial Officer and Principal Accounting Officer of the Company as such offices are defined under applicable law.


6.	Foster a Company with underlying values in safety, integrity and ethics.


7.	Develop quarterly and annual operating targets.


8.	Lead a high performance, results driven culture that meets or exceeds commitments.


9.	Ensure a system is in place which drives operational excellence and continuous improvement.


10.	Prioritize the best growth and investment strategies to pursue given limited resources.


11.	Provide visibility and strong communication skills to internal and external stakeholders.


12.	Additional responsibilities are outlined in the CFO Job Description dated October 4, 2012.


5.	Termination of Employment. Employee's employment with the Company may be terminated, prior to the expiration of the term of this Employment Agreement, in accordance with any of the following provisions:

Termination by Employee. The Employee may terminate his employment at any time during the course of this agreement by giving four (4) weeks’ notice in writing to the President and CEO of MFRI. During the notice period, Employee must fulfill all his duties and responsibilities set forth above and use his best efforts to train and support his replacement, if any. Failure to comply with this requirement may result in Termination for Cause described below, but otherwise Employee's salary and benefits will remain unchanged during the notification period.

Termination by the Company Without Cause. MFRI may terminate Employee's employment at any time during the course of this agreement by giving four (4) weeks’ notice in writing to the Employee. During the notice period, Employee must fulfill all of Employee's duties and responsibilities set forth above and use Employee's best efforts to train and support Employee's replacement, if any. Failure of Employee to comply with this requirement may result in Termination for Cause described below, but otherwise Employee's salary and benefits will remain unchanged during the notification period. Should termination occur, Employee will receive twelve (12) months of Severance and retain all rights to vested stock and/or options, and any other unvested shares will be forfeited except that shares due to vest in the current year will vest pro rata for the number of months worked for that year.

Termination by Employee for Good Reason. Employee may terminate his employment with the Company for Good Reason by giving four (4) weeks’ notice in writing to the Company. During the notice period, if requested by the Company, Employee must fulfill all of Employee's duties and responsibilities set forth above and use Employee's best efforts to train and support Employee's replacement, if any. Failure of Employee to comply with this requirement may result in Termination for Cause described below, but otherwise Employee's salary and benefits will remain unchanged during the notification period. Should Company fail to cure Employee’s stated Good Reason during the notice period and termination for Good Reason occurs, Employee will receive twelve (12) months of Severance and retain all rights to vested stock and/or options and any other unvested shares will be forfeited except that shares due to vest in the current year will vest pro-rata based on the number of months Employee was employed during that year. Good Reason means only material diminution in Employee's Base Salary or substantial changes by the Company affecting the Employee’s eligibility for STI, LTI, or duties, responsibilities, reporting or authority as outlined in this Agreement.

Termination by the Company for Cause. The Company may, at any time and without notice, terminate the Employee for "cause". Termination by the Company of the Employee for "cause" shall include but not be limited to termination based on any of the following grounds: (a) repeated failure to perform the duties of the Employee's position in a satisfactory manner which remains uncured after Employee is given notice of same and a reasonable opportunity to cure; (b) fraud, misappropriation, embezzlement or acts of similar dishonesty; (c) conviction of a felony involving moral turpitude; (d) illegal use of drugs or excessive use of alcohol in the workplace; (e) intentional and willful misconduct that may subject the Company to criminal or civil liability; (f) breach of the Employee's duty of loyalty, including the diversion or usurpation of corporate opportunities properly belonging to the Company; (g) willful disregard of Company policies and procedures; (h) breach of any of the material terms of this Agreement; and (i) insubordination or deliberate refusal to follow the lawful instructions of the President and CEO or the Board of

Directors of MFRI. Termination for Cause will result in immediate termination, no severance, and unvested stock forfeited.

Termination by Death or Disability. The Employee's employment and rights to compensation under this Employment Agreement shall terminate if the Employee is unable to perform the duties of his position due to death, or disability lasting more than 90 days, taking into consideration the accommodation obligations under the Americans with Disabilities Act or parallel state law based on the applicable facts of any such disability, and the Employee's heirs, beneficiaries, successors, or assigns shall not be entitled to any of the compensation or benefits to which Employee is entitled under this Agreement, except: (a) to the extent specifically provided in this Employment Agreement (b) to the extend other provisions more favorable to the Employee or to the Employee's heirs, beneficiaries, successors, or assigns are provided for in the specific rules governing the STI and LTI incentive plans and components, (c) to the extent required by law; or (d) to the extent that such benefit plans or policies under which Employee is covered provide a benefit to the Employee's heirs, beneficiaries, successors, or assigns.

Severance. Severance means a payment equal to Employee’s Base Salary plus STI at target payout prorated, if necessary, for the severance period, plus continuation of the Company’s paid group health and welfare benefits via COBRA for the severance period. Severance will be paid in equal bi-weekly installments for the length of the severance period, beginning thirty days after Employee signs the release of claims referenced below.


g.	Release. Any post termination severance or benefits are subject to Employee signing a release of claims prior to receipt.

Change in Control (CIC). In the event of a CIC, Employee will have accelerated vesting of all shares. If Employee’s employment is terminated by the Company without Cause or by Employee for Good Reason during the six (6) months before a CIC that was initiated prior to Employee departure and completed within twelve (12) months after Employee departure, Employee will receive accelerated vesting of all restricted shares awarded to Employee prior to termination and twelve (12) months of Severance. CIC is triggered by change in ownership or a sale of all of the Company’s assets and resulting material diminution of Employee’s duties. For purposes of determining whether a CIC has occurred, Company shall mean only MFRI, Inc.


6.	Confidentiality. To the fullest extent permitted by applicable law, the terms of the Confidentiality Agreement executed by the Employee are incorporated by reference into this Employment Agreement and are made a part hereto as if they appeared in this Employment Agreement itself. This agreement will extend for the duration of the severance period.


7.	Non-Solicitation/Non-Compete. To the fullest extent permitted by applicable law, the terms of the Non-Solicitation/Non-Compete Agreement executed by the Employee are incorporated by reference into this Employment Agreement and are made a part hereto as if they appeared in this Employment Agreement itself. This agreement will extend for the duration of the severance period.

Assignment of Inventions, Improvements and Developments. The Employee hereby assigns and agrees to assign to the Company the entire worldwide right, in all inventions, improvements and developments, patentable or unpatentable, which, during his employment by the Company he shall have made or conceived or hereafter may make or conceive, either solely or jointly with others (a) with the use of the Company’s time, equipment, materials, supplies, facilities, or trade secrets or confidential business information or (b) resulting from or suggested by his work for the Company or (c) contemplated business of the Company, including, but limited to, pre-insulated and/or secondarily contained piping systems for district heating and cooling systems, oil and gas flow lines, chemical transportation and related products and materials. All such inventions, improvements and developments shall automatically and immediately be deemed to be the property of the Company as soon as made or conceived. This assignment includes all rights to sue for all infringements, including those which may have occurred before this assignment. It is understood that this Agreement does not apply to an invention for which no equipment, supplies, facility or trade secret information of the Company was used and which was developed entirely on the

Employee’s own time. The invention related (i) to the business of the Company or (ii) to the Company’s actual or demonstrably anticipated research or development, or (b) the invention results from any work performed by the Employee for the Company.


9.	Disclosure. Employee agrees to disclose promptly to the Company all such inventions, improvements and developments when made or conceived. Upon termination of his employment for any reason, Employee shall immediately give to the Company all written records of such inventions, improvements and developments and make all full disclosures thereof, whether or not they have been reduced to writing.

Aid and Assistance. The Employee agrees, (a) to execute all documents necessary to protect inventions, improvement and developments assigned pursuant to Section 8, and to obtain, maintain, modify, or enforce any United States or foreign patent on such invention, improvements or developments; and (b) to cooperate with the Company in every reasonable way possible in obtaining evidence for use in any such proceedings to obtain, maintain, modify or enforce any such patent.

Permanent Relocation. If the Employee relocates in the future, the Company will pay for relocation expenses separately.

10.

Parachute Payment Limitation . Notwithstanding any contrary provision above, if Employee is a " disqualified individual " (as defined in Section 280G of the Internal Revenue Code), and the CIC Benefits, together with any other payments which the Employee has the right to receive from the Company, would constitute a " parachute payment " (as defined in Section 280G of the Code), the payments and benefits provided under this Agreement shall be either (i) reduced (but not below zero) so that the aggregate present value of such payments and benefits received by the Employee from the Company shall be $1.00 less than three times Employee's " base amount " (as defined in Section 280G of the Code) and so that no portion of such payments received by Employee shall be subject to the excise tax imposed by Section 4999 of the Code, or (ii) paid in full, whichever produces the better net after-tax result for Employee (taking into account any applicable excise tax under Section 4999 of the Code and any applicable income tax). If a reduced payment is made to Employee pursuant to clause (i) above and through error or otherwise that payment, when aggregated with other payments from the Company used in determining if a parachute payment exists, exceeds $1.00 less than three times Employee's base amount, Employee must immediately repay such excess to the Company upon notification that an overpayment has been made.

11.

Indemnification and Insurance. The Company will defend, indemnify and hold Employee, his heirs, executors and administrators harmless against and in respect of any and all damages, losses, obligations, liabilities, claims, deficiencies, costs and expenses (including, but not limited to, attorneys’ fees and other costs and expenses incident to any suit, action, investigation, claim or proceeding) suffered, sustained, incurred or required to be paid by Employee by reason of or on account of Employee’s performance of work on behalf of the Company, except to the extent due to any act or omission by Employee that constitutes a breach of this Agreement or is outside the scope of his authority under this Agreement. In addition, the Company will maintain directors and officer’s liability insurance in place, with reasonable and customary limits, pursuant to which Employee shall be a named, additional or covered insured.


12.	General Provisions.

Notices. All notices and other communications required or permitted by this Agreement to be delivered by MFRI or Employee to the other party shall be delivered in writing to the address shown below, either personally, or by registered, certified or express mail, return receipt requested, postage prepaid, to the address for such party specified below or to such other address as the party may from time to time advise the other party, and shall be deemed given and received as of actual personal delivery, or upon the date or actual receipt shown on any return receipt if registered, certified or express mail is used, as the case may be.

MFRI, Inc.:

6410 W. Howard Street

Niles, IL. 60714

Attention: Chairman of the Board

Karl J. Schmidt

950 E Illinois Road

Lake Forest, IL. 60045


b.	Amendments and Termination; Entire Agreement. This Agreement may not be amended or terminated except by a writing executed by all of the parties hereto. This Agreement constitutes the entire agreement of MFRI and Employee relating to the subject matter hereof and supersedes all prior oral and written understandings and agreements relating to such subject matter.

Successors and Assigns. The rights and obligations of the parties hereunder are not assignable to another person without prior written consent; provided, however, that MFRI, without obtaining Employee's consent, may assign its rights and obligations hereunder to a wholly-owned subsidiary and provided further that any post- employment restrictions shall be assignable by MFRI to any entity which purchases all or substantially all of the Company's assets.

Severability Provisions Subject to Applicable Law. All provisions of this Agreement shall be applicable only to the extent that they do not violate any applicable law, and are intended to be limited to the extent necessary so that they will not render this Agreement invalid, illegal or unenforceable under any applicable law. If any provision of this Agreement or any application thereof shall be held to be invalid, illegal or unenforceable, the validity, legality and enforceability of other provisions of this Agreement or of any other application of such provision shall in no way be affected thereby.


e.	Waiver of Rights. No waiver by MFRI or Employee of a right or remedy hereunder shall be deemed to be a waiver of any other right or remedy or of any subsequent right or remedy of the same kind.

Definitions, Headings, and Number. A term defined in any part of this Employment Agreement shall have the defined meaning wherever such term is used herein. The headings contained in this Agreement are for reference purposes only and shall not affect in any manner the meaning or interpretation of this Employment Agreement. Where appropriate to the context of this Agreement, use of the singular shall be deemed also to refer to the plural, and use of the plural to the singular.


g.	Counterparts. This Agreement may be executed in separate counterparts, each of which shall be deemed an original but both of which taken together shall constitute but one and the same instrument.


h.	Governing Laws and Forum. This Agreement shall be governed by, construed, and enforced in accordance with the laws of the Commonwealth of Delaware. The parties hereto further agree that any action brought to enforce any right or obligation under this Agreement shall be subject to the exclusive jurisdiction of the courts of the Commonwealth of Delaware.


i.	This document supersedes all prior arrangements made between both parties.

IN WITNESS WHEREOF, MFRI and Employee have executed and delivered this Agreement as of March 17, 2017.



By: /s/ Karl J. Schmidt		MFRI, Inc. By: /s/ David J. Mansfield
Karl J. Schmidt		David J. Mansfield
		President and Chief Executive Officer