EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT

(the "Agreement") is made and entered into by and between INTERNATIONAL FUEL
TECHNOLOGY, INC., a Nevada corporation (the "Company"), and JAYNE A.WINFREY (the
"Employee"), and is dated as of the fourth day of April, 2005.

RECITALS

WHEREAS

, the Chief Executive Officer ("CEO") of Company, in consultation with the Board
of Directors, has determined that it is in the best interest of the Company and
its shareholders to employ the Employee in the position set forth below, and the
Employee desires to serve in that capacity, and;

NOW, THEREFORE,

in consideration of the foregoing premises, the mutual covenants and promises
herein contained, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Company and Employee hereby
agree as follows:

1. Employment Period. The Company shall employ the Employee, and the Employee
shall serve the Company, on the terms and conditions set forth in this
Agreement, for the period commencing on April 1, 2005 and ending on March 31,
2008 ("Employment Period")

2. Position and Duties.

(a) The Employee shall serve as President and Chief Operating Officer of the
Company, reporting to the Chief Executive Officer, with such duties,
responsibilities and authorities as are customarily assigned to such position,
and such other duties and responsibilities not inconsistent therewith as may be
assigned to her from time to time by the CEO of the Company.

(b) During the Employment Period, and excluding any periods of vacation and sick
leave to which the Employee is entitled, the Employee shall devote her full-time
efforts to the business and affairs of the Company and use her best efforts to
carry out such responsibilities faithfully and efficiently. It shall not be
considered a violation of the foregoing for the Employee to (i) serve on
corporate, civic or charitable boards or committees or (ii) deliver lectures or
fulfill speaking engagements so long as such activities do not interfere with
the performance of her responsibilities as an employee of the Company in
accordance with this Agreement or violate the provisions of Section 7 of this
Agreement.

(c) Employee's responsibilities shall include, but not be limited to, the
following: (i) within the first twelve months of employment, preparation of a
comprehensive plan for compensation and benefits for executive employees, such
plan to be presented to the Executive Compensation Committee of Company's Board
of Directors; and (ii) within the first sixty (60) days of employment,
preparation of a business plan for the Company, with mutually agreed upon
milestones for its implementation.

(d) Subject to the other terms and conditions of this Agreement, within the
initial six (6) months of Employee's employment, she shall assume operational
responsibility for the Company, and will be a nominee to the Company's Board of
Directors.

 

3. Compensation.

(a) Base Salary. During the Employment Period the Employee shall receive an
annual base salary (the "Annual Base Salary") at the rate of Two Hundred
Thousand Dollars ($200,000.00), such base salary to be reviewed annually during
the Employment Period concomitant with a review of the performance of Employee.
The Annual Base Salary shall be payable monthly on or about the tenth of the
month by wire transfer to an account designated by Employee to Company.

(b) Stock Options. The Employee shall receive options to purchase shares in the
Company in accordance with the attached Stock Option Agreement, a copy of which
is attached hereto and incorporated herein by reference.

(c) Other Benefits. During the Employment Period: (i) the Employee and her
family shall be entitled to participate in all benefit programs of the Company,
including, but not limited to, health and dental insurance coverage or
reimbursement of the Employee's reasonable cost to maintain same to be added to
the Annual Base Salary; and (ii) the Employee and/or the Employee's family, as
the case may be, shall be eligible for participation in, and shall receive all
benefits under, all welfare benefit plans, practices, policies and programs
provided by the Company, including, but not limited to any comprehensive dental
plan, retirement plans and profit sharing programs the Company may provide to
any other employees from time to time.

(d) Expenses. During the Employment Period, the Employee shall be entitled to
receive prompt reimbursement for all reasonable expenses incurred by the
Employee in carrying out the Employee's duties under this Agreement, including
all reasonable commuting and living costs while in St. Louis, until such time
that the location of Employee's office is agreed and decided by all parties,
provided that the Employee complies with the policies, practices and procedures
of the Company for submission of expense reports, receipts and similar
documentation of such expenses.

(e) Fringe Benefits. During each year of the Employment Period commencing on the
date of the Agreement, the Employee shall be entitled to 25 paid days of
vacation and other fringe benefits, in each case on such terms and conditions as
are determined by the Board of Directors of the Company.

4. Termination of Employment.

(a) Probationary Period. Either Company or Employee may terminate the Agreement
at any time within ten (10) days after the expiration of the first ninety (90)
days of the Agreement ("Probationary Period") by giving written notice to the
other party. If termination is by the Company, then upon the giving of such
notice, Employee shall be paid any accrued salary for the pay period in which
the notice is proffered, plus a lump sum payment of $49,315, less applicable
withholdings and deductions.

(b) Death or Disability. The Employee's employment shall terminate automatically
upon the Employee's death during the Employment Period. The Company shall be
entitled to terminate the Employee's employment because of the Employee's
Disability during the Employment Period. "Disability" means that (i) the
Employee has been unable, for a period of 180 days to perform the Employee's
duties under this Agreement, as a result of physical or mental illness or
injury, and (ii) a physician selected by the Company or its insurers, and
acceptable to the Employee or the Employee's guardian or legal representative,
has determined that the Employee's incapacity is total and permanent. A
termination of the Employee's employment by the Company for Disability shall be
communicated to the Employee by written notice, and shall be effective on the
30th day after receipt of such notice by the Employee (the "Disability Effective
Date"), unless the Employee is able to, and does, return to full-time
performance of the Employee's duties before the Disability Effective Date.

(c) By the Company.

(i) The Company may terminate the Employee's employment during the Employment
Period for Cause or without Cause. For the purposes of the Agreement, "Cause"
shall mean:

A. any fraud, embezzlement or other dishonesty of the Employee that materially
and adversely affects the Company's business or reputation; or

B. the Employee's conviction for a felony or entering into a plea of nolo
contendere with respect to a felony; or

C. disclosure to any party outside the Company any of the Confidential
Information as hereinafter defined; or

D. the determination by a medical expert that Employee has an addiction to
alcohol, controlled or prescription medications or illegal drugs: or

E. the refusal by Employee to perform her material duties and

obligations hereunder; or Employee's willful and intentional misconduct in the
performance of her material duties and obligations.

(ii) A termination of employment by the Company for Cause shall be effectuated
by giving the Employee written notice ("Notice of Termination for Cause") of the
termination. Termination of employment by the Company for Cause shall be
effective on the date when the Notice of Termination for Cause is given, unless
the notice sets forth a later date (which date shall in no event be later than
thirty (30) days after the notice is given).

(iii) A termination of the Employee's employment by the Company without Cause
shall be effected by giving the Employee written notice of the termination, and
Employee shall be paid accrued salary for the pay period in which the notice is
given.

(d) By the Employee.

(i) The Employee may terminate employment in the event of a Good Cause Shown.
"Good Cause Shown" means:

A. the assignment to the Employee of any duties inconsistent in any respect with
paragraph (a) of Section 2 of the Agreement, other than actions that are not
taken in bad faith and are remedied by the Company within fifteen (15) days
after receipt of notice thereof from the Employee;

B. any failure by the Company to comply with any provision of Section 3 of this
Agreement, other than failures that are not taken in bad faith and are remedied
by the Company within fifteen (15) days after receipt of notice thereof from the
Employee; or

C. the occurrence of a Non-Negotiated Change in Control of the Company. For
purposes of this Agreement, "Non-Negotiated Change in Control" shall mean any
one or more of the following occurrences:

(I) Any individual, corporation (other than the Company, any trustees or other
beneficiary holding securities under any employee benefit plan of the Company,
or any Company owned, directly or indirectly, by the Stockholders of the Company
in substantially the same proportions as their ownership of stock of the
Company), partnership, trust, association, pool, syndicate, or any other entity
or any group of persons acting in concert becomes the beneficial owner (within
the meaning of Rule 13d-3 under the Securities Exchange Act of 1934) of
securities of the Company possessing more than one-half (1/2) of the voting
power for the election of directors of the Company;

(II) There shall be consummated any consolidation, merger, or other business
combination involving the Company or the securities of the Company in which
holders of voting securities of the Company immediately prior to such
consummation own, as a group, immediately after such consummation, voting
securities of the Company (or, if the Company does not survive such transaction,
voting securities of the entity surviving such transaction) having less than
one-half (1/2) of the total voting power in an election of directors of the
Company (or such other surviving corporation); or

(III) There shall be consummated any sale, lease, exchange, or other transfer
(in one transaction or a series of related transactions) of all, or
substantially all, of the assets of the Company (on a consolidated basis) to a
party which is not controlled by or under common control with the Company.

(ii) A termination of employment by the Employee for Good Cause Shown shall be
effectuated by giving the Company written notice ("Notice of Termination for
Good Cause Shown") of the termination, setting forth the conduct of the Company
that constitutes Good Cause Shown. Absent a remedy or cure by Company within
applicable time frames, a termination of employment by the Employee for Good
Cause Shown shall be effective on the fifth business day following the date when
the Notice of Termination for Good Cause Shown is given, unless the notice sets
forth a later date (which date shall in no event be later than thirty (30) days
after the notice is given).

(iii) A termination of the Employee's employment by the Employee without Good
Cause Shown shall be effected by giving the Company written notice of the
termination at least sixty (60) days prior to the termination date.

(d) No Waiver. The failure to set forth any fact or circumstance in a Notice of
Termination for Cause or a Notice of Termination for Good Cause Shown shall not
constitute a waiver of the right to assert, and shall not preclude the party
giving notice from asserting, such fact or circumstance in an attempt to enforce
any right under or provision of this Agreement.

(e) Date of Termination. The "Date of Termination" means (i) March 31, 2008;
(ii) the date of the Employee's death; (iii) the Disability Effective Date; (iv)
the date on which the termination of the Employee's employment by the Company
for Cause or by the Employee for Good Cause Shown is effective; (v) the date on
which the Company gives the Employee notice of a termination of employment
without Cause, or; (vi) 60 days after the Employee gives the Company notice of a
termination of employment without Good Cause Shown, as the case may be.

5. Obligations of the Company upon Termination.

(a) Other Than for Cause, Death or Disability. If, during the Employment Period,
the Company terminates the Employee's employment, other than during the
Probationary Period, or other than for Cause, Death or Disability, or the
Employee terminates her employment for Good Cause Shown, the Company shall (i)
pay the Employee's accrued but unpaid portion of the Annual Base Salary (the
"Accrued Obligations") to the Employee in a lump sum in cash within thirty (30)
days after the Date of Termination, and (ii) continue to pay the Annual Base
Salary for the remainder of the Employment Period. The payments provided
pursuant to this paragraph (a) of Section 5 are intended as liquidated damages
for a termination of the Employee's employment by the Company other than for
Cause or Disability or for the actions of the Company leading to a termination
of the Employee's employment by the Employee for Good Cause Shown, and shall be
the sole and exclusive remedy therefore.

(b) Death or Disability. If the Employee's employment is terminated by reason of
the Employee's death or Disability during the Employment Period, the Company
shall pay the Accrued Obligations to the Employee or the Employee's estate or
legal representative, as applicable, in a lump sum in cash within thirty (30)
days after the Date of Termination. In addition, if the Employee's employment is
terminated by reason of Disability, the Company will continue to pay to Employee
until the earlier of: (i) expiration of the Employment Period, (iii) for the six
(6) months after a determination of disability has been made or (ii) the date of
Employee's death, the Annual Base Salary, less any amounts received by Employee
under any disability insurance coverage maintained for Employee by the Company.

(c) Cause; Other than for Good Cause Shown. If the Employee's employment is
terminated by the Company for Cause during the Employment Period, or if the
Employee terminates her employment during the Employment Period other than for
Good Cause Shown, the Company shall pay Employee the salary accrued for the pay
period in which the termination occurs, unless termination is for Cause and the
cause involves fraud, embezzlement or disclosure of Confidential Information as
hereinafter defined, in which case Company shall not be liable for any payments
to Employee.

6. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit
the Employee's continuing or future participation in any plan, program, policy
or practice provided by the Company or any of its affiliated companies for which
the Employee may qualify, nor shall anything in this Agreement limit or
otherwise affect such rights as the Employee may have under any contract or
agreement with the Company or any of its affiliated companies. Vested benefits
and other amounts that the Employee is otherwise entitled to receive under any
plan, policy, practice or program of, or any contract or agreement with, the
Company or any of its affiliated companies on or after the Date of Termination
shall be payable in accordance with such plan, policy, practice, program,
contract or agreement, as the case may be, except as explicitly modified by this
Agreement.

7. Confidential Information. During her Term of Employment, the Company will
disclose to the Employee and Employee shall have access to confidential,
proprietary commercial, business and/or technical information relating to the
Company's technology, know-how, data, formulae, processes, designs, studies,
findings, inventions, ideas, chemical information, production information and
cost information ("Confidential Information"). The Employee shall not
communicate, divulge or disseminate Confidential Information in full or
partially in any manner, medium, shape or form at any time during the Employee's
employment with the Company except with the prior written consent of the Company
at the Company's sole and absolute discretion or as otherwise required by law
or legal process. This provision shall forever survive the termination of
employment of Employee for any reason whatsoever.

8. Covenant Against Competition. During the Term of Employment with the Company
and for a period of two (2) years following (i) Employee terminating her
employment other than for Good Cause Shown, or (ii) Company terminating her
employment with Cause, Employee will not, directly or indirectly, own, manage,
operate, control, be employed by, perform services for, consult with, solicit
business for, participate in, or be connected with the ownership, management,
operation, or control of any business which uses surfactant chemical technology
as an additive for fuels or lubes to improve efficiency or performance and/or
reduce emissions.

9. Covenant Against Solicitation. During the Term of Employment with the Company
and for a period of one (1) year from the Employee's Termination of Employment
from the Company for any reason whatsoever, Employee will not, directly or
indirectly, solicit other employees of the Company for employment with,
consultants to or agents of any business which performs services or sells
products materially similar to or competitive with those provided and sold by
the Company.

10. No Mitigation. In no event shall the Employee be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to the Employee under any of the provisions of this Agreement and such amounts
shall not be reduced, regardless of whether the Employee obtains other
employment.

11. Successors.

(a) This Agreement is personal to the Employee and, without the prior written
consent of the Company at the sole and absolute discretion of the Company, shall
not be assignable by the Employee.

(b) This Agreement shall inure to the benefit of and be binding upon the Company
and its successors and assigns.

Miscellaneous

.

Arbitration: Any dispute, controversy or claim arising out of or relating to
this contract, or the breach thereof, shall be settled by arbitration. Any
arbitration shall be concluded under the Commercial Rules of the American
Arbitration Association (AAA") and judgement upon the award rendered by the
arbitrator shall be final and binding and may be enforced before any court
having jurisdiction. The AAA shall not be involved in the arbitration in any
manner.

The parties shall mutually agree upon an arbitrator. In the event the parties
are unable to agree, then each party shall appoint an arbitrator of their
choosing within five (5) days and the two arbitrators shall appoint the
arbitrator within ten (10) days. Such arbitrator shall arbitrate the case no
less than sixty (60) days after the failure of a mediation, if any, or the
appointment of the arbitrator. Such arbitrator shall be self administered and
conducted on an ad hoc basis.

The arbitration shall take place at a mutually agreed upon time in St. Louis,
Missouri, at the office of the arbitrator or a location designated by the
arbitrator, and shall be governed by the laws of the State of Missouri.

The arbitrator shall be required to render an award in writing within thirty
(30) days after the close of the hearing or the post hearing briefs' due date,
should either party request to file a post hearing brief, and shall state the
reasons for reaching that award.

In all matters submitted to arbitration, each party shall bear the entire cost
and expense of its own witnesses and representation. The expenses of the
arbitrator and all other expenses of arbitration shall be shared equally. The
arbitrator shall award fees and expenses to the prevailing party, where
appropriate.

Notwithstanding anything in this Agreement to the contrary, the Company and
Employee shall be entitled to seek injunctive or similar equitable relief in any
court of competent jurisdiction in order to enforce Company's and Employee's
obligations hereunder.

 

(b) The formation, construction, and performance of this Agreement shall be
construed in accordance with the laws of the United States of America, State of
Missouri and any action or proceeding brought in connection with the enforcement
of the terms hereof shall be brought exclusively in Saint Louis County, Missouri
or the U.S. District Court for the Eastern District of Missouri. The captions of
this Agreement are not part of the provisions hereof and shall have no force or
effect. This Agreement may not be amended or modified except by a written
agreement executed by the parties hereto or their respective successors and
legal representatives.

(c) All notices and other communications under this Agreement shall be in
writing and shall be given by hand delivery to the other party, by overnight
courier with addressee signature required or by registered or certified mail,
return receipt requested, postage prepaid, addressed as follows:

If to the Employee

:

Jayne A. Winfrey

2360 Johnson Road

Southlake, TX 76092

 

 

 

 

If to the Company

:

International Fuel Technology, Inc.

Attention: Mr. Michael F. Obertop

7777 Bonhomme, Suite 1920

St. Louis, Missouri 63105

or to such other address as either party furnishes to the other in writing in
accordance with this paragraph (b) of Section 12. Notices and communications
shall be effective when actually received by the addressee.

(d) The invalidity or unenforceability of any provision of this Agreement shall
not affect the validity or enforceability of any other provision of this
Agreement. If any provision of this Agreement shall be held invalid or
unenforceable in part, the remaining portion of such provision, together with
all other provisions of this Agreement, shall remain valid and enforceable and
continue in full force and effect to the fullest extent consistent with law.

(e) Notwithstanding any other provision of this Agreement, the Company may
withhold from amounts payable under this Agreement all federal, state, local and
foreign taxes that are required to be withheld by applicable laws or
regulations.

(f) The failure of the Employee or the Company to insist upon strict compliance
with any provision of, or to assert any right under, this Agreement shall not be
deemed to be a waiver of such provision or right or of any other provision of or
right under this Agreement.

(g) The Employee and the Company acknowledge that this Agreement supersedes any
other agreement between them concerning the subject matter hereof.

(h) This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, and which together shall constitute one instrument.

 

IN WITNESS WHEREOF

, the Employee has hereunto set the Employee's hand and, pursuant to the
authorization of its Board of Directors, the Company has caused this Agreement
to be executed in its name on its behalf, all as of the day and year first above
written.

 

\s\ Jayne A. Winfrey

JAYNE A. WINFREY

 

INTERNATIONAL FUEL TECHNOLOGY, INC.

By: \s\ Jonathan R. Burst

Name: Jonathan R. Burst

Title: President and Chief Executive Officer

 

STOCK OPTION AGREEMENT

This STOCK OPTION AGREEMENT dated April 4, 2005, is between International Fuel
Technology, Inc. (the "Company"), a Nevada corporation, and Jayne A. Winfrey, an
employee of the Company (the "Optionee"). By signing this Stock Option
Agreement, the Optionee and the Company agree that any and all previous stock
option agreements between the Optionee and the Company are null and void.

In consideration of the foregoing and of the mutual undertakings set forth in
this Stock Option Agreement, the Company and the Optionee agree as follows:

Grant of Option

The Company hereby grants (the "Grant") to the Optionee an option to purchase
1,375,099 shares of Common Stock of the Company at a purchase price per share
according to the below schedule (herein called "Option") pursuant to the
Company's Stock Option Plan (the "Plan"). The Optionee and the Company agree
that in order for the Option Grant to be legally binding, both the optionee and
the Company must sign this Stock Option Agreement.

Exercisability:

The Option shall vest and become exercise as follows:

458,367 shares at an exercise price of $2.23 vesting on April 3, 2006

458,366 shares at an exercise price of $2.23 vesting on April 3, 2007

458,366 shares at an exercise price of $2.23 vesting on April 3, 2008

The Option may be partially exercised from time to time within the limitations
on exercisability set forth in Section 2.1.

Subject to Section 4, the Option shall expire and cease to be exercisable on
December 31, 2009.

Method of Exercise

The Option or any part thereof may be exercised by (i) Optionee giving written
notice to the Company, which notice shall state the election to exercise the
Option and the number of whole shares of Common Stock with respect to which the
Option is being exercised and (ii) Optionee providing the Company with full
payment for the aggregate exercise price for the shares being purchased. The
Optionee may also exercise any part of the Option in a cashless transaction with
a registered broker-dealer acting on behalf of the Optionee.

Termination of Option

If the Optionee ceases to be an employee or consultant of the Company due to
termination by Company for Cause or by Employee without Good Cause Shown as
described in the Employment Agreement, all non-vested Options will automatically
expire. If termination of employment is not due to Cause or without Good Cause
Shown, all Options vest immediately. All vested Options may be exercised by the
Optionee to the full extent that the Optionee was entitled to exercise the
Option on the day immediately prior to such cessation.

References herein to an individual's "employment" shall include any and all
periods during which such individual (a) is a common law employee of the
Company, or (b) serves as an officer or director of or consultant to the
Company, but is not otherwise a common law employee of the Company. The Optionee
shall be deemed to have terminated employment when the Optionee completely
ceases to be employed (within the meaning of the preceding sentence) by the
Company. The Board of Directors of the Company may in its discretion determine
(a) whether any leave of absence constitutes a termination of employment within
the meaning of this Agreement, and (b) the impact, if any, of any such leave of
absence on the Option granted under this Agreement.

Non-assignability

No right granted to the Optionee under the Plan or this Agreement shall be
assignable or transferable (whether by operation of law or otherwise and whether
voluntarily or involuntarily), other than by will or by the laws of descent and
distribution. During the life of the Optionee, all rights granted to the
Optionee under the Plan or under this Agreement shall be exercisable only by the
Optionee.

Withholding Taxes

Whenever under the Plan shares of Common Stock are to be delivered upon exercise
of the Option, the Company shall be entitled to require as a condition of
delivery that the Optionee remit an amount sufficient to satisfy all federal,
state and other governmental withholding tax requirements related thereto.

Adjustments on Changes in Capitalization

In the event of any increase or decrease, after the date of this Agreement, in
the number of issued shares of Common Stock resulting from the subdivision or
combination of shares of Common Stock or other capital adjustments, or the
payment of a stock dividend, or other increase or decrease in such shares
affected without receipt of consideration by the Company, the number of shares
subject to the Option and the purchase price set forth in Section 2.1 shall be
proportionately adjusted, provided, however, that any Option to purchase
fractional shares resulting from any such adjustment shall be eliminated.

Change of Control

In the event that the Company undergoes a Change of Control, then all
outstanding Options will vest immediately and be exerciseable for a period of
one year from the date upon which the Change of Control occurs.

For all purposes under the Plan, "Change of Control" shall mean (i) a merger or
consolidation of the Corporation with or into another entity, or the exchange of
securities (other than a merger or consolidation) by the holders of the voting
securities of the Corporation and the holders of voting securities of any other
entity, in which the shareholders of the Corporation immediately before the
transaction do not own 50% or more of the combined voting power of the voting
securities of the surviving entity or its parent immediately after the
transaction; (ii) a dissolution of the Corporation; (iii) a transfer of all or
substantially all of the assets of the Corporation in one transaction or a
series of transactions occurring within a twelve month period to a "Person" or
"Group" (as defined below); (iv) a transaction or a series of transactions
occurring in which a Person or Group becomes the beneficial owner, directly or
indirectly, of securities of the Corporation representing more than 50% of the
combined voting power of the Corporation's then outstanding securities; or (v) a
majority of the members of the Corporation's Board is replaced during any twelve
month period by directors whose appointment or election is not endorsed by a
majority of the Corporation's Board prior to the date of the appointment or
election; provided, however, that a "Change of Control" shall not be deemed to
have occurred if the ownership of 50% or more of the combined voting power of
the surviving corporation, asset transferee, or Corporation (as the case may
be), after giving effect to the transaction or series of transactions, is
directly or indirectly held by (A) a trustee or other fiduciary under an
employee benefit plan maintained by the Corporation or any Subsidiary, (B) one
or more of the "executive officers" of the Corporation that held such positions
prior to the transaction or series of transactions, or any entity, Person or
Group under their control, or (C) one or more members of "senior management" as
designated by the Chief Executive Officer from time to time, that held such
positions prior to the transaction or series of transactions, or any entity,
Person or Group under their control. As used herein, "Person" and "Group" shall
have the meanings set forth in Sections 13(d)(3) and/or 14(d)(2) of the
Securities Exchange Act of 1934, as amended ("1934 Act"), and "executive
officer" shall have the meaning set forth in Rule 3b-7 promulgated under the
1934 Act. "Group" shall further be determined by the Plan Administrator to
constitute "more than one person acting as a group."

Right of Discharge Reserved

Nothing in the Plan or in this Agreement shall confer upon the Optionee the
right to continue in the employment, or service of the Company, or affect any
right which the Company may have to terminate the employment or service of the
Optionee.

No Rights as a Stockholder

The Optionee shall not have any rights as a stockholder with respect to any
shares subject to the Option until the date of the issuance of a stock
certificate to him or her for such shares. Except for adjustments made pursuant
to Section 7, no adjustment shall be made for dividends, distributions or other
rights (whether ordinary or extraordinary, and whether in cash, securities or
oilier property) for which the record date is prior to the date such stock
certificate is issued.

Definition of Common Stock

The terms "Common Stock" as used in this Agreement means the shares of voting
common stock of the Company, par value $.01 per share, as constituted on the
date of this Agreement and any other shares into which such common stock shall
thereafter be changed by reason of recapitalization, merger, consolidation,
split -up, combination, exchange of shares or the like.

Section Headings

The section headings contained herein are for the purpose of convenience only
and are not intended to define or limit the contents of said sections.

Notices

Any notice to be given to the Company or the Committee hereunder shall be in
writing and shall be addressed to the Company at 7777 Bonhomme Avenue, Suite
1920, St. Louis, Missouri 63105, or at such other address as the Company may
hereafter designate to the Optionee by notice as provided herein. Any notice to
be given to the Optionee hereunder shall be addressed to the Optionee at the
address set forth beneath her signature hereto, or at such other address as the
Optionee may hereafter designate to the Company by notice as provided herein.
Notices hereunder shall be deemed to have been duly given when personally
delivered or mailed by registered or certified mail to the party entitled to
receive the same.

Successors and Assigns

This Agreement shall be binding upon and inure to the benefit of the parties
hereto and the successors and assigns of the Company, the heirs and personal
representatives of the Optionee.

Other Payments Or Awards

Nothing contained in this Agreement shall be deemed in any way to limit or
restrict the Company from making any award or payment to the Optionee under any
other plan, arrangement or understanding, whether now existing or hereafter in
effect.

SECTION 16. Modification Of Agreement

At any time and from time to time the Company may modify, extend or renew the
Option; provided that no such modification, extension or renewal may (i) impair
the Optionee's rights under the Option in any respect (without the Optionee's
consent) or (ii) conflict with applicable rules under the Securities Act of
1934.

SECTION 17. Governing Law

This Agreement will be governed by and construed in accordance with the laws of
the State of Missouri without regard to the conflict of laws provisions.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date and year first above written.

INTERNATIONAL FUEL TECHNOLOGY, INC.

\s\ Jonathan R. Burst

OPTIONEE

\s\ Jayne A. Winfrey

Jayne A. Winfrey