EXHIBIT 10.17

**EMPLOYMENT AGREEMENT**

               THIS EMPLOYMENT AGREEMENT (the "Agreement"), is made as of the 1stday of December, 2000, by and between McLAREN PERFORMANCE TECHNOLOGIES, INC., a Delaware corporation with its principal office located at 32233 West Eight Mile Road, Livonia, Michigan, 48152 (the "Corporation"), and Steven Rossi, whose addressis 8540 Pine Cone Drive, Commerce Township, Michigan 48382 (the "Employee").

RECITALS:

               A.       The Corporation is engaged in the business of designing, fabricating, developing,validating and certifying engines, traction systems and related components and products for the automotive industry (the "Business");

               B.       The Corporation wishes to employ Employee and utilize his professional experience,ability, services, background and know-how; and

               C.       Employee wishes to work for the Corporation under the terms and conditions in thisAgreement.

               NOW, THEREFORE, in consideration of the covenants and conditions set forth in this Agreement and for other good and valuableconsideration, which has been received and which is sufficient, the parties agree to the following terms:

               1.       Employment Term. Subject to the terms and conditions contained in this Agreement,the Corporation employs Employee, and Employee agrees to be employed by the Corporation, for a two (2) year period from the date of this Agreement unless the Agreement is terminated before the end of two years in accordance with Section 13. This Agreementwill automatically renew for a successive period of two (2) years, unless the Corporation notifies Employee of its intent to terminate this Agreement at least ninety (90) days prior to the end of the initial two-year term or any successive two-yearperiod, or unless the Agreement is terminated before the end of any successive two-year period in accordance with Section 12. The initial two-year term and any successive terms are referred to in this Agreement as the "Employment Term."

               2.      Duties. Employee's position with the Corporation will be President and ChiefExecutive Officer. As the President and Chief Executive Officer, Employee will be ultimately responsible for operations of the Company, carrying out the strategic direction of the Company as developed by the Board of Directors, responsible for thecreation of shareholder value, and will perform other duties which the Corporation requests from time to time. The Employee will report to the Board of Directors of the Corporation.

               3.      Time and Efforts. During his employment with the Corporation, Employee willdiligently and conscientiously devote his full business time, attention and ability to the Corporation and its Business, and will faithfully serve the Corporation. Employee will fulfill his responsibilities described in this Agreement honestly,diligently, in good faith, with his best efforts and in the best interests of the Corporation. While he is employed by the Corporation, Employee will not engage in any other business activity without first receiving written approval from the Corporation,except for personal investments in a passive capacity.

               4.      Salary and Bonus. During his employment with the Corporation, the Corporation willpay Employee an annual salary of Two Hundred Thousand Dollars ($200,000), payable according to the Corporation's standard payment practices. The ordinary and usual sums for taxes and withholding will be deducted from this salary. Upon receipt of asatisfactory performance review by the Compensation Committee of the Company, the Employee will be eligible for a five percent (5%) annual raise to be enacted upon the anniversary date of this agreement.

               5.      Stock Options. Employee shall be entitled to receive a grant for two hundredthousand (200,000) incentive stock options for each contract period, for a total of four hundred thousand (400,000) stock options assuming contract renewal as described in section C1. Strike prices will be determined to be the closing price of the stockas of the date of the agreement and the agreement renewal. One hundred thousand (100,000) of said optionswill be determined to be vested upon the first anniversary date of this contract with the additional one hundred thousand (100,000) to be vested upon the second anniversary date of the contract. This arrangement shall continue in the successive contractrenewal. All grants of stock options shall be subject to and regulated by the McLaren Performance Technologies, Inc. 2000 Stock Option Plan.

               6.      Vacation and Other Benefits. Employee will be entitled to take four (4) weeks ofpaid vacation per year. No vacation time may be carried over from one year to the next. Employee will be entitled to receive medical insurance and all other benefits provided to employees of a similar level within the Corporation which can be provided toEmployee. Employee will be entitled to receive a vehicle allowance and gasoline benefits similar to that provided to other senior executives of the Corporation.

               7.      Expenses. The Corporation will pay or reimburse Employee for all reasonable andnecessary expenses incurred by the Employee in performing his duties under this Agreement.

               8.      Rules of the Corporation. Employee agrees that he will comply with all reasonablerules and regulations of the Corporation in performing his duties under this Agreement. Employee agrees that he will carry out all reasonable orders, directions and policies of the Corporation which are consistent with his position with the Corporationand which are communicated by the Corporation to Employee, either orally or in writing. However, Employee will not be required to comply with any directions or orders if he has obtained an attorney's written opinion which is reasonably satisfactory to theCorporation stating that his compliance with a particular direction or order would violate applicable law.

               9.      Confidentiality. Employee knows that the Corporation possesses business informationwhich is confidential. During the Employee's employment with the Corporation and after the termination of Employee's employment, Employee will not use or reveal, divulge or make known to any person, company, or any other third party, any ProprietaryInformation. "Proprietary Information" is any and all information or data, whether in writing, or learned by Employee orally, by observation or other sensory detection, relating to any product, product design, service, research, development,formula, process, method of distribution or delivery, know-how, trade secret, customer list, contract term, customer pricing, supplier list or price, business strategy, compensation, plan or practice, operating records, software, technology, sales data,information or other records, lists or documents used by the Corporation in operating the Business or otherwise. The Proprietary Information and all other information relating to the Corporation belongs to and will remain the property of the Corporation.All Proprietary Information, other information and property of the Corporation must be returned to the Corporation by Employee upon termination of Employee's employment.

               10.    Corporate Opportunity. Employee agrees that during his employment with the Corporation hewill not take any action which might divert from the Corporation or any affiliate of the Corporation any business opportunity which would be within the scope of any of the present or future businesses of the Corporation or any of its subsidiaries oraffiliates (future businesses are business which are then under consideration by the Corporation or its subsidiaries and affiliates), if the loss of the business would have, as reasonably determined by the Corporation, an adverse effect upon theCorporation, unless the Corporation has given prior written approval.

               11.    Discoveries and Works. Employee agrees that all discoveries and works made or conceived byhim as of the date of this Agreement or during his employment with the Corporation, individually or with others, that relate to the Business or the Corporation's activities (including actual or demonstrably anticipated research or development of theCorporation), or result from any work performed by Employee for the Corporation, will be owned by the Corporation. The term "discoveries and works" includes, but is not limited to, the following: designs, inventions, computer programs (includingdocumentation of the programs), technical improvements, processes, drawings and works of authorship. The Employee will (a) promptly notify, make full disclosure to, and execute and deliver any documents requested by, the Corporation to evidence or betterassure the Corporation's title to the discoveries and works, (b) assist the Corporation in obtaining or maintaining for itself at its own expense United States and foreign patents, copyrights, trade secret protection or other protection of any and alldiscoveries and works, and (c) promptly execute, whether during or after his employment with the Corporation, all applications or other endorsements necessary or appropriate to maintain or protect patents and other rights for the Corporation. If there areany discoveries and works which, within six (6) months after the termination of the Employee's employment, are made, disclosed, reduced to a tangible or written form or description, or are reduced to practice bythe Employee and which pertain to the Business or the products or services being sold or developed by the Corporation at the time of Employee's termination, these discoveries and works will, as between the Employee and the Corporation, be deemed to havebeen made during the Employee's employment and will be owned by the Corporation. However, any discovery or work that the Employee has developed entirely on his own time without using the Corporation's equipment, supplies, facilities or trade secretinformation will not be owned by the Corporation, except for those discoveries and works that either: (i) relate to the Corporation's Business, or actual or demonstrably anticipated research or development of the Corporation at the time of conception orreduction to practice; or (ii) result from any work performed by the Employee for the Corporation.

               12.     Non Solicitation. Employee agrees that he will not, while he is an employee of theCorporation and for a period of one (1) year thereafter, directly or indirectly, personally or for any business entity in any capacity, entice away, employ or solicit for employment any current or former employee of the Corporation or its affiliates.

               13.     Termination.

                         (a)   This Agreement may be terminated by theCorporation: (i) for Misconduct as defined below; or (ii) immediately and without notice upon the Employee's death or disability. For the purposes of this Agreement, "disability" means as a physical or mental condition that, notwithstandingreasonable accommodations, as defined under applicable state and/or federal law, prevents Employee from performing any essential function of his job.

                      (b)   Termination of Employee for "Misconduct" means: (i) anyact or acts of Employee which would constitute a felony (or its equivalent) or fraud; (ii) a material breach by Employee performing the duties described in this Agreement which is not cured by Employee within five (5) days after the Corporation givesEmployee notice of the breach; or (iii) gross neglect, gross malfeasance, willful neglect, or dishonesty.

                        (c)   IfEmployee's employment is terminated by the Corporation for Misconduct, the Corporation's obligations under this Agreement will terminate and the Corporation will not be liable to Employer for any payments of any kind under this Agreement, includingwithout limitation any claim to unpaid bonus amounts.

                        (d)   IfEmployee's employment under this Agreement is terminated by the Corporation for reason other than Misconduct during the first year of any two-year employment period under this Agreement, the Corporation will pay Employee the remaining salary that he wouldhave received under this Agreement and arrange for the coverage of health and welfare benefits. If Employee's employment under this Agreement is terminated for reason other than Cause during the second year of any two-year employment period under thisAgreement, the Corporation will pay Employee an amount equal to the salary earned by Employee during the twelve months immediately preceding the termination and arrange for the coverage of health and welfare benefits. The frequency of the payments made toEmployee under this Section will be at the Corporation's discretion.

                        (e)   IfEmployee's employment is terminated due to his death or disability, the Employee (or his estate) will be entitled to a pro rata portion of his salary and bonus earned through the date of termination.

               14.    Assignment. Employee knows that the servicesto be performed by him for the Corporation are unique and personal. Accordingly, Employee may not assign any of his rights or delegate any of his duties or obligations under this Agreement, except as otherwise expressly provided for in this Agreement.

               15.   Injunctive Relief. Employee agrees that the remedy of monetary damages for anybreach or threatened breach by Employee of the covenants in Sections 8 (Confidentiality), 9 (Corporate Opportunity), and 11 (Nonsolicitation) of this Agreement will be inadequate to remedy fully the breach because any breach or attempted breach byEmployee would cause immediate, substantial and irreparable loss of business and profits to the Corporation and its affiliates in an amount which would be impossible to calculate. Therefore, if Employee breaches or threatens to breach any of thecovenants, in addition to any and all other legal and equitable remedies which may be available, including suit for recovery of actual damages, the Corporation and its affiliates, or any successor of the Corporation or its affiliates, will be entitled toinjunctive relief, without needing to prove any actualloss of business to the Corporation or its affiliates by reason of the Employee's breach and, to the extent permissible under the applicable law, a temporary restraining order will be granted immediately on commencement of any suit by the Corporation orits affiliates. Employee waives any right to notice of any application by the Corporation or its affiliates for a temporary restraining order.

               16.     Reasonableness. Employee has weighed all the facts, conditions andcircumstances pertaining to this Agreement and Employee agrees that all of the provisions of this Agreement are reasonable. Employee will not contest the validity of any provision of this Agreement and he waives any and all rights he may have to bring anyclaim, action or suit or to raise any defense regarding the validity and reasonableness of this Agreement or any of its provisions. If Employee brings an action or raises any defense in violation of this Section, the Corporation will be entitled toreceive reimbursement from Employee for the Corporation's reasonable attorney fees and costs.

               17.     Validity. If any provision contained in this Agreement, or theapplication of any provision, is held invalid or unenforceable by a court of competent jurisdiction, that provision will be deemed to be modified in a manner to make it consistent with the intent of the original provision, so that, as revised, theprovision will be valid and enforceable, and this Agreement, and the application of the provision to persons or circumstances other than those for which it would be invalid or unenforceable, will not be affected by the revision.

               18.     Binding Effect. This Agreement will inure to the benefit of and bebinding upon the Corporation and its permitted assigns, including without limitation any person or entity which may acquire substantially all of the Corporation's assets or business, or with or into which the Corporation may be liquidated, consolidated,merged or otherwise combined, and will inure to the benefit and be binding upon Employee, his heirs, distributes and personal representatives.

               19.     Notices. All notices and other communications to be provided underthis Agreement will be effective when they are received if they are in writing and hand delivered or sent by facsimile transmission and confirmed by U.S. mail, and will be effective one (1) day after they are sent by a nationally recognized overnightdelivery service. Any communication given in any other manner will be effective only if and when it is received by the party to be notified. For the purposes of this Section, the addresses of the parties are the addresses stated in the first paragraph ofthis Agreement. A party may change the address to which all communications are to be sent by giving written notice to the other party in accordance with this Section.

               20.     Waiver. Either party's failure to insist in any one or more instancesupon the other party's performance of any of the terms or conditions of this Agreement will not be construed as a waiver of future performance of any term, covenant or condition, but the obligations of either party with respect to the term or conditionwill continue in full force and effect.

               21.     Entire Agreement. This Agreement supersedes all previous agreementsbetween Employee and the Corporation, and contains the entire understanding and agreement between the parties regarding Employee's employment with the Corporation. This Agreement cannot be amended, modified or supplemented in any respect except by asubsequent written agreement signed by both the Corporation and Employee.

               22.     Governing Law; Forum. This Agreement is a contract made under, andwill be governed by and construed in accordance with, the law of the State of Michigan which is applicable to contracts made and to be performed entirely within Michigan, without giving effect to choice of law principles of Michigan. The Corporation andEmployee each agree that any legal or equitable action or proceeding with respect to this Agreement or Employee's employment with the Corporation will be brought only in any court of the State of Michigan, or in any court in the United States of Americasitting in Michigan, and the Corporation and Employee each submits to and accepts the jurisdiction of those courts with respect to such party's person and property, and irrevocably consents to the service of process in connection with any action orproceeding by personal delivery to or a mailing by registered or certified mail, postage prepaid to each party at the party's address contained in this Agreement. Nothing in this Section will affect the right of the Corporation and Employee to serveprocess in any other manner permitted by law. The Corporation and Employee each irrevocably waives any objection to the laying of venue of any action or proceeding in the courts described in this Section.

               23.     Headings. The headings contained in this Agreement are forconvenience only and are not to be used in construing or interpreting this Agreement.

               24.     Counterparts. This Agreement may be executed in one or morecounterparts, which will each be deemed to be an original, but all of which will constitute one and the same document.

               IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date written in the first paragraph of thisAgreement.

 

/s/ Hayden Harris