**Exhibit10.4****EMPLOYMENT AGREEMENT**     **THIS EMPLOYMENT AGREEMENT**(this “Agreement”) is made and entered into by and between **INTERNATIONALFUEL TECHNOLOGY, INC.,**a Nevada corporation (the “Company”), and **JONATHAN R. BURST** (the“Employee”), and is dated as of the first day of January, 2002.     **WHEREAS,**the Board of Directors of the Company (the “Board”) has determined that it is in the bestinterests of the Company and its shareholders to employ the Employee in the position set forthbelow, and the Employee desires to serve in that capacity.     **NOW, THEREFORE,**in consideration of the foregoing premises, the mutual covenants and promisesherein contained, and other good and valuable consideration, the receipt and sufficiency of whichis hereby acknowledged, the Company and Employee hereby agree as follows: 1. **Employment Period****.** The Company shall employ the Employee, and the Employeeshall serve the Company, on the terms and conditions set forth in this Agreement, for theperiod commencing on January 1, 2002 and ending on December 31, 2004 (“EmploymentPeriod”).     2. **Position and Duties****.**          (a) The Employee shall serve as President and Chief Executive Officer of the Company,reporting to the board of directors, with such duties and responsibilities as are customarilyassigned to such position, and such other duties and responsibilities not inconsistent therewith asmay be assigned to him from time to time by the board.          (b) During the Employment Period, and excluding any periods of vacation and sick leave towhich the Employee is entitled, the Employee shall devote his full-time efforts to the business andaffairs of the Company and use his best efforts to carry out such responsibilities faithfully andefficiently. It shall not be considered a violation of the foregoing for the Employee to (i) serveon corporate, civic or charitable boards or committees, (ii) deliver lectures or fulfill speakingengagements or (iii) manage personal investments so long as such activities do not interfere withthe performance of his responsibilities as an employee of the Company in accordance with thisAgreement or violate the provisions of Section 7 of this Agreement.     3. **Compensation****.**          (a) **Base Salary****.** During the Initial Term, the Employee shall receive an annual base salary(the “Annual Base Salary”) at the minimum rate of $250,000.00. In the event of any Renewal Term,the Annual Base Salary shall be renegotiated by the parties hereto, but in no event shall theAnnual Base Salary during any such Renewal Term be less than $250,000.00. The Annual Base Salaryshall be payable in accordance with the Company’s payroll practices as in effect from time to time.The Board of Directors of the Company may increase the Annual Base Salary above the foregoingamounts at its discretion.
1

 
          (b) **Bonus****.** In addition to the Annual Base Salary, the Employee shall be awardedbonuses (the “Bonus”) at such times and in such amounts as are deemed appropriate by the Board ofDirectors of the Company.          (c) **Stock Options****.** Employee shall receive 250,000 options to purchase shares of theCompany’s common stock at $0.14 per share (the “Stock Compensation”). The 250,000 options for thefirst year of this Employment Agreement shall vest on the last day of the first year of theEmployment Period, unless the Employee is terminated by the Company for Cause (as hereinafterdefined) or the Employee terminates his employment without Good Reason (as hereinafter defined), inwhich case Employee shall be entitled to only that portion of Stock Compensation which has accruedhereunder as of the Date of Termination. The 250,000 options for 2003 and 2004 shall vest on thelast day of this Employment Period.          (d) **Insurance****.** The Company will provide Employee, subject to applicable waitingperiods, with term life insurance in the amount of Two Million Dollars ($2,000,000.00); Employeewill cooperate with the Company in obtaining such policies.          (e) **Other Benefits****.** During the Employment Period: (i) the Employee shall be entitledto participate in all benefit programs of the Company, including, but not limited to, healthinsurance coverage or reimbursement of the Employee’s cost to maintain same; and (ii) the Employeeand/or the Employee’s family, as the case may be, shall be eligible for participation in, and shallreceive all benefits under, all welfare benefit plans, practices, policies and programs provided bythe Company, including, but not limited to any comprehensive dental plan, retirement plans andprofit sharing programs the Company may provide to any other employees from time to time.          (f) **Expenses****.** During the Employment Period, the Employee shall be entitled toreceive prompt reimbursement for all reasonable expenses incurred by the Employee in carrying outthe Employee’s duties under this Agreement, provided that the Employee complies with the policies,practices and procedures of the Company for submission of expense reports, receipt and similardocumentation of such expenses.          (g) **Fringe Benefits****.** During the Employment Period, the Employee shall be entitled topaid vacation and other fringe benefits, in each case on such terms and conditions as aredetermined by the Board of Directors of the Company.     4. **Termination of Employment****.**          (a) **Death or Disability****.** The Employee’s employment shall terminate automatically upon theEmployee’s death during the Employment Period. The Company shall be entitled to terminate theEmployee’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 six months, or for atotal of 90 days in any given period, to perform the Employee’s duties under this Agreement, as aresult of physical or mental illness or injury, and (ii) a physician selected by the Company or itsinsurers, and acceptable to the Employee or the Employee’s guardian or legal
2

 
representative, has determined that the Employee’s incapacity is total and permanent. A terminationof the Employee’s employment by the Company for Disability shall be communicated to the Employee bywritten 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-timeperformance of the Employee’s duties before the Disability Effective Date.          (b) **By the Company****.**               (i) The Company may terminate the Employee’s employment during the Employment Period for Cause orwithout Cause. “Cause” means:                 A. any fraud, embezzlement or other dishonesty of the Employee that materially and adverselyaffects the Company’s business or reputation; or                 B. the Employee’s conviction for a felony or entering into a plea of nolo contendere withrespect to a felony.               (ii) A termination of employment by the Company for Cause shall be effectuated by giving theEmployee written notice (“Notice of Termination for Cause”) of the termination, setting forth theconduct of the Employee that constitutes Cause. Termination of employment by the Company for Causeshall be effective on the date when the Notice of Termination for Cause is given, unless the noticesets forth a later date (which date shall in no event be later than 30 days after the notice isgiven).               (iii) A termination of the Employee’s employment by the Company without Cause shall be effected bygiving the Employee written notice of the termination at least thirty (30) days prior to thetermination date.          (c) **By the Employee****.**               (i) The Employee may terminate employment in the event of a Good Reason. “Good Reason” means:                 A. the assignment to the Employee of any duties inconsistent in any respect with paragraph(a) of Section 2 of this Agreement, other than actions that are not taken in bad faith and areremedied 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 (as defined below).
3

 
For purposes of this Agreement, “Non-Negotiated Change in Control” means any one or more of thefollowing occurrences:               (x) Any individual, corporation (other than the Company, any trustees or other beneficiary holdingsecurities under any employee benefit plan of the Company, or any Company owned, directly orindirectly, by the Stockholders of the Company in substantially the same proportions as theirownership of stock of the Company), partnership, trust, association, pool, syndicate, or any otherentity or any group of persons acting in concert becomes the beneficial owner (within the meaningof Rule 13d-3 under the Securities Exchange Act of 1934) of securities of the Company possessingmore than one-half (1/2) of the voting power for the election of directors of the Company;               (y) There shall be consummated any consolidation, merger, or other business combination involvingthe Company or the securities of the Company in which holders of voting securities of the Companyimmediately prior to such consummation own, as a group, immediately after such consummation, votingsecurities of the Company (or, if the Company does not survive such transaction, voting securitiesof the entity surviving such transaction) having less than one-half (1/2) of the total voting powerin an election of directors of the Company (or such other surviving corporation); or               (z) There shall be consummated any sale, lease, exchange, or other transfer (in one transaction ora series of related transactions) of all, or substantially all, of the assets of the Company (on aconsolidated 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 Reason shall be effectuated by giving theCompany written notice (“Notice of Termination for Good Reason”) of the termination, setting forththe conduct of the Company that constitutes Good Reason. A termination of employment by theEmployee for Good Reason shall be effective on the fifth business day following the date when theNotice of Termination for Good Reason is given, unless the notice sets forth a later date (whichdate shall in no event be later than 30 days after the notice is given).               (iii) A termination of the Employee’s employment by the Employee without Good Reason shall beeffected by giving the Company written notice of the termination at least thirty (30) days prior tothe termination date.
4

 
          (d) **No Waiver****.** The failure to set forth any fact or circumstance in a Notice ofTermination for Cause or a Notice of Termination for Good Reason shall not constitute awaiver of the right to assert, and shall not preclude the party giving notice fromasserting, such fact or circumstance in an attempt to enforce any right under orprovision of this Agreement.          (e) **Date of Termination****.** The “Date of Termination” means the date of theEmployee’s death, the Disability Effective Date, the date on which the termination of theEmployee’s employment by the Company for Cause or by the Employee for Good Reason is effective, orthe date on which the Company gives the Employee notice of a termination of employment withoutCause or the Employee gives the Company notice of a termination of employment without Good Reason,as the case may be.     5. **Obligations of the Company upon Termination****.**          (a) **Other Than for Cause, Death or Disability; Good Reason****.** If, during theEmployment Period, the Company terminates the Employee’s employment, other than for Cause, Death orDisability, or the Employee terminates his employment for Good Reason, the Company shall (i) paythe Employee’s accrued but unpaid portion of the Annual Base Salary (the “Accrued Obligations”) tothe Employee in a lump sum in cash within 30 days after the Date of Termination, (ii) continue topay the Annual Base Salary for the remainder of the term hereof, (iii) issue the accrued StockCompensation (the “Accrued Stock Compensation”), and (iv) issue the Stock Compensation for theremainder of the term hereof. If the Company does not extend Employee’s contract beyond the termsof this agreement, Employee shall be paid his current salary over the 1 (one) year period afterthis agreement expires. The payments provided pursuant to this paragraph (a) of Section 5 areintended as liquidated damages for a termination of the Employee’s employment by the Company otherthan for Cause or Disability or for the actions of the Company leading to a termination of theEmployee’s employment by the Employee for Good Reason, and shall be the sole and exclusive remedytherefor.          (b) **Death or Disability****.** If the Employee’s employment is terminated by reason of theEmployee’s death or Disability during the Employment Period, (i) the Company shall pay the AccruedObligations to the Employee or the Employee’s estate or legal representative, as applicable, in alump sum in cash within 30 days after the Date of Termination and (ii) the Company shall issue theAccrued Stock Compensation to the Employee or the Employee’s estate or legal representative. Inaddition, if the Employee’s employment is terminated by reason of Disability, the Company willcontinue to pay to Employee until the earlier of: (i) expiration of the Employment Period, or (ii)the date of Employee’s death, the Annual Base Salary, less any amounts received by Employee underany disability insurance coverage maintained for Employee by the Company.          (c) **Cause; Other than for Good Reason****.** If the Employee’s employment is terminatedby the Company for Cause during the Employment Period, or if the Employee terminates his employmentduring the Employment Period other than for Good Reason, the Company shall pay Employee the AccruedObligations and the Company shall issued the Accrued Stock Compensation.
5

 
     6. **Non-exclusivity of Rights****.** Nothing in this Agreement shall prevent or limit theEmployee’s continuing or future participation in any plan, program, policy or practice provided bythe Company or any of its affiliated companies for which the Employee may qualify, nor, subject toparagraph (f) of Section 11, shall anything in this Agreement limit or otherwise affect such rightsas the Employee may have under any contract or agreement with the Company or any of its affiliatedcompanies. Vested benefits and other amounts that the Employee is otherwise entitled to receiveunder any plan, policy, practice or program of, or any contract or agreement with, the Company orany of its affiliated companies on or after the Date of Termination shall be payable in accordancewith such plan, policy, practice, program, contract or agreement, as the case may be, except asexplicitly modified by this Agreement.     7. **Confidential Information****.** The Employee shall hold in a fiduciary capacity forthe benefit of the Company all secret or confidential information, knowledge or data relating tothe Company or any of its affiliated companies and their respective businesses that the Employeeobtains during the Employee’s employment by the Company or any of its affiliated companies and thatis not public knowledge (other than as a result of the Employee’s violation of this paragraph (a)of Section 7) (“Confidential Information”). The Employee shall not communicate, divulge ordisseminate Confidential Information at any time during the Employee’s employment with the Company,except with the prior written consent of the Company or as otherwise required by law or legalprocess.     8. **No Mitigation****.** In no event shall the Employee be obligated to seek otheremployment or take any other action by way of mitigation of the amounts payable to the Employeeunder any of the provisions of this Agreement and such amounts shall not be reduced, regardless ofwhether the Employee obtains other employment.     9. **Successors****.**          (a) This Agreement is personal to the Employee and, without the prior written consent of theCompany, shall not be assignable by the Employee otherwise than by will or the laws of descent anddistribution. This Agreement shall inure to the benefit of and be enforceable by the Employee’slegal representatives.          (b) This Agreement shall inure to the benefit of and be binding upon the Company and itssuccessors and assigns.     10. **Miscellaneous****.**          (a) This Agreement shall be governed by, and construed in accordance with, the laws of the State ofMissouri, without reference to principles of conflict of laws. The captions of this Agreement arenot part of the provisions hereof and shall have no force or effect. This Agreement may not beamended or modified except by a written agreement executed by the parties hereto or theirrespective successors and legal representatives.
6

 
          (b) All notices and other communications under this Agreement shall be in writing and shallbe given by hand delivery to the other party or by registered or certified mail, return receiptrequested, postage prepaid, addressed as follows:Ifto the Employee:Jonathan R. Burst