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                                                                    EXHIBIT 10.8

                              EMPLOYMENT AGREEMENT

         AGREEMENT made as of the 1st day of December 2003 by and between SAVE
THE WORLD AIR, INC. ("STWA"), a Nevada chartered corporation, and Eugene E.
Eichler (the "Executive").

BACKGROUND

         A.       STWA desires to employ the Executive and the Executive is
willing to serve on the terms and conditions herein provided.

         B.       In order to effect the foregoing, the parties hereto desire to
enter into an employment agreement on the terms and conditions set forth below.

         NOW, THEREFORE, in consideration of the premises and the respective
covenants and agreements of the parties contained herein, and intending to be
legally bound hereby, the parties hereto agree as follows:

         1.       DEFINITIONS AND SPECIAL PROVISIONS. Each capitalized word and
term used herein shall have the meaning ascribed to it in the glossary appended
hereto, unless the context in which such word or term is used otherwise clearly
requires. Such glossary is incorporated herein by reference and made a part
hereof.

         2.       EMPLOYMENT. STWA hereby agrees to employ the Executive, and
the Executive hereby agrees to serve STWA, on the terms and conditions set forth
herein.

         3.       TERM OF AGREEMENT. The Executive's employment under this
Agreement shall commence on the date hereof and, except as otherwise provided
herein, shall continue until December 31, 2007; provided, however, that
commencing on December 31, 2007 and each anniversary thereafter, the term of
this Agreement shall automatically be extended for one additional year beyond
the term otherwise established unless, prior to such date, STWA or the Executive
shall have given a Notice of Non-Extension.

         4.       POSITION AND DUTIES. The Executive shall serve as Chief
Operating Officer of STWA and he shall have such responsibilities, duties and
authority as may, from time to time, be generally associated with such position
and or as specifically detailed in the company's official "Position
Description." He shall also serve as a member of STWA's Board of Directors and
upon any committees thereof as requested by the Board. In addition, the
Executive shall serve in such capacity, with respect to each Subsidiary or
affiliated company, as the Board of Directors of each such Subsidiary or
affiliated company shall designate from time to time. During the term of this
Agreement, he shall devote substantially all of his working time and efforts to
the business and affairs of STWA, the Subsidiaries and affiliated companies;
provided, however, that nothing herein shall be construed as precluding him from
devoting a reasonable amount of time to civic, charitable, trade association and
similar activities that do not represent conflicts and are not otherwise in any
way detrimental to STWA.

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         5.       COMPENSATION AND RELATED MATTERS.

         BASE COMPENSATION. During the period of the Executive's employment
         hereunder, STWA shall pay to him annual base compensation as follows:

         For the period from December 1, 2003 to December 31, 2004 at an annual
         rate not less than $192,000.00;

         The Board(s) of Directors of STWA shall periodically review the
         Executive's employment performance, in accordance with policies
         generally in effect from time to time, for possible merit or
         cost-of-living increases in such base compensation. Except for a
         reduction, should such reduction occur, which is proportionate to a
         company-wide reduction in executive pay, the annual base compensation
         paid to the Executive in any period shall not be less than the annual
         base compensation paid to him in any prior period. The frequency and
         manner of payment of such base compensation shall be in accordance with
         STWA's executive payroll practices from time to time in effect. Nothing
         herein shall be construed as precluding the Executive from entering
         into any salary reduction or deferral plan or arrangement during the
         term of this Agreement; provided, however, that his base compensation
         shall be determined without regard to any such salary reduction or
         deferral for purposes of calculating the amount of any compensation and
         benefits to which he or his surviving spouse may be entitled under
         Paragraph 6, 7, 10, or 11 following his termination of employment. The
         amounts set forth in the first sentence of this subparagraph (a) shall
         be pro rated to the extent such period is less than a year.

                  (a)      INCENTIVE COMPENSATION. During the period of the
         Executive's employment hereunder, he shall be entitled to participate
         in all incentive plans, stock option plans, and similar arrangements as
         may be in effect and maintained by STWA for executive officers on a
         basis and at award levels consistent and commensurate with his position
         and duties hereunder.

                  (b)      EMPLOYEE BENEFIT PLANS AND OTHER PLANS OR
         ARRANGEMENTS. The Executive shall be entitled to participate in all
         Employee Benefit Plans of STWA that either, are in effect at present or
         that may be adopted in the future. In addition, he shall be entitled to
         participate in and enjoy any other plans and arrangements which provide
         for sick leave, vacation, sabbatical, or personal days, club
         memberships and dues, education payment or reimbursement,
         business-related seminars, and similar fringe benefits provided to or
         for the executive officers of STWA from time to time. Notwithstanding
         the foregoing, Executive shall be entitled to at least four (4) weeks
         vacation per calendar year during each year of employment. Such
         vacation shall be prorated during the year 2003 based on the date of
         this Agreement.

                  (c)      EXPENSES. During the period of the Executive's
         employment hereunder, he shall be entitled to receive prompt
         reimbursement for all reasonable and customary expenses, including
         transportation expenses, incurred by him in

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         performing services hereunder in accordance with the general policies
         and procedures established by STWA.

                  (d)      AUTOMOBILE. STWA shall provide for an unaccountable
         monthly automobile allowance of not less than $900.00. The company may,
         at its discretion, provide an automobile, mutually acceptable, to the
         Executive for his exclusive use.

         6.       TERMINATION BY REASON OF DISABILITY.

                  (a)      IN GENERAL. In the event the Executive becomes unable
         to perform his duties on a full-time basis by reason of the occurrence
         of his Disability and, within 30 days after a Notice of Termination is
         given, he shall not have returned to the full-time performance of such
         duties, his employment may be terminated by STWA.

                  (b)      COMPENSATION AND BENEFITS. In the event of the
         termination of the Executive's employment under Subparagraph (a), the
         term of this Agreement shall continue for one year after the Date of
         Termination, and STWA shall pay or provide the compensation and
         benefits set forth below:

                           (1)      The Executive shall be paid an amount per
                           annum equal to the greater of (i) his highest base
                           compensation (including the car allowance provided
                           for in Section 5(e)) received during one of the two
                           calendar years immediately preceding the calendar
                           year in which the Date of Termination occurs, or (ii)
                           his base compensation (including the car allowance
                           provided for in Section 5(e)) in effect immediately
                           prior to the Date of Termination (or prior to any
                           reduction which entitled him to terminate his
                           employment for Good Reason), over a period of one
                           year beginning with such Date of Termination. The
                           frequency and manner of payment of such amounts shall
                           be in accordance with STWA's executive payroll
                           practices from time to time in effect.

                           (2)      The Executive shall be paid an amount equal
                           to the higher of the aggregate bonus (es) paid to him
                           with respect to one of the two years immediately
                           preceding the year in which the Date of Termination
                           occurs. Such amount shall be paid to him in cash on
                           the first anniversary date of the Date of
                           Termination.

                           (3)      The Executive shall be paid an amount equal
                           to the highest annual contribution made on his behalf
                           (other than his own salary reduction contributions)
                           to each tax-qualified and non-qualified Defined
                           Contribution Plan of STWA with respect to the year in
                           which the Date of Termination occurs or one of the
                           two years immediately preceding such year. The amount
                           separately determined for each such plan shall be
                           aggregated and shall be paid to him in cash on the
                           first anniversary date of the Date of Termination.

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                           (4)      The Executive shall accrue benefits equal to
                           the excess of (i) the aggregate retirement benefits
                           he would have received under the terms of each
                           tax-qualified and non-qualified Defined Benefit Plan
                           of STWA as in effect immediately prior to the Date of
                           Termination had he (A) continued to be employed for
                           one more year, and (B) received (on a pro rated
                           basis, as appropriate) the greater of (I) the highest
                           compensation taken into account under each such plan
                           with respect to one of the two years immediately
                           preceding the year in which the Date of Termination
                           occurs, or (II) his annualized base compensation in
                           effect immediately prior to the Date of Termination
                           (or prior to any reduction which entitled him to
                           terminate his employment for Good Reason), over (ii)
                           the retirement benefits he actually receives under
                           such plans. The frequency, manner and extent of
                           payment of such benefits shall be consistent with the
                           terms of the plans to which they relate and any
                           elections made thereunder.

                           (5)      The Executive and his eligible dependents
                           shall be entitled to continue to participate at the
                           same aggregate benefit levels, for one year and at no
                           out-of-pocket or tax cost to him, in the Welfare
                           Benefit Plans in which he was a participant
                           immediately prior to the Date of Termination, to the
                           extent permitted under the terms of such plans and
                           applicable law. To the extent STWA is unable to
                           provide for continued participation in a Welfare
                           Benefit Plan, it shall provide an equivalent benefit
                           directly at no out-of-pocket or tax cost to him. For
                           purposes of the preceding two sentences, STWA shall
                           be deemed to have provided a benefit at no tax cost
                           to him if it pays an additional amount to him or on
                           his behalf, with respect to those benefits which
                           would otherwise be nontaxable to him, calculated in a
                           manner consistent with the provisions of Paragraph
                           12.

                  (c)      ADJUSTMENT TO CERTAIN SUBPARAGRAPH (b) COMPENSATION
         AND BENEFITS. Notwithstanding the provisions of Subparagraph (b)(5),
         STWA's obligation to pay or fund any disability insurance premiums on
         behalf of the Executive shall be suspended while his Disability
         continues, provided the cessation of payment or funding does not result
         in the termination of disability benefits. Any amounts otherwise due
         under Subparagraph (b) shall be reduced (but not below zero) by the
         dollar amount of disability benefits received by him pursuant to plans
         or policies funded, directly at its cost, by STWA.

                  (d)      EARLIER CESSATION OF CERTAIN WELFARE BENEFITS.
         Notwithstanding the provisions of Subparagraph (b)(5), STWA shall not
         be required to provide, at its cost, the welfare benefits covered
         therein after the later of (i) the attainment by the Executive and his
         spouse (if any) of age 65, or (ii) the date specified in the relevant
         plan document for benefit termination (assuming that he was employed
         until age 65 or the normal retirement date, if any, specified in such
         document).

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                  (e)      DEATH DURING REMAINING TERM OF AGREEMENT.

                           (1)      In the event the Executive dies during the
                           remaining term of this Agreement following his
                           termination for Disability and he is survived by a
                           spouse, the compensation and benefits remaining to be
                           paid and provided under Subparagraph (b) shall be
                           unaffected by his death and shall be paid and
                           provided to her or on her behalf; provided, however,
                           that the extent of her rights to the accrued benefits
                           described in Subparagraph (b)(4) shall be determined
                           by reference to the relevant plan provisions and any
                           elections made under such plans; and provided
                           further, that STWA shall not be required to provide
                           continued benefits with respect to her deceased
                           husband; and provided further, that in no event shall
                           STWA be required to provide, at its cost, the other
                           welfare benefits described in Subparagraph (b)(5) to
                           such spouse and her eligible dependents after the
                           earlier of (i) her death, or (ii) the later of (A)
                           her attainment of age 65, or (B) the date specified
                           in the relevant plan document for benefit termination
                           (assuming that the Executive was employed until age
                           65 or the normal retirement date, if any, specified
                           in such document).

                           (2)      In the event the Executive dies during the
                           remaining term of this Agreement following his
                           termination for Disability and he is not survived by
                           a spouse, (i) STWA shall thereafter make the
                           remaining payments described in Subparagraphs (b)(1)
                           through (b)(3) directly to his estate, (ii) the
                           extent of the rights of any person to the accrued
                           benefits described in Subparagraph (b)(4) shall be
                           determined by reference to the relevant plan
                           provisions and any elections made under such plans,
                           and (iii) STWA's obligation to provide continued
                           benefits under Subparagraph (b)(5) shall terminate.

                  (f)      COMPENSATION AND BENEFITS UPON EXPIRATION OF
         REMAINING TERM OF AGREEMENT. Upon the expiration of the remaining term
         of this Agreement following the Executive's termination for Disability,
         and provided his Disability then continues, he shall be entitled to
         receive the compensation and benefits provided under the terms of any
         long-term disability plan of STWA in effect on the Date of Termination
         or, if greater, at the expiration of such remaining term. If such plan
         exists, such compensation and benefits shall continue until the earlier
         of (i) his death, or (ii) the later of (A) his attainment of age 65, or
         (B) the date specified in the plan document for benefit termination. To
         the extent STWA is unable to provide such compensation and benefits
         under its long-term disability plan, if any, it shall provide
         equivalent compensation and benefits directly at no out-of-pocket or
         tax cost to him. For purposes of the preceding sentence, STWA shall be
         deemed to have provided compensation and benefits at no tax cost to him
         if it pays an additional amount to him or on his behalf, with respect
         to the compensation and benefits which would otherwise be

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         nontaxable to him, calculated in a manner consistent with the
         provisions of Paragraph 12.

         7.       TERMINATION BY REASON OF DEATH.

                  (a)      COMPENSATION AND BENEFITS TO SURVIVING SPOUSE. In the
                  event the Executive dies while he is employed under this
                  Agreement and is survived by a spouse, STWA shall pay or
                  provide the compensation and benefits set forth below:

                           (1)      The surviving spouse shall be paid an amount
                           equal to the greater of (i) the Executive's highest
                           base compensation received during one of the two
                           calendar years immediately preceding the calendar
                           year in which the Date of Termination occurs, or (ii)
                           his base compensation in effect immediately prior to
                           the Date of Termination (or prior to any reduction
                           which entitled him to terminate his employment for
                           Good Reason) for a period of one year, beginning with
                           such Date of Termination. The frequency and manner of
                           payment of such amounts shall be in accordance with
                           STWA's executive payroll practices from time to time
                           in effect.

                           (2)      The surviving spouse shall be paid an amount
                           equal to the highest payment made to Executive under
                           each incentive bonus plan of STWA with respect to one
                           of the two years immediately preceding the year in
                           which the Date of Termination occurs. Such amount
                           shall be paid in cash to her within 30 days after the
                           Date of Termination.

                           (3)      The surviving spouse shall be paid an amount
                           equal to the sum of the highest annual contribution
                           made on the Executive's behalf (other than his own
                           salary reduction contributions) to each tax-qualified
                           and non-qualified Defined Contribution Plan of STWA
                           with respect to the year in which the Date of
                           Termination occurs or one of the two years
                           immediately preceding such year. Such amount shall be
                           paid in cash to her within 30 days after the Date of
                           Termination or within 30 days after such amount can
                           first be determined, whichever is later.

                           (4)      Subject to the following sentence, the
                           surviving spouse shall be paid benefits determined by
                           reference to the excess of (i) the aggregate
                           retirement benefits the Executive would have accrued
                           under the terms of each tax-qualified and
                           non-qualified Defined Benefit Plan as in effect
                           immediately prior to the Date of Termination, had he
                           (A) continued to be employed for a period of one year
                           following the Date of Termination, and (B) received
                           (on a pro rated basis, as appropriate) the greater of
                           (I) the highest compensation taken into account under
                           each such plan with respect to one of the two years
                           immediately preceding the year in which

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                           the Date of Termination occurs, or (II) his
                           annualized base compensation in effect immediately
                           prior to the Date of Termination (or prior to any
                           reduction which entitled him to terminate his
                           employment for Good Reason), over (ii) the retirement
                           benefits actually determined under such plans. The
                           frequency, manner, and extent of payment of such
                           benefits shall be consistent with the terms of the
                           plans to which they relate and any elections made
                           thereunder.

                           (5)      The surviving spouse and her eligible
                           dependents shall be entitled to continue to
                           participate at the same aggregate benefit levels, for
                           a period of one year following the Date of
                           Termination and at no out-of-pocket or tax cost to
                           her, in the Welfare Benefit Plans in which the
                           Executive was a participant immediately prior to the
                           Date of Termination, to the extent permitted under
                           the terms of such plans and applicable law; provided,
                           however, that STWA shall not be required to provide
                           continued benefits with respect to her deceased
                           husband; and provided further, that STWA shall not
                           thereafter be required to provide, at its cost, the
                           other welfare benefits covered by such plans to such
                           spouse and her eligible dependents after the earlier
                           of (i) her death, or (ii) the later of (A) her
                           attainment of age 65, or (B) the date specified in
                           the relevant plan document for benefit termination
                           (assuming the Executive was employed until age 65 or
                           the normal retirement date, if any, specified in such
                           document). To the extent STWA is unable to provide
                           for continued participation in a Welfare Benefit Plan
                           as required, it shall provide an equivalent benefit
                           directly at no out-of-pocket or tax cost to her. For
                           purposes of the preceding two sentences, STWA shall
                           be deemed to have provided a benefit at no tax cost
                           to her if it pays an additional amount to her or on
                           her behalf, with respect to those benefits which
                           would otherwise be nontaxable to her, calculated in a
                           manner consistent with the provisions of Paragraph
                           12.

                  (b)      COMPENSATION AND BENEFITS TO ESTATE, ETC. In the
         event the Executive dies while he is employed under this Agreement and
         is not survived by a spouse, (i) STWA shall make the payments described
         in Subparagraphs (a)(1) through (a)(3) directly to his estate, (ii) the
         extent of the rights of any person to the accrued benefits described in
         Subparagraph (a)(4) shall be determined by reference to the relevant
         plan provisions and any elections made under such plans, and (iii)
         STWA's obligation to provide benefits under Subparagraph (a)(5) shall
         terminate.

         8.       TERMINATION BY STWA FOR CAUSE.

                  (a)      IN GENERAL. In the event STWA intends to terminate
         the Executive's employment for Cause, it shall deliver a Notice of
         Termination to him which specifies a Date of Termination not less than
         30 days following the

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         date of such notice, unless a shorter period of notice is required by
         the principal regulator of STWA or any affiliate of STWA.

                  (b)      COMPENSATION. Within 30 days after the Executive's
         termination under Subparagraph (a), STWA shall pay him, in one lump
         sum, his accrued but unpaid base compensation and vacation compensation
         earned through the Date of Termination.

         9.       TERMINATION BY THE EXECUTIVE WITHOUT GOOD REASON.

                  (a)      IN GENERAL. In the event the Executive intends to
         terminate his employment without Good Reason, he shall deliver a Notice
         of Termination to STWA which specifies a Date of Termination not less
         than (i) 90 days following the date of such notice, if a Change in
         Control shall not have occurred, or (ii) 30 days following the date of
         such notice, if a Change in Control shall have occurred.

                  (b)      COMPENSATION. Within 30 days after the Executive's
         termination under Subparagraph (a), STWA shall pay him, in one lump
         sum, his accrued but unpaid base compensation and vacation compensation
         earned through the Date of Termination.

         10.      TERMINATION BY STWA WITHOUT DISABILITY OR CAUSE.

                  (a)      IN GENERAL. In the event STWA intends to terminate
         the Executive's employment for any reason other than Disability or
         Cause, it shall deliver a Notice of Termination to him which specifies
         a Date of Termination not less than 90 days following the date of such
         notice.

                  (b)      COMPENSATION AND BENEFITS DURING REMAINING TERM OF
         AGREEMENT. In the event of the termination of the Executive's
         employment under Subparagraph (a), STWA shall pay or provide the
         compensation and benefits described in Paragraph 6(b), except that all
         such compensation and benefits shall be for the remaining term of this
         Agreement determined in accordance with Section 3 hereof, unless a
         change in control has occurred prior to such termination of employment,
         in which case all such compensation and benefits shall be for a term of
         three (3) years from the Date of Termination and the term of this
         Agreement shall continue until all such compensation and benefits are
         paid to Executive in full.

                  (c)      ADJUSTMENT TO CERTAIN SUBPARAGRAPH (b) COMPENSATION
         AND BENEFITS. In the event the Executive suffers a Disability during
         the remaining term of this Agreement following the Date of Termination,
         STWA's obligation to pay or fund any disability insurance premiums on
         his behalf shall be suspended while his Disability continues, provided
         the cessation of payment or funding does not result in the termination
         of disability benefits. Any amounts described in Paragraph 6(b) and
         otherwise payable under Subparagraph (b) shall be reduced (but not
         below zero) by the dollar amount of disability benefits received by him
         pursuant to plans or policies funded, directly at its cost, by STWA.

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                  (d)      EARLIER CESSATION OF CERTAIN WELFARE BENEFITS.
         Notwithstanding the provisions of Subparagraph (b), STWA shall not be
         required to provide, at its cost, the welfare benefits covered by
         Paragraph 6(b)(5) after the later of (i) the attainment by the
         Executive and his spouse (if any) of age 65, or (ii) the date specified
         in the relevant plan document for benefit termination (assuming that he
         was employed until age 65 or the normal retirement date, if any,
         specified in such document).

                  (e)      DEATH DURING REMAINING TERM OF AGREEMENT.

                           (1)      In the event the Executive dies during the
                           remaining term of this Agreement following his
                           termination without Disability or Cause by STWA and
                           he is survived by a spouse, the compensation and
                           benefits required to be paid and provided under
                           Subparagraph (b) shall be unaffected by his death and
                           shall be paid and provided to her or on her behalf;
                           provided, however, that the extent of her rights to
                           the accrued benefits described in Paragraph 6(b)(4)
                           shall be determined by reference to the relevant plan
                           provisions and any elections made under such plans;
                           and provided further, that STWA shall not be required
                           to provide continued benefits with respect to her
                           deceased husband; and provided further, that in no
                           event shall STWA be required to provide, at its cost,
                           the other welfare benefits described in Paragraph
                           6(b)(5) to such spouse and her eligible dependents
                           after the earlier of (i) her death, or (ii) the later
                           of (A) her attainment of age 65, or (B) the date
                           specified in the relevant plan document for benefit
                           termination (assuming that the Executive was employed
                           until age 65 or the normal retirement date, if any,
                           specified in such document).

                           (2)      In the event the Executive dies during the
                           remaining term of this Agreement following his
                           termination without Disability or Cause and he is not
                           survived by a spouse, (i) STWA shall thereafter make
                           the remaining payments described in Paragraphs
                           6(b)(1) through 6(b)(3) directly to his estate, (ii)
                           the extent of the rights of any person to the accrued
                           benefits described in Paragraph 6(b)(4) shall be
                           determined by reference to the relevant plan
                           provisions and any elections made under such plans,
                           and (iii) STWA's obligation to provide the continued
                           benefits described in Paragraph 6(b)(5) shall
                           terminate.

         11.      TERMINATION BY THE EXECUTIVE FOR GOOD REASON.

                  (a)      IN GENERAL. In the event the Executive intends to
         terminate his employment for Good Reason, he shall deliver a Notice of
         Termination to STWA which specifies a Date of Termination not less than
         30 days following the date of such notice.

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                  (b)      COMPENSATION AND BENEFITS DURING REMAINING TERM OF
         AGREEMENT. In the event of the termination of the Executive's
         employment under Subparagraph (a), STWA shall pay or provide the
         compensation and benefits described in Paragraph 6(b), except that all
         such compensation and benefits shall be for a term of three (3) years
         from the Date of Termination and the term of this Agreement shall
         continue until all such compensation and benefits are paid to Executive
         in full.

                  (c)      ADJUSTMENT TO CERTAIN SUBPARAGRAPH (b) COMPENSATION
         AND BENEFITS. In the event the Executive suffers a Disability during
         the remaining term of this Agreement following the Date of Termination,
         STWA's obligation to pay or fund any disability insurance premiums on
         his behalf shall be suspended while his Disability continues, provided
         the cessation of payment or funding does not result in the termination
         of disability benefits. Any amounts described in Paragraph 6(b) and
         otherwise payable under Subparagraph (b) shall be reduced (but not
         below zero) by the dollar amount of disability benefits received by him
         pursuant to plans or policies funded, directly at its cost, by STWA.

                  (d)      EARLIER CESSATION OF CERTAIN WELFARE BENEFITS.
         Notwithstanding the provisions of Subparagraph (b), STWA shall not be
         required to provide, at its cost, the welfare benefits covered by
         Paragraph 6(b)(5) after the later of (i) the attainment by the
         Executive and his spouse (if any) of age 65, or (ii) the date specified
         in the relevant plan document for benefit termination (assuming that he
         was employed until age 65 or the normal retirement date, if any,
         specified in such document).

                  (e)      DEATH DURING REMAINING TERM OF AGREEMENT.

                           (1)      In the event the Executive dies during the
                           remaining term of this Agreement following his
                           termination for Good Reason and he is survived by a
                           spouse, the compensation and benefits required to be
                           paid and provided under Subparagraph (b) shall be
                           unaffected by his death and shall be paid and
                           provided to her or on her behalf; provided, however,
                           that the extent of her rights to the accrued benefits
                           described in Paragraph 6(b)(4) shall be determined by
                           reference to the relevant plan provisions and any
                           elections made under such plans; and provided
                           further, that STWA shall not be required to provide
                           continued benefits with respect to her deceased
                           husband; and provided further, that in no event shall
                           STWA be required to provide, at its cost, the other
                           welfare benefits described in Paragraph 6(b)(5) to
                           such spouse and her eligible dependents after the
                           earlier of (i) her death, or (ii) the later of (A)
                           her attainment of age 65, or (B) the date specified
                           in the relevant plan document for benefit termination
                           (assuming that the Executive was employed until age
                           65 or the normal retirement date, if any, specified
                           in such document).

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                           (2)      In the event the Executive dies during the
                           remaining term of this Agreement following his
                           termination for Good Reason and he is not survived by
                           a spouse, (i) STWA shall thereafter make the
                           remaining payments described in Paragraphs 6(b)(1)
                           through 6(b)(3) directly to his estate, (ii) the
                           extent of the rights of any person to the accrued
                           benefits described in Paragraph 6(b)(4) shall be
                           determined by reference to the relevant plan
                           provisions and any elections made under such plans,
                           and (iii) STWA's obligation to provide the continued
                           benefits described in Paragraph 6(b)(5) shall
                           terminate.

         12.      PROVISIONS RELATING TO EXCISE TAXES.

                  (a)      IN GENERAL. In the event the Executive becomes
         liable, for any taxable year, for the payment of an Excise Tax (because
         of a change in control) with respect to the compensation and benefits
         payable by STWA under this Agreement or otherwise, STWA shall make one
         or more Gross-Up Payments to the Executive or on his behalf. The amount
         of any Gross-Up Payment shall be calculated by a certified public
         accountant or other tax professional designated jointly by the
         Executive and STWA. The provisions of this paragraph shall apply with
         respect to the Executive's surviving spouse or estate, where relevant.

                  (b)      METHODOLOGY FOR CALCULATION OF GROSS-UP PAYMENT. For
         purposes of determining the amount of any Gross-Up Payment, the
         Executive shall be deemed to pay income taxes at the highest federal,
         state, and local marginal rates of tax for the calendar year in which
         the Gross-Up Payment is to be made, net of the maximum reduction in
         federal income tax which could be obtained from the deduction of state
         and local income taxes. In the event that the Excise Tax is
         subsequently determined to be less than the amount taken into account
         at the time the Gross-Up Payment was made, the Executive shall repay to
         STWA, at the time that the amount of such reduction in Excise Tax is
         finally determined, the portion of the Gross-Up Payment attributable to
         the reduction (plus a portion of the Gross-Up Payment attributable to
         the Excise Tax and the federal, state, and local income taxes imposed
         on the portion of the Gross-Up Payment being repaid by the Executive to
         the extent such repayment results in a reduction in Excise Tax or
         federal, state, or local income tax), plus interest on the amount of
         such repayment. Such interest shall be calculated by using the rate in
         effect under Section 1274(d)(1) of the IRC, on the date the Gross-Up
         Payment was made, for debt instruments with a term equal to the period
         of time which has elapsed from the date the Gross-Up Payment was made
         to the date of repayment. In the event that the Excise Tax is
         subsequently determined to exceed the amount taken into account at the
         time the Gross-Up Payment was made (including by reason of any payment
         the existence or amount of which could not be determined at the time of
         the Gross-Up Payment), STWA shall make an additional Gross-Up Payment
         with respect to the excess at the time the amount thereof is finally
         determined, plus interest calculated in a manner similar to that
         described in the preceding sentence.

                                                                              11
<PAGE>

                  (c)      TIME OF PAYMENT. Any Gross-Up Payment provided for
         herein shall be paid not later than the 30th day following the payment
         of any compensation or the provision of any benefit which causes such
         payment to be made; provided, however, that if the amount of such
         payment cannot be finally determined on or before such day, STWA shall
         pay on such day an estimate of the minimum amount of such payment and
         shall pay the remainder of such payment (together with interest
         calculated in a manner similar to that described in Subparagraph (b))
         as soon as the amount thereof can be determined. In the event that the
         amount of an estimated payment exceeds the amount subsequently
         determined to have been due, such excess shall constitute a loan by
         STWA to the Executive, payable on the 30th day after demand by STWA
         (together with interest calculated in a manner similar to that
         described in Subparagraph (b)).

                  (d)      OTHER ARRANGEMENTS. Notwithstanding the provisions of
         this paragraph to the contrary, the actual amounts payable hereunder as
         Gross-Up Payments shall be coordinated with any similar amounts paid to
         the Executive under any other contract, plan, or arrangement.

         13.      FEES AND EXPENSES OF THE EXECUTIVE.

         After a Change in Control and except as provided in the following
         sentence, STWA shall pay, within 30 days following demand by the
         Executive, all legal, accounting, actuarial, and related fees and
         expenses incurred by him in connection with the enforcement of this
         Agreement. An arbitration panel or a court of competent jurisdiction
         shall be empowered to deny payment to the Executive of such fees and
         expenses only if it determines that he instituted a proceeding
         hereunder, or otherwise acted, in bad faith.

         14.      REDUCTION FOR COMPENSATION AND BENEFITS RECEIVED UNDER STWA
         SEVERANCE POLICY, ETC. Notwithstanding anything herein to the contrary,
         in the event the Executive, his surviving spouse, or any other person
         becomes entitled to continued compensation and benefits hereunder by
         reason of the Executive's termination of employment and, in addition,
         compensation or similar benefits are payable under a severance policy,
         program or arrangement maintained by STWA (other than retirement
         plans), then the compensation or benefits otherwise payable hereunder
         shall be reduced by the compensation or benefits provided under such
         severance policy, program or arrangement.

         15.      MITIGATION. The Executive shall not be required to mitigate
         the amount of any compensation or benefits which may become payable
         hereunder by reason of his termination by seeking other employment or
         otherwise, nor, except as otherwise provided in the following sentence
         or elsewhere herein, shall the amount of any such compensation or
         benefits be reduced by any compensation or benefits received by the
         Executive as the result of his employment by another employer.
         Notwithstanding anything in this Agreement to the contrary, STWA's
         obligation to provide any medical and dental benefits hereunder may be
         suspended, with the written concurrence of the Executive or, if
         applicable, his

                                                                              12
<PAGE>

         surviving spouse during any period of time that such benefits are being
         provided by reason of his or her employment.

         16.      FUNDING OF COMPENSATION AND BENEFITS; ACCELERATION OF CERTAIN
         PAYMENTS.

                  (a)      GRANTOR TRUST. In the event (i) the Executive's
         employment is terminated without Cause or he terminates his employment
         for Good Reason, and (ii) and a Change in Control has occurred as of
         the Date of Termination or occurs thereafter, the Executive shall have
         the right to require STWA to establish a grantor trust (taxable to
         STWA) and fund such trust, on an actuarially sound basis, to provide
         the compensation and benefits to which he is entitled hereunder, other
         than those which may be paid pursuant to the provisions of Subparagraph
         (c). The specific terms of such trust shall be as agreed to by the
         parties in good faith; provided, however, that the trustee shall be a
         financial institution independent of STWA; and provided further, that
         in no event shall STWA be entitled to withdraw funds from the trust for
         its benefit, or otherwise voluntarily assign or alienate such funds,
         until such time as all compensation and benefits required hereunder are
         paid and provided. The determination of the extent of required funding,
         including any supplemental funding in the event of adverse investment
         performance of trust assets, shall be made by an actuary or a certified
         public accountant retained by each party. To the extent such
         professionals cannot agree on the proper level of funding, they shall
         select a third such professional whose determination shall be binding
         upon the parties. Notwithstanding the foregoing, STWA shall remain
         liable for all compensation and benefits required to be paid or
         provided hereunder.

                  (b)      ALTERNATE SECURITY. In lieu of the right given to the
         Executive under Subparagraph (a), he shall have the right under such
         circumstances to require that STWA provide (i) an irrevocable standby
         letter of credit issued by a financial institution other than STWA or
         any Subsidiary of STWA with a senior debt credit rating of "A" or
         better by Moody's Investors Service or Standard & Poor's Corporation,
         or (ii) other security reasonably acceptable to him, to secure the
         payment of such compensation and benefits.

                  (c)      ACCELERATED PAYMENT OF PRESENT VALUE OF CERTAIN
         COMPENSATION. In the event (i) the Executive's employment is terminated
         without Cause or he terminates his employment for Good Reason, and (ii)
         a Change in Control has occurred as of the Date of Termination or
         occurs thereafter, the Executive shall have the continuing right to
         demand that the present value of the remaining payments described in
         Paragraphs 6(b)(1) through (3), and payable by reason of the provisions
         of Paragraph 10 or 11 (as the case may be), be paid to him in one lump
         sum within 30 days after the date written demand is given. For purposes
         of calculating the present value of such payments, a discount factor
         shall be applied to each such payment which is equal to the relevant
         applicable federal rate in effect on the date written demand is given
         by him, determined by reference to the period of time between the date
         of such notice and the scheduled time such payment would otherwise be
         made. In the

                                                                              13
<PAGE>

         event any payment described in Paragraphs 6(b)(1) through (3) is not
         yet determinable on the date written demand is made, the other payments
         shall nonetheless be made as provided above; and the undetermined
         payment shall be made within 30 days after it becomes determinable,
         calculated as provided in the preceding sentence but by treating the
         date on which the payment becomes determinable as the date of written
         notice. Nothing in this subparagraph shall be construed as affecting
         the Executive's right to one or more Gross-Up Payments in accordance
         with the provisions of Paragraph 12; and a Gross-Up Payment (if
         applicable) will be calculated and made with any payment made under
         this subparagraph, as well as any other Gross-Up Payments that may be
         required hereunder at a subsequent date.

         17.      WITHHOLDING TAXES. All compensation and benefits provided for
         herein shall, to the extent required by law, be subject to federal,
         state, and local tax withholding.

         18.      CONFIDENTIAL INFORMATION. The Executive agrees that subsequent
         to his employment with STWA, he will not, at any time, communicate or
         disclose to any unauthorized person, without the written consent of the
         STWA, any proprietary or other confidential information concerning STWA
         or any Subsidiary of STWA; provided, however, that the obligations
         under this paragraph shall not apply to the extent that such matters
         (i) are disclosed in circumstances where the Executive is legally
         obligated to do so, or (ii) become generally known to and available for
         use by the public otherwise than by his wrongful act or omission; and
         provided further, that he may disclose any knowledge of insurance,
         financial, legal and economic principles, concepts and ideas which are
         not solely and exclusively derived from the business plans and
         activities of STWA.

         19.      COVENANTS NOT TO COMPETE OR TO SOLICIT.

                  (a)      NONCOMPETITION. During the period in which he is
         employed by STWA and, if the Executive's employment terminates under
         Paragraphs 6, for a period of 12 months after the Date of Termination
         (the "Noncompetition Period"), the Executive shall not, without the
         written consent in writing of the Board of Directors of STWA, become an
         executive officer, partner, consultant, director, or a four and
         nine-tenths percent or greater shareholder or equity owner of any
         entity engaged in the banking, lending, asset management, mutual fund,
         financial planning or investment security business within the
         California counties of Camden, Burlington, or any other California
         county in which STWA has a branch or loan production office. If at the
         time of the enforcement of this paragraph a court holds that the
         duration, scope, or area restrictions stated herein are unreasonable
         under the circumstances then existing and, thus, unenforceable, STWA
         and the Executive agree that the maximum duration, scope, or area
         reasonable under such circumstances shall be substituted for the stated
         duration, scope, or area.

                  (b)      NONSOLICITATION. During his employment and the
         Noncompetition Period, the Executive shall not, whether on his own
         behalf or on behalf of any

                                                                              14
<PAGE>

         other individual or business entity, solicit, endeavor to entice away
         from STWA, a Subsidiary or any affiliated company, or otherwise
         interfere with the relationship of STWA, a Subsidiary or any affiliated
         company with any person who is, or was within the then most recent 12
         month period, an employee or associate thereof; provided, however, that
         this subparagraph shall not apply following the occurrence of a Change
         in Control.

                  (c)      EXTENSION OF NONCOMPETITION PERIOD. The
         Non-Competition Period shall be automatically extended by the length of
         time (if any) in which the Executive is in violation of any of the
         terms of this Section 19.

         20.      ARBITRATION. To the extent permitted by applicable law, any
         controversy or dispute arising out of or relating to this Agreement, or
         any alleged breach hereof, shall be settled by arbitration in Los
         Angeles, California in accordance with the commercial rules of the
         American Arbitration Association then in existence (to the extent such
         rules are not inconsistent with the provisions of this Agreement), it
         being understood and agreed that the arbitration panel shall consist of
         three individuals acceptable to the parties hereto. In the event that
         the parties cannot agree on three arbitrators within 20 days following
         receipt by one party of a demand for arbitration from another party,
         then the Executive and STWA shall each designate one arbitrator and the
         two arbitrators selected shall select the third arbitrator. The
         arbitration panel so selected shall convene a hearing no later than 90
         days following the selection of the panel. The arbitration award shall
         be final and binding upon the parties, and judgment may be entered
         thereon in the California Superior Court or in any other court of
         competent jurisdiction.

         21.      ADDITIONAL EQUITABLE REMEDY. The Executive acknowledges and
         agrees that STWA's remedy at law for a breach or a threatened breach of
         the provisions of Paragraphs 18 and 19 would be inadequate; and, in
         recognition of this fact and notwithstanding the provisions of
         Paragraph 20, in the event of such a breach or threatened breach by
         him, it is agreed that STWA shall be entitled to request equitable
         relief in the form of specific performance, temporary restraining
         order, temporary or permanent injunction, or any other equitable remedy
         which may then be available. Nothing in this paragraph shall be
         construed as prohibiting STWA from pursuing any other remedy available
         under this Agreement for such a breach or threatened breach.

         22.      RELATED AGREEMENTS. Except as may otherwise be provided
         herein, to the extent that any provision of any other agreement between
         STWA and the Executive shall limit, qualify, duplicate, or be
         inconsistent with any provision of this Agreement, the provision in
         this Agreement shall control and such provision of such other agreement
         shall be deemed to have been superseded, and to be of no force or
         effect, as if such other agreement had been formally amended to the
         extent necessary to accomplish such purpose.

         23.      NO EFFECT ON OTHER RIGHTS. Except as otherwise specifically
         provided herein, nothing contained in this Agreement shall be construed
         as adversely affecting any rights the Executive may have under any
         agreement, plan, policy or

                                                                              15
<PAGE>

         arrangement to the extent any such right is not inconsistent with the
         provisions hereof.

         24.      EXCLUSIVE RIGHTS AND REMEDY. Except for any explicit rights
         and remedies the Executive may have under any other contract, plan or
         arrangement with STWA, the compensation and benefits payable hereunder
         and the remedy for enforcement thereof shall constitute his exclusive
         rights and remedy in the event of his termination of employment.

         25.      DIRECTOR AND OFFICER LIABILITY INSURANCE; INDEMNIFICATION.
         STWA shall provide the Executive (including his heirs, executors, and
         administrators) with the maximum coverage permitted under its
         directors' and officers' liability insurance policy, as soon as STWA
         obtains such a policy, at STWA's expense and shall indemnify him as
         both a director and as an officer (and his heirs, executors, and
         administrators) to the fullest extent permitted under Federal and
         California law against all expenses and liabilities reasonably incurred
         by him in connection with or arising out of any action, suit, or
         proceeding in which he may be involved by reason of his having been an
         officer or director of STWA or any Subsidiary or affiliated company
         (whether or not he continues to be such an officer or director at the
         time of incurring such expenses or liabilities). Such expenses and
         liabilities shall include, but not be limited to, judgments, court
         costs, and attorneys' fees, and the costs of reasonable settlements.

         26.      NOTICES. Any notice required or permitted under this Agreement
         shall be sufficient if it is in writing and shall be deemed given (i)
         at the time of personal delivery to the addressee, or (ii) at the time
         sent certified mail, with return receipt requested, addressed as
         follows:

                  If to the Executive:              Eugene E. Eichler
                                                    4400 Carpenter Avenue
                                                    North Hollywood, CA 91607

                  If to STWA                        5125 Lankersham Boulevard
                                                    North Hollywood, CA 91601

                                                    Attention:  Chairman of the
                                                    Board of Directors

The name or address of any addressee may be changed at any time and from time to
time by notice similarly given.

         27.      NO WAIVER. The failure by any party to this Agreement at any
         time or times hereafter to require strict performance by any other
         party of any of the provisions, terms, or conditions contained in this
         Agreement shall not waive, affect, or diminish any right of the first
         party at any time or times thereafter to demand strict performance
         therewith and with any other provision, term, or

                                                                              16
<PAGE>

         condition contained in this Agreement. Any actual waiver of a
         provision, term, or condition contained in this Agreement shall not
         constitute a waiver of any other provision, term, or condition herein,
         whether prior or subsequent to such actual waiver and whether of the
         same or a different type. The failure of STWA to promptly terminate the
         Executive's employment for Cause or the Executive to promptly terminate
         his employment for Good Reason shall not be construed as a waiver of
         the right of termination, and such right may be exercised at any time
         following the occurrence of the event giving rise to such right.

         28.      SURVIVAL. Notwithstanding the nominal termination of this
         Agreement and the Executive's employment hereunder, the provisions
         hereof which specify continuing obligations, compensation and benefits,
         and rights (including the otherwise applicable term hereof) shall
         remain in effect until such time as all such obligations are
         discharged, all such compensation and benefits are received, and no
         party or beneficiary has any remaining actual or contingent rights
         hereunder.

         29.      SEVERABILITY. In the event any provision in this Agreement
         shall be held illegal or invalid for any reason, such illegal or
         invalid provision shall not affect the remaining provisions hereof, and
         this Agreement shall be construed, administered and enforced as though
         such illegal or invalid provision were not contained herein.

         30.      BINDING EFFECT AND BENEFIT. The provisions of this Agreement
         shall be binding upon and shall inure to the benefit of the successors
         and assigns of STWA and the executors, personal representatives,
         surviving spouse, heirs, devisees, and legatees of the Executive.

         31.      ENTIRE AGREEMENT. This Agreement embodies the entire agreement
         among the parties with respect to the subject matter hereof, and it
         supersedes all prior discussions and oral understandings of the parties
         with respect thereto.

         32.      NO ASSIGNMENT. This Agreement, and the benefits and
         obligations hereunder, shall not be assignable by any party hereto
         except by operation of law.

         33.      NO ATTACHMENT. Except as otherwise provided by law, no right
         to receive compensation or benefits under this Agreement shall be
         subject to anticipation, commutation, alienation, sale, assignment,
         encumbrance, charge, pledge, or hypothecation, or to set off,
         execution, attachment, levy, or similar process, and any attempt,
         voluntary or involuntary, to effect any such action shall be null and
         void.

         34.      CAPTIONS. The captions of the several paragraphs and
         subparagraphs of this Agreement have been inserted for convenience of
         reference only. They constitute no part of this Agreement and are not
         to be considered in the construction hereof.

         35.      COUNTERPARTS. This Agreement may be executed in any number of
         counterparts, each of which shall be deemed one and the same instrument
         which may be sufficiently evidenced by any one counterpart.

                                                                              17
<PAGE>

         36.      NUMBER. Wherever any words are used herein in the singular
         form, they shall be construed as though they were used in the plural
         form, as the context requires, and vice versa.

         37.      APPLICABLE LAW. Except to the extent preempted by federal law,
         the provisions of this Agreement shall be construed, administered, and
         enforced in accordance with the domestic internal law of the State of
         California without reference to its laws regarding conflict of laws.

         IN WITNESS WHEREOF, the parties have executed this Agreement, or caused
         it to be executed, as of the date first above written.

                                               _________________________________
                                                       Eugene E. Eichler

                                               SAVE THE WORLD AIR, INC.

                                               By: _____________________________
                                                       Edward Masry
                                                       Chairman of the Board

                                               Attest: _________________________
                                                       Janice Holder
                                                       Corporate Secretary

                                                                              18
<PAGE>

GLOSSARY

         "BOARD OF DIRECTORS" means the board of directors of the relevant
         corporation.

         "CAUSE" means (i) a documented repeated and willful failure by the
         Executive to perform his duties, but only after written demand and only
         if termination is effected by action taken by a vote of (A) prior to a
         Change in Control, at least a majority of the directors of STWA then in
         office, or (B) after a Change in Control, at least 80% of the
         non-officer directors of STWA then in office, (ii) his final conviction
         of a felony, (iii) conduct by him which constitutes moral turpitude
         which is directly and materially injurious to STWA or any Material
         Subsidiary, (iv) willful material violation of corporate policy, or (v)
         the issuance by the regulator of STWA or any Subsidiary or affiliated
         company of an unappealable order to the effect that he be permanently
         discharged.

         For purposes of this definition, no act or failure to act on the part
         of the Executive shall be considered "willful" unless done or omitted
         not in good faith and without reasonable belief that the action or
         omission was in the best interest of STWA or any of its Subsidiaries or
         affiliated companies.

         "CHANGE IN CONTROL" means the occurrence of any of the following
         events:

                  (a)      any Person (except (i) STWA or any Subsidiary or
         prior affiliate of STWA, or (ii) any Employee Benefit Plan (or any
         trust forming a part thereof) maintained by STWA or any Subsidiary or
         prior affiliate of STWA) is or becomes the beneficial owner, directly
         or indirectly, of STWA's securities representing 19.9% or more of the
         combined voting power of STWA's then outstanding securities, or 50.1%
         or more of the combined voting power of a Material Subsidiary's then
         outstanding securities, other than pursuant to a transaction described
         in Clause (c);

                  (b)      there occurs a sale, exchange, transfer or other
         disposition of substantially all of the assets of STWA or a Material
         Subsidiary to another entity, except to an entity controlled directly
         or indirectly by STWA;

                  (c)      there occurs a merger, consolidation, share exchange,
         division or other reorganization of or relating to STWA, unless--

                           (i)      the shareholders of STWA immediately before
         such merger, consolidation, share exchange, division or reorganization
         own, directly or indirectly, immediately thereafter at least two-thirds
         of the combined voting power of the outstanding voting securities of
         the Surviving Company in substantially the same proportion as their
         ownership of the voting securities immediately before such merger,
         consolidation, share exchange, division or reorganization; and

                           (ii)     the individuals who, immediately before such
         merger, consolidation, share exchange, division or reorganization, are
         members of the Incumbent Board continue to constitute at least
         two-thirds of the board of directors of the Surviving Company;
         provided, however, that if the election, or nomination for election by
         STWA's shareholders, of any new director was approved by a vote of at
         least two-thirds of the Incumbent Board, such director shall, for the
         purposes hereof, be considered a member of the Incumbent Board; and
         provided further, however, that no individual shall be considered a
         member of the Incumbent Board if such individual initially assumed
         office as a result of either an actual or threatened Election Contest
         or

                                      G-19
<PAGE>

         Proxy Contest, including by reason of any agreement intended to avoid
         or settle any Election Contest or Proxy Contest; and

                           (iii)    no Person (except (A) STWA or any Subsidiary
         or prior affiliate of STWA, (B) any Employee Benefit Plan (or any trust
         forming a part thereof) maintained by STWA or any Subsidiary or prior
         affiliate of STWA, or (C) the Surviving Company or any Subsidiary or
         prior affiliate of the Surviving Company) has beneficial ownership of
         19.9% or more of the combined voting power of the Surviving Company's
         outstanding voting securities immediately following such merger,
         consolidation, share exchange, division or reorganization;

                  (d)      a plan of liquidation or dissolution of STWA, other
         than pursuant to bankruptcy or insolvency laws, is adopted; or

                  (e)      during any period of two consecutive years,
         individuals who, at the beginning of such period, constituted the Board
         of Directors of STWA cease for any reason to constitute at least a
         majority of such Board of Directors, unless the election, or the
         nomination for election by STWA's shareholders, of each new director
         was approved by a vote of at least two-thirds of the directors then
         still in office who were directors at the beginning of the period;
         provided, however, that no individual shall be considered a member of
         the Board of Directors of STWA at the beginning of such period if such
         individual initially assumed office as a result of either an actual or
         threatened Election Contest or Proxy Contest, including by reason of
         any agreement intended to avoid or settle any Election Contest or Proxy
         Contest.

         Notwithstanding the foregoing, a Change in Control shall not be deemed
         to have occurred if a Person becomes the beneficial owner, directly or
         indirectly, of securities representing 19.9% or more of the combined
         voting power of STWA's then outstanding securities solely as a result
         of an acquisition by STWA of its voting securities which, by reducing
         the number of shares outstanding, increases the proportionate number of
         shares beneficially owned by such Person; provided, however, that if a
         Person becomes a beneficial owner of 19.9% or more of the combined
         voting power of STWA's then outstanding securities by reason of share
         repurchases by STWA and thereafter becomes the beneficial owner,
         directly or indirectly, of any additional voting securities of STWA,
         then a Change in Control shall be deemed to have occurred with respect
         to such Person under Clause (a).

         Notwithstanding anything contained herein to the contrary, if the
         Executive's employment is terminated and he reasonably demonstrates
         that such termination (i) was at the request of a third party who has
         indicated an intention of taking steps reasonably calculated to effect
         a Change in Control and who effects a Change in Control, or (ii)
         otherwise occurred in connection with, or in anticipation of, a Change
         in Control which actually occurs, then for all purposes hereof, a
         Change in Control shall be deemed to have occurred on the day
         immediately prior to the date of such termination of his employment.

         "STWA" means Save The World Air, Inc.

         "DATE OF TERMINATION" means:

                  (a)      if the Executive's employment is terminated for
         Disability, 30 days after the Notice of Termination is given (provided
         that he shall not have returned to the performance of his duties on a
         full-time basis during such 30-day period);

                  (b)      if the Executive's employment terminates by reason of
         his death, the date of his

                                      G-20
<PAGE>

         death;

                  (c)      if the Executive's employment is terminated by STWA
         for Cause, the date of termination specified in the Notice of
         Termination and determined in accordance with Section 8(a);

                  (d)      if the Executive's employment is terminated by him
         without Good Reason, the date of termination specified in the Notice of
         Termination and determined in accordance with Section 9(a);

                  (e)      if the Executive's employment is terminated by STWA
         for any reason other than for Disability or Cause, the date specified
         in the Notice of Termination and determined in accordance with Section
         10(a); or

                  (f)      if the Executive's employment is terminated by him
         for Good Reason, the termination date specified in the Notice of
         Termination and determined in accordance with Section 11(a);

         provided, however that the Date of Termination shall mean the actual
         date of termination in the event the parties mutually agree to a date
         other than that described above.

         "DEFINED BENEFIT PLAN" has the meaning ascribed to such term in Section
         3(35) of ERISA.

         "DEFINED CONTRIBUTION PLAN" has the meaning ascribed to such term in
         Section 3(34) of ERISA.

         "DISABILITY" has the meaning ascribed to the term "permanent and total
         disability" in Section 22(e)(3) of the IRC.

         "ELECTION CONTEST" means a solicitation with respect to the election or
         removal of directors that, if STWA was subject to the provisions of the
         1934 Act, would be subject to the provisions of Rule 14a-11 of the 1934
         Act.

         "EMPLOYEE BENEFIT PLAN" has the meaning ascribed to such term in
         Section 3(3) of ERISA.

         "ERISA" means the Employee Retirement Income Security Act of 1974, as
         amended and as the same may be amended from time to time.

         "EXCISE TAX" means the tax imposed by Section 4999 of the IRC (or any
         similar tax that may hereafter be imposed by federal, state or local
         law).

         "EXECUTIVE" means NAME OF EXECUTIVE, an individual residing in ADDRESS,
         California.

         "GOOD REASON" means:

                  (a)      prior to a Change in Control--

                           (i)      the Executive's demotion to a lesser
                           position, or any material diminution in his duties or
                           responsibilities;

                           (ii)     a reduction in the Executive's base
                           compensation, other than a reduction which is
                           proportionate to a company-wide reduction in
                           executive pay;

                                      G-21
<PAGE>

                           (iii)    a failure to increase the Executive's base
                           compensation, consistent with his performance rating,
                           within 24 months since the last increase, other than
                           similar treatment on a company-wide basis for
                           executives or a voluntary deferral by him of an
                           increase; or

                           (iv)     any purported termination of the Executive's
                           employment which is not in accordance with the terms
                           of this Agreement; and

                  (b)      after a Change in Control--

                           (i)      a change in the Executive's status or
                           position, or any material diminution in his duties or
                           responsibilities;

                           (ii)     any increase in the Executive's duties
                           inconsistent with his position;

                           (iii)    any reduction in the Executive's base
                           compensation;

                           (iv)     a failure to increase the Executive's base
                           compensation, consistent with his performance review,
                           within 12 months of the last increase; or a failure
                           to consider Executive for an increase within 12
                           months of his last performance review;

                           (v)      a failure to continue in effect any Employee
                           Benefit Plan in which the Executive participates,
                           including (whether or not they constitute Employee
                           Benefit Plans) incentive bonus, stock option, or
                           other qualified or nonqualified plans of deferred
                           compensation (A) other than as a result of the normal
                           expiration of such a plan, or (B) unless such plan is
                           merged or consolidated into, or replaced with, a plan
                           with benefits which are of equal or greater value;

                           (vi)     requiring the Executive to be based anywhere
                           other than the county where his principal office was
                           located immediately prior to the Change in Control;

                           (vii)    refusal to allow the Executive to attend to
                           matters or engage in activities in which he was
                           permitted to engage prior to the Change in Control;

                           (viii)   delivery to the Executive of a Notice of
                           Nonextension;

                           (ix)     failure to secure the affirmation by a
                           Successor, within three business days prior to a
                           Change in Control, of this Agreement and its or
                           STWA's continuing obligations hereunder (or where
                           there is not at least three business days advance
                           notice that a Person may become a Successor, within
                           one business day after having notice that such Person
                           may become or has become a Successor); or

                           (x)      any purported termination of the Executive's
                           employment which is not in accordance with the terms
                           of this Agreement.

Notwithstanding anything herein to the contrary, at the election of the
Executive, beginning with the 181st day following a Change in Control and
continuing through the first anniversary of such Change in Control, he may
terminate his employment for any reason or no reason and such termination will
be treated as having occurred for Good Reason.

                                       G-22
<PAGE>

         "GROSS-UP PAYMENT" means an additional payment to be made to or on
behalf of the Executive in an amount such that the net amount retained by him,
after deduction of any Excise Tax on the Total Payments and any federal, state,
and local income tax and Excise Tax on such additional payment, equals the Total
Payments.

         "INCUMBENT BOARD" means the Board of Directors of STWA as constituted
at any relevant time.

         "IRC" means the Internal Revenue Code of 1986, as amended and as the
same may be amended from time to time.

         "MATERIAL SUBSIDIARY" means a Subsidiary whose net worth, determined
under generally accepted accounting principles, at the fiscal year end
immediately prior to any relevant time is at least 25% of the aggregate net
worth of the controlled group of corporations of which STWA is parent.

         "1934 ACT" means the Securities Exchange Act of 1934, as amended and as
the same may be amended from time to time.

         "NOTICE OF NON-EXTENSION" means a written notice delivered to or by the
Executive which advises that the Agreement will not be extended as provided in
Paragraph 3.

         "NOTICE OF TERMINATION" means a written notice that (i) indicates the
specific termination provision in this Agreement relied upon, (ii) sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated, and
(iii) gives the required advance notice of termination.

     "PERSON" has the same meaning as such term has for purposes of Sections
13(d) and 14(d) of the 1934 Act.

         "PROXY CONTEST" means the solicitation of proxies or consents by or on
behalf of a Person other than the Board of Directors of STWA.

         "SUBSIDIARY" means any business entity of which a majority of its
voting power or its equity securities or equity interests is owned, directly or
indirectly by STWA.

         "SUCCESSOR" means any Person that succeeds to, or has the practical
ability to control (either immediately or with the passage of time), STWA's
business directly, by merger or consolidation, or indirectly, by purchase of
STWA's voting securities or all or substantially all of its assets.

         "SURVIVING COMPANY" means the business entity that is a resulting
company following a merger, consolidation, share exchange, division or other
reorganization of or relating to STWA.

         "TOTAL PAYMENTS" means the compensation and benefits that become
payable under the Agreement or otherwise (and which may be subject to an Excise
Tax) by reason of the Executive's termination of employment, less the federal,
state and local income tax (but not any Excise Tax) on such compensation and
benefits, in each case determined without regard to any Gross-Up Payments that
may also be made.

         "WELFARE BENEFIT PLAN" has the meaning ascribed to the term "employee
welfare benefit plan" in Section 3(1) of ERISA. For purposes of determining the
Executive's or his dependents' right to continued welfare benefits hereunder
following his termination of employment, the meaning of such term shall include

                                      G-23
<PAGE>

any retiree health plan maintained by STWA at any time after the relevant Date
of Termination, notwithstanding the fact that the Executive is not a participant
therein prior to such date.

                                      G-24