
                                                                   Exhibit 10s


                            EMPLOYMENT AGREEMENT


     AGREEMENT made as of the date set forth below by and between Jeremy D.
Peter-Hoblyn of Lamellen, Tudy, St. Bodmin, Cornwall,  England ("Employee")
and  Clean  Diesel   Technologies,   Inc.,  a  Delaware   corporation  (the
"Company"),  having a place of business at Suite 702, 300 Atlantic  Street,
Stamford, CT 06901.

     WHEREAS,  the Company desires certain services for itself and Employee
desires to contract with the Company to perform such services;

     NOW THEREFORE,  in consideration  of the mutual covenants  hereinafter
recited,  the  sufficiency  of which is hereby  acknowledged,  the  parties
hereto agree as follows:

          1. Term:  This  Agreement  shall commence on the date of grant to
Employee of a United States L-1 visa and shall  continue  thereafter  until
terminated by either party as provided below.

          2.  Scope of Work;  Title:  Employee  shall be  appointed  as the
President  and Chief  Executive  Officer of the Company.  The Company shall
also  during  the term of this  agreement  cause  Employee  annually  to be
nominated as a director of the Company. In such employment,  Employee shall
on a full-time  basis direct all of his efforts  toward the  performance of
such duties as shall be assigned  to him by the Board of  Directors  of the
Company  acting  through  its  Chairman.  "Full  time"  shall mean no other
substantial outside business activities.

          3. Salary;  Benefits:  The Company agrees to cause Employee to be
paid for his  services  hereunder  at the rate of  US$250,000.00  per year.
Employee to be paid such amounts by the Company according to its normal and
customary  procedures  from time to time in effect  but not less often than
monthly.  Employee  shall be entitled to  participate  from time to time in
such  benefit  programs,  or  equivalent,  as shall  have  heretofore  been
extended  to  him by  the  Company's  predecessor,  Fuel-Tech  N.V.  or its
affiliates.  Additionally,  the Company  shall expend up to $50,000 for the
annual  premium for a U.K.  based annuity for you (less such amounts as you
may  receive  from  the  Company's  401K or  profit  sharing  plans).  This
agreement may not be construed to prevent the Company from  rescinding  any
such other benefit programs for Employee so long as such rescission applies
to officers as a class.

          4. Expenses:  Employee shall be reimbursed by the Company for all
ordinary  and  necessary  out-of-pocket  expenses  incurred  by Employee in
performing  his  services  hereunder.  Such  expenses to be  reported  from
time-to-time by Employee on the Company's customary forms of expense report
and submitted for approval to the Chairman of the Board of the Company.

          5. Termination of Employment:  (a) Just Cause. The Company may at
any time  terminate  this  agreement for Just Cause.  Just Cause shall mean
conviction of the employee  under,  or a plea of guilty by the Employee to,
any charge which would  constitute a felony under the laws of  Connecticut;
any  instance  of fraud,  embezzlement,  self-dealing,  insider  trading or
similar  malfeasance with respect to the Company;  or substance abuse which
shall,  in the sole  discretion  of the Board of  Directors of the Company,
limit Employee's performance of his duties.

               (b)  Disability.  The Company may terminate  this  agreement
upon the physical disability of Employee,  if the Directors shall determine
that,  as a result of physical  disability  Employee  has for a  continuous
period of six months been substantially  absent from his customary place of
work and unable to perform his customary duties.

               (c) At Will.  Either of Employee  or Company  may  terminate
this  agreement on written  notice one to the other.  Where  Employee shall
terminate  this  agreement by resigning  his  employment,  he shall provide
twelve  month's  written  notice  thereof to Company.  Where  Company shall
terminate  this  agreement,   Company  shall  provide  salary  and  benefit
continuation  (in the amount and of the nature then enjoyed by Employee) to
the Employee  month-to-month  for a period of one year,  or until  Employee
shall sooner find other substantially comparable employment.

          6.   Discoveries   and   Inventions:   (a)  All   patentable  and
unpatentable inventions,  discoveries and ideas which are made or conceived
by Employee during the term of his employment,  and which are based upon or
arise out of Employee's  services hereunder  ("Developments")  are or shall
become the Company's property.  Employee agrees to disclose promptly to the
Company each such  Development  and, upon the Company's  request and at its
expense,  Employee  will assist the  Company,  or its  designee,  in making
application  for  Letters  Patent in any  country  in the  world.  Employee
further  agrees  to  execute  all  papers  and do all  things  which may be
necessary or advisable to prosecute such  applications,  and to transfer to
and vest in the Company, or its designee, all the right, title and interest
in and to such  Developments,  and all applications for patents and Letters
Patent issued thereon. If for any reason Employee is unable to effectuate a
full assignment of any such Development, Employee agrees to transfer to the
Company, or its designee,  Employee's  transferable rights, whether they be
exclusive or non-exclusive,  or as a joint inventor or partial owner of the
Development.  No action or inaction  by the  Company  shall in any event be
construed as a waiver or abandonment of its rights to any such  Development
except an instrument in writing  assigned by an authorized  official of the
Company  by which it  specifically  states it  intends  to be bound in such
respect.

          7. Proprietary Information: Employee will not at any time, either
during the term of this Agreement or thereafter, disclose to others, or use
for his own benefit or the benefit of others,  any of the  Developments  or
any confidential,  proprietary or secret  information  owned,  possessed or
used by the Company or any of its subsidiaries or affiliates (collectively,
"Proprietary  Information"),   which,  by  way  of  illustration,  but  not
limitation,   includes  devices,  structures,   machines,  data,  know-how,
business opportunities,  marketing plans, forecasts,  unpublished financial
statements,  budgets,  licenses and information  concerning prices,  costs,
employees, customers and suppliers. Employee's undertakings and obligations
under this Paragraph 7 will not apply to any Proprietary Information which:
(a) is or becomes  generally  known to the public  through no action on the
part of the Employee or (b) is generally  disclosed to third parties by the
Company or any of its  subsidiaries  or affiliates  without  restriction on
such third parties. Upon termination of this Agreement or at any other time
upon  request,  Employee  will  promptly  deliver to the Company all notes,
memoranda,  notebooks, computer disks, drawings, designs, three dimensional
figures, photographs,  layouts, diagrams, records, reports, files and other
documents  (and all  copies  or  reproductions  of such  materials)  in his
possession or under his control,  whether prepared by him or others,  which
contain Proprietary  Information.  Employee acknowledges that this material
is the sole  property of the Company or a subsidiary or an affiliate of the
Company.

          8.  Non-Competition:  Following the termination of Employment for
any reason, Employee agrees that Employee will not recruit,  entice, induce
or encourage any of the Company's  other employees or consultants to engage
in any  activity  which,  were it  done  by  Employee,  would  violate  any
provision of this  Agreement.  For a two-year  period after  termination of
employment  Employee  will not  accept  employment  or  provide  consulting
services where such employment or services  reasonably will involve the use
of  Proprietary  Information  for the benefit of others or the divulging of
Proprietary Information.  During such two-year period and before performing
any services for others,  as employee or consultant  or  otherwise,  in the
actual lines of business in which  Employee has performed  services for the
Company,  its subsidiaries or affiliates,  Employee will notify the Company
of the general  nature of the  services to be  performed  and the party for
whom they will be performed and Employee will,  also,  prior to undertaking
such service or employment  inform the other party of the existence of this
covenant in this  Agreement.  Employee  admits that breach of his covenants
hereunder  regarding the  Company's  Proprietary  information  is likely to
cause serious economic injury to the Company.

          9. Assignment: This Agreement may not be assigned by either party
without the prior written consent of the other party.

          10. Continuing Obligations: The Employee's covenants set forth in
Sections  6,  7,  and 8 above  shall  continue  according  to  their  terms
following the  termination  of this  Agreement,  and,  notwithstanding  the
provision  for  arbitration  below,  such  covenants  may  at any  time  be
judicially enforced by the Company by injunction.

          11.  Governing  Law;  Arbitration.  This  agreement,  any and all
disputes  hereunder or the  interpretation  hereof or any claim by Employee
against the Company shall be governed by and interpreted  under Connecticut
procedural and substantive law, and thirty (30) days after notice, shall be
determined  solely by arbitration  before a single  arbitrator in Stamford,
Connecticut,  under  the  employment  rules  of  the  American  Arbitration
Association in effect as of the date of this agreement or otherwise  agreed
by the parties.  The  arbitrator  shall have no power or authority to award
exemplary or punitive  damages or any statutory or  compounded  damages and
shall  render  his  award  in  writing  setting  forth  the  basis  of  his
determination.  The award of the arbitrator  shall be based on the terms of
this  agreement  and the law. Such award shall be final and binding and may
be entered into and enforced in any Court having jurisdiction.

          12.  Exclusivity:  The rights of Employee against the Company are
not limited in any way by this  Agreement,  and are not  intended to be set
forth  exclusively  hereunder;  provided,  however,  that  any  and  all of
Employee's remedies with respect to such rights, shall be limited solely to
those  available  in  arbitration  hereunder.  Employee's  rights to salary
continuation are in lieu of any severance  benefits provided under policies
of the Company from time to time in effect.

          13. Waiver.  The remedies of Employee hereunder have been entered
into as a  matter  of  bargain  and to the  extent  any  provision  of this
agreement  is or may be  construed  as a  waiver  of  employee's  remedies,
Employee does hereby waive such remedies.

          14. Notices.  All notices hereunder shall be in writing and shall
be deemed effective upon receipt, if hand delivered or if sent by facsimile
and acknowledged  electronically and confirmed by an original  confirmation
copy mailed first class  postage  prepaid.  Notices by mail or  air-courier
service shall be deemed effective upon receipt, if sent first class postage
prepaid  return receipt  requested or by  air-courier  and the sender shall
obtain the signed  receipt  or  confirmation  of  delivery  by the  courier
service.  Otherwise,  notices shall be deemed effective as of the fifth day
after  transmission.  In each  case  notices  shall be  transmitted  to the
address  first given above or such other  address as may be given by notice
as provided herein.

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

EMPLOYEE                            CLEAN DIESEL TECHNOLOGIES, INC.



   /s/ Jeremy D. Peter-Hoblyn           /s/ Charles W. Grinnell
---------------------------------     -----------------------------------
Jeremy D. Peter-Hoblyn                Charles W. Grinnell, Vice President




Date:  December 2, 1996               Date:  December 2, 1996
       --------------------------            ----------------------------
