Edgar Filing: CLEAN DIESEL TECHNOLOGIES INC

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

SCHEDULE 14A
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PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. 1)

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14A-6(E)(2))

[X] Definitive Proxy Statement

[ ] Definitive Additional Materials

[ ] Soliciting Material Pursuant to Sec.240.14a-12

CLEAN DIESEL TECHNOLOGIES, INC.
(Name of Registrant as Specified In Its Charter)

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CLEAN DIESEL TECHNOLOGIES, INC.
300 ATLANTIC STREET, SUITE 702
STAMFORD CT 06901

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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 15, 2006

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To the Stockholders of Clean Diesel Technologies, Inc.:

The annual meeting (the "Meeting") of stockholders of Clean Diesel
Technologies, Inc., a Delaware corporation ("Clean Diesel"), will be held
Thursday, June 15, 2006, at the offices of J. M. Finn & Co., Salisbury House,
London Wall, London EC2M 5TA U.K. at 11:00 a.m. to consider and act upon the
following matters, each of which is explained more fully in the following Proxy
Statement. A proxy card for your use in voting is also enclosed.

1. To elect seven (7) directors;
2. To ratify the appointment of Eisner LLP as independent auditors for the
year 2006;
3. To authorize an increase in capital from 30 million to 45 million common
shares; and
4. To transact any other business that may properly come before the meeting
or any adjournment.

Only holders of common shares of record at the close of business on April
17, 2006 are entitled to notice of and to vote at the Meeting.

Following the Meeting there will be a presentation of Clean Diesel's
business activities and an opportunity for stockholders to ask questions.

The Clean Diesel Technologies, Inc. Annual Report for 2005 is enclosed with
this Notice of Meeting and Proxy Statement.

By Order of the Board of Directors

Charles W. Grinnell
Secretary

Stamford, Connecticut
April 21, 2006

WHILE THE PRESENCE IN PERSON OR BY PROXY OF STOCKHOLDERS ENTITLED TO CAST ONE
THIRD OF THE OUTSTANDING SHARES SHALL CONSTITUTE A QUORUM AT THE MEETING,
NEVERTHELESS, THE AFFIRMATIVE VOTES OF AT LEAST A MAJORITY OF THE OUTSTANDING
SHARES IS REQUIRED FOR THE APPROVAL OF ITEM 3 OF THE AGENDA. THEREFORE, WHETHER
OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, IT IS REQUESTED THAT YOU
PROMPTLY FILL OUT, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD OR VOTING
INSTRUCTION FORM TO THE SENDER IN THE ENCLOSED RETURN ENVELOPE.

CLEAN DIESEL TECHNOLOGIES, INC.

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PROXY STATEMENT

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The enclosed proxy is solicited by the Board of Directors (the "Board") of
Clean Diesel Technologies, Inc., a Delaware corporation ("Clean Diesel" or
"CDT"), in connection with the annual meeting of stockholders of Clean Diesel
(the "Meeting") to be held at the offices of J. M. Finn & Co., Salisbury House,
London Wall, London EC2M 5TA U.K., on Thursday, June 15, 2006, at 11:00 a.m. and
at any adjournments.

The record date with respect to this solicitation is April 17, 2006. All
holders of the CDT's common shares, $.05 par, as of the close of business on
that date are entitled to vote at the Meeting. The common shares are the only
outstanding securities of CDT. According to the records of CDT's transfer agent,
as of the record date CDT had 26,100,268 common shares outstanding and eligible
to vote. A stockholders list as of the record date is available for inspection
at the office of CDT set out in the Notice of Meeting and will be available for
inspection at the Meeting.

The quorum for the Meeting is that number of common shares representing one
third of the votes entitled to be cast. Item 3 on the agenda, however, requires
the approval of a majority of the votes entitled to be cast. Each stockholder is
entitled as of the record date to cast one vote per common share held.

A proxy may be revoked by a stockholder at any time prior to its being
voted. If a proxy is properly signed and not revoked by the stockholder, the
shares it represents will be voted at the Meeting in accordance with the
instructions of the stockholder. Abstentions and broker non-votes are counted in
determining whether a quorum is present, but are not counted in the calculation
of the vote. If the proxy is signed and returned without specifying choices, the
shares will be voted in accordance with the recommendations of the Board.

Members of the Board and Executive Officers of CDT may solicit
stockholders' proxies. CDT shall bear the cost of proxy solicitation, if any.

The CDT Annual Report to Stockholders, containing financial statements
reflecting the financial position and results of operations of Clean Diesel for
2005 (the "Financial Statements"), and this Proxy Statement were distributed
together commencing in the week of May 1, 2006.

ELECTION OF DIRECTORS

The Board proposes the election of seven directors. The term of office of
each director is until the 2007 Annual Meeting or until a successor shall have
been duly elected or the director shall sooner resign, retire or be removed.
John A. de Havilland, Derek R. Gray, Charles W. Grinnell, John J. McCloy II,
David F. Merrion, Jeremy D. Peter-Hoblyn and Bernhard Steiner are the management
nominees for election as directors of Clean Diesel. These nominees are all
incumbents except Mr. Merrion. Each of the nominees has consented to act as a
director, if elected. Should one or more of these nominees become unavailable to
accept nomination or election as a director, votes will be cast for a substitute
nominee, if any, designated by the Board. If no substitute nominee is designated
prior to the election, the individuals named as proxies on the enclosed proxy
card will exercise their judgment in voting the shares that they represent,
unless the Board reduces the number of directors.

THE AFFIRMATIVE VOTE OF A PLURALITY OF THE SHARES VOTING IS REQUIRED TO
ELECT THE NOMINEES AS DIRECTORS. THE BOARD RECOMMENDS A VOTE FOR EACH OF THE
NOMINEES.

The following table sets forth certain information with respect to each
person nominated and recommended to be elected as a director of Clean Diesel.

Name Age Director Since
---------------------- --- --------------

John A. de Havilland 68 1994
Derek R. Gray 72 1998
Charles W. Grinnell 69 1994
John J. McCloy, II 68 2005
David F. Merrion 69 -
Jeremy D. Peter-Hoblyn 66 1994
Bernhard Steiner 57 2004

DIRECTORS AND EXECUTIVE OFFICERS OF THE CLEAN DIESEL

JOHN A. de HAVILLAND has been a director of CDT since its inception. Mr. de
Havilland was a director of J. Henry Schroder Wagg & Co. Ltd., a merchant bank,
from 1972 until his retirement in 1989. Except for the period of April through
December 1998, Mr. de Havilland was a Managing Director of Fuel-Tech N.V., a
pollution control company, from 1987 through March 1, 2002.

DEREK R. GRAY has been a director of CDT since 1998. Mr. Gray has been
Managing Director of S G Associates Limited, a United Kingdom fiscal advisory
firm since 1971 and a director of Velcro Industries N.V., a manufacturing
company, since 1974.

CHARLES W. GRINNELL has been Vice President, General Counsel and Corporate
Secretary of CDT since its inception and has held the same positions with
Fuel-Tech N.V. since 1987. Mr. Grinnell, a Managing Director of Fuel-Tech N.V.,
is engaged in the private practice of corporate law in Stamford, Connecticut.

JOHN J. MCCLOY, II is a private investor concentrating on venture capital
and early stage investment projects in a variety of industries. He is Chairman
of Gravitas Technology, Inc., an information technology company, a director of
NCT Group, Inc., a communications technology company, the Sound Shore Mutual
Fund, Inc., Ashland Management, Inc., an investment advisory firm, and the
American Council on Germany, and a member of the U.S. Council on Foreign
Relations.

DAVID F. MERRION, has been Chairman of Clean Diesel's Technical Advisory
Board since January 10, 2005. He is the principal of David F. Merrion LLC, a
consulting practice. Mr. Merrion is a retired Executive Vice President -
Engineering of Detroit Diesel Corporation, his employer from 1988 to 1999. He
has been a director of Catalytica Energy Systems, Inc., a catalytic research and
development company since 2004 and a director of Greenvision Technology, LLC, an
intellectual property holding company, since 2000. If elected a director, Mr.
Merrion will continue as chairman of the CDT Technical Advisory Board.

JEREMY D. PETER-HOBLYN was Chief Executive Officer of CDT from its
inception until his retirement on September 14, 2004. He was President from
inception until March 12 2002 and Chairman from March 12, 2002 until June 11,
2003. He was a Managing Director of Fuel-Tech N.V. from 1987 through March 1,
2002.

R. GLEN REID, 59, has been Vice President - Sales and Marketing of CDT
since April 18, 2003 and an employee of CDT since 2002. From 1999 to 2002 Mr.
Reid was Vice President - Sales and Marketing of Marathon Sensors, Inc., a
manufacturer of sensors and associated instrumentation.

TIMOTHY ROGERS, 44, has been Executive Vice President - International
Operations since January 25, 2006; had been Vice President - International of
CDT since February 21, 2004; and had been a consultant to CDT since September
30, 2003. From 2002 to September 2003 he was Director of Sales and Marketing of
ADAS Consulting, Ltd. and from 1993 to 2002 was a Director of Adastra, a wholly
owned subsidiary of Associated Octel Company, Ltd, a U.K. based multinational
Petrochemical Company.

DR. BERNHARD STEINER became Chief Executive Officer of CDT on September 14,
2004 and President on January 25, 2006. Dr. Steiner held Executive Director
positions from 2003 at both Wayfinder Systems AB of Sweden, a navigation and
location software development company, and OWR AG, a leading NBC protection
solutions company. He continues as a non-executive director at both

companies. From 1999 until 2003 Dr. Steiner was General Manager of the Software
Solutions Group of Motorola, Inc., an electronics company. From 1994 until 1999
he was Chairman and Chief Executive of the NXT PLC Group companies Wharfedale
and Mission and from 1996 Group Managing Director of NXT PLC. Dr. Steiner, a
graduate of the University of St. Gallen, Switzerland, has also during his
business career held executive sales and marketing positions at Canon, Sony and
Amstrad PLC.

DR. WALTER G. COPAN, 52, has been Executive Vice President/North American
Operations & Chief Technology Officer of CDT since January 25, 2006; and he had
been Vice President and Chief Technology Officer of CDT from August 3, 2005 when
he joined CDT. Previously, Dr. Copan had been Principal Licensing Executive,
Technology Transfer, of the National Renewable Energy Laboratory of the U.S.
Department of Energy since June 2003; and before that had been Managing
Director, Technology Transfer and Licensing of The Lubrizol Corporation, a fuel
additive company, his employer since 1975.

DAVID W. WHITWELL, 40, has been Senior Vice President - Administration and
Treasurer and Chief Financial Officer of CDT since January 25, 2006; and he had
been Vice President, Chief Financial Officer and Treasurer of CDT since 1999.
Previously, Mr. Whitwell had been Vice President and Chief Financial Officer of
Primedia, Inc.'s Special Interest Magazine Division since 1996 and prior to that
position had been Manager of Planning and Analysis at the Health Care Products
Division of Schering Plough, Inc. since 1991.

Mr. Merrion was nominated by the directors on recommendation of the
Compensation and Nominating Committee. Mr. Merrion was well known to the
directors because of his industry experience and membership on the CDT Technical
Advisory Board. No fees were paid on account of Mr. Merrion's nomination.

Mr. James M. Valentine, who resigned as a director of CDT on January 19,
2006, is not a nominee.

There are no family relationships among any of the director nominees or
executive officers. Please also see the text below under the captions "Certain
Relationships and Related Transactions."

COMMITTEES OF THE BOARD

The standing Committees of the Board are an Audit Committee, a Compensation
and Nominating Committee and a Finance Committee. Messrs. Gray and de Havilland
are the members of the Audit Committee. Messrs. de Havilland, Gray and McCloy
are the members of the Compensation and Nominating Committee. Messrs. de
Havilland, Gray, McCloy and Dr. Steiner are members of the Finance Committee.
Mr. Gray is Chairman of the Audit Committee and the Finance Committee and Mr. de
Havilland is Chairman of the Compensation and Nominating Committee. The Charters
of the Audit and the Compensation and Nominating Committees are available for
viewing on the CDT web site . The Audit Committee Charter is also
attached as Schedule I to this proxy statement.

The Audit Committee

The Audit Committee is responsible for review of audits, financial
reporting and compliance, and accounting and internal controls policy. For audit
services, the Audit Committee is responsible for the engagement and compensation
of independent auditors, oversight of their activities and evaluation of their
independence. The Audit Committee has instituted procedures for receiving
reports of improper record keeping, accounting or disclosure. The Board has also
constituted the Audit Committee as a Qualified Legal Compliance Committee in
accordance with Securities and Exchange Commission regulations.

In the opinion of the Board each of the voting members of the Audit
Committee has both business experience and an understanding of generally
accepted accounting principles and financial statements enabling them to
effectively discharge their responsibilities as members of that Committee.
Moreover, the Board has determined that Mr. Gray is a Financial Expert within
the meaning of Securities and Exchange Commission regulations. In making this
determination the Board considered Mr. Gray's formal training and long
experience in accounting and auditing and his former service for many years as
the Chairman of the Audit Committee of another reporting Company under the
Securities Exchange Act.

Compensation and Nominating Committee

The Compensation and Nominating Committee is responsible for establishing
executive compensation and administering Clean Diesel's Incentive Compensation
Plan and also identifies director nominees for election to fill vacancies on the
Board of Directors of CDT. Nominees are approved by the Board on recommendation
of the Committee.

In evaluating nominees, the Committee particularly seeks candidates of high
ethical character with significant business experience at the senior management
level who have the time and energy to attend to Board responsibilities.
Candidates should also satisfy such other particular requirements that the
Committee may consider important to CDT's business at the time. When a vacancy
occurs on the Board, the Committee will consider nominees from all sources,
including stockholders, nominees recommended by other parties, and candidates
known to the Directors or CDT management. The Committee may, if appropriate,
make use of a search firm and pay a fee for services in identifying candidates.
The best candidate from all evaluated will be recommended to the Board to
consider for nomination.

Stockholders who wish to recommend candidates for consideration as nominees
should on or before January 1 in each year furnish in writing detailed
biographical information concerning the candidate to the Committee addressed to
the Corporate Secretary of CDT at the address set out on the Notice of Meeting.

Finance Committee

The Finance Committee was established May 9, 2005 to focus at the Board
level on Clean Diesel's financial objectives and resources as well as investor
relations.

CORPORATE GOVERNANCE

Director Independence

Mr. Gray, Mr. de Havilland and Mr. McCloy are, and Mr. Merrion when elected
will be, independent directors under the definition of NASDAQ Rule 4500(a)(15).
Mr. Gray, Mr. de Havilland and Mr. McCloy are also independent under the more
restrictive independence standard applicable to Audit Committees in NASDAQ rule
4350(d). While CDT is not listed on a recognized stock exchange, the Board
generally follows certain policies of The NASDAQ Stock Market, Inc. as best
practice.

Meetings

During 2005 there were seven meetings of the Board of Directors of CDT,
three meetings of the Compensation and Nominating Committee, three meetings of
the Audit Committee and two meetings of the Finance Committee Each Director
attended during 2005 at least 75% of Board and Committee meetings of which he
was a member. Each Director attended the 2005 Annual Meeting of Stockholders.

Code of Business Ethics and Conduct

On the recommendation of the Audit Committee, the Board has adopted a Code
of Business Ethics and Conduct which is available for viewing on the CDT web
site . Changes to or waivers of the requirements of the Code will
be posted to the web site and reflected in appropriate Securities and Exchange
Commission filings.

Indemnification

Under the CDT Certificate of Incorporation, indemnification is afforded
Clean Diesel's directors and executive officers to the fullest extent permitted
by the provisions of the General Corporation Law of the State of Delaware. Such
indemnification also includes payment of any costs which an indemnitee incurs
because of claims against the indemnitee. Clean Diesel is, however, not
obligated to provide indemnity and costs where it is adjudicated that the
indemnitee did not act in good faith in the reasonable belief that the
indemnitee's actions were in the best interests of Clean Diesel, or, in the case
of a settlement of a claim, such determination is made by the Board of Directors
of Clean Diesel.

Clean Diesel carries insurance providing indemnification, under certain
circumstances, to all of its directors and officers for claims against them by
reason of, among other things, any act or failure to act in their capacities as
directors or officers. The annual premium

for this policy is $61,600. No sums have been paid for such indemnification to
any past or present director or officer by Clean Diesel or under any insurance
policy.

RATIFICATION OF APPOINTMENT OF AUDITORS

The Audit Committee has reappointed the firm of Eisner LLP, Certified
Public Accountants ("Eisner"), to be Clean Diesel's independent auditors for the
year 2006 and submits that reappointment to stockholders for ratification.
Eisner, an independent member of Baker Tilly International, was also engaged to
perform that service by the Audit Committee for the 2005 audit. A representative
of Eisner is not expected to be present at the London Meeting.

AUDIT FEES

Fees for professional services provided by Eisner in the last two fiscal
years by category were:

2005 2004
------- -------

Audit Fees $65,178 $65,381
Audit-Related Fees - -
Tax Fees - -
All Other Fees - -
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$65,178 $65,381

"Audit Fees" include fees for the audit of the financial statements, quarterly
reviews and assistance with regulatory filings and compliance.

PRE-APPROVAL POLICIES AND PROCEDURES

CDT's' policy and procedure is that each engagement for audit or non-audit
service is approved in advance by the Audit Committee.

THE AFFIRMATIVE VOTE OF A MAJORITY OF THE SHARES VOTING IS REQUIRED FOR THE
APPROVAL OF THIS PROPOSAL. THE BOARD RECOMMENDS A VOTE FOR THIS PROPOSAL.

REPORT OF THE AUDIT COMMITTEE

Management is responsible for Clean Diesel's internal controls and its
financial reporting. Eisner, the independent auditors, is responsible for
performing an audit of Clean Diesel's financial statements in accordance with
auditing standards generally accepted in the United States and for expressing an
opinion on those financial statements based on their audit. The Audit Committee
reviews these processes.

Management has represented that Clean Diesel's internal controls were
effective at December 31, 2005. Management has also represented that CDT's 2005
financial statements were prepared in accordance with

accounting principles generally accepted in the Unites States. The Committee has
reviewed and discussed those financial statements with both management and
Eisner and has reviewed and discussed with Eisner its report on those financial
statements. The Committee has discussed with Eisner the matters required to be
discussed by the Statement on Auditing Standards No. 61 (Communication with
Audit Committees), as amended.

The Committee has received the written disclosures and the representation
letter from the independent auditors required by Independence Standards Board
Standard No. 1 (Independence Discussions with Audit Committees), as amended, and
has discussed with the independent auditors their independence.

Based on the representations and the reviews and discussions referred to
above, the Committee recommended to the Board of Directors that the audited
financial statements be included in Clean Diesel's Annual Report on Form 10-K
for the year ended December 31, 2005 and filed with the Securities and Exchange
Commission.

This report has been provided by the following members of the Audit
Committee: D. R. Gray, Chairman and J. A. de Havilland.

AUTHORIZATION OF INCREASE IN CAPITAL

Clean Diesel has as of the record date authorized capital under its
certificate of incorporation of 30 million shares of Common and 100,000 shares
of preferred stock (the "Preferred"). No Preferred is outstanding. Of the
Common, 26,100,268 shares are issued and outstanding and 3,690,502 shares are
reserved for the exercise of outstanding options and warrants, leaving only
209,230 shares for future issue.

The directors have determined that additional Common is needed for sales to
investors to provide funds for CDT's commercialization and development
activities and general corporate purposes, and possibly for other uses,
including potential merger and acquisition activity and for provision for use as
compensation or incentives for directors, officers and employees.

CDT's working capital position is such that CDT will require future
additional sources of working capital. Although CDT now has no commitments for
the issuance of securities except pursuant to its equity incentive plan and
outstanding warrants, CDT expects in the future to conduct discussions with
third parties with respect to potential investments. If any sales of securities
are effected, the terms of such securities, including dividend or interest
rates, conversion prices, voting rights, redemption prices, maturity dates, and
similar matters will be determined by the Board of Directors. Among other
things, CDT may issue and sell unregistered Common in private transactions. Such
transactions may not be available on terms favorable to CDT, or at all.

Form of Amendment of Certificate

The CDT Board resolved on March 15, 2006 to adopt the following resolution
amending the certificate of incorporation of CDT, subject to the approval of a
majority of the outstanding Common and further resolved that the amendment is
advisable and should be recommended to the stockholders for their approval:

Resolved, that Article 4 of the certificate of incorporation be, and
it hereby is, amended by revoking in its entirety the first paragraph
of said Article 4 and the following being substituted in its place, as
follows:

"4. The corporation shall have authority to issue the total Number of Forty Five
Million One Hundred Thousand (45,100,000) Shares of the par value of $0.05 per
share, amounting in the aggregate to Two Million Two Hundred Fifty Five Thousand
Dollars ($2,255,000), and of such shares Forty Five Million (45,000,000) shall
be designated as common stock and One Hundred Thousand (100,000) shall be
designated as preferred stock."

Dilution

The effect of the issuance of additional Common, directly or upon exercise
of options or warrants, if subsequently issued, has potentially dilutive effects
on stockholders. The issuance of Common or Preferred (or even the potential
issue) may have a depressive effect on the market price of CDT's securities and
may dilute the voting power of the outstanding Common. Also the issue of
additional shares of Common or Preferred, or options or warrants to purchase
such shares, would have a dilutive effect on stockholders' equity in CDT and
reduce stockholders' rights to the net assets of CDT on dissolution.

Anti-Takeover Effect

Although the amendment is not motivated by anti-takeover concerns and is
not considered by the Board to be an anti-takeover measure, the availability of
additional authorized Common could be utilized as such. In addition to financing
purposes, CDT could also issue shares of Common or a series of Preferred that
may, depending on the amount of shares, make more difficult or discourage an
attempt to obtain control of CDT by means of a merger, tender offer, proxy
contest or other means. The Directors, might when it is determined to be in the
best interest of the stockholders, create voting, including class voting or
other impediments to obtaining control of CDT.

Preemptive and Dissenting Rights

Under Delaware law, holders of the outstanding Common have no preemptive
rights to purchase or to subscribe to the additional shares authorized by the
amendment and have no dissenting or appraisal rights with respect to the
amendment.

THE AFFIRMATIVE VOTE OF A MAJORITY OF THE OUTSTANDING AND ISSUED COMMON
SHARES IS REQUIRED FOR APPROVAL OF THE FOREGOING PROPOSAL. THE BOARD RECOMMENDS
A FOR THIS PROPOSAL.

PRINCIPAL STOCKHOLDERS AND STOCK OWNERSHIP OF MANAGEMENT

The following table sets forth information known to Clean Diesel regarding
the beneficial ownership of common stock as of March 31, 2006 by (i) each person
owning beneficially more than three percent of the outstanding common; (ii) each
director or director nominee of Clean Diesel; (iii) the Named Executive
Officers; and (iv) all directors and executive officers as a group.

NAME AND ADDRESS(1) NO. OF SHARES(2)(3) PERCENTAGE(4)
------------------------------------- ------------------- -------------
Beneficial Owners

Channel Hotels and Properties
Limited(3) 982,677 3.8%
Udaset Limited 1,015,306 3.9%
Kanis SA 1,303,485 5.0%
Trustees of Cadogan Family
Settlement(3)(5) 1,368,278 5.2%
Positive Securities Limited(3) 1,493,312 5.7%
Waltham Forest Friendly Society(2)(3) 1,724,463 6.6%
Fuel-Tech N.V.(2)(3)(5) 1,849,975 7.1%
Ruffer LLP(3) 2,529,205 9.7%
Hawkwood Fund Management(3) 3,550,000 13.6%

Directors and Named Executive Officers

Walter G. Copan (2) 64,204 *
John A. de Havilland (2) 177,761 *
Derek R. Gray (2) 766,591 2.9%
Charles W. Grinnell (2) 246,908 *
John J. McCloy, II 65,000 *
Jeremy D. Peter-Hoblyn(2) 653,775 2.5%
David Merrion - -
R. Glen Reid(2) 135,667 *
Timothy Rogers (2) 161,667 *
Bernhard Steiner(2) 362,121 1.4%
James M. Valentine(2) 486,482 1.9%
David W. Whitwell(2) 304,581 1.2%

All Directors and Officers
as a Group (11 persons)(2) 3,424,757 13.1%

* Less than 1%

(1) The address of Channel Hotels and Properties Limited is Gouray Lodge, Le
Mont de Gouray, Grouville, Jersey, Channel Islands JE3 9GH; of Udaset Limited is
Lord Coutanche House, 62-68 Esplanade Street, St. Helier, Jersey, Channel
Islands JE4 5PS; of Kanis SA, c/o SG Associates, Ltd., 45 Queen Anne Street,
London W1G 9JF U.K.; of Trustees of Cadogan Family Settlement is c/o May, May
and Merrimans, 12 South Square,

Grays Inn, London WC1R 5HH U.K.; of Positive Securities Limited is 31, The
Parade, St. Helier, Jersey, Channel Islands JE2 3QQ; of Waltham Forest Friendly
Society is Key House, 342 Hoe Street, Walthamstow, London E17 9XP U.K.; of
Fuel-Tech N.V. is Castorweg 22-24, Curacao, Netherlands Antilles; of Ruffer LLP
is 103 Wigmore Street, London W1U 1QS U.K.; and of Hawkwood Fund Management is
The Jersey Trust Company, Elizabeth House, 9 Castle Street, St. Helier, Jersey,
Channel Islands JE4 2QP; The address of Directors and Named Executive Officers
is c/o Clean Diesel Technologies, Inc., Suite 702, 300 Atlantic Street,
Stamford, Connecticut 06901.
(2) In addition to shares issued and outstanding, includes shares subject to
options or warrants exercisable within 60 days for Positive Securities Limited,
229,199 shares; Waltham Forest Friendly Society, 25,000 shares; Fuel-Tech N.V.,
25,000 shares; Dr. Copan, 50,000 shares; Mr. de Havilland, 161,317 shares; Mr.
Rogers, 136,667 shares; Dr. Steiner, 191,667 shares; Mr. Gray, 244,757 shares;
Mr. Grinnell, 217,500 shares; Mr. McCloy, 65,000 shares; Mr. Reid, 135,667
shares; Mr. Peter-Hoblyn, 452,500 shares; Mr. Valentine, 470,718 shares; Mr.
Whitwell, 292,219 shares; and, for all directors and officers as a group,
2,418,012 shares. The amount for Mr. de Havilland and for directors and officers
as a group does not include 23,599 shares owned by Mr. de Havilland's adult
children as to which he disclaims beneficial ownership.

(3) To the knowledge of Clean Diesel the Directors and Named Executive
Officers hold sole beneficial ownership and investment power over the shares
reported; Fuel-Tech N.V. has sole beneficial ownership and investment power over
their shares, and the remaining beneficial owners have at least shared
investment power over their holdings.
(4) The percentages are percentages of outstanding stock and have been
calculated by including warrants and options exercisable within 60 days by the
respective stockholders. In addition 3% rather than 5% is presented in
accordance with standard U.K. practice due to Clean Diesel's listing on the
Alternative Investment Market of the London Stock Exchange.
(5) The shares indicated for Fuel-Tech N.V. include shares held by its
wholly-owned subsidiary, Platinum Plus, Inc.
(6) Mr. de Havilland is one of four trustees who have no beneficial interest
in any Cadogan Family Settlement.

EXECUTIVE COMPENSATION

The table below sets forth information concerning compensation for services
in all capacities awarded to, earned by or paid to Dr. Bernhard Steiner, Chief
Executive Officer; Dr. Walter G. Copan, Executive Vice President, North America
and Chief Technology Officer; Mr. Timothy Rogers, Executive Vice President,
International; Mr. David W. Whitwell, Senior Vice President, Administration and
Treasurer and Chief Financial Officer; Mr. R. Glen Reid, Vice President, Sales
and Marketing; and Mr. James M. Valentine, former President and Chief Operating
Officer, during the fiscal years ended December 31, 2005, 2004 and 2003 (the
"Named Executive Officers"). For information concerning the 2006 executive
compensation program, see the text below under the caption "Compensation of
Executive Officers - 2006" in the report of the Compensation and Nominating
Committee.

Summary Compensation Table
Annual Long-Term
------------------------------------ ---------------------------
Shares
Underlying All Other
Name and Principal Year Salary Bonus Other(2) Options Compensation
Position (1) Granted (#) (4)
(3)
-------------------------------------------------------------------------------------------

Bernhard Steiner 2005 $261,743 $120,000 $ 65,436 100,000 -
Chief Executive Officer 2004 $ 80,300 - $ 20,075 200,000 -
2003 - - - -

Walter G. Copan 2005 $112,179 - - 50,000 $ 1,433
Executive Vice 2004 - - - - -
President, North 2003 - - - - -
America
Chief Technology Officer

Timothy Rogers 2005 $253,985 - - 50,000 -
Executive Vice 2004 $254,225 $ 20,083 - 20,000 -
President 2003 $ 36,000 - - 100,000 -
International

David W. Whitwell 2005 $221,450 - - 50,000 8,400
Senior Vice President 2004 $215,000 15,000 - 20,000 6,150
Administration 2003 $192,083 25,000 - 96,000 5,570
Treasurer
Chief Financial Officer

R. Glen Reid 2005 $173,050 - - 17,000 $ 6,922
Vice President 2004 $168,667 $ 5,000 - 20,000 $ 5,040
Sales and Marketing 2003 $160,667 16,000 $ 38,000 60,000 $ 4,820

James M. Valentine 2005 $324,450 - - 40,000 $ 7,199
Former President and 2004 $315,000 $ 20,000 - 30,000 $ 10,350
Chief Operating Officer 2003 $301,250 $ 50,000 - 120,000 $ 10,088

(1) Dr. Steiner became CEO on September 14, 2004. Dr. Steiner's salary is
at the rate of Euro 200,000 ($250,000) per year. Mr. Copan was employed on
August 3, 2005. Mr. Roger's 2003 compensation was in his capacity as a
consultant prior to his commencement of employment on January 1, 2004. Mr.
Valentine resigned on January 19, 2006, and under the circumstances, he is
entitled to base salary and benefits continuation for one year or until he
obtains comparable employment.
(2) The amounts designated "Other" were in 2005 and 2004 for Dr. Steiner,
healthcare premiums, pension allowance and office expense; and, in 2003 for Mr.
Reid, a relocation allowance.
(3) Options granted were non-qualified stock options through 2002;
thereafter they were incentive stock options, except for options granted to Mr.
Rogers and Dr. Steiner, which were non-qualified stock options. Options are
granted at fair market value of the shares on the date of grant. CDT has granted
no stock appreciation rights in connection with stock options.
(4) The amounts designated "All Other" were matching 401(k) or profit
sharing contributions and, for Mr. Valentine, auto allowance.

DIRECTORS' COMPENSATION

CDT provides an annual retainer of $30,000 plus associated expenses for
directors who are not employees of Clean Diesel. The Chairman of the Board
receives an additional annual retainer of $30,000. The Chairman of the Audit
Committee receives an additional annual retainer of $10,000. Directors who are
employees of Clean Diesel will receive no compensation for their service as
directors. In addition, on December 20, 2005, Messrs. de Havilland, Gray and
McCloy were each granted non-qualified stock options for 15,000 shares at the
exercise price of $1.02 per share and Mr. Peter-Hoblyn was granted a similar
option on that date for 25,000 shares. Mr. Merrion's service on the Technical
Advisory Board is compensated at the rate of $5,000 per meeting and there are
normally four meetings per year.

OPTION GRANTS IN THE LAST FISCAL YEAR
TO NAMED EXECUTIVE OFFICERS

POTENTIAL
NUMBER OF % OF TOTAL REALIZABLE VALUE OF
SHARES OPTIONS EXERCISE ASSUMED ANNUAL
NAME UNDERLYING GRANTED TO OR BASE EXPIRATION RATES OF PRICE
OPTIONS EMPLOYEES PRICE DATE APPRECIATION FOR
GRANTED (#) IN 2005 ($/SHARE) OPTION TERM
5% 10%
-------------------------------------------------------------------------------------

Bernhard 100,000 18% $ 1.02 12/20/15 $ 64,147 $ 162,561
Steiner

Walter G. 100,000 27% $ 1.391 8/3/15 $ 87,479 $ 221,690
Copan 50,000 $ 1.02 12/20/15 $ 32,074 $ 81,281

Timothy 50,000 9% $ 1.02 12/20/15 $ 32,074 $ 81,281
Rogers

David W. 50,000 9% $ 1.02 12/20/15 $ 32,074 $ 81,281
Whitwell

R. Glen 17,000 3% $ 1.02 12/20/15 $ 10,905 $ 27,636
Reid

James M. 40,000 7% $ 1.02 12/20/15 $ 25,659 $ 65,025
Valentine

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION VALUES
OF NAMED EXECUTIVE OFFICERS

NUMBER OF NUMBER OF VALUE OF
SECURITIES SECURITIES UNEXERCISED VALUE OF
SHARES UNDERLYING UNDERLYING IN-THE- UNEXERCISED
ACQUIRED VALUE UNEXERCISED UNEXERCISED MONEY IN-THE-MONEY
NAME ON REALIZED OPTIONS AT OPTIONS AT OPTIONS AT OPTIONS AT
EXERCISE FISCAL YEAR FISCAL YEAR FISCAL FISCAL YEAR-
END/ END/ YEAR-END/ END/
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
--------------------------------------------------------------------------------------

Bernhard
Steiner - - 66,667 108,334 -0- -0-

Walter G.
Copan - - 50,000 100,000 -0- -0-

Timothy
Rogers - - 136,667 33,333 -0- -0-

David W.
Whitwell - - 292,219 33,333 -0- -0-

R. Glen
Reid - - 95,667 11,333 -0- -0-

James M.
Valentine 2,000 $ 1,800 470,718 - $ 299 -0-

REPORT OF THE COMPENSATION AND NOMINATING COMMITTEE
ON EXECUTIVE COMPENSATION POLICIES

Compensation for executives is based on the philosophy that compensation
must: (a) be competitive with other businesses to attract, motivate and retain
the talent needed to lead and grow Clean Diesel's business; (b) be linked to
Clean Diesel's needs for strong entrepreneurial skills to commercialize and
promote its products; (c) encourage executive officers to build their holdings
of Clean Diesel's stock to align their goals with those of the stockholders;
and, (d) to conserve cash.

COMPENSATION OF EXECUTIVE OFFICERS - 2006

In December 2005 the Committee reviewed Clean Diesel's executive
compensation program and made significant changes for 2006. Executive salaries
were voluntarily reduced by 5% to 15% from 2005 levels. In

addition, a 2006 incentive bonus plan was instituted. Under the bonus plan each
participant may earn a Target Bonus of up to twice the amount of the
participant's salary reduction, contingent, however, on certain financial goals
being met.

COMPENSATION OF EXECUTIVE OFFICERS - 2005

The key components of Clean Diesel's executive compensation program during
2005 were base salary and stock option awards under the 1994 Plan. Excepting a
contractually committed bonus payment to Dr. Steiner of $120,000, no bonuses
were paid for 2005. Compensation was fixed by the Board in its discretion based
upon historical levels, performance, ranking within the officer group, amounts
being paid by comparable companies and Clean Diesel's financial position. Stock
options were designed to provide additional incentives to executive officers to
maximize stockholder value. Through the use of vesting periods the option
program encourages executives to remain in the employ of Clean Diesel. In
addition, because the exercise prices of such options are set at the fair market
value of the stock on the date of grant of the option, executives can only
benefit from such options, if the trading price of Clean Diesel's shares
increases, thus aligning their financial interests with those of the
stockholders. Finally, stock options minimize Clean Diesel's cash compensation
requirements.

COMPENSATION OF CHIEF EXECUTIVE OFFICER - 2005

The 2005 compensation of the Chief Executive Officer, Dr. Steiner, fixed in
2004 pursuant to an Executive Agreement of September 13, 2004, was made up of
base salary, stock options, pension and health benefits and a guaranteed bonus
payment (See the Summary Compensation Table above). In 2005, Dr. Steiner's base
salary was Euro 200,000 ($262,743); his bonus was Euro 100,000 ($120,000); and
he was paid Euro 50,000 ($65,436) for healthcare premiums, pension allowance and
office expense. Mr. Steiner was awarded at December 20, 2005 a stock option to
purchase 100,000 shares of CDT Common at the exercise price of U.S. $1.02 per
share.

The foregoing CEO compensation arrangement was approved by the Board on
recommendation of the Compensation and Nominating Committee, based on the
Committee's overall business judgment considering what is appropriate
compensation in view of Clean Diesel's position, arrangements made by comparable
companies, and Dr. Steiner's background and experience.

This report has been provided by the following members of the Compensation
Committee of the Board of Directors of Clean Diesel: and J. A. de Havilland,
Chairman, D. R. Gray and J. J. McCloy.

PERFORMANCE GRAPH

The following line graph compares (i) Clean Diesel's cumulative total
return to stockholders per share of Common Stock for the ten year period ending
December 31, 2005 to that of (ii) the Russell 2000 index and (iii) the Standard
and Poor's 1500 Super composite Specialty Chemicals Index.

[GRAPHIC OMITTED]

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

EMPLOYMENT AGREEMENTS

Messrs. Rogers, Steiner, Reid, Whitwell and Valentine have employment
agreements with Clean Diesel, effective January 1, 2004 for Mr. Rogers;
September 14, 2004 and amended March 1, 2006 for Mr. Steiner; April 1, 2002 for
Mr. Reid; March 1, 2001 for Mr. Whitwell and August 1, 1995 for Mr. Valentine.
These agreements are for indefinite terms, except for Mr. Steiner whose
agreement expires September 13, 2008. If canceled by Clean Diesel under
circumstances that are "at will" as defined in the agreements, Clean Diesel
shall continue the employee's then base salary and benefits until the employee
finds other comparable employment but not for a period in excess of the greater
of six months or the remaining period of the agreement for Mr. Steiner; one year
for Mr. Valentine; nine months for Mr. Whitwell; six months for Mr. Reid; and
three months for Mr. Rogers. Mr. Valentine is currently until January 19, 2007
receiving salary and benefits continuation under his employment agreement, as
supplemented by a Separation Agreement on January 19, 2006 between CDT and Mr.
Valentine. The agreements also contain provisions relating to the employees'
obligations to maintain the confidentiality of Clean Diesel's proprietary
information and to protect such information from competitors and to assign
certain inventions to Clean Diesel.

MANAGEMENT AND SERVICES AGREEMENT

CDT entered into a Management and Services Agreement of July 1995, as
amended (the "Services Agreement") with Fuel Tech, Inc., a wholly-owned
subsidiary of Fuel-Tech N.V. Fuel-Tech N.V. holds 7.1% of the Common shares of
CDT. Services provided to CDT under the Services Agreement are principally legal
services proved by Mr. Grinnell who is an employee of Fuel Tech, Inc. and a
director of Fuel-Tech N.V. and of CDT. In 2005, 2004 and 2003, the amounts of
$71,000, $70,000, and $69,000, respectively, were paid by CDT to Fuel Tech, Inc.
on account these services. Mr. Grinnell will recuse himself from consideration
of any transactions between these companies that may be, or may appear to be,
material to either company.

TECHNOLOGY ASSIGNMENTS

Clean Diesel's technology is comprised of patents, patent applications,
trade or service marks, data and know-how. A substantial portion of this
technology is held under assignments of technology from Fuel Tech, Inc. and Fuel
Tech affiliates. The assignments provide for running royalties payable to Fuel
Tech, Inc. commencing in 1998 of 2.5% of gross revenues derived from platinum
fuel catalysts. Such royalties incurred in 2005, 2004 and 2003 were $10,300,
$7,450 and $4,800. Clean Diesel may at any time terminate the royalty obligation
by payment to Fuel Tech, Inc. in any year from 2005 through 2008 of amounts,
depending on the year, declining from $3.3 million in 2006 to $1.1 million in
2008.

GENERAL

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Clean Diesel believes that all officers and directors of Clean Diesel were
in compliance with 2005 filing requirements relating to beneficial ownership
reports under Section 16(a) of the Securities Exchange Act of 1934, except that
the following filings were delayed, each filing relating to a single
transaction: the Forms 4 due for Mr. Gray on June 13, November 14, and December
22 were filed on July 6, November 16, and December 29; the Form 4 for Mr.
Peter-Hoblyn due November 14 was filed November 16;; the Form 4 due for Mr.
Rogers on December 22 was filed on December 29; the Form 4 for Mr. Reid due on
December 22 was filed December 27; and the Form 4 for Mr. Valentine due December
22 was filed February 24, 2006.

STOCKHOLDER PROPOSALS

Proposals of stockholders intended for inclusion in the proxy statement and
proxy to be mailed to all stockholders entitled to vote at the 2007 Annual
Meeting of Stockholders of Clean Diesel must be received in writing at the
address of Clean Diesel set out on the Notice of Meeting on or before December
22, 2006 and, if received thereafter, may be excluded by Clean Diesel.

COMMUNICATIONS WITH THE BOARD OF DIRECTORS

Any stockholder desiring to send a communication to the Board, or any
individual director, may forward such communication to the Corporate Secretary
to the address of Clean Diesel set out on the Notice of Meeting. Under
procedures fixed from time to time by the independent directors, the Corporate
Secretary will collect and organize all such communications and forward them to
the Board or individual director.

OTHER BUSINESS

Management knows of no other matters that properly be, or are likely to be,
brought before the Meeting other than those described in this proxy statement.

By Order of the Board of Directors

Charles W. Grinnell
Secretary

Stamford Connecticut
April 21, 2006

CLEAN DIESEL WILL PROVIDE WITHOUT CHARGE TO EACH PERSON BEING SOLICITED BY THIS
PROXY STATEMENT, UPON WRITTEN REQUEST, A COPY OF THE ANNUAL REPORT OF CLEAN
DIESEL ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2005, INCLUDING THE
FINANCIAL STATEMENTS AND SCHEDULES THERETO, AS FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION. ALL SUCH REQUESTS SHOULD BE DIRECTED TO THE CORPORATE
SECRETARY AT THE ADDRESS OF CLEAN DIESEL ON THE NOTICE OF MEETING.

STATEMENTS IN THIS PROXY STATEMENT WHICH ARE NOT HISTORICAL FACTS, SO-CALLED
"FORWARD-LOOKING STATEMENTS" ARE MADE PURSUANT TO THE SAFE HARBOR PROVISIONS OF
THE UNITED STATES PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. STOCKHOLDERS
ARE CAUTIONED THAT ALL FORWARD-LOOKING STATEMENTS INVOLVE RISKS AND
UNCERTAINTIES, INCLUDING THOSE DETAILED IN CLEAN DIESEL'S FILINGS WITH THE
SECURITIES EXCHANGE COMMISSION.

Schedule 1

CLEAN DIESEL TECHNOLOGIES, INC.
Audit Committee of the Board of Directors Charter
(As Amended March 13, 2003)

The Board of Directors (the "Board") of Clean Diesel Technologies, Inc. (the
"Company") has established from among its members an Audit Committee (the
"Committee") with the composition, responsibilities and duties described below:

Composition
-----------

The Committee shall be comprised of not less than that number of independent
directors and Financial Experts as shall satisfy applicable law and regulations
and the requirements of any stock exchange on which the Company may be listed
from time to time. Appointment to the Committee or designation as a Financial
Expert is not intended and shall not be construed as imposing on the appointee
or designee a higher degree of individual responsibility, obligation, or
liability or that the duties, obligations or liabilities of the other directors,
or members of the Committee, are decreased because of such appointment or
designation.

Responsibility
--------------

The Committee's responsibility is to assist the Board in fulfilling its
fiduciary responsibilities as to accounting policies and reporting practices of
the Company. The Committee is authorized to retain and fix the compensation of
persons having a special competence as necessary to assist the Committee in
fulfilling such responsibility. Notwithstanding the terms of this Charter, it
shall not be the duty of the Committee to plan or conduct audits or to determine
that the Company's financial statements are complete and accurate and are in
accordance with generally accepted accounting principles, that being the
responsibility of Management and the Independent Accountant. The Independent
Accountant shall report directly to the Committee in connection with issuing an
audit report or related work.

Attendance
----------

At all meetings of the Committee two independent members shall constitute a
quorum. As necessary, the Chairman of the Committee may request members of
Management and representatives of the Independent Accountant to be present at
meetings.

Minutes
-------

Minutes of the meetings of the Committee shall be prepared by the Corporate
Secretary, shall be sent to both Committee members and to directors who are not
Committee members and, after approval by the Committee, shall be kept with the
minutes of the meetings of the Board.

Duties & Responsibilities
---------------------------

1. For purposes of issuing an audit report or related work, have sole authority
to appoint the Independent Accountant; oversee and evaluate the work of the
Independent Accountant; approve the compensation of the Independent Accountant;
review and approve in advance all matters concerning audit and non-audit
services proposed to be performed by the Independent Accountant; and review and
approve any discharge of the Independent Accountant.

2. Receive periodic written statements from the Independent Accountant
regarding its independence and delineating all relationships between it and the
Company, including fees for audit and non-audit services, consistent with
applicable Independence Standards Board Standards; discuss such statements with
the Independent Accountant to review in detail any disclosed relationship or
service that may impact the objectivity and independence of the Independent
Accountant; and, if the Committee shall so determine, take appropriate action to
preserve the independence of the Independent Accountant.

3. Review with Management and the Independent Accountant, prior to the annual
audit, the scope and general extent of the Independent Accountant's audit
examinations and, to the extent appropriate, the Independent Accountant's review
of the Company's interim financial statements.

4. Review with Management and the Independent Accountant, upon completion of
the annual audit, and prior to public release, the Company's financial results
and financial statements for the year proposed for inclusion in the Company's
report to the Securities and Exchange Commission on Form 10-K and annual report
to stockholders (the "Annual Reports"). Discuss with the Independent Accountant
matters required to be discussed by applicable Statements on Auditing Standards
and the applicable requirements of law and regulations relating to the annual
audit.

5. Review with Management and the Independent Accountant the Company's policies
and procedures, as appropriate, to reasonably assess the adequacy of internal
accounting and financial reporting and disclosure controls and receive from the
Independent Accountant, as may be required by applicable law and regulations,
reports on such controls for inclusion in the Company's Annual Reports.

6. Discuss with the Independent Accountant the quality of the Company's
financial accounting personnel and any relevant recommendations of the
Independent Accountant.

7. Prepare the report of the Committee required by the rules of the Securities
and Exchange Commission to be included in the Company's annual proxy statement.

8. Review and approve all related party transactions regardless of amount.

9. Establish procedures for the receipt, retention and treatment of complaints
received by the Company regarding accounting, internal accounting or disclosure
controls, or auditing matters; and the confidential, anonymous submission by
employees of the Company of concerns regarding questionable accounting or
auditing matters.

10. Act ^ as the Qualified Legal Compliance Committee of the Company to receive
reports of material violations of the securities laws, breaches of fiduciary
duty or similar material violations, from legal counsel representing the Company
and practicing before the Securities and Exchange Commission.

11. Review this Charter annually with a view toward recommending revisions to
the Board.

12. Perform such other duties as may be required by law, the Company's
governing documents or the rules of any stock exchange on which the Company may
be listed.

PROXY PROXY

SOLICITED BY THE BOARD OF DIRECTORS

CLEAN DIESEL TECHNOLOGIES, INC.

ANNUAL MEETING OF STOCKHOLDERS - JUNE 15 , 2006

The undersigned hereby appoints Derek R. Gray, Bernhard Steiner, or Charles
W. Grinnell, acting singly, with full power of substitution, proxies for the
undersigned and authorizes them to represent and vote, as designated on the
reverse side, all of the shares of Common Stock of Clean Diesel Technologies,
Inc. ( "Clean Diesel") which the undersigned may be entitled to vote at the
annual meeting of stockholders of Clean Diesel to be held at the offices of
James M. Finn & Co., Salisbury House, London Wall, London EC2M 5TA, U.K. at
11:00 a.m. on Thursday, June 15, 2006, and at any adjournments or postponements
of the meeting, for the approval of the agenda items set forth below and with
discretionary authority as to any other matters that may properly come before
the meeting, all in accordance with and as described in the accompanying Notice
of Meeting and Proxy Statement. The Board of Directors recommends a vote for
election as director of each of the nominees and for each other agenda item,
and, if no direction is given, this proxy will be voted for all nominees and for
such other items.

IMPORTANT - TO BE SIGNED AND DATED ON THE REVERSE SIDE

. Fold and Detach Here .

1. To approve the election as directors of Derek R. Gray, John A. de Havilland,
Charles W. Grinnell, John J. McCloy II, David F. Merrion, Jeremy D.
Peter-Hoblyn, and Bernhard Steiner.

FOR all nominees WITHHOLD
listed above (except AUTHORITY
as marked to the to vote for all
contrary) nominees listed above

(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name on the line provided below.)

--------------------------------------------------------------------------------

2. To ratify the appointment of Eisner LLP as the independent auditors for the
year 2006.

FOR AGAINST ABSTAIN

3. To authorize an increase in capital of from 30 million to 45 million common
shares.

FOR AGAINST ABSTAIN

Dated , 2006
--------------------

----------------------------------

----------------------------------
(Signature of Stockholder)

Please sign exactly as name appears.
If acting as attorney, executor, trustee
or in other representative capacity,
insert name and title.