Exhibit 4
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS NON-QUALIFIED STOCK OPTION AGREEMENT (this "Agreement") is between
Mark Neuhaus (the "Grantee") and the other party named on the signature page to
this Agreement (the "Company"). Each of the Grantee and the Company are also
referred to in this agreement as the "Parties."
WHEREAS, the Board of Directors of the Company (the "Board of
Directors") has authorized the grant to the Grantee, for services to be rendered
by the Grantee as a consultant to the Company pursuant to the terms of a
Consulting and Marketing License Agreement (the "Consulting Agreement") between
the Company and the Grantee, of a non-qualified stock option (the "Option") to
purchase the number of shares of the Company's common stock (the "Common Stock")
specified in paragraph 1 of this Agreement, at the price specified in paragraph
1 of this Agreement.
NOW THEREFORE, in consideration of the premises and mutual covenants
set forth in this Agreement, the Parties hereby agree as follows:
1. Number of Shares; Exercise Price. Pursuant to action taken by the
Board of Directors, the Company hereby grants to the Grantee, in consideration
of consulting services to be performed for the benefit of the Company pursuant
to the Consulting Agreement, an option ("Option") to purchase the number of
common shares ("Option Shares") of Common Stock set forth below, at the exercise
price set forth below:
Number of Shares or Total Dollar amount: 2,758,620
Exercise Price or Percentage per Share (in US$): $0.725 per share
2. Term. The Option and this Agreement shall expire ten (10)
years from the date of this
Agreement.
3. Shares Subject To Exercise. The Option shall be immediately
exercisable and shall remain exercisable for the entire Term specified in
paragraph 2 of this Agreement.
4. Method and Time of Exercise. The Option may be exercised in whole or
from time to time in part by written notice delivered to the Company stating the
number of Option Shares with respect to which the Option is then being
exercised, together with a check or wire to the Company in the amount equal to
the Exercise Price multiplied by the number of Option Shares then being issued
pursuant to the written notice of exercise. Not less than one hundred (100)
Option Shares may be purchased upon exercise of the Option at any one time
unless the number of Option Shares for which exercise of the Option is being
made is all of the Option Shares then issuable upon exercise of the Option. Only
whole shares shall be issued upon exercise of the Option.
5. Tax Withholding. As a condition to exercise of the options
Grantee shall be liable to pay to all applicable federal, state and local taxes.
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6. Exercise Following Termination of Consulting Agreement. The
Option shall not terminate as a result of the termination of Grantee's services
as a consultant to the Company pursuant to the Consulting Agreement.
7. Transferability. The Option and this Agreement may not be
assigned or transferred except by will or by the laws of descent and
distribution, and with consent of the Company.
8. Grantee Not a Shareholder. The Grantee shall have no rights as
a shareholder with respect to the Option Shares issued from time to time upon
exercise of the Option until the earlier of: (1) the date of issuance of a stock
certificate or stock certificates to the Grantee applicable to the Option Shares
then issuable to the Grantee upon exercise of the Option and (2) the date on
which the Grantee or his nominee is recorded as owner of such Option Shares on
the Company's stock ledger by the Company's registrar and transfer agent, which
may be the Company. Except as set forth in paragraph 13 of this Agreement, no
adjustment will be made for dividends or other rights for which the record date
is prior to the earlier of the events described in clauses (1) and (2) of this
paragraph.
9. Restrictions on Transfer. The Grantee represents and agrees
that, upon the Grantee's exercise of the Option in whole or in part, unless
there is in effect at that time under the Securities Act of 1933 a registration
statement relating to the Option Shares, the Grantee will acquire the Option
Shares for the purpose of investment and not with a view to their resale or
further distribution, and that upon such exercise hereof, the Grantee will
furnish to the Company a written statement to such effect, satisfactory to the
Company in form and substance.
10. Shares Qualified for Listing. Company represents that its
Common Stock is qualified for trading or quotation on a nationally recognized
securities exchange or stock quotation system, including, without limitation,
the NASDAQ Bulletin Board, and for trading with the California Department of
Corporations or such other applicable jurisdictions.
11. Registration Rights. Upon signing this Agreement, the Company
shall immediately, at the Company's expense, use its best efforts to file with
the Securities and Exchange Commission ("SEC"), a registration statement
("Registration Statement") on Form S-8 or other comparable form, or if such form
is not then available, such other form of registration statement then available,
in such form as to comply with applicable federal and state laws for the purpose
of registering or qualifying the Option Shares for public resale by the Grantee,
and prepare and file with the appropriate state securities regulatory
authorities the documents reasonably necessary to register or qualify the Option
Shares, subject to the ability of the Company to register or qualify the Option
Shares under applicable state law.
12. Notices. All notices to the Company shall be addressed to the
Company at the principal office of the Company at the address and facsimile
number set forth on the signature page of this Agreement, and all notices to the
Grantee shall be addressed to the Grantee at the address and facsimile number of
the Grantee set forth on the signature page of this Agreement or, if different,
the last address and facsimile number on file with the Company, or to such other
address and facsimile number as either may designate to the other in writing. A
notice shall be deemed to be duly given if and when enclosed in a properly
addressed sealed envelope deposited, postage prepaid and followed by facsimile
to the addressee. In lieu of giving notice by mail as aforesaid, written notices
under this Agreement may be given by personal delivery to the Grantee or to the
Company (as the case may be) by nationally recognized courier or overnight
delivery service.
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13. Adjustments. If there is any change in the capitalization of
the Company after the date of this Agreement affecting in any manner the number
of kind of outstanding shares of Common Stock of the Company, whether by stock
dividend, stock split, reclassification or recapitalization of such stock, or
because the Company has merged or consolidated with one or more other
corporations (and provided the Option does not thereby terminate pursuant to
paragraph 14 of this Agreement), then the number and kind of shares then subject
to the Option and the exercise price to be paid for the Option Shares shall be
appropriately adjusted by the Board of Directors; provided however, that in no
event shall any such adjustment result in the Company being required to sell or
issue any fractional shares. Any such adjustment shall be made without change in
the aggregate exercise price applicable to the unexercised portion of the
Option, but with an appropriate adjustment to the exercise price of each Option
Share or other unit of security then covered by the Option and this Agreement.
14. Cessation of Corporate Existence. Notwithstanding any other
provision of this Agreement, in the event of the reorganization, merger or
consolidation of the Company with one or more corporations as a result of which
the Company is not the surviving corporation, or the sale of substantially all
the assets of the Company or of more than fifty percent (50%) of the then
outstanding stock of the Company to another corporation or other entity in a
single transaction, the Option grated hereunder shall terminate, provided
however, that not later than five (5) days before the effective date of such
merger or consolidation or sale of assets in which the Company is not the
surviving corporation, the surviving corporation may, but shall not be so
obligated to, tender to the Grantee an option to purchase a number of shares of
capital stock of the surviving corporation equal to the number of Option Shares
then issuable upon exercise of the Option, and such new option or options for
shares of the surviving corporation shall contain such terms, conditions and
provisions as shall be required substantially to preserve the rights and
benefits of the Option and this Agreement.
15. Miscellaneous.
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(a) Entire Agreement. This Agreement and the Consulting Agreement contain
the entire agreement between the Parties, and may not be waived,
amended, modified or supplemented except by agreement in writing signed
by the Party against whom enforcement of any waiver, amendment,
modification or supplement is sought. Waiver of or failure to exercise
any rights provided by this Agreement and the Consulting Agreement in
any respect shall not be deemed a waiver of any further or future
rights.
(b) Governing Law. This Agreement shall be construed under the internal
laws of the State of California, and the Parties agree that the
exclusive jurisdiction for any litigation or arbitration arising from
this Agreement shall be in Los Angeles, California or New York City,
New York to be mutually agreed upon by both parties.
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(c) Counterpart. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but which when
taken together shall constitute one agreement.
(d) Severability. If one or more provisions of this Agreement are held to
be unenforceable under applicable law, such provision(s) shall be
excluded from this Agreement and the balance of this Agreement shall be
interpreted as if such provision were excluded and shall be enforceable
in accordance with its terms.
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IN WITNESS WHEREOF the Parties hereto have executed this Agreement as
of the date set forth below.
Date: 8/29/01 OPTIONEE:
/s/ Mark Neuhaus
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Mark Neuhaus
Social Security Number:
Address for Notices:
COMPANY:
SULPHCO, INC
By:/s/ Rudolph W. Gunnerman
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Name: Rudolph W. Gunnerman
Title: Chairman of the Board
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