Sulphco Inc Ex 10.2


    EXHIBIT
      10.2

     

    

      EMPLOYMENT
        AGREEMENT

      


      This
        EMPLOYMENT AGREEMENT (this “Agreement”),
        is
        entered into as of November 10, 2005 (the “Effective
        Date”),
        by
        and between SulphCo, Inc., a Nevada corporation (along with its successors
        and
        assigns, the “Company”),
        and
        Loren J. Kalmen (“Executive”).

       

      WHEREAS,
        the Company desires to employ Executive, and Executive desires to be employed
        by
        the Company, on the terms and conditions hereinafter set forth;

       

      NOW,
        THEREFORE, in consideration of the mutual promises contained herein and other
        good and valuable consideration, the Company and Executive agree as
        follows:

       

      1.    Employment.
        

       

      (a)    Term.
        Subject
        to the terms hereof, Executive’s employment hereunder shall commence as of the
        Effective Date and shall continue until terminated pursuant to Section 3
        below
        (such period, the “Employment
        Period”).

       

      (b)    Position,
        Place of Performance and Duties.
        Executive will serve as the Company’s Chief Financial Officer. Executive will
        have the responsibilities, duty and authority commensurate with the position
        of
        Chief Financial Officer and will perform such other services of an executive
        nature as may be prescribed from time to time by the Company’s Board of
        Directors (the “Board”) and agreed to by Executive. Executive’s employment will
        be based at the Company’s principal offices in Sparks, Nevada or such other
        place as may be agreed to by Executive and the Board. In addition, Executive
        will be available to travel at such times and to such places as may be
        reasonably necessary in connection with the performance of his duties hereunder.
        Subject to the last sentence of this Section 1(b), Executive
        shall devote his full business time and efforts in the performance of his
        duties
        hereunder. Notwithstanding the foregoing, it is expressly agreed that (i)
        Executive may (A) manage his personal investments, (B) provide consulting
        services to existing clients of Loren J. Kalmen, CPA, Ltd., (C) engage in
        charitable or not-for-profit activities, and/or (D) serve on the board of
        directors of up to one other company which is not a competitor of the Company,
        in
        each
        case, in a manner that does not materially interfere with his obligations
        to the
        Company hereunder, and (ii) neither the Company nor any officer, director,
        employee, shareholder or other person shall have any right, by virtue of
        this
        Agreement, to share or participate in such other investments or activities
        or to
        the income or proceeds derived therefrom. It is recognized by the Company
        that
        Executive is in the process of closing out a long-standing CPA practice and
        needs to focus some attention thereon during the first months of his employment.
        It is understood, therefore, that his salary in those first months is in
        part to
        compensate him for difficulties encountered in winding-up his
        practice.

       

      2.    Compensation.

       

      (a)    Base
        Salary.
        Commencing on the Effective Date, the Company will pay Executive a base salary
        at the annual rate of $300,000, which amount shall be reviewed annually and
        subject to increase (but not decrease) at the good faith discretion of the
        Board
        (as adjusted from time to time, the “Base
        Salary”).
        The
        Base Salary will be payable in substantially equal installments (no less
        frequently than bi-weekly) in accordance with the Company’s payroll practices as
        in effect from time to time.

       

      
        
          
          

        

        
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      (b)    Bonus.
        Based
        on Executive’s performance and the overall performance of the Company, Executive
        will be eligible to receive bonuses from time to time, the amount and nature
        of
        which shall be determined by the Board. 

       

      (c)    Equity
        Compensation.
        Executive shall be entitled to receive awards from any Company incentive
        compensation plan applicable to similarly situated senior executives of the
        Company, in accordance with the terms thereof and on a basis commensurate
        with
        Executive’s position and responsibilities. 

       

      (d)    Vacation.
        Executive will be entitled to (i) a minimum of four calendar weeks paid vacation
        in each calendar year to be taken at such times and in such number of days
        as is
        agreeable between the Company and Executive, but never more than two weeks
        at
        once, (ii) paid sick days as needed due to illness or other incapacity, and
        (iii) paid holidays in accordance with the Company’s policies for its senior
        executives as in effect from time to time. Accrued unused vacation may be
        carried over for up to twelve months.

       

      (e)    Benefits.
        Commencing as of the Effective Date, Executive (and his eligible dependents)
        will be entitled to participate in the same manner as the Company’s other senior
        executives in any employee benefit plans which the Company provides or may
        establish for the benefit of its senior executives generally (including,
        without
        limitation, disability, medical, and other insurance, bonuses and similar
        plans)
        (collectively, the “Benefits”).

       

      (f)    Reimbursement
        of Expenses.
        The
        Company will reimburse Executive for all out-of-pocket business expenses
        that
        are incurred by him in furtherance of the Company’s business in accordance with
        the Company’s policies with respect thereto as in effect from time to time.
        Without limiting the generality of the foregoing, the Company shall pay or
        reimburse Executive for charges relating to the use of his cellular phone
        and
        business travel expenses, it being understood that he shall travel on first
        or
        business class at his discretion.

       

      3.    Termination.
        Executive’s employment
        hereunder will terminate upon the first to occur of the following: 

       

      (a)    Executive’s
        his death; 

       

      (b)    by
        the
        Company or Executive (or his legal representative) in the event of Executive’s
        Disability (as defined below);

       

      (c)    by
        the
        Company for Cause (as defined below);

       

      (d)    by
        the
        Company without Cause; or 

       

      (e)    by
        Executive, with or without Good Reason (as defined below).

       

      
        
          
          

        

        
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      For
        purposes of this Agreement, the following terms shall have the following
        meanings:

       

      “Cause”
        means
        (i) Executive’s conviction of a felony, either in connection with the
        performance of his obligations to the Company or which otherwise materially
        and
        adversely affects his ability to perform such obligations, (ii)
        Executive’s willful disloyalty or deliberate dishonesty, (iii) the commission by
        Executive of an act of fraud or embezzlement against the Company, or (iv)
        a
        material breach by Executive of any material provision of this Agreement
        which
        breach is not cured within 30 days after delivery to Executive by the Company
        of
        written notice of such breach, provided that, if such breach is not capable
        of
        being cured within such 30 day period, Executive will have a reasonable
        additional period to cure such breach. No act or omission on Executive’s part
        will be considered “willful” unless done, or admitted to be done, by Executive
        in bad faith or without his reasonable belief that such act or omission was
        in
        the best interest of the Company.

       

      “Disability”
        means
        Executive’s mental, physical or other disability the condition of which renders
        him incapable of performing his obligations under this Agreement for a period
        of
        90 consecutive days or an aggregate of 120 days (whether or not consecutive)
        in
        any 12-month period.

       

      “Good
        Reason”
        means
        (i) a failure by the Company to comply with any material provision of this
        Agreement which is not cured within 10 days after Executive has given written
        notice of such noncompliance to the Company, (ii) any change in Executive’s
        duties inconsistent with his positions as President and Chief Operating Officer
        (including, any change in his offices or reporting requirements), or (iii)
        at
        Executive’s election, a Change in Control of the Company if, following such
        Change in Control, Executive is no longer the President and Chief Operating
        Officer of the Company (or the surviving or successor company, as applicable),
        or is offered a position not acceptable to him.

       

      “Change
        in Control”
        means
        (i) the acquisition by any person, entity or affiliated group (other than
        Rudolf
        W. Gunnerman) becoming the beneficial owner or owners of more than 50% of
        the
        outstanding equity securities of the Company or otherwise becoming entitled
        to
        vote more than 50% of the voting power of the Company, (ii) a consolidation
        or
        merger (in one transaction or a series of related transactions) of the Company
        pursuant to which the holders of the Company’s equity securities immediately
        prior to such transaction or series of related transactions would not be
        the
        holders immediately after such transaction or series of related transactions
        of
        more than 50% of the voting power of the entity surviving such transaction
        or
        series of related transactions, or (iii) the sale, lease, exchange or other
        transfer (in one transaction or a series of related transactions) of all
        or
        substantially all of the assets of the Company.

       

      4.    Termination
        Procedures; Effect of Termination.
        

       

      (a)    Notice
        of Termination.
        Any
        termination of Executive’s employment by the Company or Executive (other than
        termination on account of Executive’s death) shall be communicated by written
        notice (a “Notice
        of Termination”)
        to the
        other party hereto in accordance with Section 8(a) below, which notice shall
        indicate the specific termination provision in Section 3 of this Agreement
        relied upon and, if termination by the Company for Cause, the specific reasons
        therefore.

       

      
        
          
          

        

        
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      (b)    Date
        of Termination.
        As used
        herein, “Date
        of Termination”
        shall
        mean (i) if Executive’s employment is terminated as a result of Executive’s
        death, the date of Executive’s death, (ii) if Executive’s employment is
        terminated by reason of Executive’s Disability, on the date Notice of
        Termination is given or such later date specified in the Notice of Termination
        as the effective date of termination, (iii) if Executive’s employment is
        terminated by the Company for Cause, on the date Notice of Termination is
        given
        or such later date specified in the Notice of Termination as the effective
        date
        of termination, (iv) if Executive’s employment is terminated by the Company
        without Cause, such date which is specified in the Notice of Termination
        as the
        effective date of termination, provided that such date shall be at least
        30 days
        after the date such Notice of Termination is given, and (v) if Executive’s
        employment is terminated by Executive, with or without Good Reason, such
        date
        which is specified in the Notice of Termination as the effective date of
        termination. 

       

      (c)    Compensation
        Upon Termination.
        

       

      (i)    At
        any
        time that Executive’s employment is terminated, the Company will pay the Accrued
        Obligations to Executive (or to his estate or legal representative, if
        applicable) on or promptly following the Date of Termination. For purposes
        of
        this Agreement, “Accrued
        Obligations”
        means
        (A) the portion of Executive’s Base Salary as has accrued up through the Date of
        Termination which the Executive has not yet been paid, (B) an amount equal
        to
        any unpaid bonus which have accrued through the Date of Termination, (C)
        an
        amount equal to the value of Executive’s accrued unused vacation days, and (D)
        the amount of expenses incurred by Executive on behalf of the Company prior
        to
        the Date of Termination and not yet reimbursed.

       

      (ii)    In
        addition to the payments required under subsection 4(c)(i), if Executive’s
        employment is terminated by reason of his Disability and such Disability
        arose
        from a job-related accident or other event, by the Company without Cause
        or by
        Executive for Good Reason, then within 30 days following the Date of
        Termination, the Company will (A) pay to Executive (or his estate or legal
        representative if applicable), a lump-sum severance payment equal to three
        months of his then current Base Salary, and (B) continue to pay the group
        medical and dental insurance coverage premiums of fees for Executive and
        his
        eligible dependents for a period of six months following the Date of Termination
        as an “active employee” under the Company’s then existing plans. 

       

      (d)    Other
        Provisions.
        The
        effect of termination on any stock options or restricted stock granted or
        issued
        to Executive shall be governed by the terms and provisions of any applicable
        option agreement, restricted stock agreement or equity incentive plan. If
        Executive’s employment is terminated by the Company without Cause, the Company
        will use its best efforts to secure Executive alternative employment on
        substantially the same or more favorable terms. Notwithstanding any other
        provision of this Agreement, (i) Executive will have no obligation to mitigate
        Executive’s damages for any breach of this Agreement by the Company or for any
        termination of this Agreement, whether by seeking employment or otherwise,
        and
        (ii) the amount of any benefit due to Executive after the date of such
        termination pursuant to this Agreement will not be reduced or offset by any
        payment or benefit that Executive may receive from any other
        source.

       

      
        
          
          

        

        
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      5.    Confidentiality.
        Executive will enter into a confidentiality/non-disclosure agreement,
        substantially similar to the Company’s standard form of
        confidentiality/non-disclosure agreement for its senior executives.


       

      6.    Indemnification.
        The
        Company shall, to the fullest extent permitted by law and by its Certificate
        of
        Incorporation and Bylaws, indemnify Executive and hold him harmless for any
        acts
        or decisions made by him in good faith while performing his duties to the
        Company, and shall at all times during Executive’s employment with the Company,
        maintain Directors’ and Officers’ Liability Insurance in amounts and on such
        other terms as agreed to by Executive and the Board. In addition, the Company
        will enter into a separate indemnification agreement setting forth the Company’s
        indemnification obligations to Executive, in form and substance mutually
        agreeable to Executive and the Board. 

       

      7.    Company
        Representations and Warranties.
        In
        order
        to induce Executive to accept employment as the Company’s President and Chief
        Operating Officer, the Company represents and warrants to Executive as set
        forth
        below and acknowledges that Executive is relying on such representations
        and
        warranties in accepting his employment hereunder: 

       

      (a)    The
        Company is in compliance in all material respects with all applicable
        requirements of the Sarbanes-Oxley Act of 2002, as amended, and the rules
        and
        regulations thereunder, and all other applicable laws, regulations, orders,
        judgments and decrees. 

       

      (b)    The
        registration statements, proxy statements, annual, quarterly and current
        reports
        and other reports or filings filed with the U.S. Securities Exchange Commission,
        and the press releases disseminated, by the Company since its inception,
        taken
        as a whole, do not contain any untrue statement of a material fact or omit
        to
        state a material fact required to be stated therein or necessary in order
        to
        make the statements therein, in light of the circumstances under which they
        were
        made, not misleading, including, without limitation, with regard to the
        Company’s technology or other intellectual property.

       

      (c)    The
        Company is in compliance with all listing or maintenance requirements of
        the
        American Stock Exchange and has no reason to believe that it will not, in
        the
        foreseeable future, continue to be in such compliance. 

       

      8.    General.

       

      (a)    Notices.
        All
        notices, requests, consents and other communications hereunder will be in
        writing, will be addressed to the receiving party’s address set forth below or
        to such other address as a party may designate by notice hereunder, and will
        be
        either (i) delivered by hand, (ii) sent by overnight courier,
        or
        (iii) sent by registered or certified mail, return receipt requested,
        postage prepaid. All notices, requests, consents and other communications
        hereunder will be deemed to have been given either (A) if by hand,
        at the
        time of the delivery thereof to the receiving party at the address of such
        party
        set forth above, (B) if sent by overnight courier, on the next business
        day
        following the day such notice is delivered to the courier service, or (C)
        if
        sent by registered or certified mail, on the third business day following
        the
        day such mailing is made. All notices, requests, consents and other
        communications hereunder will be sent as follows:

       

      
        
          	
                	If
                  to the Company:	
                  SulphCo,
                    Inc.

                


        

        
          	 	 	
                  850
                    Spice Islands Drive

                


        

        
          	 	 	
                  Sparks,
                    Nevada 89431

                


        

        
          	 	 	
                  Attention:
                    Chairman of the Board

                


        

        
          	 	 	 


        

        
          	 	If to
                  Executive:	Loren J.
                  Kalmen


        

        
          	 	 	5795 Golden Eagle
                  Drive


        

        
          	 	 	
                  Reno,
                    Nevada 89523

                


        

      

        

       

      
        
          
          

        

        
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      (b)    Entire
        Agreement.
        This
        Agreement (together with the indemnification agreement referred to herein)
        embodies the entire agreement and understanding between the parties hereto
        with
        respect to the subject matter hereof and supersedes all prior oral or written
        agreements and understandings relating to the subject matter hereof. No
        statement, representation, warranty, covenant or agreement of any kind not
        expressly set forth in this Agreement will affect, or be used to interpret,
        change or restrict, the express terms and provisions of this
        Agreement.

       

      (c)    Modifications
        and Amendments.
        The
        terms and provisions of this Agreement may be modified or amended only by
        written agreement executed by the parties hereto.

       

      (d)    Waivers
        and Consents.
        The
        terms and provisions of this Agreement may be waived, or consent for the
        departure therefrom granted, only by written document executed by the party
        entitled to the benefits of such terms or provisions. No such waiver or consent
        will be deemed to be or will constitute a waiver or consent with respect
        to any
        other terms or provisions of this Agreement, whether or not similar. Each
        such
        waiver or consent will be effective only in the specific instance and for
        the
        purpose for which it was given, and will not constitute a continuing waiver
        or
        consent.

       

      (e)    Successors
        and Assigns; Third Party Beneficiaries.
        All
        statements, representations, warranties, covenants and agreements in this
        Agreement will be binding on the parties hereto and will inure to the benefit
        of
        the respective successors, heirs, executors and permitted assigns of each
        party
        hereto; provided that no party hereto may assign any rights or obligations
        hereunder without the consent of the other party. Nothing in this Agreement
        will
        be construed to create any rights or obligations except among the parties
        hereto, and (except for Executive’s estate or other legal representative) no
        person or entity will be regarded as a third-party beneficiary of this
        Agreement.

       

      (f)    Governing
        Law.
        This
        Agreement and the rights and obligations of the parties hereunder will be
        construed in accordance with and governed by the law of the State of Nevada,
        without giving effect to the conflict of law principles thereof.

       

      (g)    Jurisdiction,
        Venue.
        Any
        legal action or proceeding with respect to this Agreement will be brought
        in the
        Federal or state courts of Washoe County, Nevada with competent subject matter
        jurisdiction. By execution and delivery of this Agreement, each of the parties
        hereto accepts for itself and in respect of its property, generally and
        unconditionally, the exclusive jurisdiction of the aforesaid
        courts.

       

      
        
          
          

        

        
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      (h)    Severability.
        The
        parties intend this Agreement to be enforced as written. However, if
        any
        court of competent jurisdiction determines any provision, or any portion
        thereof, of this Agreement to be unenforceable or invalid, then such provision
        shall be deemed limited to the extent that such court deems it valid or
        enforceable and the remaining provisions of this Agreement shall nevertheless
        remain in full force and effect

       

      (i)    Headings
        and Captions.
        The
        headings and captions of the various subdivisions of this Agreement are for
        convenience of reference only and will in no way modify or affect the meaning
        or
        construction of any of the terms or provisions hereof.

       

      (j)    No
        Waiver of Rights, Powers and Remedies.
        No
        failure or delay by a party hereto in exercising any right, power or remedy
        under this Agreement, and no course of dealing between the parties hereto,
        will
        operate as a waiver of any such right, power or remedy of the party. No single
        or partial exercise of any right, power or remedy under this Agreement by
        a
        party hereto, nor any abandonment or discontinuance of steps to enforce any
        such
        right, power or remedy, will preclude such party from any other or further
        exercise thereof or the exercise of any other right, power or remedy hereunder.
        The election of any remedy by a party hereto will not constitute a waiver
        of the
        right of such party to pursue other available remedies. No notice to or demand
        on a party not expressly required under this Agreement will entitle the party
        receiving such notice or demand to any other or further notice or demand
        in
        similar or other circumstances or constitute a waiver of the rights of the
        party
        giving such notice or demand to any other or further action in any circumstances
        without such notice or demand.

       

      (k)    Deductions
        and Withdrawals.
        The
        Company will deduct from each payment to be made to Executive under this
        Agreement such amounts, if any, required to be deducted or withheld under
        applicable law or under any employment benefit plan in which Executive
        participate.

       

      (l)    Counterparts.
        This
        Agreement may be executed in two or more counterparts, and by different parties
        hereto on separate counterparts, each of which will be deemed an original,
        but
        all of which together will constitute one and the same instrument. This
        Agreement may be delivered by facsimile, and facsimile signatures shall be
        treated as original signatures for all applicable purposes.

       

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      IN
        WITNESS WHEREOF, the undersigned has executed and delivered this Employment
        Agreement as of the date and year first above written.

       

      
        
          	 	 	 
	 	SULPHCO,
                  INC.
	 
 	 
 	 
 
	 	By:  	/s/ Rudolf
                  W. Gunnerman
	 	
                  

                
	 	
                  Dr.
                    Rudolf W. Gunnerman

                  Chairman & Chief Executive
                    Officer

                


        

         

        
          
            	 	 	 
	 	By:  	/s/ Loren
                    J. Kalmen
	 	
                    

                  
	 	
                    LOREN
                      J. KALMEN

                  
	 	 
	 	 
	
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