Document:

Stock Option Agreement

    Exhibit
      10.2

    

    

    SULPHCO,
      INC.

    STOCK
      OPTION AGREEMENT

    

    

    This
      Stock Option Agreement (the "Agreement") is made and entered into as of May
      23,
      2006 (hereinafter referred to as the "Effective Date"), by and between SULPHCO,
      INC., a Nevada corporation (the "Company"), and RUDOLF
      W. GUNNERMAN ("Optionee"),
      with reference to the following facts:

    

    A.  The
      Company has duly adopted the 2006 Stock Option Plan (hereinafter referred to
      as
      the "Plan"), subject to stockholder approval, which authorizes the Option
      Committee (the "Committee") to grant stock options, and which Plan is intended
      to encourage ownership of stock of the Company by officers, directors,
      consultants, advisors and other key management employees and to provide
      additional incentive for them to promote the success of the
      Company.

    

    B.
      The
      Committee has determined that Optionee is entitled to participate in the Plan,
      and has taken appropriate action to authorize the granting of a stock option
      to
      Optionee for the number of shares, at the price per share and on the terms
      set
      forth in this Agreement, subject to stockholder approval of the
      Plan.

    

    C.
      Optionee
      desires to participate in the Plan and to receive an option on the terms and
      conditions set forth in this Agreement.

    

    NOW,
      THEREFORE, the parties agree as follows:

    

    1.
      Grant of Option.
      The
      Company hereby grants to Optionee the right and option (hereinafter referred
      to
      as the "Option") to purchase all or any part of an aggregate of One
      Million (1,000,000)
      shares
      (the "Option Shares") of common stock, $.001 par value, of the Company (the
      "Common Stock") at the times and on the terms and conditions set forth in this
      Agreement. The Option shall be a “non-statutory stock option” under the Internal
      Revenue Code of 1986.

    

    2.
      Exercise Price. The
      purchase price (the "Exercise Price") of each Option Share shall be $9.03
      per
      share of the Company’s Common Stock.

    

    
      
        3.
          Option
          Period. 

      

    

    

    3.1 The
      Option shall be exercisable on and after the first to occur of a “Change in
      Control” or a “Vesting Event” (as such quoted terms are defined in paragraph 3
      this Agreement) and shall expire, and all rights to purchase the Option Shares
      shall terminate, at the close of business on the day immediately preceding
      the
      third anniversary of the Effective Date, unless terminated earlier as provided
      in this Agreement. The Option shall not be exercisable until the time at which
      all legal requirements in connection with the Plan have been fully complied
      with, including
      stockholder approval of the Plan. If Optionee is subject to the reporting
      requirements of Section 16(a) of the Securities Exchange Act of 1934 (the
      "Exchange Act"), the Option shall not be exercisable until at least six months
      and one day from the Effective Date.

     

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    
 

    3.2 For
      purposes of this Agreement, “Vesting Event” shall mean the reporting by the
      Company of $50,000,000 or more of gross revenues in a fiscal year.
   

    

    3.3 (a)
       A
      Change
      in Control shall be deemed to have occurred if (i) a Takeover Transaction
      (as defined in paragraph (2) of this Section 3.10) occurs; or
      (ii) any election of directors of the Company takes place (whether by the
      directors then in office or by the stockholders at a meeting or by written
      consent) and a majority of the directors in office following such election
      are
      individuals who were not nominated by a vote of two-thirds of the members of
      the
      Board of Directors, or, if the Company had a nominating committee at such time,
      its nominating committee, immediately preceding such election; or (iii) the
      Company effectuates a complete liquidation or a sale or disposition of all
      or
      substantially all of its assets. 

    

           (b)
       A
      “Takeover Transaction” shall mean (i) a merger or consolidation of the
      Company with, or an acquisition of the Company or all or substantially all
      of
      its assets by, any other corporation or entity, other than a merger,
      consolidation or acquisition in which the individuals who were members of the
      Board of Directors of the Company immediately prior to such transaction continue
      to constitute a majority of the Board of Directors or other governing body
      of
      the surviving corporation or entity (or, in the case of an acquisition involving
      a holding company, constitute a majority of the Board of Directors or other
      governing body of the holding company) for a period of not less than twelve
      (12) months following the closing of such transaction, or (ii) one or
      more occurrences or events as a result of which any “person” (as such term is
      used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934,
      as
      amended (the “Exchange Act”)), becomes the “beneficial owner” (as such term is
      defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
      thirty percent (30%) or more of the combined voting power of the Company’s then
      outstanding securities.   

     

    4.
      Option Exercise. 

    

      4.1
       The
      Option shall be exercised by delivering this Agreement for endorsement to the
      Company, at its principal office, attention of the Corporate Secretary, together
      with a Notice and Agreement of Exercise (in the form attached hereto or
      specified from time to time by the Committee) indicating the number of Option
      Shares Optionee wishes to purchase and full payment of the Exercise Price of
      such shares. In no event shall the Company be required to issue or transfer
      fractional shares.

    

    4.2 Payment
      for Option Shares may be made in cash, by cashier’s or certified
      check.

    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    

    

    

    5.
      Employment of Optionee.

    

    5.1.
      Except as otherwise provided in paragraph 6 of this Agreement, Optionee may
      not
      exercise the Option unless, at the time of exercise, Optionee is employed by
      the
      Company or a parent or a subsidiary thereof and has been in the employ of the
      Company or a parent or a subsidiary thereof continuously since the Effective
      Date. For purposes of this paragraph, the period of continuous employment with
      the Company shall be deemed to include (without extending the term of the
      Option) any period during which Optionee is on leave of absence with the consent
      of the Company, provided that such leave of absence shall not exceed three
      months and Optionee returns to the employ of the Company at the expiration
      of
      such leave of absence. If Optionee fails to return to the employ of the Company
      at the expiration of such leave of absence, Optionee’s employment with the
      Company shall be deemed terminated as of the date such leave of absence
      commenced. 

    

    The
      continuous employment of Optionee with the Company shall also be deemed to
      include any period during which Optionee is a member of the military, provided
      that Optionee returns to the employ of the Company within 90 days (or such
      longer period as may be prescribed by law) from the date Optionee first becomes
      entitled to discharge. If Optionee does not return to the employ of the Company
      within 90 days from the date Optionee first becomes entitled to discharge (or
      such longer period as may be prescribed by law), Optionee’s employment with the
      Company shall be deemed to have terminated as of the date Optionee’s military
      service ended.

    

    5.2 Nothing
      contained herein shall be construed to impose upon the Company or subsidiary
      thereof any obligation to employ Optionee for any period or to supersede or
      in
      any way alter, increase or diminish the respective rights and obligations of
      the
      Company or any parent or subsidiary thereof and Optionee under any employment
      contract now or hereafter existing between them.

    

    6.
      Termination of Employment. 

    

    6.1.
       If
      the
      employment of Optionee with the Company shall terminate because of 

    Retirement,
      Disability (as such terms are defined in the Plan) or death, unless otherwise
      provided

    by
      the
      Committee (with the consent of Optionee) or otherwise expressly provided herein,
      (a) the Option, to the extent then presently exercisable, shall remain in full
      force and effect and may be exercised pursuant to the provisions hereof,
      including expiration at the end of the fixed term hereof, and (b) the Option,
      to
      the extent not then presently exercisable, shall terminate as of the date of
      such termination of employment and shall not be exercisable
      thereafter.

    

    6.2 If
      the
      employment of Optionee with the Company shall terminate for any reason other
      than the reasons set forth in paragraph 6.1 hereof, unless otherwise provided
      by
      the Committee, (a) the Option, to the extent then presently exercisable, shall
      remain exercisable only for
      a
      period of ninety (90) days after the date of such termination of employment
      and
      may be exercised during such period pursuant to the provisions hereof, including
      expiration at the end of the fixed term hereof, and (b) the Option, to the
      extent not then presently exercisable, shall terminate as of the date of such
      termination of employment and shall not be exercisable thereafter.

     

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    
 

    7.
      Securities Laws Requirements. 

    

    7.1 The
      Option shall not be exercisable unless and until any applicable registration
      or
      qualification requirements of federal and state securities laws, and all other
      requirements of law or any regulatory bodies having jurisdiction over such
      exercise or issuance and delivery, have been fully complied with. The Company
      will use reasonable efforts to maintain the effectiveness of a Registration
      Statement under the Securities Act of 1933 (the “Securities Act”) for the
      issuance of the Option and the Option Shares but there may be times when no
      such
      Registration Statement will be currently effective. Exercise of the Option
      may
      be temporarily suspended without liability to the Company during times when
      no
      such Registration Statement is currently effective, or during times when, in
      the
      reasonable opinion of the Committee, such suspension is necessary to preclude
      violation of any requirements of applicable law or regulatory bodies having
      jurisdiction over the Company. If the Option would expire for any reason except
      the end of its term during such a suspension, then if exercise of the Option
      is
      duly tendered before its expiration, the Option shall be exercisable and
      exercised (unless the attempted exercise is withdrawn) as of the first day
      after
      the end of such suspension. The Company shall have no obligation to file any
      Registration Statement covering resales of the Option Shares.

    

    7.2. Upon
      each
      exercise of the Option, Optionee shall represent, warrant and agree, by the
      Notice and Agreement of Exercise delivered to the Company, that (a) no Option
      Shares will be sold or otherwise distributed in violation of the Securities
      Act
      or any other applicable federal or state securities laws, (b) if Optionee is
      subject to the reporting requirements under Section 16(a) of the Exchange Act,
      Optionee will furnish to the Company a copy of each Form 4 or Form 5 filed
      by
      Optionee and will timely file all reports required under federal securities
      laws, and (c) Optionee will report all sales of Option Shares to the Company in
      writing on the form prescribed from time to time by the Company. All Option
      Share certificates may be imprinted with legend 

    conditions
      reflecting federal and state securities law restrictions and conditions and
      the
      Company may comply therewith and issue “stop transfer” instructions to its
      transfer agents and registrars without liability.

    

    8.
      Transferability of Option.
      The
      Option may not be transferred by Optionee without the prior written consent
      of
      the Committee unless such transfer is pursuant to a Will of Optionee or the
      laws
      governing the distribution of Optionee’s property upon his or her death. The
      Option may be exercised, during the lifetime of Optionee, only by Optionee
      and
      Optionee’s permitted transferees. Notwithstanding the foregoing, the Option
      shall not be assignable by operation of law and shall not be subject to
      attachment, execution, garnishment, sequestration, the law of bankruptcy
      or any other legal or equitable process. Any attempted assignment, transfer,
      pledge, hypothecation or other disposition contrary to the provisions of this
      Agreement, and the levy of any execution, attachment or similar process
      thereupon, shall be null and void and without effect.

     

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    9.
      Changes in Capitalization.

    

    9.1 The
      number and class of shares subject to the Option, the Exercise Price (but not
      the total price), and the minimum number of shares as to which the Option may
      be
      exercised at any one time, shall be proportionately adjusted in the event of
      any
      increase or decrease in the number of the issued shares of Common Stock which
      results from a split-up or consolidation of shares, payment of a stock dividend
      or stock dividends exceeding a total of two and one-half percent (2.5%) for
      which the record dates occur in any one fiscal year, a recapitalization (other
      than the conversion of convertible securities according to their terms), a
      combination of shares or other like capital adjustment, so that upon exercise
      of
      the Option, Optionee shall receive the number and class of shares Optionee
      would
      have received had Optionee been the holder of the number of shares of Common
      Stock for which the Option is being exercised upon the date of such change
      or
      increase or decrease in the number of issued shares of the Company.

    

    9.2
      Upon
      a 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 in which the Company survives as a wholly-owned subsidiary of another
      corporation, or upon a sale of all or substantially all of the property of
      the
      Company to another corporation, or any dividend or distribution to stockholders
      of more than 10% of the Company's assets, adequate adjustment or other
      provisions shall be made by the Company or other party to such transaction
      so
      that there shall remain and/or be substituted for the Option Shares provided
      for
      herein, the shares, securities or assets which would have been issuable or
      payable in respect of or in exchange for the Option Shares then remaining under
      the Option, as if Optionee had been the owner of such shares as of the
      applicable date. Any securities so substituted shall be subject to similar
      successive adjustments.

    

    10.
      Relationship.  The
      Option shall not be deemed to be salary or other compensation to Optionee for
      purposes of any pension, thrift, profit sharing, stock purchase or other
      employee benefit
      plan now maintained or hereafter adopted by the Company.

    

    11.
      Privileges of Ownership.
      Optionee shall not have any of the rights of a stockholder with respect to
      the
      shares covered by the Option except to the extent that share certificates have
      actually been issued and registered in Optionee's name on the books of the
      Company or its registrar upon the due exercise of the Option. The Company shall
      be allowed a reasonable time following notice of exercise in which to accomplish
      the issuance and registration.

    

    12.
      Reference to Plan.
      This
      Agreement and the Option are subject to all of the terms and conditions of
      the
      Plan, which are hereby incorporated by reference. In the event of any
conflict
      between this Agreement and the Plan, the provisions of the Plan shall
      prevail.

     

     

    
      
        
        

      

      
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    13.
      Notices.
      Any
      notice to be given under the terms of this Agreement shall be addressed to
      the
      Company in care of its Corporate Secretary at its principal executive offices
      and any notice to be given to Optionee shall be addressed to Optionee at the
      address appearing on the employment records of the Company, or at such other
      address or addresses as either party may hereafter designate in writing to
      the
      other. Any such notice shall be deemed duly given when personally delivered
      or
      enclosed in a properly sealed envelope, addressed as herein required and
      deposited, postage prepaid, in a post office or branch post office regularly
      maintained by the jurisdiction in which it is deposited.

    

    14.
      Withholding Taxes.
      The
      Company shall have the right at the time of exercise of the Option to make
      adequate provision for any federal, state, local or foreign taxes which it
      believes are or may be required by law to be withheld with respect to such
      exercise ("Tax Liability"), to ensure the payment (through withholding from
      Optionee's salary or the Option Shares or otherwise as the Company shall deem
      in
      its sole and conclusive discretion to be in its best interests) of any such
      Tax
      Liability.

    

    15.
      Number and Gender.
      Terms
      used herein in any number or gender include other numbers or genders, as the
      context may require.

    

    16.
      Counterparts. This
      Agreement may be executed in one or more counterparts, each of which shall
      be
      deemed an original, but all of which together shall constitute one and the
      same
      instrument.

    

    
      
         

        
        

      

      
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    17.
      Governing Law. This
      Agreement and performance under it, shall be construed in accordance with and
      under the laws of the State of Nevada, U.S.A. Should a court or other body
      of
      competent jurisdiction determine that any term or provision of this Agreement
      is
      excessive in scope, such term or provision shall be adjusted rather than voided
      and interpreted so as to be enforceable to the fullest extent possible, and
      all
      other terms and provisions of this Agreement shall be deemed valid and
      enforceable to the fullest extent possible.

    

    IN
      WITNESS WHEREOF, the Company and Optionee have executed this Agreement as of
      the
      Effective Date.

    

    

      
        	
                "OPTIONEE":

              	 	
                "COMPANY":

              
	 	 	 
	
                Rudolf
                  W. Gunnerman

              	 	
                SULPHCO,
                  INC.

              
	 	 	 
	 	 	 
	
                /s/
                  Rudolf W. Gunnerman

              	 	
                /s/
                  Loren J. Kalmen

              
	
                (Signature)

              	 	
                By:Loren
                  J. Kalmen

              
	 	 	
                Its:
                  Chief Financial Officer

              

      

    

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    SULPHCO,
      INC.

    NOTICE
      AND AGREEMENT OF EXERCISE

    OF
      STOCK OPTION 

    

    

    I
      hereby
      exercise my SulphCo, Inc. Stock Option dated as of May 23, 2006, as to
      __________ shares of SulphCo, Inc. common stock, $.001 par value (the "Option
      Shares").

    

    Enclosed
      are the documents and payment specified in Paragraph 4 of my Option Agreement.
      I
      understand that no Option Shares shall be issued and delivered unless and until
      any applicable registration requirements of the Securities Act of 1933, as
      amended, any listing requirements of any securities exchange on which stock
      of
      the same class is then listed, and any other requirements of law or any
      regulatory bodies having jurisdiction over such issuance and delivery, shall
      have been fully complied with. I hereby represent, warrant and agree, to and
      with SulphCo, Inc. (the "Company"), that:

    

    a.
       The
      Option Shares I am purchasing are being acquired for my account, and no other
      person (except, if I am married, my spouse) will own any interest
      therein.

    

    b.
       I
      will
      not sell or dispose of my Option Shares in violation of the Securities Act
      of
      1933 or any other applicable Federal or state securities laws. I will obtain
      the
      Company's advice prior to any disposition of my Option Shares.

    

    c.
       I
      agree
      that the Company may, without liability, place legend conditions upon my Option
      Shares and issue "stop transfer" restrictions requiring compliance with
      applicable securities laws and the terms of my Option.

    

    d.
       If
      and so
      long as I am subject to reporting requirements under Section 16(a) of the
Securities
      Exchange Act of 1934, as amended, I will furnish to the Company a copy of each
      Form 4 and Form 5 filed by me and will timely file all reports required under
      the Federal securities laws.

    

    e. 
      I will
      report to the Company all sales of Option Shares on the form prescribed from
      time to time by the Company.

    

    The
      number of Option Shares specified above are to be issued in the following
      registration (husband and wife will be shown to be joint tenants unless I state
      that the Option Shares will be held as community property or as tenants in
      common):

    

    

      
        	 	 	 
	
                (Print
                  your name) 

              	 	
                (Signature)
                  

              

      

    

     

     

    8Director Stock Option Agreement

    Exhibit
      10.3

    

    

    SULPHCO,
      INC.

    DIRECTOR
      STOCK OPTION AGREEMENT

    

    

    This
      Stock Option Agreement (the "Agreement") is made and entered into as of May
      23,
      2006 (hereinafter referred to as the "Effective Date"), by and between SULPHCO,
      INC., a Nevada corporation (the "Company"), and ROBERT
      VAN MAASDIJK ("Optionee"),
      with reference to the following facts:

    

    A.  The
      Company has duly adopted the 2006 Stock Option Plan (hereinafter referred to
      as
      the "Plan"), subject to stockholder approval, which authorizes the Option
      Committee (the "Committee") to grant stock options, and which Plan is intended
      to encourage ownership of stock of the Company by officers, directors,
      consultants, advisors and other key management employees and to provide
      additional incentive for them to promote the success of the
      Company.

    

    B.
      The
      Committee has determined that Optionee is entitled to participate in the Plan,
      and has taken appropriate action to authorize the granting of a stock option
      to
      Optionee for the number of shares, at the price per share and on the terms
      set
      forth in this Agreement, subject to stockholder approval of the
      Plan.

    

    C.
      Optionee
      desires to participate in the Plan and to receive an option on the terms and
      conditions set forth in this Agreement.

    

    NOW,
      THEREFORE, the parties agree as follows:

    

    1.
      Grant of Option.
      The
      Company hereby grants to Optionee the right and option (hereinafter referred
      to
      as the "Option") to purchase all or any part of an aggregate of One
      Hundred Twenty-Five Thousand (125,000)
      shares
      (the "Option Shares") of common stock, $.001 par value, of the Company (the
      "Common Stock") at the times and on the terms and conditions set forth in this
      Agreement. The Option shall be a “non-statutory stock option” under the Internal
      Revenue Code of 1986.

    

    2.
      Exercise Price. The
      purchase price (the "Exercise Price") of each Option Share shall be $9.03
      per
      share of the Company’s Common Stock.

    

    3.
      Option Period.
      The
      Option shall be exercisable on and as of the Effective Date and shall expire,
      and all rights to purchase the Option Shares shall terminate, at the close
      of
      business on the day immediately preceding the third anniversary of the Effective
      Date, unless terminated earlier as provided in this Agreement. The Option shall
      not be exercisable until the time at which all legal requirements in connection
      with the Plan have been fully complied with, including stockholder approval
      of
      the Plan. If Optionee is subject to the reporting requirements of Section 16(a)
      of the Securities Exchange Act of 1934 (the "Exchange Act"), the Option shall
      not be exercisable until at least six months and one day from the Effective
      Date.

    

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    4.
      Option Exercise. 

    

    4.1
       The
      Option shall be exercised by delivering this Agreement for endorsement to the
      Company, at its principal office, attention of the Corporate Secretary, together
      with a Notice and Agreement of Exercise (in the form attached hereto or
      specified from time to time by the Committee) indicating the number of Option
      Shares Optionee wishes to purchase and full payment of the Exercise Price of
      such shares. In no event shall the Company be required to issue or transfer
      fractional shares.

    

    4.2 Payment
      for Option Shares may be made in cash, by cashier’s or certified
      check.

    

    5.
      Securities Laws Requirements. 

    

    5.1 The
      Option shall not be exercisable unless and until any applicable registration
      or
      qualification requirements of federal and state securities laws, and all other
      requirements of law or any regulatory bodies having jurisdiction over such
      exercise or issuance and delivery, have been fully complied with. The Company
      will use reasonable efforts to maintain the effectiveness of a Registration
      Statement under the Securities Act of 1933 (the “Securities Act”) for the
      issuance of the Option and the Option Shares but there may be times when no
      such
      Registration Statement will be currently effective. Exercise of the Option
      may
      be temporarily suspended without liability to the Company during times when
      no
      such Registration Statement is currently effective, or during times when, in
      the
      reasonable opinion of the Committee, such suspension is necessary to preclude
      violation of any requirements of applicable law or regulatory bodies having
      jurisdiction over the Company. If the Option would expire for any reason except
      the end of its term during such a suspension, then if exercise of the Option
      is
      duly tendered before its expiration, the Option shall be exercisable and
      exercised (unless the attempted exercise is withdrawn) as of the first day
      after
      the end of such suspension. The Company shall have no obligation to file any
      Registration Statement covering resales of the Option Shares.

    

    5.2. Upon
      each
      exercise of the Option, Optionee shall represent, warrant and agree, by the
      Notice and Agreement of Exercise delivered to the Company, that (a) no Option
      Shares will be sold or otherwise distributed in violation of the Securities
      Act
      or any other applicable federal or state securities laws, (b) if Optionee is
      subject to the reporting requirements under Section 16(a) of the Exchange Act,
      Optionee will furnish to the Company a copy of each Form 4 or Form 5 filed
      by
      Optionee and will timely file all reports required under federal securities
      laws, and (c) Optionee will report all sales of Option Shares to the Company
      in
      writing on the form prescribed from time to time by the Company. All Option
      Share certificates may be imprinted with legend conditions reflecting federal
      and state securities law restrictions and conditions and the Company may comply
      therewith and issue “stop transfer” instructions to its transfer agents and
      registrars without liability.

     

    
 

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    6.
      Transferability of Option.
      The
      Option may not be transferred by Optionee without the prior written consent
      of
      the Committee unless such transfer is pursuant to a Will of Optionee
or
      the
      laws governing the distribution of Optionee’s property upon his or her death.
      The Option may be exercised, during the lifetime of Optionee, only by Optionee
      and Optionee’s permitted transferees. Notwithstanding the foregoing, the Option
      shall not be assignable by operation of law and shall not be subject to
      attachment, execution, garnishment, sequestration, the law of bankruptcy or
      any
      other legal or equitable process. Any attempted assignment, transfer, pledge,
      hypothecation or other disposition contrary to the provisions of this Agreement,
      and the levy of any execution, attachment or similar process thereupon, shall
      be
      null and void and without effect.

     

    7.
      Changes in Capitalization.

    

    7.1 The
      number and class of shares subject to the Option, the Exercise Price (but not
      the total price), and the minimum number of shares as to which the Option may
      be
      exercised at any one time, shall be proportionately adjusted in the event of
      any
      increase or decrease in the number of the issued shares of Common Stock which
      results from a split-up or consolidation of shares, payment of a stock dividend
      or stock dividends exceeding a total of two and one-half percent (2.5%) for
      which the record dates occur in any one fiscal year, a recapitalization (other
      than the conversion of convertible securities according to their terms), a
      combination of shares or other like capital adjustment, so that upon exercise
      of
      the Option, Optionee shall receive the number and class of shares Optionee
      would
      have received had Optionee been the holder of the number of shares of Common
      Stock for which the Option is being exercised upon the date of such change
      or
      increase or decrease in the number of issued shares of the Company.

    

    7.2
      Upon
      a 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 in which the Company survives as a wholly-owned subsidiary of another
      corporation, or upon a sale of all or substantially all of the property of
      the
      Company to another corporation, or any dividend or distribution to stockholders
      of more than 10% of the Company's assets, adequate adjustment or other
      provisions shall be made by the Company or other party to such transaction
      so
      that there shall remain and/or be substituted for the Option Shares provided
      for
      herein, the shares, securities or assets which would have been issuable or
      payable in respect of or in exchange for the Option Shares then remaining under
      the Option, as if Optionee had been the owner of such shares as of the
      applicable date. Any securities so substituted shall be subject to similar
      successive adjustments.

    

    8.
      Relationship.  The
      Option shall not be deemed to be salary or other compensation to Optionee for
      purposes of any pension, thrift, profit sharing, stock purchase or other
      employee benefit
      plan now maintained or hereafter adopted by the Company.

    

    9.
      Privileges of Ownership.
      Optionee shall not have any of the rights of a stockholder with respect to
      the
      shares covered by the Option except to the extent that share certificates have
      actually been issued and registered in Optionee's name on the books of the
      Company or its registrar upon the due exercise of the Option. The Company shall
      be allowed a reasonable time following
      notice of exercise in which to accomplish the issuance and
      registration.

     

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    
 

    10.
      Reference to Plan.
      This
      Agreement and the Option are subject to all of the terms and conditions of
      the
      Plan, which are hereby incorporated by reference. In the event of any conflict
      between this Agreement and the Plan, the provisions of the Plan shall
      prevail.

    

    11.
      Notices.
      Any
      notice to be given under the terms of this Agreement shall be addressed to
      the
      Company in care of its Corporate Secretary at its principal executive offices
      and any notice to be given to Optionee shall be addressed to Optionee at the
      address appearing on the employment records of the Company, or at such other
      address or addresses as either party may hereafter designate in writing to
      the
      other. Any such notice shall be deemed duly given when personally delivered
      or
      enclosed in a properly sealed envelope, addressed as herein required and
      deposited, postage prepaid, in a post office or branch post office regularly
      maintained by the jurisdiction in which it is deposited.

    

    12.
      Withholding Taxes.
      The
      Company shall have the right at the time of exercise of the Option to make
      adequate provision for any federal, state, local or foreign taxes which it
      believes are or may be required by law to be withheld with respect to such
      exercise ("Tax Liability"), to ensure the payment (through withholding from
      Optionee's salary or the Option Shares or otherwise as the Company shall deem
      in
      its sole and conclusive discretion to be in its best interests) of any such
      Tax
      Liability.

    

    13.
      Number and Gender.
      Terms
      used herein in any number or gender include other numbers or genders, as the
      context may require.

    

    14.
      Counterparts. This
      Agreement may be executed in one or more counterparts, each of which shall
      be
      deemed an original, but all of which together shall constitute one and the
      same
      instrument.

    

    
      
         

        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    

    

    

    15.
      Governing Law. This
      Agreement and performance under it, shall be construed in accordance with and
      under the laws of the State of Nevada, U.S.A. Should a court or other body
      of
      competent jurisdiction determine that any term or provision of this Agreement
      is
      excessive in scope, such term or provision shall be adjusted rather than voided
      and interpreted so as to be enforceable to the fullest extent possible, and
      all
      other terms and provisions of this Agreement shall be deemed valid and
      enforceable to the fullest extent possible.

    

    IN
      WITNESS WHEREOF, the Company and Optionee have executed this Agreement as of
      the
      Effective Date.

    

    

      
        	
                "OPTIONEE":

              	 	
                "COMPANY":

              
	 	 	 
	
                ROBERT
                  VAN MAASDIJK

              	 	
                SULPHCO,
                  INC.

              
	 	 	 
	 	 	 
	
                /s/
                  Robert van Maasdijk

              	 	
                /s/
                  Loren J. Kalmen

              
	
                (Signature)

              	 	
                By:Loren
                  J. Kalmen

              
	 	 	
                Its:
                  Chief Financial
                  Officer

              

      

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    SULPHCO,
      INC.

    NOTICE
      AND AGREEMENT OF EXERCISE

    OF
      STOCK OPTION 

    

    

    I
      hereby
      exercise my SulphCo, Inc. Stock Option dated as of May 23, 2006, as to
      __________ shares of SulphCo, Inc. common stock, $.001 par value (the "Option
      Shares").

    

    Enclosed
      are the documents and payment specified in Paragraph 4 of my Option Agreement.
      I
      understand that no Option Shares shall be issued and delivered unless and until
      any applicable registration requirements of the Securities Act of 1933, as
      amended, any listing requirements of any securities exchange on which stock
      of
      the same class is then listed, and any other requirements of law or any
      regulatory bodies having jurisdiction over such issuance and delivery, shall
      have been fully complied with. I hereby represent, warrant and agree, to and
      with SulphCo, Inc. (the "Company"), that:

    

    a.
       The
      Option Shares I am purchasing are being acquired for my account, and no other
      person (except, if I am married, my spouse) will own any interest
      therein.

    

    b.
       I
      will
      not sell or dispose of my Option Shares in violation of the Securities Act
      of
      1933 or any other applicable Federal or state securities laws. I will obtain
      the
      Company's advice prior to any disposition of my Option Shares.

     

    c.
       I
      agree
      that the Company may, without liability, place legend conditions upon my Option
      Shares and issue "stop transfer" restrictions requiring compliance with
      applicable securities laws and the terms of my Option.

    

    d.
       If
      and so
      long as I am subject to reporting requirements under Section 16(a) of the
Securities
      Exchange Act of 1934, as amended, I will furnish to the Company a copy of each
      Form 4 and Form 5 filed by me and will timely file all reports required under
      the Federal securities laws.

    

    e. 
      I will
      report to the Company all sales of Option Shares on the form prescribed from
      time to time by the Company.

    

    The
      number of Option Shares specified above are to be issued in the following
      registration (husband and wife will be shown to be joint tenants unless I state
      that the Option Shares will be held as community property or as tenants in
      common):

    
 

    
      

        
          	 	 	 
	
                  (Print
                    your name) 

                	 	
                  (Signature)
                    

                

        

      

       

       

      6

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