UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
(Rule
14a-101)
INFORMATION
REQUIRED IN PROXY STATEMENT
SCHEDULE
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SulphCo,
Inc.
4333 W.
Sam Houston Pkwy N., Suite 190
Houston,
Texas 77043
www.sulphco.com
NOTICE OF THE 2010 ANNUAL MEETING OF
STOCKHOLDERS
To
Be Held On June 10, 2010
Dear
Stockholder:
You are
cordially invited to attend the 2010 Annual Meeting of Stockholders of SulphCo,
Inc., a Nevada corporation (the “Company”). The annual meeting will be held on
Thursday, June 10, 2010 at 9:30 a.m. Central Daylight Time at Four Oaks
Place (Central Plains conference room, 2
nd
floor),
1330 Post Oak Boulevard, Houston, TX 77056, for the following
purposes:
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1.
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To elect four
directors to serve for one year or until the next annual meeting of
stockholders;
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2.
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To
ratify the Audit Committee’s appointment of Hein & Associates LLP as
the Company’s independent registered public accountants for fiscal year
2010; and
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3.
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To
conduct any other business properly brought before the annual meeting or
any adjournment or postponement
thereof.
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These
items of business are more fully described in the Proxy Statement accompanying
this Notice. The record date for the annual meeting is April 19, 2010. Only
stockholders of record at the close of business on that date may vote at the
annual meeting or any adjournment or postponement thereof. A list of the
stockholders entitled to vote at the annual meeting will be available for
examination by any stockholder for any purpose reasonably related to the annual
meeting during ordinary business hours in the office of the Secretary of the
Company during the ten days prior to the annual meeting.
You are
cordially invited to attend the annual meeting in person. Whether or not you
expect to attend the annual meeting, please complete, date, sign and return the
proxy card as promptly as possible in order to ensure your representation at the
annual meeting. Even if you have voted by proxy, you may still vote in person if
you attend the annual meeting. Please note, however, that if your shares are
held of record by a broker, bank, or other nominee and you wish to vote at the
annual meeting, you must obtain a proxy issued in your name from that record
holder.
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By
Order of the Board of Directors,
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/s/ Larry D. Ryan
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Larry
D. Ryan
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Chief
Executive Officer
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Houston,
Texas
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April
16, 2010
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Important Notice Regarding the
Availability of Proxy Materials for the annual meeting of stockholders to be
held on June 10
,
2010:
In accordance with rules and regulations adopted by the Securities and
Exchange Commission, we are now providing access to our proxy materials over the
Internet. Accordingly, in lieu of sending you a paper copy of our proxy
materials, the Company will send a Notice of Internet Availability of Proxy
Materials to stockholders of record and beneficial owners as of the close of
business on the record date. On the date of mailing of the Notice of Internet
Availability of Proxy Materials, all stockholders of record and beneficial
owners will have the ability to access the proxy materials at
https://materials.proxyvote.com/865378
.
These proxy materials are available free of charge.
The
Notice of Internet Availability of Proxy Materials will also identify the date,
time and location of the annual meeting; the matters to be acted upon at the
annual meeting and the Board of Directors’ recommendation with regard to each
matter; a toll-free telephone number, an e-mail address, and a website where
stockholders can request a paper or e-mail copy of the proxy statement, our
Annual Report for the 2009 fiscal year and a form of proxy relating to the
annual meeting; information on how to access the form of proxy; and information
on how to obtain directions to attend the annual meeting and vote in
person.
SulphCo,
Inc.
4333
W. Sam Houston Pkwy N., Suite 190
Houston,
Texas 77043
www.sulphco.com
PROXY
STATEMENT
FOR
THE ANNUAL MEETING OF STOCKHOLDERS
To
Be Held On June 10, 2010
QUESTIONS
AND ANSWERS ABOUT THESE PROXY MATERIALS AND VOTING
Why
am I receiving these materials?
This
proxy statement and the proxy card are being furnished to you because the Board
of Directors (the “Board”) of SulphCo, Inc. (sometimes referred to as the
“Company,” “SulphCo,” “us” or “our”) is soliciting your proxy to vote at the
2010 Annual Meeting of Stockholders. You are invited to attend the annual
meeting to vote on the proposals described in this proxy statement. However, you
do not need to attend the annual meeting to vote your shares. Instead, you may
simply complete, sign and return the proxy card, which is available at
https://materials.proxyvote.com/865378
.
The approximate date on which the proxy statement and accompanying materials are
intended to be sent or made available to the stockholders is April 26,
2010.
Who
can vote at the annual meeting?
Only
stockholders of record at the close of business on April 19, 2010 (the “Record
Date”), will be entitled to vote at the annual meeting. On the Record Date,
there were 101,708,741
shares of Common Stock
outstanding and entitled to vote.
Stockholders of Record: Shares
Registered in Your Name
If on the
Record Date, your shares were registered directly in your name with our transfer
agent, Integrity Stock Transfer, then you are a stockholder of
record. If you are a stockholder of record, you may vote in person at
the annual meeting, or vote by proxy using the proxy card. Whether or not you
plan to attend the annual meeting, we ask you to fill out and return the proxy
card, which is available at
https://materials.proxyvote.com/865378
,
if you wish to have your vote recorded. You may still attend the annual meeting
and vote in person if you have already voted by proxy.
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To vote in person, come to the
annual meeting and we will give you a ballot when you
arrive.
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2.
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To vote using the proxy card,
simply print the proxy card, complete, sign and date the proxy card and
return it promptly. If you return your signed proxy card to us before the
annual meeting, we will vote your shares as you
direct.
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Beneficial Owner: Shares Registered
in the Name of a Broker or Bank
If on the
Record Date, your shares were held in an account at a brokerage firm, bank,
dealer or other similar organization, then you are the beneficial owner of
shares held in “street name’’ and you should have received a proxy card and
voting instructions with these proxy materials from that organization rather
than from us. The organization holding your account is considered the
stockholder of record for purposes of voting at the annual meeting. As a
beneficial owner, you have the right to direct your broker or other agent on how
to vote the shares in your account. Simply complete and mail the proxy card or
follow the instructions included with the proxy materials to vote by telephone
or internet to ensure that your vote is counted. You are also invited to attend
the annual meeting. However, since you are not the stockholder of record, you
may not vote your shares in person at the annual meeting unless you request and
obtain a valid proxy from your broker or other agent. Follow the
instructions from your broker or bank included with these proxy materials, or
contact your broker or bank to request a proxy form.
What
am I voting on?
There are
two matters scheduled for a vote:
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1.
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The
election of four directors for a term of one year or until the next annual
meeting of stockholders;
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2.
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The
ratification of the Audit Committee’s appointment of Hein & Associates
LLP as the Company’s independent registered public accountants for fiscal
year 2010.
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How
do I vote?
You may
either vote “For” all nominees to the Board of Directors or you may withhold
from voting for any nominee you specify. For all of the other matters
to be voted on, you may vote “For”, “Against” or abstain from
voting.
Do
I have appraisal or dissenters’ rights with respect to any of the matters to be
voted upon?
No, under Nevada law, stockholders do
not have rights of appraisal or similar rights of dissenters’ with respect to
any matter to be voted upon herein.
How many votes do I
have
?
On each
matter to be voted upon, you have one vote for each share of common stock you
own as of the Record Date.
What
if I return a proxy card but do not make specific choices?
If you
return a signed and dated proxy card without marking any voting selections, your
shares will be voted “For” all of the matters to be voted on. If any other
matter is properly presented at the annual meeting, your proxy (one of the
individuals named on your proxy card) will vote your shares using his or her
best judgment.
Who
is paying for this proxy solicitation?
The
Company will pay for the entire cost of soliciting proxies. In addition to these
proxy materials, our directors and employees may also solicit proxies in person,
by telephone or by other means of communication. Directors and employees will
not be paid any additional compensation for soliciting proxies. We may also
reimburse brokerage firms, banks and other agents for the cost of forwarding
proxy materials to beneficial owners.
What does it mean if I receive more
than one proxy card
?
If you
receive more than one proxy card, your shares are registered in more than one
name or are registered in different accounts. Please complete, sign and return
each proxy card to ensure that all of your shares are voted.
Can
I change my vote after submitting my proxy?
Yes. You
can revoke your proxy at any time before the final vote at the annual meeting.
You may revoke your proxy in any one of three ways:
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You may submit another properly
completed proxy bearing a later
date.
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2.
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You
may send a written notice that you are revoking your proxy to SulphCo’s
Secretary at 4333
W.
Sam Houston Pkwy N., Suite 190 Houston, Texas
77043.
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3.
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You may attend the annual meeting
and vote in person. Simply attending the annual meeting will not, by
itself, revoke your proxy.
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When
are stockholder proposals due for next year’s annual meeting?
To be considered for inclusion in next
year’s proxy materials, your proposal must be delivered in writing by March 3,
2011, to the Company’s Secretary at 4333 W. Sam Houston Pkwy N., Suite 190
Houston, Texas 77043. If the 2011 annual meeting is held before May
11, 2011 or after July 10, 2011, the proposal must be received by us either 90
days prior to the actual meeting date or 10 days after we first publicly
announce the meeting date, whichever is later. Stockholders are also
advised to review the Company’s Bylaws, which contain additional requirements
with respect to advance notice of stockholder proposals and director
nominations.
How
are votes counted?
Votes
will be counted by the inspector of election appointed for the annual meeting,
who will separately count “For” votes, “Against” votes, abstentions and broker
non-votes. Abstentions will be counted toward the vote total for each proposal
and will have the same effect as “Against” votes. Broker non-votes have no
effect and will not be counted toward the vote total for any
proposal.
If your
shares are held by your broker as your nominee (that is, in “street name”), you
will need to obtain a proxy form from the institution that holds your shares and
follow the instructions included on that form regarding how to instruct your
broker to vote your shares. If the broker or nominee is not given specific
instructions, shares held in the name of such broker or nominee may not be voted
on those matters and will not be considered as present and entitled to vote with
respect to those matters. Shares represented by such “broker non-votes” will,
however, be counted in determining whether there is a quorum.
How
many votes are needed to approve each proposal?
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For
the election of directors, the four nominees receiving the most “For”
votes (among votes properly cast in person or by proxy) will be
elected. Broker non-votes will have no
effect.
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For
the ratification of the auditors, a majority of the shares of common stock
represented in person or by proxy and entitled to vote at the annual
meeting must be voted in favor of the
proposal.
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What
is the quorum requirement?
A quorum
of stockholders is necessary to hold a valid meeting. A quorum will be present
if at least a majority of the outstanding shares are represented by stockholders
present at the meeting or by proxy. On the Record Date, there were
101,708,741
shares
of Common Stock outstanding and entitled to vote. Thus 50,854,371
shares of Common Stock
must be represented by stockholders present at the annual meeting or by proxy to
have a quorum. Your shares will be counted toward the quorum only if you submit
a valid proxy vote or vote at the annual meeting. Abstentions and broker
non-votes will be counted toward the quorum requirement. If there is no quorum,
a majority of the votes present at the annual meeting may adjourn the annual
meeting to another date.
How can I find out the results of
the voting at the annual meeting
?
Voting
results will be disclosed by the Company on Form 8-K within four business days
after the end of the annual meeting.
Interest
of Certain Persons in Matters to be Acted Upon.
None of the Company’s directors
or executive officers has any substantial interest, direct or indirect, by
security holdings or otherwise, in any matter to be acted upon at the annual
meeting.
PROPOSAL
NO. 1 – ELECTION OF FOUR DIRECTORS
SulphCo’s
Board is currently comprised of six members divided into two classes: Class I
and Class III. On March 27, 2009, the Board adopted an amendment to
our bylaws to eliminate the staggered board structure established in April
2008. In order to effectuate this change and to respect the decision
of the stockholders in electing the directors to their various respective terms
at the 2008 annual meeting of stockholders, Class I directors standing for
election at the 2010 annual meeting of stockholders will be elected for only a
term of one year.
The term
of the Class III directors will terminate at the 2011 annual meeting of
stockholders, at which time they or their duly appointed successors will stand
for election for only a term of one year. The Class III directors are
Lawrence G. Schafran and Robert H. C. van Maasdijk.
The Board
has recommended for election at the 2010 annual meeting of stockholders the
following persons:
Robert J.
Hassler
Orri
Hauksson
Dr. Larry
D. Ryan
Fred S.
Zeidman
If
elected at the annual meeting, these directors would serve until the 2011 annual
meeting of stockholders and until their successors are elected and qualified, or
until their earlier death, resignation or removal.
Directors
are elected by a plurality of the votes present in person or represented by
proxy and entitled to vote at the annual meeting. Shares represented by executed
proxies will be voted, if authority to do so is not withheld, for the election
of Robert J. Hassler, Orri Hauksson, Dr. Larry D. Ryan and Fred S. Zeidman. In
the event that any nominee should be unavailable for election as a result of an
unexpected occurrence, such shares will be voted for the election of such
substitute nominee as the Board may propose. Each of Robert J. Hassler, Orri
Hauksson, Dr. Larry D. Ryan and Fred S. Zeidman has agreed to serve if elected,
and we have no reason to believe that they will be unable to serve.
THE BOARD OF DIRECTORS RECOMMENDS
THAT YOU VOTE “FOR” EACH NAMED NOMINEE
.
Our
directors and nominees, their ages as of March 31, 2010, positions with SulphCo
and the dates of their initial election or appointment as director are as
follows:
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Name
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Age
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Position With the Company
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Served From
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Fred
S. Zeidman
(1)
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64
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Chairman
of the Board
Director
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April
2009
August
2008
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Dr.
Larry D. Ryan
(1)
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38
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Chief
Executive Officer
Director
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January
2007
February
2007
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Robert
H. C. van Maasdijk
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65
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Director
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April
2005
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Lawrence
G. Schafran
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71
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Director
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December
2006
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Robert
J. Hassler
(1)
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58
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Director
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April
2009
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Orri
Hauksson
(1)
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39
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Director
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April
2009
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(1)
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These
directors have been nominated for election to the Board at the 2010 annual
meeting of stockholders.
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Fred S. Zeidman,
Chairman of
the Board since April 2009 and
a director since August
2008, has held leadership positions in a number of energy related
companies. Since December 2009, Mr. Zeidman has been a Principal at
the turnaround and restructuring firm XRoads Solutions Group and a member of the
board of directors for Hyperdynamics Corporation. Since November
2009, Mr. Zeidman has served as a member of the board of directors for MegaWest
Energy Corp. Since March 2009, Mr. Zeidman has been a Senior Director for
Governmental Affairs at Ogilvy Government Relations in Washington
D.C. In March 2008, Mr. Zeidman was appointed the Interim
President of Nova Biosource Fuels, Inc. (“Nova”), a publicly traded biodiesel
technology company, and has served as a Nova director since June
2007. From August 2009 through November 2009, Mr. Zeidman was the
Chief Restructuring Officer for Transmeridian Exploration, Inc. Mr.
Zeidman has been Bankruptcy Trustee of AremisSoft Corp since
2004. Mr. Zeidman served as Vice Chairman of Corporate Strategies,
Inc. from July 2004 to December 2009 and has served as Vice Chairman of the
University of Texas Health Science System since October 2008. Mr.
Zeidman has served as Chairman of the United States Holocaust Memorial Council
since March 2002. Mr. Zeidman was on the board of Compact Power,
Inc., an energy storage systems company from November 2007 to November
2009. Mr. Zeidman has served on the board of Prosperity Bank for 26
years. He also served as CEO, President and Chairman of the Board of
Seitel Inc., an oil field services company, from June 2002 to February
2007. Mr. Zeidman served as a Managing Director of the law firm
Greenberg Traurig, LLP from July 2003 to December 2008. Mr. Zeidman
holds a Bachelor’s degree from Washington University in St. Louis and a Masters
in Business Administration degree from New York University.
On March 30, 2009, Nova announced that
it and certain of its subsidiaries had filed voluntary petitions for relief
under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy
Court for the District of Delaware.
Dr. Larry D. Ryan,
SulphCo’s
Chief Executive Officer since January 2007 and a director since February
2007, previously, was a senior executive in General Electric’s
Advanced Materials Division, where he spent 9 years in technical and business
leadership roles, most recently as the Business Manager for the Elastomers and
RTV unit. Prior to his role as Business Manager, Dr. Ryan served as Technology
Director for GE-Bayer Silicones and Global Technology Leader for the Elastomers
and RTV division of GE Advanced Materials in Leverkusen, Germany. He is a
graduate of the prestigious General Electric Edison Engineering Development
Program, a technical leadership program focused on process engineering projects
and product quality improvements and has extensive experience in the Six Sigma
business process methodology. Dr. Ryan has a Ph.D. in Chemical Engineering from
the University of Delaware.
Robert H. C. van Maasdijk,
a
director since April 2005, served as Chairman of Mulier Capital, an investment
bank, from December 2005 to August 2009. During 2006, he sold Attica Alternative
Investment Fund, Ltd., a private investment fund, of which he was Chairman and
CEO and had headed since 1999. For the previous 16 years, he served as Managing
Director and CEO of Lombard Odier Investment Portfolio Management Ltd. Over his
36-year career, he has held executive, portfolio management and research
positions with Ivory & Sime, Edinburgh; Banque Lambert, Brussels; Pierson
Heldring Pierson, Amsterdam; and with Burham and Company, New York.
In 2008, a default verdict was entered
against Mr. van Maasdijk in an involuntary bankruptcy proceeding arising from a
commercial dispute, which was initiated against him in the United
Kingdom. Mr. van Maasdijk has entered into an individual voluntary
arrangement with his creditors and filed an application with the Winchester
County Court (the “Court”) to formally annul the bankruptcy. Mr. van
Maasdijk’s application was heard by the Court on April 6, 2009 at which
time the Court annulled the bankruptcy.
Lawrence G. Schafran,
a
director and Audit Committee Chairman since December 2006, has extensive
experience in the financial markets, complex litigation and corporate
governance, and is a member of the Board of Directors of other U. S.
publicly-traded companies. Mr. Schafran currently is a Managing Director
of Providence Capital, Inc., a private New York City based activist investment
firm, specializing in small-cap mining and oil/gas exploration firms. He has
held this position since July 2003. From 1999 through 2002, Mr. Schafran
served as Trustee, Chairman/Interim-CEO/President and Co- Liquidating Trustee of
the Special Liquidating Trust of Banyan Strategic Realty Trust.
He also
serves as a director of SecureAlert, Inc., Tarragon Corporation, National Patent
Development Corp., New Frontier Energy, Inc., Subaye, Inc. and DollarDays
International, Inc. Mr. Schafran received a Bachelor of Arts Degree
in Finance and a Masters Degree in Business Administration from the University
of Wisconsin.
Robert J. Hassler
, a director
since April 2009, has a broad knowledge of the petroleum industry, with
extensive experience in operations, planning and project
management. His career encompassed 33 years with ConocoPhillips
in technical and senior management roles in refining and marketing, as well as
exploration and production. In 2004, he became President of
ConocoPhillips’ East/Gulf Coast US Refining and, in 2006, President of
ConocoPhillips’ European Refining and Marketing. Mr. Hassler retired in
2008. He holds a Bachelor of Science in Chemical Engineering
from the University of Nebraska and a Masters in Management from
MIT.
Orri Hauksson
, a director
since April 2009, has extensive experience in a wide range of
industries. During his career, he has held various business
development, management and board positions. He was responsible for
launching new shipping routes for the North European shipping company Eimskip,
was the Icelandic Prime Minister’s Political Adviser, oversaw venture capital
investments at Argnor Wireless Ventures in Stockholm and was a sales manager for
U.S. software company Maskina. During 2003-2007, he was a Vice
President responsible for R&D, business development and M&A at Síminn,
Iceland’s incumbent telecommunications operator. He was a board
member of Straumur, a publicly listed investment bank with operations throughout
Scandinavia, sat on the board of the shipping and storing company Eimskip and on
the board of the Finnish telecommunications company Elisa. Apart from
SulphCo, he currently is a board member of Scandanavian Biogas in Sweden and
Indian Motorcycle Company in North Carolina. Mr. Hauksson serves as
investment manager at Novator Partners and holds an MBA from Harvard Business
School and a Mechanical Engineering degree from the University of
Iceland.
PROPOSAL
NO. 2
RATIFICATION
OF THE AUDIT COMMITTEE’S APPOINTMENT OF
INDEPENDENT
REGISTERED PUBLIC ACCOUNTANTS
The Audit
Committee of the Board has appointed Hein & Associates LLP as the Company’s
independent registered public accountants for the fiscal year ending December
31, 2010. Services provided to the Company by Hein & Associates
LLP in fiscal year 2009 are described under
“Fees to Independent Registered
Public Accountants”
below.
We are
asking our stockholders to ratify the selection of Hein & Associates LLP as
our independent registered public accountants for fiscal year 2010. Although
ratification is not required by our bylaws or otherwise, the Board is submitting
the selection of Hein & Associates LLP to our stockholders for ratification
as a matter of good corporate practice.
The
affirmative vote of the holders of a majority of shares represented in person or
by proxy and entitled to vote on this item will be required for approval.
Abstentions will be counted as represented and entitled to vote and will
therefore have the effect of a negative vote.
THE
BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THE RATIFICATION OF THE
APPOINTMENT OF HEIN & ASSOCIATES LLP AS THE COMPANY’S INDEPENDENT REGISTERED
PUBLIC ACCOUNTANTS FOR FISCAL YEAR 2010.
In the
event stockholders do not ratify the appointment, the appointment will be
reconsidered by the Audit Committee and the Board. Even if the selection is
ratified, the Audit Committee may, in its discretion, select a different
registered public accounting firm at any time during the year if it determines
that such a change would be in the best interests of the Company and our
stockholders.
CORPORATE
GOVERNANCE
Board Meetings and
Committees
During
the fiscal year ended December 31, 2009, the Board met eight
times, and during the
fiscal year each Board member attended at least 75% of the aggregate of the
Board meetings and meetings of committees on which he served. The Board of
Directors has three standing committees; the Audit Committee, the Compensation
Committee and the Corporate Governance and Nominating Committee, each consisting
solely of independent directors, all of whom satisfy the independence standards
adopted by the NYSE-Amex.
Audit Committee
The Audit
Committee is currently comprised of the following directors of the Company:
Lawrence G. Schafran (Chair), Robert H. C. van Maasdijk and Orri Hauksson, each
of whom is independent, as independence is currently defined in applicable SEC
and NYSE-Amex rules. During the fiscal year ended December 31, 2009,
the Audit Committee met four
times. The Board has
determined that Mr. Schafran, Mr. van Maasdijk and Mr. Hauksson each qualify as
an “audit committee financial expert,” as defined in applicable SEC rules. The
Board made a qualitative assessment of Mr. Schafran’s, Mr. van Maasdijk’s and
Mr. Hauksson’s level of knowledge and experience based on a number of factors,
including their formal education and experience.
The Audit
Committee is responsible for overseeing the Company’s corporate accounting,
financial reporting practices, audits of financial statements and the quality
and integrity of the Company’s financial statements and reports. In addition,
the Audit Committee oversees the qualifications, independence and performance of
the Company’s independent auditors. In furtherance of these responsibilities,
the Audit Committee’s duties include the following: evaluating the performance
of and assessing the qualifications of the independent auditors; determining and
approving the engagement of the independent auditors to perform audit, review
and attest services and performing any proposed permissible non-audit services;
evaluating employment by the Company of individuals formerly employed by the
independent auditors and engaged on the Company’s account and any conflicts or
disagreements between the independent auditors and management regarding
financial reporting, accounting practices or policies; discussing with
management and the independent auditors the results of the annual audit;
reviewing the financial statements proposed to be included in the Company’s
annual report on Form 10-K; discussing with management and the independent
auditors the results of the auditors’ review of the Company’s quarterly
financial statements; conferring with management and the independent auditors
regarding the scope, adequacy and effectiveness of internal auditing and
financial reporting controls and procedures; and establishing procedures for the
receipt, retention and treatment of complaints regarding accounting, internal
accounting control and auditing matters and the confidential and anonymous
submission by employees of concerns regarding questionable accounting or
auditing matters. The Audit Committee operates under the written Audit Committee
Charter adopted by the Board in 2003, a copy of which may be obtained by writing
the Secretary of the Company at 4333 W. Sam Houston Pkwy N., Suite 190, Houston,
Texas 77043. A current copy of the Audit Committee Charter is also
available on the Company’s website at
http://www.sulphco.com
.
The Report of the Audit Committee is included elsewhere in this proxy
statement.
Compensation
Committee
The
Compensation Committee is currently comprised of the following directors of the
Company: Robert H. C. van Maasdijk (Chair), Fred S. Zeidman, Robert J. Hassler
and Orri Hauksson. Each director is independent under applicable SEC and
NYSE-Amex rules. During the fiscal year ended December 31, 2009, the
Compensation Committee met two
times. The Compensation
Committee reviews and, as it deems appropriate, recommends to the Board
policies, practices and procedures relating to the compensation of the officers
and other managerial employees and the establishment and administration of
employee benefit plans. It advises and consults with the officers of the Company
as may be requested regarding managerial personnel policies. The Compensation
Committee also has such additional powers as may be conferred upon it from time
to time by the Board. The Compensation Committee operates under the written
Compensation Committee Charter adopted by the Board in 2007, a copy of which may
be obtained by writing the Secretary of the Company at 4333 W. Sam Houston Pkwy
N., Suite 190, Houston, Texas 77043. A current copy of the Compensation
Committee Charter is also available on the Company’s website at
http://www.sulphco.com
.
The Report of the Compensation Committee is included elsewhere in this proxy
statement.
Corporate
Governance and Nominating Committee
The Corporate Governance and Nominating
Committee is currently comprised of Robert J. Hassler (Chair), Robert H. C. van
Maasdijk and Lawrence G. Schafran. Each director is independent under
applicable SEC and NYSE-Amex rules. During the fiscal year ended
December 31, 2009, the Corporate Governance and Nominating Committee met three
times. This committee’s responsibilities include:
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•
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evaluating
the composition, size and governance of our Board of Directors and its
committees and making recommendations regarding future planning and the
appointment of directors to our
committees;
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•
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establishing
a policy for considering stockholder nominees for election to our Board of
Directors;
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•
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evaluating
and recommending candidates for election to our Board of
Directors;
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•
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overseeing
our Board of Directors’ performance and self-evaluation process and
developing continuing education programs for our
directors;
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•
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reviewing
our corporate governance principles and policies and providing
recommendations to the Board regarding possible changes;
and
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•
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reviewing
and monitoring compliance with our code of ethics and our insider trading
policy.
|
The Board seeks a diverse group of
candidates who possess the background, skills and expertise to make a
significant contribution to the Board, to the Company and to its stockholders.
Desired qualities to be considered include: high-level leadership experience in
business or administrative activities, and significant accomplishment; breadth
of knowledge about issues affecting the Company; proven ability and willingness
to contribute special competencies to Board activities; personal integrity;
loyalty to the Company and concern for its success and welfare; willingness to
apply sound and independent business judgment; awareness of a director’s vital
role in assuring the Company’s good corporate citizenship and corporate image;
no present conflicts of interest; availability for meetings and consultation on
Company matters; enthusiasm about the prospect of serving; willingness to assume
broad fiduciary responsibility; and willingness to become a Company
stockholder.
The Corporate Governance and
Nominating Committee considers all nominees for election as directors of the
Company, including all nominees recommended by stockholders, in accordance with
the mandate contained in its charter. The Company does not pay a fee to any
third party to identify or assist in identifying or evaluating potential
nominees. In evaluating candidates, the committee reviews all candidates in the
same manner, regardless of the source of the recommendation. The policy of the
Corporate Governance and Nominating Committee is to consider individuals
recommended by stockholders for nomination as a director in accordance with the
procedures described in the committee’s charter under “Composition of the Board
of Directors, Evaluation and Nominating Activities.” A copy of the charter may
be obtained by writing the Secretary of the Company at 4333 W. Sam Houston Pkwy
N., Suite 190, Houston, Texas 77043. A current copy of the Corporate
Governance and Nominating Committee Charter is also available on the Company’s
website at
http://www.sulphco.com
.
Director Nominations and
Independence
The
nomination process involves a careful examination of the performance and
qualifications of each incumbent director and potential nominees before deciding
whether such person should be nominated. The Board believes that the business
experience of its directors has been, and continues to be, critical to the
Company’s success. Directors should possess integrity, independence, energy,
forthrightness, analytical skills and commitment to devote the necessary time
and attention to the Company’s affairs. Directors must possess a willingness to
challenge and stimulate management and the ability to work as part of a team in
an environment of trust.
The Board
will generally consider all relevant factors, including, among others, each
nominee’s applicable expertise and demonstrated excellence in his or her field,
the usefulness of such expertise to the Company, the availability of the nominee
to devote sufficient time and attention to the affairs of the Company, the
nominee’s reputation for personal integrity and ethics, and the nominee’s
ability to exercise sound business judgment. Other relevant factors, including
age and diversity of skills, will also be considered. Director nominees are
reviewed in the context of the existing membership of the Board (including the
qualities and skills of the existing directors), the operating requirements of
the Company and the long-term interests of its stockholders. The Board uses its
network of contacts when compiling a list of potential director candidates and
may also engage outside consultants (such as professional search
firms).
In
addition, the Board of Directors reviews each nominee’s relationship with the
Company in order to determine whether the nominee can be designated as
independent. The following members of our Board of Directors meet the
independence requirements and standards currently established by the SEC and
NYSE-Amex: Robert H. C. van Maasdijk, Lawrence G. Schafran, Fred S. Zeidman,
Orri Hauksson and Robert J. Hassler.
Policy
Regarding Directors’ Attendance at Annual Meeting of Stockholders
The Board
has not adopted a policy with respect to director attendance at annual meetings
of stockholders. Directors are not compensated for attending an annual meeting
of stockholders. However, directors are reimbursed for out-of-pocket expenses
for attendance at an annual meeting of stockholders. The Board encourages each
director to attend the annual meeting of stockholders, whether or not a Board
meeting is scheduled for the same date. At the Company’s 2009 annual meeting of
stockholders, all members of the Company’s Board of Directors were in
attendance.
Stockholder Communications with the
Board of Directors
A
stockholder may contact one or more of the members of the Board of Directors in
writing by sending such communication to the Secretary at 4333 W. Sam Houston
Pkwy N., Suite 190, Houston, Texas 77043. The Secretary will promptly forward
stockholder communications to the appropriate director or directors for review.
Anyone who has a concern about the conduct of the Company or the Company’s
accounting, internal accounting controls or auditing matters, may communicate
that concern to the Secretary, the Chairman of the Board or any member of the
Board of Directors at the Company’s address. We believe that the Board’s
responsiveness to stockholder communications has been adequate. Communications
that consist of stockholder proposals must instead follow the procedures set
forth under “Stockholder Proposals” on page 35
of this Proxy
Statement.
STOCK
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following tables present certain information as of April 16, 2010 regarding the
beneficial ownership of our common stock by (i) each of our directors and
executive officers individually, (ii) all of our directors and executive
officers as a group, and (iii) all persons known by us to be beneficial owners
of five percent or more of our common stock. A person has beneficial ownership
over shares if the person has voting or investment power over the shares. Unless
otherwise noted, the persons listed below have sole voting and investment power
and beneficial ownership with respect to such shares.
Security
Ownership of Certain Beneficial Owners
The
following table presents the ownership of beneficial owners known to us who own
more than five percent of our common stock as of April 16, 2010.
|
Title of
Class
|
|
Name and Address of Beneficial Owner
|
|
Amount and Nature of Beneficial
Ownership
|
|
|
Percent of
Class
(1)
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Common
|
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Dr.
Rudolf W. and Mrs. Doris Gunnerman
|
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12,437,693
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(2)
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12.23
|
%
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6601
Windy Hill Way, Reno, NV 89502
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(1)
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The
Percent of Class is based on 101,708,741 of the Company’s shares issued
and outstanding as of April 16,
2010.
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(2)
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The
share ownership of Dr. and Mrs. Gunnerman is reflected pursuant to the
information contained in Schedule 13D/A, which was filed with the
Commission on April 5, 2010. Of these shares 12,435,693 are subject to
shared voting power between them. The voting power for the remaining 2,000
shares is held solely by Dr.
Gunnerman.
|
Security
Ownership of Directors and Executive Officers
The following table shows the number of
shares of our common stock beneficially owned as of April 16, 2010 by each
nominee director, each incumbent director, the executive officers named in the
“Summary Compensation Table” and all directors and executive officers as a
group. None of such shares are pledged as security.
|
Title of
Class
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Name of Beneficial Owner
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|
Amount and Nature
of Beneficial
Ownership
(1)
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Percent of
Class
(1)
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Common
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Robert
H. C. van Maasdijk
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440,321
(2)
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0.43%
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Common
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Lawrence
G. Schafran
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503,338
(3)
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0.49%
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Common
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Fred
S. Zeidman
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278,544
(4)
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0.27%
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Common
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Robert
J. Hassler
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122,641
(5)
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0.12%
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Common
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Orri
Hauksson
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106,325
(6)
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0.11%
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Common
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Dr.
Larry D. Ryan
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450,000
(7)
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0.44%
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Common
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M.
Clay Chambers
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130,000
(8)
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0.13%
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Common
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Stanley
W. Farmer
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240,000
(9)
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0.24%
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Common
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Dr.
Florian J. Schattenmann
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91,667
(10)
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0.09%
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Common
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All
Directors and Current Executive Officers as a group (9
persons)
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2,362,836
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2.32%
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(1)
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Beneficial
ownership is determined in accordance with rules of the SEC, and includes
generally voting power and/or investment power with respect to securities.
Shares of common stock which may be acquired by a beneficial owner upon
exercise or conversion of warrants, options or rights which are currently
exercisable or exercisable within 60 days of April 16, 2010, are included
in the table as shares beneficially owned and are deemed outstanding for
purposes of computing the beneficial ownership percentage of the person
holding such securities but are not deemed outstanding for computing the
beneficial ownership percentage of any other person. Except as indicated
by footnote, to our knowledge, the persons named in the table above have
the sole voting and investment power with respect to all shares of common
stock shown as beneficially owned by them. The Percent of Class
is based on 101,708,741 of the Company’s shares issued and outstanding as
of April 16, 2010.
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(2)
|
Mr.
van Maasdijk owns all of the shares outright, with the exception of
options to purchase 419,984 shares of which 344,984 are exercisable within
60 days of April 16, 2010.
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(3)
|
Mr.
Schafran owns all of the shares outright, with the exception of options to
purchase 485,478 shares of which 410,478 are exercisable within 60 days of
April 16, 2010.
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(4)
|
Mr.
Zeidman has options to acquire 378,544 shares of which 278,544 are
exercisable within 60 days of April 16,
2010.
|
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(5)
|
Mr.
Hassler has options to acquire 197,641 shares of which 122,641 are
exercisable within 60 days of April 16,
2010.
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(6)
|
Mr.
Hauksson has options to acquire 181,325 shares of which 106,325 are
exercisable within 60 days of April 16,
2010.
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(7)
|
Dr.
Ryan has options to acquire 750,000 shares of which 450,000 are
exercisable within 60 days of April 16,
2010.
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(8)
|
Mr.
Chambers has options to acquire 280,000 shares, of which 130,000 are
exercisable within 60 days of April 16,
2010.
|
|
(9)
|
Mr.
Farmer has options to acquire 390,000 shares, of which 240,000 are
exercisable within 60 days of April 16,
2010.
|
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(10)
|
Dr.
Schattenmann has options to acquire 375,000 shares, of which 91,667 are
exercisable within 60 days of April 16,
2010.
|
Legal
Proceedings
There are various claims and lawsuits
pending against the Company arising in the ordinary course of the Company’s
business. Although the amount of liability, if any, against the Company is not
reasonably estimable, the Company is of the opinion that these claims and
lawsuits will not materially affect the Company’s financial position. We have
and will continue to devote significant resources to our defense as
necessary.
The following paragraphs set forth the
status of litigation as of March 31, 2010.
In
Clean Fuels Technology v. Rudolf W.
Gunnerman, Peter Gunnerman, RWG, Inc. and SulphCo, Inc.
, Case No.
CV05-01346 (Second Judicial District, County of Washoe) the Company, Rudolf W.
Gunnerman, Peter Gunnerman, and RWG, Inc., were named as defendants in a legal
action commenced in Reno, Nevada (the “Clean Fuels Litigation”). The
plaintiff, Clean Fuels Technology later assigned its claims in the lawsuit to
EcoEnergy Solutions, Inc., which entity was substituted as the
plaintiff. In general, the plaintiff’s alleged claims relate to
ownership of the “sulfur removal technology” originally developed by Professor
Teh Fu Yen and Rudolf Gunnerman with financial assistance provided by Rudolf W.
Gunnerman, and subsequently assigned to the Company. On September 14,
2007, after a jury trial and extensive post-trial proceedings, the trial court
entered final judgment against the plaintiff EcoEnergy Solutions, Inc. on all of
its claims. As per the final judgment, all of the plaintiff’s claims
were resolved against the plaintiff and were dismissed with
prejudice. In addition, the trial court entered judgment in favor of
the Company and against the plaintiff for reimbursement of legal fees and costs
of approximately $124,000, with post-judgment interest. The plaintiff
appealed the judgment on October 5, 2007. On August 3, 2009, the Nevada Supreme
Court affirmed the court’s Order and judgment in its entirety. The
Nevada Supreme Court then denied EcoEnergy’s request for a rehearing on
September 25, 2009 and further denied EcoEnergy’s Petition for En Banc
Reconsideration on November 17, 2009. On December 15, 2009, the
Nevada Supreme Court restored jurisdiction to the district court for any
post-appeal issues. Since that time, the Company received legal fees, costs, and
interest awarded to it under the judgment from EcoEnergy. The Company then moved
the district court for an award of legal fees and costs incurred on
appeal. The district court granted the award and the Company received
approximately $120,000 in March 2010 for costs incurred in connection with the
appeal.
Talisman
Litigation
In
Talisman Capital Talon Fund, Ltd. v.
Rudolf W. Gunnerman and SulphCo, Inc.
, Case No. 05-CV-N-0354-BES-RAM, the
Company and Rudolf W. Gunnerman were named as defendants in a legal action
commenced in federal court in Reno, Nevada. The plaintiff’s claims relate to the
Company's ownership and rights to develop its "sulfur removal technology." The
Company regards these claims as without merit. Discovery in this case formally
concluded on May 24, 2006. On September 28, 2007, the court granted, in part,
the defendants' motion for summary judgment and dismissed the plaintiff's claims
for bad faith breach of contract and unjust enrichment that had been asserted
against Rudolf Gunnerman. The court denied the plaintiff's motion for partial
summary judgment. The trial for this matter commenced on December 1, 2008 and
continued through December 12, 2008. The court recessed the trial on
December 12, 2008 prior to hearing closing arguments. Post trial
briefs were filed with the court on February 20, 2009, and closing arguments
were heard on March 3, 2009. On May 14, 2009, the court entered a judgment in
favor of the Company and dismissed all claims with prejudice. The plaintiff
appealed the judgment on June 11, 2009. The plaintiff’s appeal brief was filed
with the court in late December 2009. The Company’s answering brief
was filed with the court in early February 2010 after which the plaintiff may
file a reply brief thereto within 14 days. No date has been set for
argument or submission of the appeal. No liability has been accrued relative to
this action.
Hendrickson
Derivative Litigation
On
January 26, 2007, Thomas Hendrickson filed a shareholder derivative claim
against certain current and former officers and directors of the Company in the
Second Judicial District Court of the State of Nevada, in and for the County of
Washoe. The case was known as
Thomas Hendrickson, Derivatively on
Behalf of SulphCo, Inc. v. Rudolf W. Gunnerman, Peter W. Gunnerman, Loren J.
Kalmen, Richard L. Masica, Robert Henri Charles Van Maasdijk, Hannes
Farnleitner, Michael T. Heffner, Edward E. Urquhart, Lawrence G. Schafran, Alan
L. Austin, Jr., Raad Alkadiri and Christoph Henkel
, Case No. CV07-00187,
Dept. No. B6. The complaint alleged, among other things, that the
defendants breached their fiduciary duty to the Company by failing to act in
good faith and diligence in the administration of the affairs of the Company and
in the use and preservation of its property and assets, including the Company’s
credibility and reputation. On April 12, 2007 the Company and
individual defendants filed a motion to dismiss, based upon the plaintiff’s
failure to make a demand upon the Board of Directors and failure to state a
claim. On July 3, 2007, the parties filed a Stipulation of Voluntary
Dismissal Without Prejudice (the “Stipulation”). The Stipulation
provided that in connection with the dismissal of this action each of the
parties will bear their own costs and attorney fees and thereby waive their
rights, if any, to seek costs and attorney fees from the opposing
party. Further, neither the plaintiff nor his counsel received any
consideration for the dismissal of this action.
In September of 2007, the Company’s
Board of Directors received a demand letter (the “Hendrickson Demand Letter”)
from Mr. Hendrickson’s attorney reasserting the allegations contained in the
original derivative claim and requesting that the Board of Directors conduct an
investigation of these matters in response thereto. In response to
the Hendrickson Demand Letter, the Company’s Board of Directors formed a
committee comprised of three independent directors (the “Committee”) to evaluate
the Hendrickson Demand Letter and to determine what action, if any, should be
taken. The Committee retained independent counsel to advise it.
On September 2, 2008, the Company’s
Board of Directors held a special meeting for the purpose of hearing and
considering the Committee’s report and recommendation. At that
meeting, the Committee reported on its investigation and presented the
Committee’s unanimous recommendation that no actions be brought by the Company
based upon the matters identified in the Hendrickson Demand
Letter. The Board of Directors unanimously adopted the Committee’s
recommendation. SulphCo communicated this conclusion to Mr. Hendrickson’s
counsel in mid-September 2008.
On November 6, 2008, Mr. Hendrickson
re-filed the shareholder derivative claim in the 127th Judicial District Court
of Harris County, Texas. The case is known as
Thomas Hendrickson, Derivatively on
Behalf of SulphCo, Inc. v. Rudolf W. Gunnerman, Peter W. Gunnerman, Loren J.
Kalmen, Richard L. Masica, Robert Henri Charles Van Maasdijk, Hannes
Farnleitner, Michael T. Heffner, Edward E. Urquhart, Lawrence G. Schafran, Alan
L. Austin, Jr., Raad Alkadiri and Christoph Henkel
, Case No.
200866743. The Company has responded to this litigation by moving to
dismiss and the individual defendants have responded by moving to dismiss for
lack of personal jurisdiction. No relief is sought against the
Company and no liability has been accrued relative to this action.
On April
7, 2010, the parties entered into a Memorandum of Understanding ("MOU"),
providing for a proposed settlement of the action under certain
conditions. Under the MOU, the parties will negotiate a definitive
settlement agreement and after notice to SulphCo shareholders, the Court will
hold a hearing on the parties' motion for final settlement approval and
dismissal of the action with prejudice. As there has been no definitive
settlement agreement executed, the parties have not asked the Court for an order
of preliminary approval. Under the terms of the MOU, the contemplated
settlement will not have a material impact on the financial condition of
the
Company.
SECTION
16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section
16(a) of the Securities Exchange Act of 1934, as amended, requires the Company’s
directors, executive officers and persons who own more than 10% of a registered
class of the Company’s equity securities, to file with the SEC initial reports
of ownership and reports of changes in ownership of common stock and other
equity securities of the Company. Directors, officers and greater than 10%
stockholders are required to furnish the Company with copies of all Section
16(a) forms they file.
To the
Company’s knowledge, based solely on a review of the copies of such reports
furnished to the Company, with respect to the fiscal year ended December 31,
2009, the officers, directors and beneficial owners of more than 10% of our
common stock have filed their initial statements of ownership on Form 3 on a
timely basis, and the officers, directors and beneficial owners of more than 10%
of our common stock have also filed the required Forms 4 or 5 on a timely basis,
except as follows: Rudolf W. Gunnerman (number of late reports - 3, number of
transactions not timely reported - 3); Robert J. Hassler (number of late reports
- 1, number of transactions not timely reported - 1); Orri Hauksson (number of
late reports - 1, number of transactions not timely reported -
1).
MANAGEMENT
Business
Experience of Current Executive Officers Who Are Not Directors
Set forth below are brief biographies
of each of the executive officers of the Company (excluding executive officers
who are also directors) as of the date of this Proxy Statement. Such biographies
include a description of all positions with the Company presently held by each
such person, and the positions held by, and principal areas of responsibility
of, each such person during the last five years.
M. Clay Chambers
has served as
our Chief Operating Officer since February 2008. From March 2003 to
February 2008, Mr. Chambers worked for El Paso Corporation (“El Paso”), a large
natural gas pipeline operator and natural gas producer, as a consultant advising
on the sale of El Paso’s chemical assets after the acquisition of Coastal
Corporation by El Paso in 2001. Mr. Chambers has over 35 years experience in the
refining and petrochemical industry, having begun his career with UOP, Inc. and
having held senior management positions with Coastal Corporation and Texas City
Refining. At Coastal Corporation he served as Vice President of Refining, Senior
Vice President of International Project Development and Senior Vice President of
Petroleum Coordination. Mr. Chambers had overall management responsibility for
refineries located in Corpus Christi, Texas; Eagle Point, New Jersey; Mobile,
Alabama; Wichita, Kansas and Aruba, with a total crude capacity of 538,000
barrels/day. He has extensive expertise regarding the full range of refinery and
petrochemical processing units and has also held senior management positions in
the product, crude supply and petroleum marketing areas. Mr. Chambers
holds a professional degree in Chemical & Petroleum Refining Engineering
from Colorado School of Mines and an MBA from the University of
Houston.
Stanley W. Farmer
has served as our Vice
President and Chief Financial Officer since June 2007. Mr. Farmer was also
appointed as the Company’s Treasurer and Corporate Secretary in March 2009. From
June 2005 to June 2007, Mr. Farmer was an audit partner at Malone & Bailey,
PC, a full service certified public accounting firm specializing in providing
audit services to small public companies. From November 2004 to April
2005, Mr. Farmer was the Chief Financial Officer at Texas Energy Ventures,
L.L.C., a wholesale and retail energy holding company. From May 2003
to November 2004, Mr. Farmer was an Assistant Controller at Reliant Energy
Wholesale Group, a subsidiary of Reliant Energy, Inc., a provider of electricity
and energy-related products to retail and wholesale customers. From
April 2000 to May 2003, Mr. Farmer was a Senior Director at Enron Corp. in its
accounting transaction support group. Mr. Farmer has also held
management positions with a focus in the energy sector of Arthur Andersen LLP
(May 1997 to April 2000) and KPMG LLP (January 1991 to May 1997).
Mr. Farmer has a B.B.A in
Accounting from Texas A&M University (College Station, Texas), is a
certified public accountant (Texas) and is a member of the American Institute of
Certified Public Accountants and the Texas Society of Certified Public
Accountants.
Dr. Florian J. Schattenmann
currently serves as our Vice President and Chief Technology Officer and
has been with the Company since August of 2008. From December 2006 to July 2008,
Dr. Schattenmann was the Global Elastomers and European Technology Leader at
Momentive Performance Materials (formerly General Electric Advanced Materials),
a manufacturer of high-technology material solutions with a product portfolio
that included silicone-based products, fused quartz and ceramics. From May 2006
to December 2006, Dr. Schattenmann was Technology Director for GE-Bayer
Silicones based in Leverkusen, Germany. Dr. Schattenmann joined the GE Advanced
Materials business from the GE Global Research Center where, from May 2001 to
April 2006, he successively led several laboratories focused on the development
of advanced technologies ranging from electronic materials to selective
catalysis to nano-structured materials. Dr. Schattenmann is a certified Master
Black Belt from GE in Six Sigma process methodology, holds seven patents and is
the (co-)author of numerous peer-reviewed publications. Dr. Schattnemann has a
Ph.D. in Inorganic Chemistry from M.I.T.
EXECUTIVE
COMPENSATION
Compensation
Discussion and Analysis
The
following discussion and analysis explains the Company’s compensation program as
it applies to the named executive officers who served in 2009. This discussion
and analysis should be read in conjunction with the Summary Compensation Table,
its accompanying footnotes and the additional tabular and narrative disclosures
that follow the Summary Compensation Table.
What
are the objectives of SulphCo’s compensation program?
The
Compensation Committee has designed our compensation program for named executive
officers in order to meet the following objectives:
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|
·
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provide
a strong incentive to our named executive officers to achieve their
potential and our business goals;
|
|
|
·
|
make
prudent use of our resources; and
|
|
|
·
|
align
the interests of our named executive officers with the interests of our
stockholders.
|
What are the elements of SulphCo’s
compensation program and what is SulphCo’s purpose in paying each such element
of compensation?
Our
compensation program consists of base salary, annual cash incentive awards and
long-term incentive awards (e.g., equity based awards). Perquisites are not a
material element of our compensation program. We believe the
combination of elements that comprise our compensation program provides a
competitive and reasonable pay package that attracts the talent that we need,
motivates that talent to achieve our goals, reinforces expectations of
leadership and aligns our executives’ interests with our stockholders’
interests.
Base Salary.
Base salary is
paid in cash commensurate with the responsibilities of each individual’s
position. We believe our base salaries attract and retain executives
with the qualifications we need for leading and growing our business. The
Compensation Committee annually reviews base salaries and approves adjustments
based on the following factors:
|
|
·
|
sustained
job performance;
|
|
|
·
|
annual
Company performance; and
|
|
|
·
|
relevant
individual knowledge and skill
|
Annual Cash Incentive
Awards.
Annual cash incentive awards include discretionary
cash bonuses. The purpose of our annual cash incentive awards is to
encourage superior performance from our executives that is consistent with the
achievement of our goals. The Compensation Committee considers the individual’s
experience and performance and approves awards based on the following
factors:
|
|
·
|
annual
job performance;
|
|
|
·
|
annual
Company performance; and
|
|
|
·
|
relevant
individual knowledge and skill
|
Long-Term Incentive
Awards.
Long-term
incentive awards include equity based awards. Equity based awards are
granted pursuant to the SulphCo, Inc. 2006 Stock Option Plan (the “2006 Plan”)
and the SulphCo, Inc. 2008 Omnibus Long-Term Incentive Plan (“2008
LTIP”). Our long-term incentive awards are designed to retain
executives who demonstrate the qualifications we need and to provide continued
motivation and incentive to achieve our goals. We believe that awarding equity
incentive compensation aligns our executives’ interests with those of our
stockholders.
In
addition to these compensation elements, we also offer the named executive
officers the opportunity to participate in the Company’s benefit plans that are
generally available to all Company employees, including, but not limited to,
401(k) plan and a medical insurance plan.
How does SulphCo determine the
amount for each element of compensation paid?
As a
development stage company with a limited number of employees and limited
resources, compensation of named executive officers is determined on a
case-by-case basis, depending on a variety of factors, including Company
performance, individual performance, current and potential impact on corporate
performance, reputation, skills and experience. We do not utilize a definite
formula to determine the amount of each element of compensation
paid.
How does each compensation element, and
SulphCo’s decision regarding that element, fit into SulphCo’s overall
compensation objectives and affect decisions regarding other elements?
Base salaries, annual cash incentives
and long-term incentives are determined on a case-by-case basis and are
important elements of the total compensation package designed to attract and
retain the talent we need in order to achieve our business goals, which include
successful development and commercialization of our products and services. In
addition, the equity element of long-term incentive awards furthers our goal of
aligning the interests of our executive officers with the interests of our
stockholders.
Awards of long-term incentive awards
such as stock options can promote retention if their value increases, and they
create stockholder alignment because their value increases as our stock price
increases.
What
is the basis for selecting particular events as triggering payment in connection
with termination or change-in-control?
We provide for payments and benefits if
a named executive officer is terminated without cause or resigns for good reason
in connection with a change-in-control as described below under “Potential
Payments upon Termination or Change-in-Control.” In addition, in our executive
employment agreements, we provide for payments and other benefits if a named
executive officer’s employment is involuntarily terminated as a result of
something other than death, disability, cause or a change-in-control. See
“Potential Payments upon Termination or Change-in-Control.” These
payment provisions, including the respective amounts, were determined on a
case-by-case basis and were necessary to attract the named executive officers to
accept the types of risks attendant with joining the Company in its current
developmental stage.
Does
the accounting and tax treatment of a particular form of compensation impact the
form and design of awards?
The Compensation Committee considers
tax and accounting treatment of various compensation alternatives, including the
potential tax deductibility of proposed compensation arrangements. However,
these are not typically driving factors. The Compensation Committee may approve
non-deductible compensation arrangements if it believes that such arrangements
are in the best interests of the Company and its stockholders. As part of its
analysis, the Compensation Committee may take into account a variety of factors,
including our ability to utilize the deduction based on projected taxable
income. During 2009, no compensation decisions were impacted by tax
and/or accounting treatment.
What
are SulphCo’s equity or other security ownership requirements or guidelines?
Does SulphCo have any policies regarding hedging the economic risk of such
ownership?
At the present time, the Board has not
adopted stock ownership guidelines for our directors and executive officers.
However, the Board may elect to do so in the future.
Because short-range speculation in our
securities based on fluctuations in the market may cause conflicts of interests
with our stockholders, our Insider Trading Policy prohibits trading in options,
warrants, puts and calls related to our securities and it also prohibits selling
our securities short or holding our securities in margin accounts.
What
is the role of SulphCo’s executive officers in the compensation process?
Our Chief Executive Officer has access
to the internal compensation information. Using that information, our Chief
Executive Officer makes recommendations to the Compensation Committee regarding
the compensation of our other named executive officers. Taking these
recommendations into account, the Compensation Committee independently reviews
the data and makes its own determinations, subject to the approval of the
Board.
Does
SulphCo have any program, plan or practice to time option grants to its
executives in coordination with the release of material non-public
information?
We do not have any program, plan or
practice to time grants of stock options to our executives in coordination with
the release of material non-public information and we do not set grant dates of
stock options to new executives in coordination with the release of such
information. Our executive officers do not have any role in
establishing the timing of grants of stock options. We have not
timed, and do not intend to time, our release of material non-public information
for the purpose of affecting the value of executive
compensation.
Analysis
At the beginning of each fiscal year,
the Company’s Compensation Committee of the Board of Directors establishes a set
of mutually agreed upon individual goals and objectives with each of its named
executive officers. These mutually agreed upon individual goals and
objectives form the basis against which the performance of the named executive
officer is measured for determining compensation. The 2009 individual
goals and objectives for each of the Company’s named executive officers and the
Compensation Committee’s assessment of each named executive officer’s
performance are as follows:
|
|
|
Achieved
|
|
Dr. Larry D. Ryan
Chief Executive Officer – 2009 Goals & Objectives
|
|
Y
|
|
N
|
|
Laboratory
|
|
|
|
|
|
Establish
full understanding of the hydro-treating behavior of sulfones generated in
the Sonocracking™ process including hydrogen consumption and process
parameters
|
|
Y
|
|
|
|
Develop
solid-catalyst based or catalyst-free Sonocracking™
process
|
|
|
|
N
|
|
Expand
best-in-class analytical equipment and techniques in the Houston
laboratory
|
|
Y
|
|
|
|
Develop
library of detailed data packages for customer oil and distillate
samples
|
|
Y
|
|
|
|
|
|
|
|
|
|
Field
Trials & Scale Up
|
|
|
|
|
|
Develop
key elements of a customer accepted data package including large scale
mass balance
|
|
Y
|
|
|
|
Continue
to identify critical process bottlenecks and develop economical solutions
for implementation
|
|
Y
|
|
|
|
|
|
|
|
|
|
Commercial
Opportunities
|
|
|
|
|
|
Execute
1-3 memoranda of understanding with key potential
customers
|
|
Y
|
|
|
|
Develop
and execute Joint Development Programs with 1-3 key potential
customers
|
|
Y
|
|
|
|
Solidify
market opportunity and financial metrics for 1-3 customer
applications
|
|
Y
|
|
|
|
Establish
implementable plan for 1-3 applications, including commercial terms and
agreement
|
|
Y
|
|
|
|
|
|
|
|
|
|
Financing
|
|
|
|
|
|
Renegotiate/extend
the terms of the $4.7 million convertible notes (the “Notes”) payable such
that the right of the holders of the Notes to put the Notes to SulphCo
beginning August 1, 2009, is deferred to late 2010 or removed
altogether
|
|
Y
|
|
|
|
Continue
to advance the SulphCo story with existing and new institutional investors
for the purpose of enhancing SulphCo’s ability to raise funds via equity
sales if circumstances permit
|
|
Y
|
|
|
|
Maintain
current high standards of excellence
|
|
Y
|
|
|
|
|
|
|
|
|
|
Organizational
& Other
|
|
|
|
|
|
Enhance
and promote SulphCo’s public image through press and investor relations,
investor meetings, articles in publications, and any other means necessary
and applicable
|
|
Y
|
|
|
|
Build
necessary organizational structure as SulphCo moves toward commercial
implementation of its Sonocracking™ technology
|
|
Y
|
|
|
Based on
its review of Dr. Ryan’s individual goals and objectives, the Compensation
Committee unanimously agreed to recommend to the Board of Directors that no base
salary increase, no cash bonus and no additional equity incentive awards should
be awarded to Dr. Ryan for 2009. The decision was based on the
Committee’s view that the Company goal for the management team was the execution
of revenue generating commercial contracts, and this was not achieved in
2009.
|
|
|
Achieved
|
|
Stanley W. Farmer
Chief Financial Officer – 2009 Goals & Objectives
|
|
Y
|
|
N
|
|
Financing
- Continue to
explore all avenues for possible fund raising including:
|
|
|
|
|
|
Renegotiating/extending
the terms of the $4.7 million convertible notes (the “Notes”) payable such
that the right of the holders of the Notes to put the Notes to SulphCo
beginning August 1, 2009, is deferred to late 2010 or removed
altogether
|
|
Y
|
|
|
|
Continuing
to advance the SulphCo story with existing and new institutional investors
for the purpose of enhancing SulphCo’s ability to raise funds via equity
sales if circumstances permit
|
|
Y
|
|
|
|
Continuing
to pursue funding alternatives under the DOE’s Loan Guarantee Program as
well as other governmental funding opportunities such as
grants
|
|
Y
|
|
|
|
|
|
|
|
|
|
Accounting & Financial
Reporting
- Continue to improve and enhance SulphCo’s accounting
and financial reporting function by:
|
|
|
|
|
|
Maintaining
current high standards of excellence
|
|
Y
|
|
|
|
Assessing
infrastructure needs (e.g., back office accounting needs, accounting
software requirements, etc.) in anticipation of SulphCo entering into
revenue generating contracts
|
|
Y
|
|
|
|
Maintaining
SulphCo’s compliance with the requirements of the Sarbanes-Oxley Act of
2002
|
|
Y
|
|
|
|
Continuing
to enhance communication between senior management and the Board of
Directors on critical financial matters
|
|
Y
|
|
|
|
|
|
|
|
|
|
Commercial
- Continue to
assist SulphCo’s Chief Executive Officer in:
|
|
|
|
|
|
Aggressively
managing SulphCo’s monthly cash burn rate
|
|
Y
|
|
|
|
Developing
customer prospects to the point of revenue generation
|
|
Y
|
|
|
|
Developing
and refining SulphCo’s business model
|
|
Y
|
|
|
|
Dealings
with current and prospective investors
|
|
Y
|
|
|
|
|
|
|
|
|
|
Investor Relations & Public
Relations
- Continue to enhance and improve SulphCo’s credibility
in the marketplace by:
|
|
|
|
|
|
Supporting
the activities of SulphCo’s VP of Corporate Development with ongoing
investor and public relations initiatives
|
|
Y
|
|
|
|
Managing
and maximizing the return on investment as it relates to FD, SulphCo’s
current external IR/PR firm
|
|
Y
|
|
|
Based on
its review of Mr. Farmer’s individual goals and objectives, the Compensation
Committee unanimously agreed to recommend to the Board of Directors that no base
salary increase, no cash bonus and no additional equity incentive awards should
be awarded to Mr. Farmer for 2009. The decision was based on the
Committee’s view that the Company goal for the management team was the execution
of revenue generating commercial contracts, and this was not achieved in
2009.
|
|
|
Achieved
|
|
M. Clay Chambers
Chief Operating Officer – 2009 Goals &
Objectives
|
|
Y
|
|
N
|
|
Customer
Installations & Support
|
|
|
|
|
|
Develop
process and project implementation plans for potential customer
sites
|
|
Y
|
|
|
|
Provide
economic models for both customers and SulphCo
|
|
Y
|
|
|
|
Provide
project management and operators for customer
installations
|
|
Y
|
|
|
|
Execute
logistics for implementing field trials and permanent customer
installations including construction monitoring, start-ups and performance
test runs
|
|
Y
|
|
|
|
Develop
operating and safety manuals for field installations
|
|
Y
|
|
|
|
|
|
|
|
|
|
Agent,
Distributor, and Customer Agreements and Contracts
|
|
|
|
|
|
Develop
and review legal agreements with agents, distributors, and
customers
|
|
Y
|
|
|
|
Enlist
outside counsel as necessary to facilitate agreements
|
|
Y
|
|
|
|
Ensure
agreements and contracts meet SulphCo financial and liability
requirements
|
|
Y
|
|
|
|
Provide
technical and operational support to SulphCo’s marketing
efforts
|
|
Y
|
|
|
|
|
|
|
|
|
|
Outside
Contractor Management
|
|
|
|
|
|
Manage
outside contractors via contracts and schedules
|
|
Y
|
|
|
|
Utilize
outside contract operators for start-ups and tests runs at customer
sites
|
|
Y
|
|
|
|
|
|
|
|
|
|
Houston
Facility Operation
|
|
|
|
|
|
Ensure
safe and compliant operation of SulphCo’s Houston facility
|
|
Y
|
|
|
|
Provide
necessary support for investment and equipment for SulphCo
personnel
|
|
Y
|
|
|
|
Continually
maintain, upgrade and modernize mobile skids for testing as
necessary
|
|
Y
|
|
|
|
|
|
|
|
|
|
Organizational
|
|
|
|
|
|
Hire
necessary project management personnel and contract operators for field
installations
|
|
Y
|
|
|
|
Utilize
department personnel to help in research and development as
needed
|
|
Y
|
|
|
Based on
its review of Mr. Chambers’ individual goals and objectives, the Compensation
Committee unanimously agreed to recommend to the Board of Directors that no base
salary increase, no cash bonus and no additional equity incentive awards should
be awarded to Mr. Chambers for 2009. The decision was based on the
Committee’s view that the Company goal for the management team was the execution
of revenue generating commercial contracts, and this was not achieved in
2009.
|
|
|
Achieved
|
|
Dr. Florian J. Schattenmann
Chief Technology Officer – 2009 Goals &
Objectives
|
|
Y
|
|
N
|
|
Sonocracking™
Technology - Laboratory
|
|
|
|
|
|
Establish
full understanding of the hydro-treating behavior of sulfones generated in
the Sonocracking™ process including hydrogen consumption and process
parameters
|
|
Y
|
|
|
|
Develop
solid-catalyst based or catalyst-free Sonocracking™
process
|
|
|
|
N
|
|
Implement
user-friendly ultrasound probe technology in close cooperation with
MWH
|
|
Y
|
|
|
|
Develop
mobile flow-through unit (<1 gpm) for fast customer
deployment
|
|
Y
|
|
|
|
Expand
best-in-class analytical equipment and techniques in the Houston
laboratory
|
|
Y
|
|
|
|
Develop
library of detailed data packages for customer oil and distillate
samples
|
|
Y
|
|
|
|
|
|
|
|
|
|
Sonocracking™
Technology – Field Trials and Scale Up
|
|
|
|
|
|
Implement
Sonocracking™ process chemistry in customer field trials as part of
collaborations
|
|
Y
|
|
|
|
Develop
key elements of a customer accepted data package including large scale
mass balance
|
|
Y
|
|
|
|
Continue
to identify critical process bottlenecks and develop economical
solution
|
|
Y
|
|
|
|
|
|
|
|
|
|
External
Technology Focus
|
|
|
|
|
|
Develop
and execute joint development type relationships with key customers;
minimum 2 collaborations in 2009
|
|
Y
|
|
|
|
Tell
the SulphCo technology story through interviews, presentations and other
professional media
|
|
Y
|
|
|
|
Develop
technical relationships with key academic and third party validation
institutions
|
|
Y
|
|
|
|
|
|
|
|
|
|
Organizational
|
|
|
|
|
|
Hire
technical engineering personnel for post-Sonocracking™ process
schemes
|
|
Y
|
|
|
|
Continue
to grow technical team by mentoring and setting goals and
accountability
|
|
Y
|
|
|
Based on
its review of Dr. Schattenmann’s individual goals and objectives, the
Compensation Committee unanimously agreed to recommend to the Board of Directors
that no base salary increase, no cash bonus and no equity incentive awards
should be awarded to Dr. Schattenmann for 2009. The decision was
based on the Committee’s view that the Company goal for the management team was
the execution of revenue generating commercial contracts, and this was not
achieved in 2009.
Summary
Compensation Table
The
following table sets forth the annual compensation earned during 2009, 2008 and
2007 (as applicable) by our principal executive officer, our principal financial
officer and all other executive officers of the Company for
2009. These persons are referred to collectively as the “named
executive officers.”
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option
|
|
|
Other
|
|
|
|
|
|
Name and
|
|
|
|
|
|
Salary
|
|
|
Bonus
|
|
|
Awards
(5)
|
|
|
Compensation
(6)
|
|
|
Total
|
|
|
Principal Position
|
|
|
Year
|
|
|
( $ )
|
|
|
( $ )
|
|
|
( $ )
|
|
|
( $ )
|
|
|
( $ )
|
|
|
Dr.
Larry D. Ryan
(1)
|
|
|
2009
|
|
|
|
300,000
|
|
|
|
-
|
|
|
|
77,706
|
|
|
|
7,350
|
|
|
|
385,056
|
|
|
Chief
Executive Officer
|
|
|
2008
|
|
|
|
300,000
|
|
|
|
75,000
|
|
|
|
-
|
|
|
|
6,900
|
|
|
|
381,900
|
|
|
|
|
|
2007
|
|
|
|
287,500
|
|
|
|
155,000
|
|
|
|
1,346,094
|
|
|
|
89,339
|
|
|
|
1,877,933
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stanley
W. Farmer
(2)
|
|
|
2009
|
|
|
|
250,000
|
|
|
|
-
|
|
|
|
9,010
|
|
|
|
7,350
|
|
|
|
266,360
|
|
|
Vice
President, Chief
|
|
|
2008
|
|
|
|
250,000
|
|
|
|
56,250
|
|
|
|
71,655
|
|
|
|
6,900
|
|
|
|
384,805
|
|
|
Financial
Officer, Treasurer
|
|
|
2007
|
|
|
|
140,625
|
|
|
|
90,000
|
|
|
|
735,795
|
|
|
|
6,750
|
|
|
|
973,170
|
|
|
and
Corporate Secretary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
M.
Clay Chambers
(3)
|
|
|
2009
|
|
|
|
250,000
|
|
|
|
-
|
|
|
|
18,021
|
|
|
|
7,350
|
|
|
|
275,371
|
|
|
Chief
Operating Officer
|
|
|
2008
|
|
|
|
226,442
|
|
|
|
80,000
|
|
|
|
425,779
|
|
|
|
25,668
|
|
|
|
757,889
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dr.
Florian J. Schattenmann
(4)
|
|
|
2009
|
|
|
|
225,000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
7,350
|
|
|
|
232,350
|
|
|
Vice
President and
|
|
|
2008
|
|
|
|
93,750
|
|
|
|
85,000
|
|
|
|
374,482
|
|
|
|
14,076
|
|
|
|
567,308
|
|
|
Chief
Technical Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Dr.
Ryan has been the Company’s Chief Executive Officer since January 12,
2007.
|
|
(2)
|
Mr.
Farmer has been the Company’s Vice President and Chief Financial Officer
since June 2007 and Treasurer and Corporate Secretary since March
2009.
|
|
(3)
|
Mr.
Chambers has been the Company’s Chief Operating Officer since February 6,
2008.
|
|
(4)
|
Dr.
Schattenmann has been the Company’s Vice President and Chief Technical
Officer since August 4, 2008.
|
|
(5)
|
The
rule changes adopted by the SEC in December 2009 changed the way
compensation related to stock options is reported in the Summary
Compensation Table. Stock option awards must now be reflected in the year
awarded based on their full aggregate grant date fair value computed in
accordance with FASB Accounting Standards Codification Topic 718, rather
than based on the expense attributable to them in the applicable fiscal
year. This new manner of disclosure applies to all disclosures made after
December 20, 2009, and is required for awards made in prior
years. As such, prior year amounts have been restated to
reflect the full aggregate fair value of stock options awarded in that
period. The methodology used to estimate the fair value of each
stock award is further discussed in the 2009 Annual Report on Form 10-K
filed by the Company on February 25, 2010, under the headings Stock Plans
and Share-Based Compensation (Note
13).
|
|
(6)
|
The
2007 amount for Dr. Ryan includes $82,589 for relocation expenses and
related taxes. The 2008 amount for Mr. Chambers includes
$18,768 for consulting fees prior to his employment with the
Company. The 2008 amount for Dr. Schattenmann includes $9,188
for relocation expenses and related taxes. All other amounts shown relate
to matching contributions to the SulphCo 401(k) Profit Sharing
Plan.
|
Grants
of Plan Based Awards in 2009
The
following table sets forth certain information regarding 2009 grants pursuant to
the 2008 LTIP that were made to the named executive officers listed in the
previous table.
|
Name
|
|
|
Grant
Date
|
|
|
Estimated Future
Payments Under
Equity Incentive
Plan Awards:
Target
|
|
|
All Other
Option Awards:
# of Securities
Underlying
Options
(1)
|
|
|
Exercise
Price of
Option
Awards
|
|
|
Grant Date Fair
Value of Stock
and Option
Awards
|
|
|
Dr.
Larry D. Ryan
|
|
|
3/17/09
|
|
|
|
-
|
|
|
|
100,000
|
|
|
$
|
0.91
|
|
|
$
|
77,706
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stanley
W. Farmer
|
|
|
3/11/09
|
|
|
|
-
|
|
|
|
15,000
|
|
|
$
|
0.70
|
|
|
$
|
9,010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
M.
Clay Chambers
|
|
|
3/11/09
|
|
|
|
-
|
|
|
|
30,000
|
|
|
$
|
0.70
|
|
|
$
|
18,021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dr.
Florian J. Schattenmann
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
(1)
|
The
option grants awarded to Dr. Ryan, Mr. Farmer and Mr. Chambers were
discretionary grants awarded by the Board in recognition of their
individual efforts through that date. The shares subject to the
options vested on the date of
grant.
|
Other than the option grants included
in the table above, there were no other plan based awards made by the Company to
the named executive officers during 2009.
Outstanding
Equity Awards at December 31, 2009
The
following table sets forth information on options that were outstanding as of
December 31, 2009 for our named executive officers.
|
Name
|
|
|
Grant
Date
|
|
|
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
|
|
|
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
|
|
|
Exercise
Price of
Option
Awards
|
|
|
Option Expiration
Date
|
|
|
Dr.
Larry D. Ryan
(1)
|
|
|
1/12/07
|
|
|
|
100,000
|
|
|
|
50,000
|
|
|
$
|
3.54
|
|
|
1/12/17
|
|
|
|
|
|
4/4/07
|
|
|
|
33,333
|
|
|
|
16,667
|
|
|
$
|
3.86
|
|
|
4/4/17
|
|
|
|
|
|
12/21/07
|
|
|
|
150,000
|
|
|
|
-
|
|
|
$
|
4.96
|
|
|
12/21/17
|
|
|
|
|
|
3/17/09
|
|
|
|
100,000
|
|
|
|
-
|
|
|
$
|
0.91
|
|
|
3/17/19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stanley
W. Farmer
(2)
|
|
|
6/11/07
|
|
|
|
100,000
|
|
|
|
50,000
|
|
|
$
|
3.66
|
|
|
6/11/17
|
|
|
|
|
|
12/21/07
|
|
|
|
50,000
|
|
|
|
-
|
|
|
$
|
4.96
|
|
|
12/21/17
|
|
|
|
|
|
6/18/08
|
|
|
|
25,000
|
|
|
|
-
|
|
|
$
|
3.28
|
|
|
6/18/18
|
|
|
|
|
|
3/11/09
|
|
|
|
15,000
|
|
|
|
-
|
|
|
$
|
0.70
|
|
|
3/11/19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
M.
Clay Chambers
(3)
|
|
|
2/6/08
|
|
|
|
50,000
|
|
|
|
100,000
|
|
|
$
|
3.09
|
|
|
2/6/18
|
|
|
|
|
|
3/11/09
|
|
|
|
30,000
|
|
|
|
-
|
|
|
$
|
0.70
|
|
|
3/11/19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dr.
Florian J. Schattenmann
(4)
|
|
|
8/4/08
|
|
|
|
41,667
|
|
|
|
83,333
|
|
|
$
|
2.80
|
|
|
8/4/18
|
|
|
|
|
|
12/3/08
|
|
|
|
50,000
|
|
|
|
-
|
|
|
$
|
1.23
|
|
|
12/3/18
|
|
|
(1)
|
Dr.
Ryan’s January 12, 2007 option grant vests over a three-year period, with
one-third of the shares subject to the option vesting on each of the first
three anniversaries following the date of grant. The April 4,
2007 option vests over a three-year period, with one-third of the shares
subject to the option vesting on each of the first three anniversaries
coinciding with the vesting schedule of the January 12, 2007 option
grant.
|
|
(2)
|
Mr.
Farmer’s June 11, 2007 option grant vests over a three-year period, with
one-third of the shares subject to the option vesting on each of the first
three anniversaries following the date of
grant.
|
|
(3)
|
Mr.
Chambers’ February 6, 2008 option grant vests over a three-year period,
with one-third of the shares subject to the option vesting on each of the
first three anniversaries following the date of
grant.
|
|
(4)
|
Dr.
Schattenmann’s August 4, 2008 option grant vests over a three-year period,
with one-third of the shares subject to the option vesting on each of the
first three anniversaries following the date of
grant.
|
Other than the option grants included
in the table above, there are no other outstanding equity awards at December 31,
2009.
Option
Exercises and Stock Vested in 2009
None of
our named executive officers exercised stock options or vested in any restricted
shares during 2009.
POTENTIAL
PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL
Severance
Payments
Our
employment agreements with Messrs. Ryan, Farmer, Chambers and Schattenmann
provide for severance payments in connection with terminations by the Company
without “cause” or by the executives for “good reason,” as such terms are
described below. If any of these executives are terminated by the
Company without “cause” or the executive resigns for “good reason,” then subject
to the executive’s execution and delivery of a full general release, in a form
acceptable to the Company, releasing all claims, known or unknown, that the
executive may have against the Company, and any subsidiary or related entity,
their officers, directors, employees and agents, the Company will pay to the
executive a lump-sum severance payment equal to one year of his then current
base salary; and upon proper election of health care continuation coverage
(under a federal law known as COBRA) the Company will pay the group medical and
dental COBRA premiums for the executive and his eligible dependents until the
date the executive first becomes eligible for coverage under a subsequent
employer’s applicable group health plan(s), the date such coverage terminates
under applicable law, or depending on the executive, twelve (12) months or
eighteen months (18) after the termination date of his employment, whichever is
the earliest date to occur.
For
purposes of the executive employment agreements, “cause” means: (i) the
executive’s conviction of, or plea of
nolo contendere
to, a felony,
or a crime involving dishonesty, disloyalty or moral turpitude;
(ii) the executive’s
willful disloyalty or deliberate dishonesty; (iii) the commission by executive
of an act of fraud or embezzlement against the Company; (iv) the executive’s
failure to use his good faith efforts to perform in all material respects such
duties as are contemplated by his agreement, or to follow any lawful direction
of his superior, the Board or any committee thereof; (v) the executive’s gross
negligence in the performance of his duties hereunder; or (vi) a material breach
by the executive of any provision of his employment agreement or of any Company
policy, which breach is not cured within thirty (30) days after delivery to the
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, the
executive will have a reasonable additional period to cure such
breach. Any determination of “cause” shall be made in good faith by a
majority vote of the Board.
For
purposes of the executive employment agreements, “good reason” means, without
the executive’s consent: (i) a failure by the Company to comply with any
material provision of the employment agreement which is not cured within thirty
(30) days after the executive has given written notice of such noncompliance to
the Company, provided that, if such failure is not capable of being cured within
such 30-day period, the Company will have a reasonable additional period to cure
such failure; (ii) a material adverse change by the Company in the executive’s
responsibilities, duties or authority with the Company; or (iii) at the
executive’s election, a “change in control” of the Company if, following such
change in control, the executive no longer holds the same position within the
Company (or the surviving or successor company, as applicable), provided that
the executive’s election under this subsection (iii) may only be exercised
within the thirty (30) day period following the first six (6) month anniversary
following the change in control.
For
purposes of the executive employment agreements, “change in control” means: (i)
the acquisition by any person, entity or affiliated group becoming the
beneficial owner 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 at least 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.
The
following table summarizes severance payments and benefits that would have been
provided to Messrs. Ryan, Farmer, Chambers and Schattenmann pursuant to a
termination of employment as a result of a termination by the Company without
“cause” or by the executive for “good reason” as of December 31,
2009:
|
Name
|
|
|
Lump Sum Cash
Payment
(1)
|
|
|
Medical and Dental
Coverage
(2)
|
|
|
Total
|
|
|
Dr.
Larry D. Ryan
|
|
|
$
|
300,000
|
|
|
$
|
14,400
|
|
|
$
|
314,400
|
|
|
Stanley
W. Farmer
|
|
|
$
|
250,000
|
|
|
$
|
14,400
|
|
|
$
|
264,400
|
|
|
M.
Clay Chambers
|
|
|
$
|
250,000
|
|
|
$
|
21,600
|
|
|
$
|
271,600
|
|
|
Dr.
Florian J. Schattenmann
|
|
|
$
|
225,000
|
|
|
$
|
21,600
|
|
|
$
|
246,600
|
|
|
(1)
|
In
addition to the lump sum cash payment disclosed above, each of the
executives would also be entitled to any earned (or awarded), but yet
unpaid, salary, (and/or bonus) payments, and business expense
reimbursements in accordance with Company
policy.
|
|
(2)
|
The
value of medical and dental coverage was estimated assuming a cost of
$1,200 a month for a period of twelve or eighteen months, the longest
period of time that these costs would have to be borne by the
Company.
|
Note that
the Company does not have any “change-in-control” agreements or policies, other
than a “change-in-control” being one possible triggering event for a “good
reason” termination by the executive, as described above.
DIRECTOR
COMPENSATION
Directors
Compensation Table for 2009
For the
year ended December 31, 2009, each non-employee director was entitled to receive
an annual cash retainer of $100,000 as well as an annual grant of options to
purchase 25,000 shares of the Company’s common stock that vest immediately and
have a ten (10) year term, effective on the second day after the date of public
disclosure of the Company’s 2008 financial results. The Chairman of the Board
was to receive an additional $50,000 and chairmen of standing committees were to
receive an additional $25,000. In order to conserve working capital,
the Board resolved in March 2009 to accept options to acquire shares of the
Company’s common stock in lieu of 75% of the annual cash
retainer. The following table sets forth compensation paid to the
Company's non-employee directors in 2009.
|
Name
|
|
|
Fees Earned or
Paid in Cash
($)
|
|
|
Option Awards
(6)
($)
|
|
|
All Other
Compensation ($)
|
|
|
Total
($)
|
|
|
Robert
H.C. van Maasdijk
(1)
|
|
|
|
37,500
|
|
|
|
116,358
|
|
|
|
-
|
|
|
|
153,858
|
|
|
Fred
S. Zeidman
(2)
|
|
|
|
31,250
|
|
|
|
99,611
|
|
|
|
-
|
|
|
|
130,861
|
|
|
Lawrence
G. Schafran
(3)
|
|
|
|
31,250
|
|
|
|
99,611
|
|
|
|
-
|
|
|
|
130,861
|
|
|
Robert
J. Hassler
(4)
|
|
|
|
-
|
|
|
|
88,642
|
|
|
|
-
|
|
|
|
88,642
|
|
|
Orri
Hauksson
(5)
|
|
|
|
-
|
|
|
|
77,126
|
|
|
|
-
|
|
|
|
77,126
|
|
|
(1)
|
Mr.
van Maasdijk received options to acquire 154,310 shares, of which 129,310
were granted as compensation, in lieu of cash compensation of $112,500,
for serving on the board of directors ($100,000 annual compensation +
$50,000 for service as chairman of the board, less $37,500 previously
paid). The number of option shares was calculated by dividing $112,500 by
the closing price on the grant
date.
|
|
(2)
|
Mr.
Zeidman received options to acquire 132,758 shares, of which 107,758 were
granted as compensation, in lieu of cash compensation of $93,750, for
serving on the board of directors ($100,000 annual compensation + $25,000
for service as committee chairman, less $31,250 previously paid). The
number of option shares was calculated by dividing $93,750 by the closing
price on the grant date.
|
|
(3)
|
Mr.
Schrafran received options to acquire 132,758 shares, of which 107,758
were granted as compensation, in lieu of cash compensation of $93,750, for
serving on the board of directors ($100,000 annual compensation + $25,000
for service as committee chairman, less $31,250 previously paid). The
number of option shares was calculated by dividing $93,750 by the closing
price on the grant date.
|
|
(4)
|
Mr.
Hassler became a non-employee director on April 27, 2009. Upon
joining the board of directors, Mr. Hassler received
options to acquire 25,000 shares. Mr. Hassler also received options to
acquire 97,641 in lieu of 100% of the annual cash retainer normally paid
to non-employee directors and chairmen of standing committees. The number
of option shares was calculated by dividing $81,042 (the pro-rata portion
of (i) the $100,000 annual non-employee director compensation and (ii) the
$25,000 annual compensation for service as a committee chairman) by the
closing price on the grant date
.
|
|
(5)
|
Mr.
Hauksson became a non-employee director on April 27, 2009. Upon
joining the board of directors, Mr. Hauksson received options to acquire
25,000 shares. Mr. Hauksson also received options to acquire 81,325 shares
in lieu of 100% of the annual cash retainer normally paid to non-employee
directors. The number of option shares was calculated by dividing $67,500
(the pro-rata portion of the $100,000 annual non-employee director
compensation by the closing price on the grant
date
|
|
(6)
|
The
rule changes adopted by the SEC in December 2009 changed the way
compensation related to stock options is reported in the Summary
Compensation Table. Stock option awards must now be reflected in the year
awarded based on their full aggregate grant date fair value computed in
accordance with FASB Accounting Standards Codification Topic 718, rather
than based on the expense attributable to them in the applicable fiscal
year. The methodology used to estimate the fair value of each
stock award is further discussed in the 2009 Annual Report on Form 10-K
filed by the Company on February 25, 2010, under the headings Stock Plans
and Share-Based Compensation (Note 13). Disclosure of the
aggregate number of option or option-like awards for each non-employee
director is provided above under the heading “Security Ownership of
Directors and Executive
Officers.”
|
Directors
Compensation for 2010
Beginning
in 2010, each non-employee director will receive an annual cash retainer of
$30,000 payable in equal monthly installments, a $2,500 meeting attendance
fee for each meeting attended up to $10,000, and an annual grant of options to
purchase 75,000 shares of the Company’s common stock. Chairmen of
standing committees will receive an additional cash retainer of $5,000 and the
Chairman of the Board is to receive an additional $15,000 cash retainer plus
options to purchase an additional 25,000 shares of the Company’s common stock.
All option grants to non-employee directors in 2010 are performance-based and
vest over a twelve month period based on the achievement of certain commercial
milestones by the Company and have a ten (10) year term if vested before the
specified vesting deadline.
Compensation
Committee Interlocks and Insider Participation in Compensation
Decisions
During
the last fiscal year, Robert H. C. van Maasdijk (Chair), Fred S. Zeidman, Robert
J. Hassler and Orri Hauksson served as members of the Compensation
Committee. None of the committee members were officers or employees
of the Company during the fiscal year, were formerly officers of the Company,
nor were a related party as defined under Item 404 of Regulation
S-K. None of the Company’s executive officers served on the board of
directors or compensation committee of any other entity whose executive officers
served either the Company’s Board or Compensation Committee.
COMPENSATION
PLANS
Table
of Securities Authorized for Issuance under Equity Compensation Plans at the End
of 2009
The
following table presents information regarding our securities which are
authorized for issuance under all of our equity compensation plans as of
December 31, 2009.
|
Plan Category
|
|
|
Number of Securities to
be Issued upon Exercise
of Outstanding Options,
Warrants and rights
|
|
|
Weighted-average
Exercise Price of
Outstanding Options,
Warrants and Rights
|
|
|
Number of Securities
Remaining Available for
Future Issuance under Equity
Compensation Plans
(Excluding Securities
Reflected at Left)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
Compensation
Plans
Approved by
Security
Holders
|
|
|
|
4,469,885
|
|
|
$
|
2.77
|
|
|
|
4,755,115
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
Compensation
Plans
Not Approved by
Security
Holders
|
|
|
|
100,000
|
|
|
$
|
4.25
|
|
|
|
|
(1)
|
(1)
Future grants
are within the discretion of our Board of Directors and, therefore, cannot be
determined at this time.
Under
compensation plans approved by our security holders, 1,769,690 shares are
issuable in connection with outstanding options granted pursuant to the 2006
Plan approved by the Company’s stockholders in 2006 and 2,700,195 securities are
outstanding options granted pursuant to the 2008 LTIP approved by the Company’s
stockholders in 2008. At the 2009 Annual Meeting of Stockholders, the
Company’s stockholders approved an amendment to the 2008 LTIP to increase the
number of shares available for issuance by 5,000,000 shares from 2,250,000 to
7,250,000.
Under
compensation plans not approved by our security holders, 50,000 securities
relate to warrants granted in connection with the License Agreement between the
Company and ISM dated as of November 9, 2007, by which the Company agreed to
issue warrants to purchase 45,000 shares of common stock to ISM and warrants to
purchase 5,000 shares of common stock to JM Resources LLC, at an exercise price
of $6.025 per share. The warrants vest immediately and have a
three-year term.
Under
compensation plans not approved by our security holders, 50,000 securities
relate to warrants granted in connection with the Development and Manufacturing
Agreement between the Company and MWH dated as of June 28, 2008, by which the
Company agreed to issue warrants to purchase 50,000 shares of common stock share
to MWH, at an exercise price of $2.49 per share. The warrants are
fully vested and have a three-year term from the grant date.
CERTAIN RELATIONSHIPS AND RELATED
PARTY TRANSACTIONS
Other
than the Company’s Code of Ethics, the Board of Directors does not have a
specific written policy regarding the review of related party
transactions. The Board of Directors does, however, follow certain
procedures relating to the approval of transactions involving related
parties. The Company’s related party transactions review process
includes key activities required to identify related parties, determine that
related party transactions are conducted on an arm’s length basis, and disclose
related party transactions in the Company’s SEC filings. Related party
transactions and terms of those transactions are identified, reviewed, and
disclosed in accordance with Item 404 of Regulation S-K under the Securities Act
of 1933, as amended. A “Related Party” is an executive officer, a member of the
board of directors, a nominee for director, a stockholder owning more than 5% of
the Company’s common stock, or a member of the immediate family of any such
persons.
The
Secretary of the Company becomes aware of reportable or material related party
transactions during the course of the year through notification by the relevant
Related Party or applicable employee of the Company. The Secretary is
responsible for ensuring that the Board reviews the relevant proposed
transaction (with the exception of ordinary course transactions), and approves
(a majority vote of disinterested directors is required) such transaction if the
Board determines that the proposed transaction terms are fair to the Company and
have been negotiated at arm’s length. Such determination will be made based upon
a review of the facts and circumstances surrounding the proposed transaction and
upon guidance by any advisors as determined by the Board.
Prior to
approving any related party transaction, the disinterested members of the Board
reviewing such transaction must (i) be satisfied that they received all material
facts relating to the transaction, (ii) have considered all relevant facts and
circumstances available to them and (iii) have determined that the transaction
is in (or not inconsistent with) the best interests of the Company’s
stockholders.
The following is a description of
related party transactions involving more than $120,000 in 2009, between us and
our directors, nominees, executive officers, stockholders owning more than 5% of
the Company’s common stock or members of their immediate family.
During
the year ended December 31, 2009, the Company made payments totaling
approximately $0.9 million to Märkisches Werk Halver, GmbH (“MWH”) in connection
with ongoing probe development activities under an existing
agreement. Under the terms of the agreement, MWH will continue to
develop and manufacture high-volume, high-power ultrasound systems for use in
SulphCo’s Sonocracking process (the “Equipment”) through June 2013. MWH will
sell Equipment exclusively to the Company and the Company will purchase a
minimum of 60% of its annual Equipment requirements from MWH. The
Company may purchase a lesser percentage of Equipment from MWH if the Company
can either purchase comparable equipment at a price that is 25% less than the
price charged by MWH or MWH does not manufacture the Equipment within the
Company’s quality control specifications. In addition to the fees that MWH will
receive for its probe development and manufacturing activities, MWH also
received an option to purchase 50,000 shares of SulphCo common
stock. Edward E. Urquhart, the Chief Executive Officer of MWH from
July 2003 through May 2009, was a member of the Company’s Board of Directors
from August 2006 to April 2009.
COMPENSATION
COMMITTEE REPORT
The
Compensation Committee has reviewed the Compensation Discussion and Analysis and
discussed that analysis with management. Based on its review and discussions
with management, the Compensation Committee recommended to the Board of
Directors that the Compensation Discussion and Analysis be included in the
Company's 2010 Proxy Statement. This report is provided by the following
directors, who comprise the Compensation Committee:
|
April
13, 2010
|
Robert
H.C. van Maasdijk (Chair)
|
|
|
Fred
S. Zeidman
|
|
|
Robert
J. Hassler
|
|
|
Orri
Hauksson
|
AUDIT COMMITTEE REPORT
The
Audit Committee has reviewed and discussed the audited financial statements with
our management. The Audit Committee has discussed with our independent auditors
the matters required to be discussed by Statement on Auditing Standards No. 61
(Codification of Statements on Auditing Standards, AU Section 380). The Audit
Committee has received the written disclosures and the letter from the
independent auditors required by Independence Standards Board Standard No. 1,
and has discussed with the independent auditors the independent auditors'
independence. Additionally, the Audit Committee has reviewed fees charged by the
independent auditors and has monitored whether the non-audit services provided
by its independent auditors are compatible with maintaining the independence of
such auditors. Based upon its reviews and discussions, the Audit Committee
recommended to our Board of Directors that the audited financial statements be
included in our Annual Report on Form 10-K for the fiscal year ended December
31, 2009 for filing with the SEC and the Board approved that
recommendation. This report is provided by the following directors,
who comprise the Audit Committee:
|
April
13, 2010
|
Lawrence
G. Schafran (Chair)
|
|
|
Robert
H. C. van Maasdijk
|
|
|
Orri
Hauksson
|
PRINCIPAL
ACCOUNTANTS FEES AND SERVICES
On June
17, 2009, the Board of Directors ratified the Audit Committee’s appointment of
Hein & Associates LLP (“Hein”) as the independent registered public
accountants for the fiscal year ending December 31, 2009. Representatives
from Hein are not expected to be present at the 2010 annual meeting of
stockholders and, accordingly, will not be available to answer questions at the
meeting.
In deciding to appoint Hein, the Audit
Committee reviewed auditor independence issues and existing commercial
relationships with Hein and concluded that Hein had no commercial relationship
with the Company that would impair its independence.
The
following tables include aggregate fees billed by Hein for each of our fiscal
years ended December 31, 2009 and 2008.
Hein & Associates LLP
Fees
|
|
|
2009
|
|
|
2008
|
|
|
|
|
|
|
|
|
|
|
|
|
Audit
Fees
|
|
$
|
140,000
|
|
|
$
|
156,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Audit-related
Fees
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax
Fees
|
|
|
-
|
|
|
|
10,700
|
|
|
|
|
|
|
|
|
|
|
|
|
All
Other Fees
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Fees
|
|
$
|
140,000
|
|
|
$
|
166,700
|
|
Fees for
audit services include fees associated with the annual audit and reviews of our
quarterly reports, as well as services performed in conjunction with our filings
of Registration Statements on Form S-3 and Form S-8 as applicable. The
Audit Committee has reviewed the above fees for non-audit services and believes
such fees are compatible with the independent registered public accountants’
independence.
Policy
on Audit Committee Pre-Approval of Audit and Non-Audit Services of Independent
Accountant
The Audit
Committee’s policy is to pre-approve all audit and non-audit services provided
by the independent accountants. These services may include audit services,
audit-related services, tax fees, and other services. Pre-approval is generally
provided for up to one year and any pre-approval is detailed as to the
particular service or category of services and is subject to a specific budget.
The Audit Committee has delegated pre-approval authority to certain committee
members when expedition of services is necessary. The independent accountants
and management are required to periodically report to the full Audit Committee
regarding the extent of services provided by the independent accountants in
accordance with this pre-approval delegation, and the fees for the services
performed to date. None of the fees paid to the independent accountants during
fiscal 2009 and 2008, under the categories Audit-Related and All Other fees
described above were approved by the Audit Committee after services were
rendered pursuant to the de minimis exception established by the
SEC.
FAMILY
RELATIONSHIPS
There are
currently no family relationships between the directors, executive officers or
any other person who may be selected as a director or executive officer of
SulphCo.
CODE
OF ETHICS
The
Company has adopted the SulphCo Code of Ethics that applies to its principal
executive officer and principal financial officer. The Code of Ethics was
included as an exhibit to a Form 8-K (SEC File No. 1-32636) filed with the SEC
on June 13, 2008. We intend to disclose on our website any substantive amendment
to our code of ethics that applies to our principal executive officer, principal
financial officer, principal accounting officer or controller, or persons
performing similar functions, other executive officers and Directors within four
business days of such amendment. In addition, we intend to disclose the nature
of any material waiver, including an implicit waiver, from a provision of our
code of ethics that is granted to any executive officer or director, the name of
such person who is granted the waiver and the date of the waiver as required by
applicable laws, rules and regulations.
STOCKHOLDER
PROPOSALS
Proposals
that stockholders wish to be included in next year’s proxy statement for the
annual meeting of stockholders to be held in 2011 in accordance with Rule 14a-8
under the Securities Exchange Act of 1934 must be received by the Office of the
Secretary at our principal offices at 4333 W. Sam Houston Pkwy N., Suite 190,
Houston, TX 77043 no later than March 3, 2011.
ANNUAL REPORT
A copy of
the Company’s Annual Report on Form 10-K for the year ended December 31, 2009,
which has been filed with the SEC pursuant to the 1934 Act, being furnished to
you along with this Proxy Statement is available at
https://materials.proxyvote.com/865378
.
Additional copies of this Proxy Statement and/or the Annual Report, as well as
copies of any Quarterly Report on Form 10-Q may be obtained without charge upon
written request to the Secretary, SulphCo, Inc., 4333 W. Sam Houston Pkwy N.,
Suite 190, Houston, TX 77043, or on the SEC’s internet website at
www.sec.gov.
STOCKHOLDERS SHARING THE SAME LAST NAME AND
ADDRESS
In
accordance with notices that the Company sent to certain stockholders, the
Company is sending only one copy of its annual report and proxy statement to
stockholders who share the same last name and address, unless they have notified
the Company that they want to continue receiving multiple copies. This practice,
known as “householding,” is designed to reduce duplicate mailings and save
significant printing and postage costs as well as natural
resources.
If you
received a householded mailing this year and you would like to have additional
copies of the Company’s annual report and/or proxy statement mailed to you, or
you would like to opt out of this practice for future mailings, please submit
your request to the Company’s Secretary by mail at 4333 W. Sam Houston Pkwy N.,
Suite 190, Houston, TX 77043 or by telephone at (713) 896-9100. The Company will
promptly send additional copies of the annual report and/or proxy statement upon
receipt of such request. You may also contact the Company if you received
multiple copies of the annual meeting materials and would prefer to receive a
single copy in the future.
OTHER MATTERS
The Board
knows of no other matters that will be presented for consideration at the annual
meeting. If any other matters are properly brought before the annual meeting, it
is the intention of the persons named in the accompanying proxy to vote on such
matters in accordance with their best judgment.
|
|
By
Order of the Board of Directors
|
|
|
|
|
|
/s/ Larry D. Ryan
|
|
|
Name:
Larry D. Ryan
|
|
|
Title:
Chief Executive Officer
|
|
|
|
|
|
Dated:
April 16, 2010
|
SULPHCO, INC.
4333
W. Sam Houston Pkwy N., Suite 190
Houston,
TX 77043
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD JUNE 10,
2010
THIS
PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The
undersigned hereby appoints Larry D. Ryan and Fred S. Zeidman, and each of them,
Proxies, with full power of substitution in each of them, in the name, place and
stead of the undersigned, to vote at the Annual Meeting of Stockholders of
SulphCo, Inc. (the “Company”) on June 10, 2010, at 9:30 a.m.
Central Daylight Time at Four Oaks Place (Central Plains conference room,
2
nd
floor), 1330 Post Oak Boulevard, Houston, TX 77056 or at any adjournment or
adjournments thereof, according to the number of votes that the undersigned
would be entitled to vote if personally present, upon the following
matters:
|
1.
|
ELECTION OF
DIRECTORS:
|
|
o
FOR
all nominees listed below
|
o
WITHHOLD
AUTHORITY
|
|
(
except as marked to the
contrary below)
|
|
Robert J.
Hassler, Orri Hauksson, Dr. Larry D. Ryan and Fred S. Zeidman
(
Instruction: To withhold authority to
vote for any individual nominee, write the nominee’s name in the space
below.)
4.
RATIFICATION OF THE AUDIT COMMITTEE’S APPOINTMENT OF HEIN & ASSOCIATES LLP
AS THE COMPANY’S INDEPENDENT REGISTERED ACCOUNTANTS FOR FISCAL YEAR
2010:
|
o
FOR
|
o
AGAINST
|
o
ABSTAIN
|
In their discretion, the Proxies are
authorized to vote upon such other business as may properly come before the
meeting.
THIS PROXY WILL BE VOTED IN
ACCORDANCE WITH THE INSTRUCTIONS GIVEN ABOVE.
IF NO INSTRUCTIONS ARE GIVEN, THIS
PROXY WILL BE VOTED FOR THOSE NOMINEES AND THE PROPOSALS LISTED
ABOVE.
DATED:
_________________, 2010
Please
sign exactly as name appears hereon. When shares are held by joint tenants, both
should sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such. If a corporation, please sign in
full corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
|
|
|
Signature
|
|
|
|
|
|
Signature
if held
jointly
|
Please
mark, sign, date and return this proxy card promptly using the enclosed
envelope.
SULPHCO,
INC.
4333
W. Sam Houston Pkwy N., Suite 190
Houston,
TX 77043
**Important
Notice Regarding the Availability of Proxy Materials**
for
the
2010
Annual Meeting of Stockholders
to
Be Held on
June
10, 2010
|
The
proxy statement and annual report on Form 10-K are available
at
https://materials.proxyvote.com/
865378
|
|
Meeting
Information
|
How
to Vote
|
|
|
|
|
|
Date:
|
June
10, 2010
|
To
vote, simply complete and mail the proxy card or follow the instructions
included with the proxy materials to vote by telephone or
Internet. Alternatively, you may elect to vote in person at the
annual meeting. You will be given a ballot when you
arrive.
|
|
Time:
|
9:30
AM CDT
|
|
|
Location:
|
Four
Oaks Place
|
|
|
|
1330
Post Oak Boulevard
|
|
|
|
2
nd
Floor - Central Plains Conference Room
|
|
|
|
Houston,
TX 77056
|
|
Voting
Items
The Board
of Directors recommends you vote
FOR
the following
proposals:
|
|
1.
|
Election of
four
directors
for a term of one year or until
the next annual meeting of
stockholders
|
|
|
Nominees:
|
Robert
J. Hassler
|
|
|
2.
|
Ratification
of Audit Committee’s appointment of Hein & Associates LLP as the
Company’s independent registered public accountants for fiscal year
2010
|
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