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To: Jeffrey S. Mitchell who wrote (1732)	7/3/2001 7:46:23 PM
From: Jeffrey S. Mitchell	Read Replies (1) \| Respond to of 12465

Re: 6/22/01 - ZDNet: Global treaty--threat to the Net? Friday June 22 08:15 AM EDT Global treaty--threat to the Net? By Lisa M. Bowman, ZDNet News A treaty to govern the Internet is being written but critics contend that the proposed rules will endanger free speech and turn ISPs into cyber cops. International policy-makers this week ended a round of talks aimed at setting common rules affecting online trade and commerce, but they made little progress in bridging divisions that threaten to delay the pact. In the works for nearly a decade, the Hague Convention on Jurisdiction and Foreign Judgments is still almost unknown outside international policy circles. Nevertheless, it could have broad implications for consumers and businesses by setting new rules for online copyrights, free speech and e-commerce--if it is approved. Opposition to the treaty heated up Wednesday, when a two-week drafting session wrapped up with few concessions to critics, primarily from the United States, who say the pact threatens free speech and could force Internet service providers to become global content police. "In a nutshell, it will strangle the Internet with a suffocating blanket of overlapping jurisdictional claims, expose every Web page publisher to liabilities for libel, defamation and other speech offenses from virtually any country, (and) effectively strip Internet service providers of protections from litigation over the content they carry," Jamie Love, director of Ralph Nader (news - web sites)'s Consumer Project on Technology (CPT), wrote in a report after the meeting. The treaty is one of several efforts by the global community to grapple with a complicated legal issues on a borderless Web. Four years ago, nations including the United States signed onto a World Intellectual Property Organization pact to protect copyright in the digital age. And several countries, including the United States, are hammering out the world's first cybercrime treaty, which would provide a standard for fighting online crime. The Hague (news - web sites) treaty differs from those efforts because it would not outline specific laws participants must follow. It's much broader, requiring participants to agree to enforce each others' laws on a variety of topics. As it stands, the treaty would require courts to enforce the commercial laws of the convention's 52 member nations, even if they prohibit actions that are legal under local laws. Until now, many countries and companies have wrangled with jurisdictional disputes on a case-by-case basis. In the brick-and-mortar world, companies doing business in a foreign country must abide by the laws of that land. However, because the Web allows companies to sell items and services to people in foreign countries without requiring them to leave home, it promises to spawn a legal tangle some think can be solved only by a treaty outlining global rules for cross-border litigation. No legal borders A glimpse of the cross-border problem was already seen in the Yahoo Nazi-paraphernalia case. Last year, a French court ruled that Yahoo must block French citizens' access to online auctions of Nazi memorabilia on its U.S.-based site or face fines of $14,000 per day because the items violated France's hate-speech laws. In response to the ruling, Yahoo pulled the Nazi paraphernalia, even though it's protected under U.S. laws. A U.S. court is considering whether to declare French laws unenforceable in this country, but the treaty, if enacted, could make that difficult. Diverse opponents have criticized the treaty, among them librarians, online stores and global ISPs. However, few of those groups managed to insert major changes in a new draft of the treaty hammered out over the past two weeks. Delegates did not soften speech laws to provide for countries that value the exchange of information. In addition, they strengthened some intellectual property provisions--over the objections of consumer groups. "The bottom line is that it didn't go well," said Barry Steinhardt, associate director of the American Civil Liberties Union (news - web sites), which sent representatives to the convention. He said that although American delegates listened to free-speech worries, most others did not. CPT's Love agreed. "We got our ass kicked," he said. "It was a bad two weeks for us." Free-speech advocates fear U.S. citizens could lose many of their rights if all Web sites have to ensure they are following the narrowest laws, such as those of, say, China or Morocco. They point to worst-case scenarios. For example, a site criticizing government wrongdoing--which is legal by U.S. standards--might have to shut down because it runs afoul of laws in some other countries. In a letter to Hague convention delegates sent last week, the American Library Association wrote: "We are concerned that the draft convention...could subject Internet users in the United States to intellectual property infringement in other countries for activities that are lawful in the U.S." But delegates point to an exemption that allows judges to refuse to enforce judgments in countries where they would violate that region's public policies. "We're not using this treaty as a vehicle to change laws," said one convention delegate who asked not to be named. However, critics say those exemptions don't go far enough and don't prevent litigants from shopping around for a forum most favorable to their cause. What's more, U.S. judges may be reluctant to overturn a ruling under the treaty because they would not want a judge in another country to refuse to enforce a U.S. law. Network watchdogs But it's not just the consumer groups against big business. The corporate world is equally divided. ISPs that do business globally worry that they may have to act as Net policemen, scouring the Web to make sure sites they host don't break the laws of any convention member country. Under U.S. laws, service providers are not required to monitor their networks for copyright violations. They're obligated to take down infringing sites only after a copyright owner notifies them. But under the treaty, countries with more strict requirements may crack down on ISPs that don't snoop on their customers' behavior. Sarah Deutsch, associate general counsel for Verizon Communications (NYSE:VZ - news), said the treaty, as it stands, could disrupt e-commerce because Web infrastructure companies would have to worry about every transmission that moves over their network. Despite complaints from her company, AT&T and Yahoo, the delegates did not insert protections for ISPs and portals into the treaty. "On the whole we were very disappointed that many of our key concerns were not addressed," Deutsch said. There's also speculation that the treaty could endanger other Web transactions that are legal in some countries but not in others, such as Internet gambling. For example, if a site in the United Kingdom, where gambling is legal, took a bet from a U.S. citizen, could the site be shut down for violating U.S. laws? In the patent arena, issues are equally as muddy. U.S. companies have been on an aggressive, and successful, crusade to patent all things software-related. Not so in Europe. Theoretically, the treaty could require foreign countries to enforce strict U.S. patents in their homeland. Plus, it could make those who post or link to technology that's controversial in the United States, including the DeCSS (news - web sites) DVD-cracking code or certain types of encrypted communication, illegal worldwide. "People don't realize what a disaster this could be," said Richard Stallman, president of the Free Software Foundation, who added that his worries apply to all software, not just the free kind. Cheers for copyrights The only groups that seem to have positive comments about the treaty are copyright holders, who hope the pact will let them crack down on infringement in new and more stringent ways. "The draft convention may advance, in some respects, the effective protection of copyright--particularly as the convention relates to enforcement of judgments," a group including the Association of American Publishers, the Business Software Alliance, the Recording Industry Association of America (news - web sites) and the Motion Picture Association of America wrote during a comment period on the convention. In other words, those groups hope to apply the laws of countries with the strictest copyright restrictions to gain control of their products. For example, some countries don't have the same balance that the United States does between the rights of consumers and copyright holders--such as fair use (which includes the ability to make copies for personal use) or sampling (which includes the ability to take a brief snippet of a book, song or other work for the purposes of review). Therefore, a copyright holder who wanted to maintain control over his or her work could shop for a court in a country that would crack down on any use of that work. Because so many groups with so many competing interests are wrangling over the treaty, it's unlikely it will be ratified anytime soon. Negotiations have been going on since 1992. The Internet added a new twist to the debate over jurisdiction, dragging out the process for years. A final version of the treaty is not expected until 2002, at the earliest. And the United States could always refuse to sign it, a move that could take the teeth out of the Web portions of the treaty because it is home to so many Internet companies. Still, Stallman and others hope that more people will rally to fight the treaty as they learn of its potential impact, by contacting delegates and lawmakers. "We can't assume it will die of its own accord," he said. "We have to stop it." Copyright © 2001 Yahoo! Inc., and ZD Inc. All Rights Reserved. ZDNet and ZDNet logo are registered trademarks of ZD Inc. Content originally published in Ziff Davis Media publications is the copyrighted property of Ziff Davis Media. dailynews.yahoo.com

To: Jeffrey S. Mitchell who wrote (1732)	9/25/2001 4:27:47 PM
From: Jeffrey S. Mitchell	Respond to of 12465

Re: 9/12/01 - [SLPH] Sulphco's President and Director Resigns; Alleges Bogus Consulting Agreement Item No. 6. Resignation of Registrant Directors. - ----------- ------------------------------------ (a) On September 12, 2001, Stan L. McLelland forwarded a letter to SulphCo, Inc. (the "Company") in which Mr. McLelland resigned as an officer and director of the Company. Prior to his resignation, Mr. McLelland was the Company's President and was a director. In his September 12, 2001 letter, Mr. McLelland Sutton notes that at a meeting of the Board of Directors held on August 31, 2001, the Board voted 3 directors to 2 not approve a transaction between the Company and an individual named Mark Neuhaus. Mr. McLelland also notes that after the August 31, 2001 meeting, the Company's Chairman of the Board, Rudolph W. Gunnerman, asked the directors dissenting from the transaction with Mr. Neuhaus to resign and that Mr. Gunnerman subsequently sent such directors a letter requesting their resignations. Mr. McLelland points out that Mr. Gunnerman's letter requesting these resignations also indicated that if these directors did not resign that Mr. Gunnerman would call a special meeting of the shareholders and would vote the more than two-thirds of the Company issued and outstanding shares of common stock, which are under Mr. Gunnerman's control, in favor of removing these directors. Mr. McLelland also indicates that a the September 12, 2001 Board meeting was not reconvened for the purpose of approving the transaction with Mr. Neuhaus. Mr. McLelland question that availability of Form S-8 in connection with the transaction with Mr. Neuhaus because Mr. McLelland believes that Mr. Neuhaus was not a consultant or an employee of the Company. Mr. McLelland summarizes his concerns by stating that he believes that board of directors has never: 1. Approved any consulting agreement with Mr. Neuhaus: 2. Approved the Non-Qualified Stock Option Agreement set out in the Form S-8 filed in connection with the transaction with Mr. Neuhaus; 3. Authorized the sale of any stock described in the Form S-8; nor, 4. Approved the filing of the Form S-8. (b) The Company notes that the filing of the recent Registration Statement on Form S-8 by the Company was approved by a majority of the members of the Board of Directors. Since Mr. Sutton resignation, the Board of Directors has ratified all actions taken by the officers of the Company in connection with the Form S-8, including approving the agreement between Mr. Neuhaus and the Company, and has approved the filing of the Form S-8. Also, the Company believes that Mr. Neuhaus clearly is a consultant given the terms of the agreement between Mr. Neuhaus and the Company. Accordingly, the Company believes that Mr. McLelland is incorrect and that Form S-8 is available for the transaction in question. (c) Mr. McLelland's letter is attached to this Form 8-K as an exhibit. Item No. 7. Exhibits - ----------- -------- (c) Exhibits September 12, 2001 Resignation letter of Stan L. McLelland. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: September 21, 2001 SULPHCO, INC. By: /s/ Dr. Rudolph W. Gunnerman -------------------------------- Dr. Rudolph W. Gunnerman Chairman of the Board ===== Stan L. McLelland 2003A Sharon Lane Austin, Texas, 78703 512-322-0099 September 12, 2001 SulphCo, Inc. Mr. Rudolph W. Gunnerman Chairman of the Board 1650 Meadow Wood Lane Reno, Nevada 89502 Dear Mr. Gunnerman: Last Friday at approximately 1:00 p.m. Eastern Daylight Time, I was informed through a phone call from a co-director, Joe Sutton, that a Form S-8 has been filed with the SEC on behalf of SulphCo, Inc. purporting to register more than 2,750,000 shares of the Company's common stock to be offered for sale to a purported "consultant", Mark Neuhaus, at a price not to exceed $0.725 per share (approximately one-half its market value) pursuant to a "consultant Non-Qualified Stock Option Agreement." After reviewing a copy of the filing, I can only describe my reaction as one of shock. Exactly one week earlier, on August 31, 2001 we held a long, telephonic Board Meeting of the Company's Directors at which you attempted to convince the Board to approve the sale of $2,000,000 of the Company's common stock at a price of no less than $0.75 per share (or a total number of 2,666,666 shares) to a corporation owned by Mr. Neuhaus and, in connection therewith, to approve the filing of a Form S-8 to register those shares. After extensive discussion, a formal vote was taken on your proposal, and the Board, acting as a Board, rejected your proposal with Messrs, McLelland, Sutton and Holman voting "no" and you and Mr. Walker voting in favor. After the vote was taken, you announced that, because the Board did not support your proposal, you would be submitting your resignation to the Board the following week. Instead on Labor Day, September 3, 2001, you sent a letter by fax to each of the dissenting directors stating that you "must sever and terminate" our "services as officers and directors of the company" and informing each of us that, if we failed to resign, you would call a special meeting of the shareholders and have us removed. You advised each of us that you presently had in hand more than two-thirds of the total number of shares outstanding and that the outcome was, therefore, pre-ordained. I am attaching to this letter a copy of that correspondence which was sent to me. On Tuesday, September 4, 2001, I returned to my office in Reno where you hand delivered another copy of your letter and I advised you that I had received the fax and had no intention of resigning. The following day, Wednesday September 5, 2001, you and I were both at the office most of the day and, just before you left the office, I handed you two different letters, one concerning changes to a contract and the other concerning the results of some independent lab tests. At no time did you or anyone else suggest that you wanted the Board to re-convene or re-consider its decision to reject the Neuhaus proposal. Similarly, all day Thursday September 6, 2001 and Friday morning, neither you nor Alex Walker Jr., who has held himself out as General Counsel to the Company, ever attempted to contact me (as Chief executive Officer of the Company, a member of the Board of Director's and a member of the three person Executive Committee of the Board (along with Joe Sutton, Chairman, and yourself)) to suggest that the Board re-convene or re-consider its decision. Likewise, no one ever hinted or suggested that you and Mr. Walker were going to cause a Registration Statement to be filed without even informing the Company's CEO or the Company's Directors. I can only conclude that your failure to do so was a calculated decision designed to improve the likelihood of success of your efforts to have the stock registered and issued before any objections could be raised. With regard to the registration by way of Form S-8 for the stock which you wanted to sell to Mr. Neuhaus, you will recall that near the end of the Board Meeting on August 31, 2001, shortly before the vote, I raised concern that the stock did not qualify for registration under Form S-8 because that section was limited to registration of stock to be used in written employee benefit plans and, since Mr. Neuhaus was neither an employee nor a consultant, the S-8 would not be appropriate. Either you or Mr. Walker stated that Mr. Neuhaus was a consultant and that the Board had approved that relationship. It was pointed out that Mr. Walker, acting as Corporate Secretary, had drafted minutes of the July 9, 2001 board meeting which asserted that the Board ratified and approved a consulting agreement with Mr. Neuhaus.1 After discussion, however, Mr. Walker admitted that he had prepared the Company's minutes to reflect Board approval of a consulting contract with Mark Neuhaus because you had instructed him to do so, telling him that you would "take care of the Texans" (referring to Joe Sutton and me). After much additional discussion, it became clear that neither Mr. Sutton, Mr. Holman nor I had ever seen any consulting agreement (or a description thereof) for Mr. Neuhaus, nor could we understand what kind of bona fide consulting services a race car driver like Mr. Neuhaus could provide. In short, the Board left no doubt that is had never approved any consulting or other contractual arrangement with Mr. Neuhaus. In summary, I think the record is clear that the Board of Directors, acting as a Board, as is required by law, has never: 1) Approved any consulting agreement with Mr. Neuhaus, 2) Approved the Non-Qualified Stock Option Agreement set out in the S-8, 3) Authorized the sale of any stock described in the S-8, nor - -------- 1 At the meeting you and Mr. Walker proposed that the Board approve a contract of Mark Neuhaus to pay $4,000,000 for an amount of the Company's common stock price at 60% of market price. There was also a request that the Board authorize the company to file a Form S-8 for the sale of Neuhaus stock. While no vote was taken on the proposal, the clear sense of the Board was that these discounted sales were unacceptable to the Board. 4) Approved the filing of the S-8. By surreptitiously entering into agreements, for which you have no authority, by causing a registration statement to be filed with the SEC after the board expressly rejected that proposal, and doing so without even informing the CEO and two members of the Board of Directors, and by other actions which I will not describe in this letter, you have made it impossible for me to exercise the control, authority and responsibilities which I was hired to perform. In fact, your actions have denied me the right to exercise the powers specifically delegated to me in my Employment Agreement. Likewise, Joe Sutton's understandable decision to distance himself from members of a Board of Directors who demonstrate little, if any, regard for appropriate corporation governance has left me little hope that I can prevail in an effort to establish responsible governance that looks out for the interests of all Company shareholders. Accordingly, I have no choice but to resign as an Officer and Director of the Company. This resignation is being made pursuant to Section 5.3 of my Employee Agreement. Please be advised that I request that this letter be disclosed in a current report on Form 8-K as required by the Securities Exchange Act of 1934. Sincerely, By: /s/ Stan McLelland - ---------------------- Stan McLelland cc: Stephen Cutler, Acting Director of the Division of Enforcement Securities and Exchange Commission 450 Fifth Street, N.W. Washington, D.C. 20549 VIA FACSIMILE No. 202-942-9636 cc: Andrew J. Beck, Esq. Torys 237 Park Avenue New York, NY 10117 VIA FACSIMILE No. 212-682-0200 attachment - Gunnerman letter sec.gov