<PAGE>
As filed with the Securities and Exchange Commission on September 28, 1998
Registration No. 333-__________
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------------
EARTHSHELL CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 77-0322379
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
-------------------------
111 South Calvert Street, Suite 1950, Baltimore, Maryland 21202-6174
(Address of Principal Executive Office) (Zip Code)
-------------------------
E. KHASHOGGI INDUSTRIES, LLC
STOCK OPTION AGREEMENTS
AND THE
E. KHASHOGGI INDUSTRIES, LLC
EQUITY INCENTIVE PLAN
(Full Title of the Plan)
-------------------------
Simon K. Hodson
Chief Executive Officer
800 Miramonte Drive, Santa Barbara, CA 93109
(Name and Address of Agent For Service)
(805) 897-2294
(Telephone Number, Including Area Code, of Agent For Service)
-------------------------
WITH A COPY TO:
ROBERT K. MONTGOMERY, ESQ.
Gibson, Dunn & Crutcher LLP
2029 Century Park East
Los Angeles, California, 90067
(310) 552-8500
-------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
TITLE OF AMOUNT PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO TO BE PROPOSED MAXIMUM OFFERING AGGREGATE OFFERING REGISTRATION
BE REGISTERED REGISTERED PRICE PER SHARE (3) PRICE (3) FEE (3)
<S> <C> <C> <C> <C>
Common Stock 915,690 shares (1) $ 2.67 $ 2,444,892 $ 722
- -------------------------------------------------------------------------------------------------------------------------------
Common Stock 294,310 shares (2) $21.00 $ 6,180,510 $ 1,824
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The securities to be registered include an aggregate of 915,690 shares
reserved for issuance under the individual stock option agreements listed
in the Index of Exhibits (collectively, the "Agreements") and also covers
an indeterminate number of shares issuable upon adjustment pursuant to the
terms of the Agreements and Rule 416 under the Securities Act of 1933, as
amended (the "Securities Act").
(2) This registration statement also covers an indeterminate number of shares
issuable upon adjustment pursuant to the terms of the E. Khashoggi
Industries, LLC Equity Incentive Plan and Rule 416 under the Securities
Act.
(3) Estimated pursuant to Rule 457 (c) and (h) of the Securities Act solely for
purposes of calculating the registration fee, as follows: $2.67 with
respect to 915,690 shares of Common Stock that are currently under option
with the Agreements, based on the price of $2.67 per share at which the
options may be exercised; $21.00 with respect to 193,500 shares of Common
Stock that are currently under option, based on the price of $21.00 per
share at which the options may be exercised; and $21.00 with respect to
100,810 shares of Common Stock, based on a price of $21.00 per share, the
estimated grant price of the options.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
EarthShell Corporation (the "Company") hereby incorporates by reference in
this registration statement the following documents:
(a) The Company's prospectus on Form S-1 filed pursuant to Rule 424
(b) of the Securities Act, containing audited financial statements for
the Company's fiscal year ended December 31, 1997, as filed with the
Securities and Exchange Commission (File No. 333-13287).
(b) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A filed on December 29,
1997; and
(c) All other reports filed pursuant to Section 13 (a) or 15 (d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act")
since the end of the fiscal year covered by the registrant document
referred to in (a) above, which includes the Company's Quarterly
Reports on Form 10-Q for the quarters ended March 31, 1998 and June
30, 1998, filed on May 15, 1998 and August 13, 1998, respectively.
All documents subsequently filed by the Company pursuant to Sections 13
(a), 13 (c), 14 and 15 (d) of the Exchange Act, prior to the filing of a
post-effective amendment to this registration statement which indicates
that all securities offered hereby have been sold or which deregisters all
securities remaining unsold, shall be deemed to be incorporated by
reference in this registration statement and to be part hereof from the
date of filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or
superceded for purposes of this Registration Statement to the extent that a
statement contained herein or in any other subsequently filed document
which also is or is deemed to be incorporated by reference herein modifies
or supercedes such statement. Any such statement so modified or superceded
shall not be deemed, except as so modified or superceded, to constitute a
part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
The validity of the shares of Common Stock covered by the
Registration Statement has been passed upon for the Company by Gibson,
Dunn & Crutcher LLP. Mr. Robert K. Montgomery and Mr. J. Nicholson Thomas,
each partners of such firm, beneficially own 10,000 shares and 1,250
shares, respectively, of Common Stock of the Company through a retirement
plan.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law (the "DGCL") makes
provision for the indemnification of officers and directors in terms
sufficiently broad to indemnify officers and directors of the Company under
certain circumstances from liabilities (including reimbursement for
expenses incurred) arising under the Securities Act. The Company's Charter
and Bylaws provide, in effect, that, to the fullest extent and under the
circumstances permitted by Section 145 of the DGCL, the Company will
indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of the
fact that they are a director or officer of the Company or is or was
serving at the request of the
<PAGE>
Company as a director or officer of another corporation or enterprise. The
Company may, in its discretion, similarly indemnify its employees and
agents. The Charter relieves its directors from monetary damages to the
Company or its stockholders for breach of such director's fiduciary duty as
directors to the fullest extent permitted by the DGCL. Under
Section 102(b)(7) of the DGCL, a corporation may relieve its directors
from personal liability to such corporation or its stockholders for
monetary damages for any breach of their fiduciary duty as directors except
(i) for a breach of the duty of loyalty, (ii) for failure to act in good
faith, (iii) for intentional misconduct or knowing violation of law,
(iv) for willful or negligent violation of certain provisions in the DGCL
imposing certain requirements with respect to stock repurchases, redemption
of dividends, or (v) for any transactions from which the director derived
an improper personal benefit. Depending upon the character of the
proceeding, under Delaware law, the Company may indemnify against expenses
(including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred in connection with any action,
suit or proceeding if the person indemnified acted in good faith and in a
manner he or she reasonably believed to be in or not opposed to the best
interest of the Company, and, with respect to any criminal action or
proceeding, had no cause to believe his or her conduct was unlawful. To the
extent that a director or officer of the Company has been successful in the
defense of any action, suit or proceeding referred to above, the Company
will be obligated to indemnify him or her against expenses (including
attorneys' fees) actually and reasonably incurred in connection therewith.
The Company maintains an insurance policy pursuant to which the directors
and officers of the Company are insured, within the limits and subject to
the limitations of the policy, against certain expenses in connection with
the defense of certain claims, actions, suits or proceedings, and certain
liabilities which might be imposed as a result of such claims, actions,
suits or proceedings, which may be brought against them by reason of their
being or having been such directors and officers.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
- ------- ----------------------
<C> <S>
4.1 Specimen certificate of Common Stock *
4.2 Form of 1994 Stock Option Agreement and Amendment. (The
employees/consultants of E. Khashoggi Industries, LLC, as listed in
Exhibit 4.3, have executed a stock option agreement and an amendment
in the forms attached hereto as Exhibit 4.2)
4.3 Listing of E. Khashoggi Industries, LLC Employees/Consultants
4.4 E. Khashoggi Industries, LLC Equity Incentive Plan
4.5 Form of 1998 Non-qualified Stock Option Agreement
5.1 Opinion of Gibson, Dunn & Crutcher LLP
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Gibson, Dunn & Crutcher LLP (included in Exhibit 5.1 hereto)
24.1 Power of Attorney (included on Signature Page)
</TABLE>
* Filed as an exhibit to the Company's Registration Statement on Form S-1,
as amended (No. 333-13287), effective March 23, 1998 and incorporated
herein by reference.
<PAGE>
ITEM 9. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10 (a)(3)
of the Securities Act;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent
a fundamental change in the information set forth in the
registration statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement; provided,
however, that paragraphs (1)(i) and (1)(ii) do not apply if
the registration statement is on Form S-3 or Form S-8, and
the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic
reports filed by the registrant pursuant to Section 13 or
Section 15(d) of the Exchange Act that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered, which remain,
unsold at the termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) of Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be
a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City and County of Santa Barbara, State of California, on
September 28, 1998.
EarthShell Corporation
By: /s/ Simon K. Hodson
--------------------------------------------
Simon K. Hodson, Chief Executive Officer
<PAGE>
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Simon K.
Hodson and D. Scott Houston his or her true and lawful attorneys-in-fact and
agents, each acting alone, with full powers of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this registration statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, each acting alone,
full powers and authority to do so and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might, or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, each acting alone, or his
substitute or substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
registration statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
/s/ Essam Khashoggi
- ---------------------------- Chairman of the Board September 23, 1998
Essam Khashoggi
/s/ Simon K. Hodson
- ---------------------------- Vice Chairman of the Board, September 23, 1998
Simon K. Hodson and Chief Executive Officer
(Principal Executive Officer)
/s/ John Daoud
- ---------------------------- Secretary and Director September 23, 1998
John Daoud
/s/ Ellis Jones
- ---------------------------- Director September 23, 1998
Ellis Jones
/s/ Layla Khashoggi
- ---------------------------- Director September 23, 1998
Layla Khashoggi
/s/ Graham H. Phillips
- ---------------------------- Director September 23, 1998
Graham H. Phillips
/s/ William A. Marquard
- ---------------------------- Director September 23, 1998
William A. Marquard
/s/ Jerold H. Rubenstein
- ---------------------------- Director September 23, 1998
Jerold H. Rubenstein
/s/ D. Scott Houston
- ---------------------------- Chief Financial Officer September 23, 1998
D. Scott Houston (Principal Financial Officer
and Principal Accounting
Officer)
<PAGE>
INDEX OF EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
- ------- -----------------------
<C> <S>
4.1 Specimen certificate of Common Stock *
4.2 Form of 1994 Stock Option Agreement and Amendment. (The
employees/consultants of E. Khashoggi Industries, LLC, as listed in Exhibit
4.3, have executed a stock option agreement and an amendment in the forms
attached hereto as Exhibit 4.2)
4.3 Listing of E. Khashoggi Industries, LLC Employees/Consultants
4.4 E. Khashoggi Industries, LLC Equity Incentive Plan
4.5 Form of 1998 Non-qualified Stock Option Agreement
5.1 Opinion of Gibson, Dunn & Crutcher LLP
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Gibson, Dunn & Crutcher LLP (included in Exhibit 5.1 hereto)
24.1 Power of Attorney (included on Signature Page)
</TABLE>
- --------------------------------------------------------------------------------
* Filed as an exhibit to the Company's Registration Statement on Form S-1, as
amended (No. 333-13287), effective March 23, 1998 and incorporated herein
by reference.
<PAGE>
EXHIBIT 4.2
E. KHASHOGGI INDUSTRIES
STOCK OPTION AGREEMENT
I. NOTICE OF STOCK OPTION GRANT
OPTIONEE:
You have been granted an option to purchase Common Stock of EarthShell
Container Corporation, a Delaware corporation ("ECC"), subject to the terms of
this Option Agreement, as follows:
Grant Number: No. ________
Date of Grant: July 1, 1994
Exercise Price per Share: $700.00
Total Number of Shares Granted:
---------------
Total Exercise Price: $
---------------
Type of Option: Nonstatutory Stock Option
Term/Expiration Date: July 31, 2003
VESTING SCHEDULE:
This Option shall become exercisable in one or more installments, in the
amounts and on the dates set forth below:
25% after 1 year, 25% after 2 years, and 50% after 3 years from the Date of
Grant.
TERMINATION PERIOD:
This Option may be exercised for six months after termination of employment
or consulting relationship, or such longer period as may be applicable upon
death or Disability of Optionee as provided herein, but in no event later than
the Term/Expiration Date as provided above.
<PAGE>
II. AGREEMENT
1. GRANT OF OPTION. E. Khashoggi Industries, a California general
partnership (the "Company"), hereby grants to the Optionee named in the Notice
of Grant (the "Optionee"), an option (the "Option") to purchase the total number
of shares of Common Stock (the "Shares") of ECC set forth in the Notice of
Grant, at the exercise price per share set forth in the Notice of Grant (the
"Exercise Price") subject to the terms, definitions and provisions this
Agreement.
2. EXERCISE OF OPTION. This Option shall be exercisable during its
term in accordance with the Exercise Schedule set out in the Notice of Grant
except as provided as follows:
(i) RIGHT TO EXERCISE.
(a) This Option may not be exercised for a fraction of a
share.
(b) In the event of Optionee's death, disability or other
termination of employment, the exerciasblility of the Option is governed by
Sections 5, 6, and 7 below, subject to the limitation contained in subsection
2(i)(c).
(c) In no event may this Option be exercised after the date
of expiration of the term of this Option as set forth in the Notice of Grant.
(ii) METHOD OF EXERCISE. This Option shall be exercisable by
written notice (in the form attached as Exhibit A) which shall state the
election to exercise the Option, the number of Shares in respect of which the
Option is being exercised, and such other representations and agreements as
to the holder's investment intent with respect to such shares of Common Stock
as may be required by Company. Such written notice shall be signed by the
Optionee and shall be delivered in person or by certified mail to the
Secretary or other appropriate official of the Company. The written notice
shall be accompanied by payment of the Exercise Price. This Option shall be
deemed to be exercised upon receipt by the Company of such written notice
accompanied by the Exercise Price.
No Shares will be issued pursuant to the exercise of an Option unless
such transfer and such exercise shall comply with all relevant provisions of
law and the requirements of any stock exchange upon which the Shares may then
be listed. Assuming such compliance, for income tax purposes the Shares shall
be considered transferred to the Optionee on the date on which the Option is
exercised with respect to such Shares.
3. OPTIONEE'S REPRESENTATIONS. In the event the Shares purchasable
pursuant to the exercise of this Option have not been registered under the
Securities Act of 1933, as amended, at the time this Option is exercised,
Optionee shall, if required by Company, concurrently with the exercise of all
or any portion of the Option, deliver to the Company his or her Investment
Representation Statement in the form attached hereto as Exhibit B, and shall
read the applicable rules of the Commissioner of Corporations attached to
such Investment Representation Statement.
<PAGE>
4. METHOD OF PAYMENT. Payment of the Exercise Price shall be by any
of the following, or a combination thereof, at the election of the Optionee:
(i) cash; or
(ii) check; or
(iii) promissory note (as agreed to by the Company); or
(iv) surrender of other shares of Common Stock of ECC which are
owned by the Optionee and have a fair market value on the date of surrender
equal to the Exercise Price of the Shares as to which the Option is being
exercised.
5. TERMINATION OF RELATIONSHIP. In the event of termination of
Optionee's Continuous Status as an Employee or Consultant of the Company,
Optionee may, to the extent otherwise so entitled at the date of such
termination (the "Termination Date"), exercise this Option during the
Termination Period set out in the Notice of Grant. To the extent that Optionee
was not entitled to exercise this Option at the date of such termination, or if
Optionee does not exercise this Option within the time specified herein, the
Option shall terminate.
6. DISABILITY OF OPTIONEE. Notwithstanding the provisions of Section
5 above, in the event of termination of Optionee's Continuous Status as an
Employee or Consultant of the Company as a result of total and permanent
disability (as defined in Section 22(e)(3) of the Internal Revenue Code),
Optionee may, but only within twelve (12) months from the date of termination of
employment (but in no event later than the date of expiration of the term of
this Option as set forth in Section 9 below), exercise the Option to the extent
otherwise so entitled at the date of such termination. To the extent that
Optionee was not entitled to exercise the Option at the date of termination, or
if Optionee does not exercise such Option (to the extent otherwise so entitled)
within the time specified herein, the Option shall terminate.
7. DEATH OF OPTIONEE. In the event of termination of Optionee's
Continuous Status as an Employee or Consultant of the Company as a result of the
death of Optionee, the Option may be exercised at any time within twelve (12)
months following the date of death (but in no event later than the date of
expiration of the term of this Option as set forth in Section 9 below), by
Optionee's estate or by a person who acquired the right to exercise the Option
by bequest or inheritance, but only to the extent the Optionee could exercise
the Option at the date of death.
8. NON-TRANSFERABILITY OF OPTION. This Option may not be transferred
in any manner otherwise than by will or by the laws of descent or distribution
and may be exercised during the lifetime of Optionee only by him/her. The terms
of this Option shall be binding upon the executors, administrators, heirs,
successors and assigns of the Optionee.
9. TERM OF OPTION. This Option may be exercised only within the term
set out in the Notice of Grant, and may be exercised during such term only in
accordance with the terms of this Agreement.
<PAGE>
10. TAX CONSEQUENCES. Set forth below is a brief summary as of the
date of this Option of some of the federal and California tax consequences of
exercise of this Option and disposition of the Shares. THIS SUMMARY IS
NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE.
OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING
OF THE SHARES.
(i) EXERCISE OF NONSTATUTORY STOCK OPTION. There may be a regular
federal income tax liability and California income tax liability upon the
exercise of the Option. The Optionee will be treated as having received
compensation income (taxable at ordinary income tax rates) equal to the excess,
if any, of the fair market value of the Shares on the date of exercise over the
Exercise Price. If Optionee is an employee, the Company will be required to
withhold from Optionee's compensation or collect from Optionee and pay to the
applicable taxing authorities an amount equal to a percentage of this
compensation income at the time of exercise.
(ii) DISPOSITION OF SHARES. In the case of an nonqualified stock
option, if Shares are held for at least one year, any gain realized on
disposition of the Shares will be treated as long-term capital gain for federal
and California income tax purposes
E. Khashoggi Industries,
a California Partnership
By: E. Khashoggi Holdings, L.P.
Its Managing General Partner
By: E. Khashoggi Industries, Inc.
General Partner of E. Khashoggi
Holdings, L.P.
By:
----------------------------
Essam Khashoggi, President
OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE
OPTION HEREOF IS EARNED ONLY BY CONTINUING CONSULTANCY OR EMPLOYMENT AT THE WILL
OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR
ACQUIRING SHARES HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT
NOTHING IN THIS AGREEMENT, SHALL CONFER UPON OPTIONEE
<PAGE>
ANY RIGHT WITH RESPECT TO CONTINUATION OF EMPLOYMENT OR CONSULTANCY OF THE
COMPANY, NOR SHALL IT INTERFERE IN ANY WAY WITH HIS OR HER RIGHT OR THE
COMPANY'S RIGHT TO TERMINATE HIS OR HER EMPLOYMENT OR CONSULTANCY AT ANY
TIME, WITH OR WITHOUT CAUSE.
Optionee hereby accepts this Option subject to all of the terms and
provisions thereof. Optionee has reviewed this Option in its entirety, has had
an opportunity to obtain the advice of counsel prior to executing this Option
and fully understands all provisions of the Option. Optionee hereby agrees to
accept as binding, conclusive and final all decisions or intepretations of the
Company upon any questions arising under this Option.
Dated:
--------------------------- ------------------------------
Optionee
<PAGE>
STOCK OPTION AMENDMENT AGREEMENT
This Stock Option Amendment Agreement (the "Agreement"), is made effective
as of February 15, 1995, by and between "Optionee" ("Optionee") and E. Khashoggi
Industries, a California general partnership (the "Company").
Whereas, the Company has granted to Optionee an option to purchase common
stock of Earthshell Container Corporation, a Delaware corporation ("ECC"),
pursuant to a Stock Option Agreement (the "Option Agreement") by and between the
Company and Optionee, dated July 1, 1994; and more specifically identified as
Grant No. ("Grant").
WHEREAS, the parties desire to amend certain provisions of the Option
Agreement;
NOW, THEREFORE, in consideration of the premises set forth herein and for
such other good and valuable consideration the receipt and sufficiency is hereby
acknowledged, the parties hereto agree as follows:
1. The term "Termination Period" as defined under Section I of the Option
Agreement is hereby amended in its entirety to read as follows:
TERMINATION PERIOD:
This Option may be exercised for six months after the termination
of a continuous relationship with the Company as an employee and/or
consultant, as applicable, or such longer period as may be applicable
upon death or disability of Optionee as provided herein, but in no
event later than the Term/Expiration Date as provided above. For
example, if Optionee terminates employment with the Company and
immediately thereafter continues as a consultant of the Company, the
Termination Period will not commence because Optionee has a continuous
relationship with the Company, first as an employee and then as a
consultant.
2. Paragraph 5 of Section II of the Option Agreement is hereby amended in
its entirety to read as follows:
<PAGE>
5. TERMINATION OF RELATIONSHIP. In the event of any termination
of Optionee's continuous relationship with the Company as an employee
and/or consultant, as applicable, Optionee may, to the extent otherwise so
entitled at the date of such termination (the "Termination Date"), exercise
the Option during, but in no event later than, the Termination Period set
out in the Notice of Grant. To the extent that Optionee was not entitled
to exercise this Option at the date of such termination, or if Optionee
does not exercise this Option within the time specified herein, the Option
shall terminate. Notwithstanding the foregoing, if Optionee's relationship
with the Company as an employee is terminated by the Company, other than
for cause, Optionee may, to the extent otherwise so entitled at the date of
such termination, exercise the Option at anytime after Optionee's
termination but in no event later than the date of expiration of the term
of this Option as set forth in Section 9 below.
3. All other terms and conditions of the Option Agreement shall continue
in full force and effect.
IN WITNESS WHEREOF, the Company and the Optionee have executed this
Agreement by their duly authorized representative.
OPTIONEE: COMPANY:
E. KHASHOGGI INDUSTRIES, a California partnership
- -----------------------
[Optionee] By: E. Khashoggi Holdings, L.P.,
Its: Managing General Partner
By: E. Khashoggi Industries, Inc.
Its: General Partner of E. Khashoggi
Holdings, L.P.
By:
------------------------------------------
Essam Khashoggi, President
2
<PAGE>
EXHIBIT 4.3
Listing of E. Khashoggi Industries, LLC employees/consultants that have executed
individual stock option agreements with E. Khashoggi Industries, LLC, see Form
of 1994 Stock Option Agreement and Amendment at Exhibit 4.2.
1. Per J. Andersen
2. Lori Claridge-Bowles
3. Deborah L. Brown
4. Bruce Christensen
5. David Dellinger
6. Patricia A. Fredlund
7. John Gritt
8. Mark A. Hyatt
9. Allen R. Jensen
10. Amitabha Kumar
11. Sandeep Kumar
12. Jan P.A. Loflander
13. Julanne Lum
14. Denise S. Miller
15. Shaode Ong
16. Robert T. Peterson
17. Randall A. Smith
18. Gary Stevens
19. Kristopher R. Turner
<PAGE>
EXHIBIT 4.4
E. KHASHOGGI INDUSTRIES, LLC
EQUITY INCENTIVE PLAN
Section 1. PURPOSE OF PLAN
The purpose of this Equity Incentive Plan (the "Plan") of E. Khashoggi
Industries, LLC, (the "Company") is to enable the Company to attract, retain and
motivate the employees, directors and consultants of the Company and the direct
or indirect subsidiaries of the Company (each, a "Subsidiary") by providing for
or increasing the proprietary interests of such persons in the Company and/or
its Subsidiaries.
Section 2. PERSONS ELIGIBLE UNDER PLAN
Each of the following persons (each, a "Participant") shall be eligible to
be considered for the grant of Awards (as hereinafter defined) hereunder:
(1) any employee (an "Employee") of the Company, its predecessor, E. Khashoggi
Industries, a California general partnership ("EKI Predecessor"), or any
Subsidiary, and (2) any consultant, manager or director of the Company, EKI
Predecessor or any Subsidiary.
Section 3. AWARDS
(a) The Committee (as defined in Section 6 below), on behalf of the
Company, is authorized under this Plan to enter into any type of arrangement
with a Participant that is not inconsistent with the provisions of this Plan and
that, by its terms, involves or might involve the issuance or sale of (i) shares
of common stock, par value $0.01, of EarthShell Corporation, a Delaware
corporation (the "EarthShell Shares") that are or were issued and outstanding
and owned by the Company or EKI Predecessor, (ii) a profits or capital interest
in, or shares of common stock of, any Subsidiary other than EarthShell
Corporation, whether such Subsidiary is a corporation, partnership, limited
liability company or other form of legal entity, identified in a resolution
adopted by the Committee as a Subsidiary whose shares or other equity or profits
interests shall be the subject of Awards under this Plan ("New Subsidiary Equity
Interests" and, together with EarthShell Shares, the "Equity Interests"), or
(iii) a Derivative Security (as such term is defined in Rule 16a-l promulgated
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as
such rule may be amended from time to time, with an exercise or conversion
privilege at a price related to any Equity Interests or with a value derived
from the value of the Equity Interests. The entering into of any such
arrangement is referred to herein as the "grant" of an "Award."
(b) Awards are not restricted to any specified form or structure and may
include, without limitation, sales or bonuses of stock, restricted stock,
non-qualified or incentive stock options, reload stock options, stock purchase
warrants, other rights to acquire stock, securities convertible into or
redeemable for stock, stock appreciation rights, phantom stock, dividend
equivalents, performance units or performance shares, or profits or capital
interests in a partnership or limited liability company. An Award may consist
of one such security or benefit, or two or more of them in tandem or in the
alternative.
<PAGE>
(c) Awards may be issued, and Equity Interests may be issued pursuant to
an Award, for any lawful consideration as determined by the Committee,
including, without limitation, past, present or future services rendered or to
be rendered by the recipient of such Award.
(d) Subject to the provisions of this Plan, the Committee, in its sole and
absolute discretion, shall determine all of the terms and conditions of each
Award granted under this Plan, which terms and conditions may include, among
other things:
(i) a provision permitting the recipient of such Award to pay the
purchase price of the Equity Interests or other property issuable pursuant to
such Award, or such recipient's tax withholding obligation with respect to such
issuance, in whole or in part, by any one or more of the following:
(A) the delivery of cash;
(B) the delivery of other property deemed acceptable by the
Committee;
(C) the delivery of previously owned Equity Interests of the
issuer of the Equity Interests that are the subject of such
Award (the "Issuer"), provided that such shares of Equity
Interests shall have been owned for at least six months; or
(D) the delivery of a recourse promissory note, the terms and
conditions of which shall be determined by the Committee; or
(ii) a provision conditioning or accelerating the receipt of benefits
pursuant to such Award, either automatically or in the discretion of the
Committee, upon the occurrence of specified events, including, without
limitation, a change of control of the Issuer or the Company (as defined by the
Committee), an acquisition of a specified percentage of the voting power of the
Issuer or the Company, the dissolution or liquidation of the Issuer or the
Company, a sale of substantially all of the property and assets of the Issuer or
the Company or an event of the type described in Section 7 hereof.
Section 4. EQUITY INTERESTS SUBJECT TO PLAN
(a) The Committee shall fix the maximum aggregate number of EarthShell
Shares and New Subsidiary Equity Interests that may be issued pursuant to Awards
granted under the Plan and to any one individual. The maximum number of Equity
Interests to be Awarded in connection with any Issuer may be increased or
decreased by the Committee at any time (subject to Section 8), and such number
shall be calculated without reference to the unexercised portion of any option
or similar Award that has expired or terminated. It is not intended that the
Equity Interests to be Awarded with respect to any Issuer will exceed five
percent (5%) of the outstanding Equity Interests of such Issuer owned by the
Company or any Subsidiary.
(b) In the event Equity Interests are to be issued by a corporate Issuer
to any Participant, the Committee shall use its best efforts to ensure that the
Awards qualify as
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"performance based compensation" under Section 162(m) of the Internal Revenue
Code of 1986, as amended (the "Code"). Further, the aggregate number of
Equity Interests to be issued pursuant to this Plan shall be subject to
adjustment under Section 7 only to the extent permitted by Section 162(m) of
the Code.
(c) For purposes hereof, the aggregate number of Equity Interests issued
and issuable pursuant to Awards granted under this Plan shall at any time be
deemed to be equal to the sum of the following:
(i) the number of Equity Interests that were issued prior to such
time pursuant to Awards granted under this Plan, other than Equity Interests
that were subsequently reacquired by the Company or the Issuer pursuant to the
terms and conditions of such Awards and with respect to which the holder thereof
received no benefits of ownership such as dividends; plus
(ii) the maximum number of Equity Interests that are or may be
issuable at or after such time pursuant to Awards granted under this Plan prior
to such time.
Section 5. DURATION OF PLAN
No Awards shall be made under this Plan after June 30, 2008, although
Equity Interests may be issued after June 30, 2008 pursuant to Awards made on or
prior to such date.
Section 6. ADMINISTRATION OF PLAN
(a) This Plan shall be administered by a committee (the "Committee") of
the Board of Managers of the Company (the "Board") consisting of at least three
managers who shall decide all matters by majority vote. The Committee initially
shall be comprised of the following individuals: Essam Khashoggi, Simon Hodson
and John Daoud. Any Committee member may be removed or replaced at any time,
with or without cause, by the members of the Company.
(b) Subject to the provisions of this Plan, the Committee shall be
authorized and empowered to do all things necessary or desirable in connection
with the administration of this Plan, including, without limitation, the
following:
(i) adopt, amend and rescind rules relating to this Plan;
(ii) determine which persons are Participants and to which of such
Participants, if any, Awards shall be granted hereunder;
(iii) grant Awards to Participants and determine the terms and
conditions thereof, including the number of Equity Interests issuable pursuant
thereto;
(iv) determine whether, and the extent to which, adjustments are
required pursuant to Section 7 hereof; and
(v) interpret and construe this Plan and the terms and conditions of
any Award granted hereunder.
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Any determination made by the Committee in good faith shall be binding on
each Participant affected by such determination (unless such determination is
contrary to the specific terms and provisions of the agreement with the
Participant pursuant to which the Awards were granted).
Section 7. ADJUSTMENT
If the outstanding securities of any class of Equity Interests then subject
to this Plan are increased, decreased or exchanged for or converted into cash,
property or a different number or kind of securities, or if cash, property or
securities are distributed in respect of such outstanding securities, in either
case as a result of a reorganization, merger, consolidation, recapitalization,
restructuring, reclassification, dividend (other than a regular, quarterly cash
dividend) or other distribution, stock split, reverse stock split or the like,
or if substantially all of the property and assets of the Company or any other
Issuer are sold, then, unless the terms of such transaction shall provide
otherwise, the Committee shall make appropriate and proportionate adjustments in
(a) the number and type of Equity Interests or other securities, cash or
property that may be acquired pursuant to Awards theretofore granted under this
Plan, (b) the maximum number and type of Equity Interests or other securities,
cash or property that may be issued pursuant to Awards thereafter granted under
this Plan, and (c) to the extent permitted under Section 4(b) hereof, the
maximum number of Equity Interests for which Awards may be granted during any
one calendar year, provided further that no such adjustment shall be made to the
extent the Committee determines that such adjustment would result in the
disallowance of a federal income tax deduction for compensation attributable to
Awards hereunder by causing such compensation to be other than
"performance-based compensation" under Section 162(m) of the Code.
Section 8. AMENDMENT AND TERMINATION OF PLAN
The Board may amend or terminate this Plan at any time and in any manner,
subject to the following limitations:
(a) no such amendment or termination shall deprive the recipient of any
Award theretofore granted under this Plan, without the consent of such
recipient, of any of his or her rights thereunder or with respect thereto;
(b) Section 4 hereof shall not be amended more than once every six months,
other than to comply with changes in the Code, the Employee Retirement Income
Security Act ("ERISA"), or the rules and regulations thereunder; and
(c) if an amendment to the Plan would (i) increase the maximum number of
Equity Interests that may be issued pursuant to (A) all Awards, granted under
this Plan, (B) Awards granted under this Plan during any calendar year to any
one Participant, (ii) change the class of persons eligible to receive Awards
under the Plan, (iii) otherwise materially increase the benefits hereunder
accruing to Participants who are subject to Section 16 of the Exchange Act in a
manner not specifically contemplated herein, or (iv) affect the Plan's
compliance with Rule 16b-3 or applicable provisions of the Code, as amended from
time to time, the amendment shall be approved by the Company's members to the
extent required to comply with Rule 16b-3,
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Sections 422 and 162(m) of the Code, and other applicable provisions of or
rules under the Code, as amended from time to time.
Section 9. EFFECTIVE DATE OF PLAN
This Plan shall be effective as of July 1, 1998; provided that this Plan
shall retroactively apply to all options heretofore granted by the Company or
EKI Predecessor to its employees or consultants (to the extent the terms of this
Plan are not inconsistent with the terms of any option agreement embodying the
terms of any Award issued prior to the date of this Plan), including options
issued to Company Employees to acquire EarthShell Shares held by the Company or
EKI Predecessor. It is understood that all such options granted prior to March
23, 1998 were granted in respect of a specified number of EarthShell Shares
prior to the effectiveness of the 262-for-1 stock split of the EarthShell Shares
that took effect on March 23, 1998.
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EXHIBIT 4.5
E. KHASHOGGI INDUSTRIES, LLC
NON-QUALIFIED STOCK OPTION AGREEMENT
This Non-Qualified Stock Option Agreement ("Agreement") is made and entered
into as of the Date of Grant indicated below by and between E. Khashoggi
Industries, LLC, a Delaware limited liability company (the "Company"), and the
person named below as Participant.
R E C I T A L S
A. Participant is an employee or consultant of the Company; and
B. Pursuant to the Company's Equity Incentive Plan (the "Plan"), the
Managers of the Company, acting through its Compensation Committee (the
"Committee"), has approved the grant to Participant of an option to purchase
shares of the common stock (the "Common Stock") of EarthShell Corporation, a
Delaware corporation ("EarthShell"), on the terms and conditions set forth
herein. The Common Stock subject to the option is presently owned by the
Company.
A G R E E M E N T
In consideration of the foregoing recitals and the covenants set forth
herein, the parties hereto hereby agree as follows:
1. GRANT OF OPTION; CERTAIN TERMS AND CONDITIONS. The Company hereby
grants to Participant, and Participant hereby accepts, as of the Date
of Grant, an option to purchase the number of shares of Common Stock
indicated below (the "Option Shares") at the Exercise Price Per Share
indicated below, which option shall expire at 5:00 o'clock p.m.,
California time, on the Expiration Date indicated below (unless
terminated earlier as provided herein), and shall be subject to all of
the terms and conditions set forth in this Agreement (the "Option").
On the first anniversary of the Date of Grant, the Option shall become
exercisable to purchase, and shall vest with respect to, 25% of the
Option Shares. On each successive anniversary of the Date of Grant,
the Option shall become exercisable to purchase, and shall vest with
respect to, an additional 25% of the Option Shares, such that, on the
fourth anniversary of the Date of Grant, the Option shall become
exercisable to purchase, and shall vest with respect to, 100% of the
Option Shares.
2. No. _____________________________
Participant:
Date of Grant: July 1, 1998
Number of Option Shares:
Exercise Price Per Share: $21.00
Expiration Date: June 30, 2008
<PAGE>
The Option does not qualify as an incentive stock option under Section 422
of the Internal Revenue Code of 1986, as amended (the "Code").
2. TERMINATION OR ACCELERATION OF OPTION.
(a) TERMINATION OF EMPLOYMENT. The Option may terminate prior to the
Expiration Date in the event that Participant shall cease to render services as
an employee of, or consultant to, the Company and its subsidiaries (such event
shall be referred to herein as the "Termination" of Participant's "Employment").
The term "subsidiaries" shall mean any corporation, partnership or limited
liability company in which the Company owns, directly or indirectly, more than
50% of the voting and economic interests.
(i) TERMINATION FOR CAUSE.
A. In the event Participant's Employment is
Terminated by the Company or any of its subsidiaries for "cause" (as defined
below), then (x) the portion of the Option that has not vested on or prior to
the date of such Termination of Employment shall terminate on such date, and
(y) the remaining vested portion of the Option shall terminate upon the earlier
of the Expiration Date or thirty (30) days following the date of such
Termination of Employment.
B. "Cause" means the occurrence of any of the
following events: (x) failure (excluding any failure due to death or Permanent
Disability (as defined in Section 2(a)(ii) below)) by the Participant to
substantially perform his or her duties with the Company or its subsidiaries;
provided, however, that the Participant must be notified by the Company or the
subsidiaries, as applicable, of any such failure to perform his or her duties
and shall have thirty (30) days from the date of such notice to cure such
failure; (y) any act by the Participant of fraud, misappropriation, dishonesty,
embezzlement or similar conduct against the Company or its subsidiaries; or
(z) indictment or conviction of the Participant for a felony or any other crime
involving moral turpitude. Any determination by the Committee that
Participant's Employment has been Terminated for "cause" shall be considered
binding on Participant provided that such determination is not unreasonable
based on all the facts and circumstances relevant to such Termination.
(ii) TERMINATION BY REASON OF DEATH OR PERMANENT DISABILITY.
A. If Participant's Employment is Terminated by
reason of the death or Permanent Disability (as defined below) of Participant,
then (A) the portion of the Option that has not vested on or prior to the date
of such Termination of Employment shall terminate on such date, and (B) the
remaining vested portion of the Option shall terminate upon the earlier of the
Expiration Date or the first anniversary of the date of such Termination of
Employment.
B. "Permanent Disability" shall mean the inability to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment that can be expected to result in
death or that has lasted or can be expected to last for a continuous period of
not less than ninety (90) days. Participant shall not be deemed to have a
Permanent Disability until proof of the existence thereof shall have been
furnished to the Committee in such form and manner, and at such times, as the
Committee may require. Any determination by the Committee that Participant does
or does not have a Permanent Disability shall be final and binding upon the
Company and Participant.
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(iii) TERMINATION BY PARTICIPANT'S VOLUNTARY ACTIONS. If
Participant's Employment is Terminated voluntarily by Participant, whether by
retirement, resignation or other action taken by Participant, and not as a
result of Participant's death or Permanent Disability, then (A) the portion of
the Option that has not vested on or prior to the date of such Termination of
Employment shall terminate on such date, and (B) the remaining vested portion of
the Option shall terminate upon the earlier of the Expiration Date or thirty
(30) days following the date of such Termination of Employment.
(iv) OTHER TERMINATION BY THE COMPANY. If Participant's
Employment is Terminated by the Company or its subsidiaries for no reason, or
for any reason other than for "cause" (as defined in Section 2(a)(i)(B) above),
Participant's death or Participant's Permanent Disability (as defined in Section
2(a)(ii)(B) above), then (A) the portion of the Option that has not vested on or
prior to the date of such Termination of Employment shall terminate on such
date, and (B) the remaining vested portion of the Option shall terminate upon
the earlier of the Expiration Date or the first anniversary of such Termination
of Employment.
(b) EVENTS CAUSING ACCELERATION OF OPTION. The Committee, in its
sole discretion, may accelerate the exercisability of the Option at any time and
for any reason.
(c) OTHER EVENTS CAUSING TERMINATION OF OPTION. Notwithstanding
anything to the contrary in this Agreement, the Option shall terminate upon the
consummation of any of the following events:
(i) the dissolution or liquidation of the Company or
EarthShell; or
(ii) a sale of substantially all of the property and assets of
the Company or EarthShell; or
(iii) a merger or consolidation of the Company or EarthShell
with another entity or any other form of reorganization in which the Company or
EarthShell, as applicable, dissolves or ceases to exist.
3. ADJUSTMENTS. In the event that the outstanding securities of the
class then subject to the Option are increased, decreased or exchanged for or
converted into cash, property and/or a different number or kind of securities,
or cash, property and/or securities are distributed in respect of such
outstanding securities, in either case as a result of a reorganization, merger,
consolidation, recapitalization, reclassification, stock split, reverse stock
split or the like, then, unless such event shall cause the Option to terminate
pursuant to Section 2(c) hereof, the Committee shall, in accordance with and
subject to the relevant provisions of the Plan, make appropriate and
proportionate adjustments in the number and type of shares or other securities
or cash or other property that may thereafter be acquired upon the exercise of
the Option; PROVIDED, HOWEVER, no such adjustment shall be made to the extent
the Committee determines that such adjustment would result in the disallowance
of a federal income tax deduction for compensation attributable to the Option by
causing such compensation to be other than "performance-based compensation"
under Section 162(m) of the Code; and PROVIDED, FURTHER, that any such
adjustments in the Option shall be made without changing the aggregate Exercise
Price Per Share of the then unexercised portion of the Option.
4. EXERCISE. The Option shall be exercisable during Participant's
lifetime only by Participant or by his or her guardian or legal representative,
and after Participant's death only by the person or entity entitled to do so
under Participant's last will and testament or applicable intestate law. The
Option may only be exercised by the delivery to the Company of a written notice
of such
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exercise, which notice shall specify the number of Option Shares to be
purchased (the "Purchased Shares") and the aggregate Exercise Price Per Share
for such shares (the "Exercise Notice"), together with payment in full of
such aggregate Exercise Price Per Share in cash or by cashier's check payable
to the Company; PROVIDED, HOWEVER, that, in the sole discretion of the
Committee, payment for such aggregate Exercise Price Per Share may instead be
made, in whole or in part, by the delivery to the Company of a fully recourse
promissory note, having such terms as the Committee determines in its sole
discretion. The Option may not be exercised for a fraction of a share.
5. PAYMENT OF WITHHOLDING TAXES. If the Company becomes obligated to
withhold an amount on account of any tax imposed as a result of the exercise of
the Option, including, without limitation, any federal, state, local or other
income tax, or any F.I.C.A., state disability insurance tax or other employment
tax, then Participant shall, on the first day upon which the Company becomes
obligated to pay such amount to the appropriate taxing authority, pay such
amount to the Company in cash or by cashier's check payable to the Company. The
Company may, in its sole discretion, offset any amounts owed by the Company to
Participant in order to satisfy Participant's obligations under this Section 5.
6. NOTICES. All notices and other communications required or permitted
to be given pursuant to this Agreement shall be in writing and shall be deemed
given on the day delivered if delivered personally or by facsimile transmission
(provided a copy of the facsimile transmission is mailed promptly thereafter to
the recipient in the manner set forth herein), or one day after mailing by
reputable overnight courier, or five days after mailing by certified or
registered mail, postage prepaid, return receipt requested, to the Company at
800 Miramonte Drive, Santa Barbara, California 93109, Attention: Chairman of
the Board, or to Participant at the address set forth beneath his or her
signature on the signature page hereto, or at such other addresses as they may
designate by written notice in the manner aforesaid.
7. STOCK EXCHANGE REQUIREMENTS; APPLICABLE LAWS. Notwithstanding
anything to the contrary in this Agreement, no shares of stock purchased upon
exercise of the Option, and no certificate representing all or any part of such
shares, shall be issued or delivered if (a) such shares have not been admitted
to listing upon official notice of issuance on each stock exchange upon which
shares of that class are then listed or (b) in the opinion of counsel to the
Company, such issuance or delivery would cause the Company to be in violation of
or to incur liability under any federal, state or other securities law, or any
requirement of any stock exchange listing agreement to which the Company is a
party, or any other requirement of law or of any administrative or regulatory
body having jurisdiction over the Company. Participant agrees to execute and
deliver to the Company such representations, covenants and agreements, including
representations as to Participant's investment intent, as the Company or its
counsel may require to ensure that the Participant's exercise of the Option and
the transfer of the Option Shares to Participant complies with the requirements
of this Section 7.
8. NONTRANSFERABILITY. Neither the Option nor any interest therein may
be sold, assigned, conveyed, gifted, pledged, hypothecated or otherwise
transferred in any manner by Participant other than by will or the laws of
descent and distribution.
9. PLAN. The Option is granted pursuant to the Plan, as in effect on the
date this Agreement is delivered to Participant, and is subject to all the terms
and conditions of the Plan, as the same may be amended from time to time;
PROVIDED, HOWEVER, that no such amendment shall deprive Participant, without his
or her consent, of the Option or of any of Participant's material rights under
this Agreement. The interpretation and construction by the Committee of the
Plan, this Agreement, the Option and such rules and regulations as may be
adopted by the Committee for the
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purpose of administering the Plan shall be final and binding upon
Participant. Until the Option shall expire, terminate or be exercised in
full, the Company shall, upon written request therefor, send a copy of the
Plan, in its then current form, to Participant or any other person or entity
then entitled to exercise the Option.
10. STOCKHOLDER RIGHTS. No person or entity shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of any Option Shares
until the Option shall have been duly exercised to purchase such Option Shares
in accordance with the provisions of this Agreement, and such Option Shares
shall have been delivered to Participant.
11. EMPLOYMENT OR CONTRACT RIGHTS. No provision of this Agreement or of
the Option granted hereunder shall (a) confer upon Participant any right to
continue in the employ of or contract with the Company or any of its
subsidiaries, (b) affect the right of the Company and each of its subsidiaries
to terminate the employment or contract of Participant, with or without cause,
or (c) confer upon Participant any right to participate in any employee welfare
or benefit plan or other program of the Company or any of its subsidiaries other
than the Plan. PARTICIPANT HEREBY ACKNOWLEDGES AND AGREES THAT THE COMPANY AND
EACH OF ITS SUBSIDIARIES MAY TERMINATE THE EMPLOYMENT OR CONTRACT OF PARTICIPANT
AT ANY TIME AND FOR ANY REASON, OR FOR NO REASON, UNLESS PARTICIPANT AND THE
COMPANY OR SUCH SUBSIDIARY ARE PARTIES TO A WRITTEN EMPLOYMENT AGREEMENT THAT
EXPRESSLY PROVIDES OTHERWISE.
12. GOVERNING LAW. This Agreement and the Option granted hereunder shall
be governed by and construed and enforced in accordance with the laws of the
State of California without reference to choice or conflict of law principles.
13. ACCEPTANCE OF OPTION. Participant hereby accepts this Option subject
to all of the terms and provisions thereof. Participant has reviewed this
Option in its entirety, has had an opportunity to obtain the advice of counsel
prior to executing this Option and fully understands all provisions of the
Option. Participant hereby agrees to accept as binding, conclusive and final
all decisions or interpretations of the Committee upon any questions arising
under this Option. Participant understands that he or she may recognize taxable
income upon the exercise of the Option and that he or she may recognize a
taxable gain or loss upon the subsequent disposition of the Option Shares.
Participant further acknowledges that he or she is not relying on the Company or
its counsel for tax advice in connection with this Option and that Participant
will rely on the advice of his or her personal tax advisors in connection with
all matters associated with the grant and exercise of this Option and the
disposition of the Option Shares.
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IN WITNESS WHEREOF, the Company and Participant have duly executed this
Agreement as of the Date of Grant.
E. KHASHOGGI INDUSTRIES, LLC PARTICIPANT:
-----------------------------
Signature
-----------------------------
By: Street Address
---------------------------
Title: Chairman and CEO -----------------------------
City, State and Zip Code
-----------------------------
Social Security Number
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EXHIBIT 5.1
September 28, 1998
EarthShell Corporation
111 South Calvert Street, Suite 1950
Baltimore, Maryland 21202-6174
Re: Registration Statement on Form S-8
Ladies and Gentlemen:
We have acted as counsel for EarthShell Corporation, a Delaware
corporation (the "Company"), in connection with the registration of 915,690
shares of common stock of the Company issuable under the individual stock
options agreements and 294,310 shares of common stock issuable under the E.
Khashoggi Industries, LLC Equity Incentive Plan (collectively, the "Common
Stock"). In connection therewith, we have examined, among other things, the
Registration Statement on Form S-8 (the "Registration Statement") proposed to
be filed by the Company with the Securities and Exchange Commission on or
about September 25, 1998. We have also examined the proceedings and other
actions taken by the Company in connection with the authorization issuance
and sale to the predecessor-in-interest of E. Khashoggi Industries LLC
("EKI") of the shares of Common Stock that are transferable under the
individual stock option agreements and the E. Khashoggi Industries, LLC
Equity Incentive Plan and such other matters as we deemed necessary for
purposes of rendering this opinion.
Based upon the foregoing, and in reliance thereon, we are of the opinion
that the shares of Common Stock transferable by EKI under the individual
stock options agreements and under the E. Khashoggi Industries, LLC Equity
Incentive Plan, have been validly issued and fully paid and are nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ GIBSON, DUNN & CRUTCHER LLP
------------------------------------
GIBSON, DUNN & CRUTCHER LLP
<PAGE>
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
EarthShell Corporation ("The Company") on Form S-8 of our report dated February
20, 1998 (except for Note 10 as to which the date is March 23, 1998), which
report contains an explanatory paragraph related to the Company's ability to
continue as a going concern, appearing in the prospectus on Form S-1 filed
pursuant to Rule 424(b) of the Securities Act as filed with the Securities and
Exchange Commission (File No. 333-13287).
DELOITTE & TOUCHE LLP
Los Angeles, California
September 22, 1998
