-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GrbcoqcrhO/mJ16SNKCpykwEzM/wC2bpUTIXqEicGd/eOIpf8bjWfT7Q7l981mD8 YPLaQut1AKj/ZRJW7b6Idw== /in/edgar/work/20000728/0000891020-00-001350/0000891020-00-001350.txt : 20000921 0000891020-00-001350.hdr.sgml : 20000921 ACCESSION NUMBER: 0000891020-00-001350 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20000728 EFFECTIVENESS DATE: 20000728 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TEEKAY SHIPPING CORP CENTRAL INDEX KEY: 0000911971 STANDARD INDUSTRIAL CLASSIFICATION: [4412 ] IRS NUMBER: 000000000 STATE OF INCORPORATION: C5 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: SEC FILE NUMBER: 333-42434 FILM NUMBER: 680833 BUSINESS ADDRESS: STREET 1: EURO CANADIAN CENTRE,4TH FL.POBOX SS6293 STREET 2: MARLBOROUGH ST. & NAVY LYON RD CITY: NASSAU BAHAMAS STATE: C5 ZIP: 00000 BUSINESS PHONE: 8093228020 MAIL ADDRESS: STREET 1: EURO CANADIAN CENTRE,4TH FL.POBOX SS6293 STREET 2: MARLBOROUGH ST. & NAVY LYON RD CITY: NASSAU BAHAMAS STATE: C5 ZIP: 00000 FORMER COMPANY: FORMER CONFORMED NAME: VIKING STAR SHIPPING INC DATE OF NAME CHANGE: 19930914 S-8 1 s-8.txt FORM S-8 1 ================================================================================ AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 28, 2000 REGISTRATION NO. 333- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ------------------------ TEEKAY SHIPPING CORPORATION (Exact name of registrant as specified in its charter) REPUBLIC OF THE MARSHALL ISLANDS NOT APPLICABLE (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization)
TK HOUSE BAYSIDE EXECUTIVE PARK WEST BAY STREET & BLAKE ROAD NASSAU THE BAHAMAS (Address of principal executive offices, including zip code) TEEKAY SHIPPING CORPORATION AMENDED 1995 STOCK OPTION PLAN (Full title of the plans) LAWCO OF OREGON, INC. PERKINS COIE LLP 1211 S.W. FIFTH AVENUE, SUITE 1500 PORTLAND, OREGON 97204-3715 ATTENTION: KAREN M. DODGE (503) 727-2000 (Name, address and telephone number, including area code, of agent for service) ------------------------ COPIES TO: DAVID S. MATHESON PERKINS COIE LLP 1211 S.W. FIFTH AVENUE, SUITE 1500 PORTLAND, OREGON 97204-3715 ------------------------ CALCULATION OF REGISTRATION FEE
- ---------------------------------------------------------------------------------------------------------------------- TITLE OF SECURITIES NUMBER TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF TO BE REGISTERED REGISTERED(1) OFFERING PRICE AGGREGATE OFFERING PRICE REGISTRATION FEE - ---------------------------------------------------------------------------------------------------------------------- Common Stock, par value $0.001 per share 2,350,000 $38.65625 $90,842,187.50 $23,982.34 - ----------------------------------------------------------------------------------------------------------------------
(1) Based on shares subject to outstanding options or reserved for future issuance pursuant to the amendment to the 1995 Stock Option Plan, together with an indeterminate number of additional shares which may be necessary to adjust the number of shares reserved for issuance pursuant to such employee benefit plan as the result of any future stock split, stock dividend or similar adjustment of the registrant's outstanding Common Stock. (2) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(c) under the Securities Act of 1933, as amended, based on the average of the high ($39.25) and low ($38.0625) sales prices for the Common Stock on July 25, 2000, as reported for such date on the New York Stock Exchange. ================================================================================ 2 PART II INFORMATION REQUIRED IN REGISTRATION STATEMENT ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents filed with the Securities and Exchange Commission (the "Commission") are hereby incorporated by reference in this Registration Statement: (a) Transition Report of Teekay on Form 20-F for the transition period from April 1, 1999 to December 31, 1999, which contains audited financial statements of the registrant; (b) The description of Teekay's Common Stock contained in the Registration Statement on Form 20-F filed with the Commission on July 10, 1995, including any amendments or reports filed for the purpose of updating such description; and (c) All other reports filed by the registrant 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 transition period covered by the Transition Report on Form 20-F referenced above. All documents filed by the registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), after the date hereof, and prior to the filing of a post-effective amendment which indicates that the securities offered hereby have been sold or which deregisters the securities covered hereby then remaining unsold, shall also be deemed to be incorporated by reference into this Registration Statement and to be a part hereof commencing on the respective dates on which such documents are filed. ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS Teekay Shipping Corporation ("Teekay") is a Marshall Islands corporation. The Marshall Islands Business Corporation Act ("MIBCA") provides that a Marshall Islands corporation shall have the power to 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 (other than an action by or in the right of the corporation) by reason of the fact that he is or was a director or officer of the corporation, or is or was serving at the request of the corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of no contest, or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe his conduct was unlawful. A Marshall Islands corporation also has the power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he is or was a director or officer of the corporation, or is or was serving at the request of the corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys' fees) actually and reasonably incurred by him 3 or in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable for negligence or misconduct in the performance of his duty to the corporation unless and only to the extent that the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the court shall deem proper. To the extent that a director or officer of a Marshall Islands corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in the preceding paragraph, or in the defense of a claim, issue or matter therein, he shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him in connection therewith. Expenses incurred in defending a civil or criminal action, suit or proceeding may be paid in advance of the final disposition of such action, suit or proceeding as authorized by the board of directors in the specific case upon receipt of an undertaking by or on behalf of the director or officer to repay such amount unless it shall ultimately be determined that he is entitled to be indemnified by the corporation as authorized in the MIBCA. In addition, a Marshall Islands corporation has the power to purchase and maintain insurance on behalf of any person who is or was a director or officer of the corporation or is or was serving at the request of the corporation as a director or officer against any liability asserted against him and incurred by him in such capacity whether or not the corporation would have the power to indemnify him against such liability under the provisions of the MIBCA. Section J of the Company's Articles of Incorporation, as amended, provides that to the fullest extent permitted under the MIBCA, a director of the Company shall not be liable to the Company or its shareholders for monetary damages for breach of fiduciary duty as a director. Section 10.00 of the Company's Bylaws provides that any person who is made party to a proceeding by virtue of being an officer or director of the Company or, being or having been such a director or officer or an employee of the Company, serving at the request of the Company as a director, officer, employee or agent of another corporation or other enterprise, shall be indemnified and held harmless to the fullest extent permitted by the MIBCA against any and all expense, liability, loss (including attorneys' fees, judgments, fines or penalties and amounts paid in settlement) actually incurred or suffered by such person in connection with the proceeding. In addition, the Company has entered into separate Indemnification Agreements with each of the Company's officers and directors listed in the Registration Statement which provide for indemnification of the director or officer against all expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative except to the extent that such person is otherwise indemnified, such action, suit or proceeding arose out of such person's intentional misconduct, knowing violation of law or out of a transaction in which such director or officer is finally judicially determined to have derived an improper personal benefit or if it shall be determined by a final judgment or other final adjudication that such indemnification was not lawful. 4 ITEM 8. EXHIBITS
Exhibit Number Description - ------- ------------------------------------------------------------ 5.1 Opinion of Watson, Farley & Williams regarding legality of the Common Stock being registered 23.1 Consent of Ernst & Young, Chartered Accountants 23.2 Consent of Watson, Farley & Williams (included in opinion filed as Exhibit 5.1) 24.1 Power of Attorney (see signature page) 99.1 Teekay Shipping Corporation Amended 1995 Stock Option Plan
ITEM 9. UNDERTAKINGS A. 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 this 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 this Registration Statement; and (iii) To include any material information with respect to the plan of distribution not previously disclosed in this Registration Statement or any material change to such information in this Registration Statement; provided, however, that paragraphs (1)(i) and (1)(ii) above do not apply if 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 this 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. B. 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) or 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefits plan's annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in this 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. 5 C. 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 Commission such indemnification is against public policy as expressed in the Securities 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 Securities Act and will be governed by the final adjudication of such issue. 6 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, 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 of Vancouver, Province of British Columbia, on the 26th day of July, 2000. TEEKAY SHIPPING CORPORATION By: /s/ Bjorn Moller ------------------------------------ Bjorn Moller President and Chief Executive Officer POWER OF ATTORNEY Each person whose individual signature appears below hereby authorizes Bjorn Moller and Peter S. Antturi, or either of them, as attorneys-in-fact with full power of substitution, to execute in the name and on the behalf of each person, individually and in each capacity stated below, and to file, any and all amendments to this Registration Statement, including any and all post-effective amendments. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated below on the 26th day of July, 2000.
SIGNATURE TITLE --------- ----- /s/ Bjorn Moller President, Chief Executive Officer and - ----------------------------------------------------- Director (Principal Executive Officer) Bjorn Moller /s/ Peter S. Antturi Vice President, Chief Financial Officer, - ----------------------------------------------------- Treasurer and Director (Principal Financial Peter S. Antturi and Accounting Officer) /s/ C. Sean Day Director and Chairman of the Board - ----------------------------------------------------- C. Sean Day /s/ Axel Karlshoej Director and Chairman Emeritus - ----------------------------------------------------- Axel Karlshoej /s/ Bruce C. Bell Director and Secretary - ----------------------------------------------------- Bruce C. Bell /s/ Michael D. Dingman Director - ----------------------------------------------------- Michael D. Dingman /s/ Morris L. Feder Director - ----------------------------------------------------- Morris L. Feder /s/ Steve G.K. Hsu Director - ----------------------------------------------------- Steve G.K. Hsu /s/ Thomas Kuo-Yuen Hsu Director - ----------------------------------------------------- Thomas Kuo-Yuen Hsu /s/ Leif O. Hoegh Director - ----------------------------------------------------- Leif O. Hoegh
7 INDEX TO EXHIBITS
Exhibit Number Description - ------- ------------------------------------------------------------ 5.1 Opinion of Watson, Farley & Williams regarding legality of the Common Stock being registered 23.1 Consent of Ernst & Young, Chartered Accountants 23.2 Consent of Watson, Farley & Williams (included in opinion filed as Exhibit 5.1) 24.1 Power of Attorney (see signature page) 99.1 Teekay Shipping Corporation Amended 1995 Stock Option Plan
EX-5.1 2 ex5-1.txt OPINION OF SPECIAL COUNSEL 1 EXHIBIT 5.1 [WATSON, FARLEY & WILLIAMS LETTERHEAD] July 28, 2000 Teekay Shipping Corporation TK House Bayside Executive Park West Bay street & Blake Road Nassau THE BAHAMAS Ladies and Gentlemen: We have acted as special counsel on matters of Marshall Islands law for Teekay Shipping Corporation, a Marshall Islands corporation (the "Company"), in connection with the preparation of a Registration Statement on Form S-8 (the "Registration Statement") under the Securities Act of 1933, as amended (the "Act"), which you are filing with the Securities and Exchange Commission with respect to 2,350,000 shares of Common Stock, par value $0.001 per share, which may be issued pursuant to the Company's 1995 Stock Option Plan, as amended to date (the "Plan"). In so acting, we have examined a copy of the Registration Statement and originals, or copies certified to our satisfaction, of all such corporate records of the Company, agreements and other documents, certificates of public officials and officers and representatives of the Company and appropriate persons, and such other documents as we have deemed necessary as a basis for the opinions hereinafter expressed. We have assumed without independent investigation, (i) the genuineness of all signatures, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as photostatic or facsimile copies, and the authenticity of the originals of such copies and (ii) the accuracy of the factual representations made to us by officers and other representatives of the Company, whether evidenced by certificates or otherwise. Based upon and subject to the foregoing, we are of the opinion that any shares that may be issued pursuant to the Plan have been duly authorized and that, upon the execution by the proper officers of the Company and the registration by its registrar of such shares, the sale thereof by the Company in accordance with the terms of the Plan, the receipt of consideration therefor in accordance with the terms of the Plan, such shares will be validly issued, fully paid and nonassessable. This opinion is limited to the law of the Republic of The Marshall Islands. In rendering this opinion, we have relied upon our independent examination of the Associations Law of the Republic of The Marshall Islands 1990, as amended, made available to us by Marshall Islands Maritime & Corporate Administrators, Inc. 2 We hereby consent to the filing of this opinion as an exhibit to the Registration Statement. In giving such consent, we do not admit that we are in the category of persons whose consent is required under Section 7 of the Act. Very truly yours, /s/ Watson, Farley & Williams EX-23.1 3 ex23-1.txt CONSENT OF AUDITORS 1 EXHIBIT 23.1 CONSENT OF ERNST & YOUNG, CHARTERED ACCOUNTANTS We consent to the incorporation by reference in the Registration Statement (Form S-8) of Teekay Shipping Corporation of our report dated February 11, 2000, with respect to the consolidated financial statements and schedule of Teekay and its Subsidiaries included in the Transition Report (Form 20-F) for the transition period from April 11, 1999 to December 31, 1999, filed with the Securities and Exchange Commission. ERNST & YOUNG, Chartered Accountants Nassau, Bahamas July 28, 2000 EX-99.1 4 ex99-1.txt AMENDED 1995 STOCK OPTION PLAN 1 EXHIBIT 99.1 TEEKAY SHIPPING CORPORATION AMENDED 1995 STOCK OPTION PLAN 1. PURPOSE 1.01 The purpose of the 1995 Stock Option Plan (the "Plan") is to provide an effective long term incentive for selected key employees, directors, officers and consultants of Teekay Shipping Corporation and related companies including Teekay Shipping Limited (including its affiliates, "Teekay Shipping"), which provides management services to Teekay Shipping Corporation, to foster a greater proprietary interest in the continued success of the Company. 2. DEFINITIONS 2.01 In this Plan: (a) "Board" means the Board of Directors of Teekay Shipping Corporation; (b) "Company" means Teekay Shipping Corporation, or any successor corporation; (c) "Committee" means the committee of the Board charged with the responsibility of administering the Plan or, failing the designation of a committee, Committee means the Board; (d) "Consultant" means any person who acts as a consultant, advisor or independent contractor to the Company or a Participating Related or Subsidiary Company; (e) "Director" means a member of the Board of Directors of Teekay Shipping Corporation or a Participating Related or Subsidiary Company. A Director who is an Employee will be governed by the Plan as an Employee and will not be subject to any provisions which would otherwise apply to Directors. In no event will benefits under the Plan for a Director be additive to benefits for an Employee (or vice versa) who is the same person; (f) "Employee" means any person who is a full-time or permanent part-time salaried employee on the payroll of Teekay Shipping Corporation or any Participating Related or Subsidiary Company, but shall specifically exclude temporary, seasonal or contract help; (g) "Officer" means any person who is appointed as an Officer by the Board of Directors of the Company or of a Participating Related or Subsidiary company; (h) "Options" means the rights granted to an Officer, Employee, Director or Consultant to purchase Shares in accordance with the terms of the Plan; (i) "Participant" means an Officer, Employee, Director or Consultant who has been granted Options to purchase Shares of the Company in accordance with the terms of the Plan; 2 (j) "Participating Related or Subsidiary Company" means a subsidiary of Teekay Shipping Corporation or a related company designated by the Board as having Officers, Employees, Directors or Consultants eligible under the Plan; (k) "Plan" means this 1995 Stock Option Plan of Teekay Shipping Corporation; (l) "Retirement" or "Retires" means the early or normal retirement of an Employee within the retirement policy of the Company, whether or not such Employee is a member of or entitled to benefits under any retirement plan of the Company. With respect to a Director, retirement means cessation of such person's term as a Director upon the scheduled end of such term or earlier upon resignation; (m) "Shares" or "Stock" means common shares of Teekay Shipping Corporation; (n) "Share Appreciation Rights (SAR)" means the increase in fair market value of the common shares of Teekay Shipping Corporation from the date of grant to date of exercise; and (o) "Total Disability" means solely because of disease or injury, an Employee is deemed by a qualified physician selected by the Company to be unable to work at any occupation which the Employee is reasonably qualified to perform. In the case of a Director, total disability means solely because of disease or injury, a Director is deemed by a qualified physician selected by the Company to be unable to carry out his or her responsibilities as a Director. 3. ADMINISTRATION 3.01 The Plan shall be administered by the Committee. 3.02 The Committee shall: (a) formulate guidelines and administrative provisions to implement and run the Plan; (b) decide all matters relating to the administration of the Plan including the interpretation of the terms of the Plan. Any decision of the Committee shall be conclusive unless otherwise determined by the Board; (c) design and approve any forms and agreements required to carry out the provisions of the Plan; (d) delegate to any person or persons administrative duties as the Committee considers appropriate; (e) determine the time at which Options shall be granted, the number of Shares subject to each Option, the price at which the Option may be exercised, the term during which the Option may be exercised and any restrictions which limit exercise; and (f) designate those individuals, subject to section 4.01, to whom Stock Options may be granted. -2- 3 4. ELIGIBILITY 4.01 Unless expressly excluded herein, Officers, Employees, Directors and Consultants of Teekay Shipping Corporation and Related or Subsidiary Companies shall be eligible to become Participants. 5. SHARES SUBJECT TO THE PLAN AND DURATION OF THE PLAN 5.01 The number of Shares reserved and available for Options under the Plan shall be 6,298,571 shares. 5.02 No increase in the number of Shares reserved for issuance under the Plan is allowed without approval of the Board. 5.03 Any Shares which are subject to Options which are cancelled or forfeit shall be available for the granting of Options thereafter under the Plan. 5.04 The Plan shall be effective upon the Initial Public Offering of the Company and shall continue as long as Options under the Plan are available. 6. SHARE APPRECIATION RIGHTS 6.01 In tandem with each Option granted under the Plan, the Committee may grant an equal number of Share Appreciation Rights (SAR). SAR's are subject to the same provisions covering price, vesting, term, exercise and termination of employment as apply to the Options to which each is contingently attached. 6.02 The purpose of the SAR's is to increase the flexibility of the Participant and the Company in the exercise of an Option and the administration of the Plan. The granting of an SAR in tandem with an Option is not intended to increase the compensation Participants would otherwise earn through the Plan. The exercise of either one automatically cancels the right to exercise the other. 6.03 Each SAR carries with it the right of a Participant to receive payment from the Company equal to the gain that would have been realized if the related Share Option had been exercised and the shares resold at fair market value on the date of exercise. 6.04 A Participant may elect to exercise an SAR if his or her intent is not to retain ownership of the shares being exercised. At the time of exercise the Participant is required to notify the Company of his or her intention on the prescribed form. 6.05 The Participant may elect to receive an SAR award in cash, Shares or any combination of the two. -3- 4 7. TERMS AND CONDITIONS OF OPTIONS 7.01 Each Option granted under the Plan shall be evidenced by a written agreement between the Company and the Participant. The agreements shall include the substance of the following provisions: (a) the number of Shares for which the Options (and SAR's [if any] granted in tandem) are granted; (b) the price at which the Options (or SAR's) may be exercised; (c) unless otherwise specified by the Committee, 25% of the Options (or SAR's) granted will vest and be exercisable the day following one year from the date of the grant of the Options, with a further 25% of the Options (or SAR's) vesting and becoming exercisable the day following each subsequent year from the date of the grant; (d) an expiry date determined by the Committee which under no circumstances will be later than ten years after the grant of the Options (and SAR's granted in tandem); (e) Options (or SAR's) may be exercised only upon submitting written notice of exercise, accompanied by payment in full of the Option price (if the Option is being exercised). Payment on exercise of an Option may be made by the Participant in cash or certified cheque, or such other forms of payment as may be permitted by the Committee at any time prior to exercise of the Option; and (f) Options and the rights and privileges conferred by the Plan may not be transferred, assigned, pledged or hypothecated in any manner (whether by operation of law or otherwise) other than by will or by the applicable laws of descent and distribution and shall not be subject to execution, attachment or similar process. Any attempt to transfer, assign, pledge, hypothecate or otherwise dispose of any Option, or of any right or privilege conferred hereby, contrary to the provisions of this Plan, or the sale or levy or any attachment or similar process upon the rights and privileges conferred hereby shall be null and void. Notwithstanding the foregoing, if the Committee permits, a Participant may, during the Participant's lifetime, designate a person who may exercise the Option after the Participant's death by giving written notice of such designation to the Committee. Such designation may be changed from time to time by a Participant by giving written notice to the Committee revoking any earlier designation and making a new designation. 7.02 If a change in the Shares of Teekay Shipping Corporation occurs by reason of subdivision, split, reverse split, stock dividend, or similar recapitalization, then an equitable adjustment shall be made by the Board for outstanding Options. 8. EFFECT OF LIQUIDATION, REORGANIZATION OR ACQUISITION 8.01 Except as provided in section 8.02, upon a merger (other than a merger of the Company in which the holders of Stock immediately prior to the merger have the same proportionate ownership of Stock in the surviving corporation immediately after the merger), consolidation, acquisition of property or stock, separation, reorganization (other than a mere re-incorporation or the creation -4- 5 of a holding company) or liquidation of the Company, as a result of which the shareholders of the Company receive cash, stock or other property in exchange for or in connection with their shares of Stock, any Option shall terminate, but the Participant shall have the right immediately prior to any such merger, consolidation, acquisition of property or stock, separation, reorganization or liquidation to exercise such Participant's option in whole or in part whether or not the vesting requirements set forth in the agreement relating to such Option have been satisfied. 8.02 If all the shareholders of the Company receive capital stock of another corporation ("Exchange Stock") in exchange for their shares of Stock in any transaction involving a merger, consolidation, acquisition of property or stock, separation or reorganization, all Options granted hereunder shall be converted into options to purchase shares of Exchange Stock unless the Company and the corporation issuing the Exchange Stock, in their sole discretion, determine that any or all such options granted hereunder shall not be converted into options to purchase shares of Exchange Stock but instead shall terminate in accordance with the provisions of section 8.01. The amount and price of converted options shall be determined by adjusting the amount and price of the Options granted hereunder in the same proportion as used for determining the number of shares of Exchange Stock the holders receive in such merger, consolidation, acquisition of property or stock, separation or reorganization. Unless accelerated by the Board, the vesting schedule set forth in the Option agreement shall continue to apply to the options granted for the Exchange Stock. 8.03 (a) A Participant shall have the right, upon and after the making of an Offer, to exercise such Participant's Options (or related SAR's) in whole or in part whether or not the vesting requirements set forth in the Plan or in the agreement relating to the Options (or related SAR's) have been satisfied. In the case of Options (or related SAR's) where such vesting requirements have not been satisfied, the exercise shall be solely for the purpose of permitting the Participant to tender the Shares received upon such exercise pursuant to the Offer. (b) "Offer" means an offer: (i) made generally to the holders of the Company's voting securities, to the Participant or to a class of security holders which include the Participant, in one or more jurisdictions to purchase directly or indirectly voting securities of the Company or (ii) which is a tender offer, exchange offer or take-over bid in any applicable jurisdiction (disregarding for that purpose any minimum percentage of shares to be acquired to constitute such offer or bid in such jurisdictions) where the voting securities which are the subject of the Offer, together with the offeror's then presently beneficially owned voting securities, would in the aggregate exceed 25% of the outstanding voting securities of the Company. If two or more persons, corporations or entities make offers jointly or in concert or intend to exercise jointly or in concert any voting rights attaching to the securities to be acquired, then the voting securities beneficially owned by each of them shall be included in the calculation of the percentage of the outstanding voting securities of the Company beneficially owned by each of them. -5- 6 Notwithstanding the foregoing, Offer does not include an Offer made by the Company, any subsidiary or related company with the approval of the Board or any employee benefit plan sponsored by the Company. In this Section 8.03 and in Section 8.04, "beneficial ownership", "beneficially owned", and words of similar import shall have the meaning, with necessary grammatical changes, in Rule 13d-3 of the Securities Exchange Act of 1934, as amended. (c) The Company shall, immediately upon receipt of notice of the Offer, notify each Participant of full particulars of the Offer. (d) In lieu of or in combination with (but not in duplication of) the right set out in Section 8.03(a), a Participant shall also have the right, exercisable during the 30 (thirty) days after the Offer has been consummated by the offeror taking up and paying for Shares pursuant to the Offer, to surrender such Participant's Options (or related SAR's) in whole or in part to the Company (whether or not the Options (or related SAR's) are otherwise vested at the time). The Participant shall in return be entitled to a cash distribution from the Company in an amount equal to the excess of (i) the Take-Over Price of the Shares at the time subject to such surrendered Option (or related SAR) (or surrendered portion of such Option (or related SAR)) over (ii) the aggregate exercise price payable for such Shares. Such cash distribution shall be made within five (5) days following the Option (or related SAR) surrender date. Upon receipt of such cash distribution, the Option (or related SAR) shall be cancelled with respect to the Shares subject to the surrendered Option (or related SAR) (or surrendered portion of such Option (or related SAR)) and the Participant shall cease to have any further right to acquire Shares pursuant thereto. The Option (or related SAR) shall however remain outstanding for the balance of the Shares and the Company shall issue a new agreement for those remaining Shares. "Take-Over Price" shall mean the greater of (i) the Fair Market Value per Share on the date the Option (or related SAR) is surrendered to the Company in connection with the Offer and (ii) the highest reported price per Share paid by the offeror in effecting such Offer. "Fair Market Value" per Share on any relevant date shall mean the closing selling price per Share on the date in question on the stock exchange or quotation system which is the primary market for the Shares. If there is no closing selling price for the Shares on the date in question, then the Fair Market Value shall mean the closing selling price on the last preceding date for which such quotation exists, if any, or as shall be determined by the Board based on the advice of an independent investment banker. (e) If, after consummation of the Offer by the offeror taking up and paying for Shares pursuant to the Offer, there is an Involuntary Termination of a Participant who holds Options (or related SAR's) in respect of which Shares were not tendered or taken up and paid for pursuant to the Offer nor surrendered pursuant to Section 8.03(d), such Participant shall be entitled, notwithstanding Section 9.01, to exercise such Options (or related SAR's) for a period of five years, or -6- 7 such longer period as may be determined by the Board, following Involuntary Termination, provided that such exercise may not be made after the expiration of the right to exercise such Options (or related SAR's) for any reason other than Involuntary Termination. "Involuntary Termination" means the termination of a Participant's service by reason of: (i) Participant's involuntary dismissal or discharge for reasons other than Misconduct; or (ii) Participant's voluntary resignation following (a) a change in Participant's position which materially reduces Participant's level of responsibility (b) a reduction in Participant's level of compensation (including base salary, fringe benefits or participation in any corporate performance based bonus or incentive programs) by more than 15% or (c) a relocation of Participant's place of employment by more than 50 miles, provided and only if such change, reduction or relocation is effected without the Participant's consent. "Misconduct" shall mean the commission of any act of fraud, embezzlement or dishonesty by Participant, or unauthorized use or disclosure by Participant of confidential information or trade secrets of the Company (or any subsidiary or related company), or any intentional misconduct by Participant adversely affecting the business or affairs of the Company (or any subsidiary or related company) in a material manner. The foregoing definition shall not be deemed to be inclusive of all the acts or omissions which the Company (or any subsidiary or related company) may consider as grounds for the dismissal or discharge of Participant or any other person in the service of the Company (or subsidiary or related company). 8.04 (a) A Participant shall have the right, upon and after a Board Change or a Control Purchase, to exercise such Participant's Options (or related SAR's) in whole or in part whether or not the vesting requirements set forth in the Plan or in the agreement relating to the Options (or related SAR's) have been satisfied. (b) "Board Change" means, during any period of two consecutive years or less, persons who at the beginning of such period constituted the entire Board of Directors ceased for any reason to constitute a majority thereof unless the election or appointment, or the nomination for election by the Company's shareholders, of each new Director was approved by a vote of at least two-thirds of the Directors then still in office who were Directors at the beginning of the period. (c) "Control Purchase" means any transaction in which any person, corporation or entity shall become the beneficial owner directly or indirectly of more than 25% of the outstanding voting securities of the Company, and such person, corporation or entity shall vote any of such securities at any meeting of the shareholders of the Company in favour of a resolution passed at such meeting which was not recommended by a majority of the "Continuing Directors" (as defined in the Amended and Restated Articles of Incorporation of the Company). If two or more persons, corporations or entities jointly -7- 8 or in concert beneficially own the securities or intend to exercise jointly or in concert any voting rights attaching to the securities, then the voting securities beneficially owned by each of them shall be included in the calculation of the percentage of the outstanding voting securities of the Company beneficially owned by each of them. The foregoing definition does not apply to beneficial ownership by the Company, any subsidiary or related company with the approval of the Board or any employee benefit plan sponsored by the Company. 8.05 Notwithstanding anything to the contrary in the Plan or in the agreement relating to the Options (or related SAR's), the Board or the Committee, may, in its discretion, at any time, determine that a Participant shall have the right to exercise such Participant's Options (or related SAR's) in whole or in part whether or not the vesting requirements set forth in the Plan or in the agreement relating to the Options (or related SAR's) have been satisfied; and may, in its discretion rescind such determination made by it but without depriving a Participant of the benefits to which he or she would otherwise be entitled as a result of having exercised the Options (or related SAR's) before the rescission of the determination. 9. TERMINATION OF EMPLOYMENT OR CEASING TO BE A DIRECTOR 9.01 If a Participant ceases to be an Officer, Employee, Director or Consultant for any reason other than Disability, Retirement or Death, then all options not yet vested shall immediately expire on the date the Participant ceases to be an Officer, Employee, Director or Consultant and any unexercised Options which are vested pursuant to the provisions of section 7.01(c) must be exercised in accordance with terms of the granting of the Options except that such exercise shall be, unless otherwise provided by the Committee, on or before the earlier of the expiration of 90 days immediately following the date of ceasing to be an Officer, Employee, Director or Consultant or the expiration date of such Options pursuant to section 7.01(d), and thereafter any Options not exercised shall expire. 9.02 If a Participant Retires or becomes Totally Disabled after the granting of the Options, all vesting periods set forth in section 7.01(c) will be waived and the Options will be exercisable at any time up to the earlier of five years from the date of Retirement or Disability or the expiration dates of such Options in accordance with the terms of the granting of the Options, and thereafter any Options not exercised shall expire. 9.03 If a Participant dies during active service following the granting of Options, all vesting periods set forth in section 7.01(c) will be waived and such Options will expire two years from the date of death or the expiration of the Options, whichever is earlier, and thereafter all Options expire. 10. AMENDMENT AND TERMINATION 10.01 The Board may at any time amend, suspend or terminate the Plan in whole or in part provided that no amendment, suspension or termination shall adversely affect the vested rights of any Participant without the consent of such Participant. -8- 9 10.02 Any amendment, suspension or termination of the Plan shall be communicated to all participants within thirty (30) days of such amendment, suspension or termination. 10.03 No amendment, suspension or termination of the Plan may contravene the requirements of any securities commission, stock exchange, or regulatory body of any jurisdiction to which the Plan or Teekay Shipping Corporation is now or may hereafter be subject. 11. GENERAL 11.01 This Plan and any agreement entered into pursuant to section 7 hereof shall be construed and interpreted according to the laws of the Commonwealth of the Bahamas. 11.02 If any provision in this Plan is void, the remaining provisions shall be binding as though the void parts were deleted. 11.03 Participation in the Plan does not confer upon the Officer, Employee, Director or Consultant any right to continued employment (Employee), status as a Director (Director), or appointment as an Officer or Consultant. Participation in the Plan does not create any rights or privileges of a shareholder of the Company with respect to any Shares issuable upon exercise of any Option unless and until such Option has been exercised. 11.04 For the purposes of the Plan, unless the context otherwise requires, words importing the singular include the plural and vice versa, and words importing the male gender include the female gender and vice versa. -9- -----END PRIVACY-ENHANCED MESSAGE-----