Todd Shipyards Corporation Incentive Stock Compensation Plan
GRANT OF INCENTIVE STOCK OPTION
Date of Grant: July 17, 1995
This Grant, dated as of the date of grant first stated above
(the "Date of Grant") is delivered by Todd Shipyards Corporation,
a Delaware corporation ("Todd") to _______________ (the
"Grantee") who is an employee or officer of Todd or one of its
subsidiaries (the Grantee's employer is sometimes referred to
herein as the "Employer").
WHEREAS, the Board of Directors of Todd (the "Board") on
June 2, 1993, adopted, with subsequent shareholder approval, the
Todd Incentive Stock Compensation Plan (the "Plan"); and
WHEREAS, the Plan provides, inter alia, for the granting of
incentive stock options by a committee to be appointed by the
Board (the "Committee") to directors, officers and key employees
of Todd or any subsidiary of Todd (excluding directors and
officers who are not employees) to purchase, or to exercise
certain rights with respect to, shares of the Class A Common
Stock of Todd, par value $.01 per share (the "Stock"), in
accordance with the terms and provisions thereof; and
WHEREAS, the Committee considers the Grantee to be a person
who is eligible for a grant of incentive stock options under the
Plan, and has determined that it would be in the best interest of
Todd to grant the incentive stock options documented herein.
NOW, THEREFORE, the parties hereto, intending to be legally
bound hereby, agree as follows:
1. Grant of Option.
Subject to the terms and conditions hereinafter set forth,
Todd, with the approval and at the direction of the Committee,
hereby grants to the Grantee, as of the Date of Grant, an option
to purchase up to _______ shares of Stock at a price of $_____
per share, the fair market value. Such option is hereinafter
referred to as the "Option" and the shares of stock purchasable
upon exercise of the Option are hereinafter sometimes referred to
as the "Option Shares". The Option is intended by the parties
hereto to be, and shall be treated as an incentive stock option
(as such term is defined under section 422 of the Internal
Revenue Code of 1986).
2. Exercise.
Subject to such further limitations as are provided herein,
the Options shall become exercisable as follows:
_______________________________________________
3. Termination of Option.
(a) The Option and all rights hereunder with respect
thereto, to the extent such rights shall not have been exercised,
shall terminate and become null and void after the expiration of
five (5) years from the Date of Grant (the "Option Term").
(b) Upon the occurrence of the Grantee's ceasing for any
reason to be employed by the Employer (such occurrence being a
"termination of the Grantee's employment"), the Option, to the
extent not previously exercised, shall terminate and become null
and void immediately upon such termination of the Grantee's
employment, except in a case where the termination of the
Grantee's employment is by reason of retirement, disability or
death.
Upon a termination of the Grantee's employment by reason of
retirement, disability or death, the Option may be exercised
during the following periods, but only to the extent that the
Option was outstanding and exercisable on any such date of
retirement, disability or death: (i) the one-year period
following the date of such termination of the Grantee's
employment in the case of disability (within the meaning of
Section 22(e)(3) of the Code), (ii) the six-month period
following the date of issuance of letters testamentary or letters
of administration to the executor or administrator of a deceased
Grantee, in the case of Grantee's death during his employment by
the Employer, but not later than one year after the Grantee's
death, and (iii) the three-month period following the date of
such termination in the case of retirement on or after the
attainment of age 65, or in the case of disability other than as
described in (i) above. In no event, however, shall any such
period extend beyond the Option Term.
(c) In the event of the death of the Grantee, the Option
may be exercised by the Grantee's legal representative(s), but
only to the extent that the Option would otherwise have been
exercisable by the Grantee.
(d) A transfer of the Grantee's employment between Todd and
any subsidiary of Todd, or between any subsidiaries of Todd,
shall not be deemed as a termination of the Grantee's employment.
(e) Notwithstanding any other provisions set forth herein
or in the Plan, if the Grantee shall (i) commit any act of
malfeasance or wrongdoing affecting Todd or any subsidiary of
Todd, (ii) breach any covenant not to compete or employment
contract with Todd or any subsidiary of Todd, or (iii) engage in
conduct that would warrant the Grantee's discharge for cause
(excluding general dissatisfaction with the performance of the
Grantee's duties, but including any act of disloyalty or any
conduct clearly tending to bring discredit upon Todd or any
subsidiary of Todd), any unexercised portion of the Option shall
immediately terminate and be void.
4. Exercise of Options.
(a) The Grantee may exercise the Option with respect to all
or any part of the number of Option Shares then exercisable
hereunder by giving the Secretary of Todd written notice of
intent to exercise. The notice of exercise shall specify the
number of Option shares as to which the Option is to be exercised
and the date of exercise thereof, which date shall be at least
five days after the giving of such notice unless an earlier time
shall have been mutually agreed upon.
(b) Full payment (in U.S. dollars) by the Grantee of the
option price for the Option Shares purchased shall be made on or
before the exercise date specified in the notice of exercise in
cash, or, with the prior written consent of the Committee, in
whole or in part through the surrender of previously acquired
shares of Stock at their fair market value on the exercise date,
provided, however, that the shares to be so surrendered have been
held and fully paid for by Grantee for (i) not less than six
months or (ii), if such shares were acquired pursuant to the
exercise of an incentive stock option as defined in the Code, not
less than one year.
On the exercise date specified in the Grantee's notice or as
soon thereafter as is practicable, Todd shall cause to be
delivered to the Grantee, a certificate or certificates for the
Option Shares then being purchased (out of theretofore unissued
Stock or reacquired Stock, as Todd may elect) upon full payment
for such Option shares. The obligation of Todd to deliver Stock
shall, however, be subject to the condition that if at any time
the Committee shall determine in its discretion that the listing,
registration or qualification of the Option or the Option Shares
upon any securities exchange or under any state or federal law,
or the consent or approval of any governmental regulatory body,
is necessary or desirable as a condition of, or in connection
with, the Option or the issuance or purchase of Stock thereunder,
the Option may not be exercised in whole or in part unless such
listing, registration, qualification, consent or approval shall
have been effected or obtained free of any conditions not
acceptable to the Committee.
(c) If the Grantee fails to pay for any of the Option
Shares specified in such notice or fails to accept delivery
thereof, the Grantee's right to purchase such Option Shares may
be terminated by Todd.
(d) The date specified in the Grantee's notice as the date
of exercise shall be deemed the date of exercise of the Option,
provided that payment in full for the Option Shares to be
purchased upon such exercise shall have been received by such
date. Notwithstanding the foregoing, for purposes of Section
3(b) above, the exercise date shall be the date of Grantee's
notice to Todd so long as payment for the shares to be acquired
upon exercise is made in full within five business days
thereafter.
5. Adjustment of and Changes in Stock of Todd.
In the event of a reorganization, recapitalization, change
of shares, stock split, spin-off, stock dividend,
reclassification, subdivision or combination of shares, merger,
consolidation, rights offering or any other change in the
corporate structure or shares of capital stock of Todd, the
Committee shall make such adjustment as it deems appropriate in
the number and kind of shares of Stock subject to the Option
and/or in the option price; provided, however, that no such
adjustment shall give the Grantee any additional benefits under
the Option.
6. Fair Market Value.
As used herein, the "fair market value" of a share of Stock
shall be the average of the high and low sale prices per share of
Stock on the New York Stock Exchange, as determined by the
Committee, on the applicable date or reference hereunder, or if
there is no sale on such date, then the average of such high and
low sale prices on the last previous day on which a sale is
reported.
7. No Rights of Stockholders.
Neither the Grantee nor any personal representative shall
be, or shall have any of the rights and privileges of, a
stockholder of Todd with respect to any shares of Stock
purchasable or issuable upon the exercise of the Option, in whole
or in part, prior to the date of exercise of the Option.
8. Non-Transferability of Option.
During the Grantee's lifetime, the Option hereunder
shall be exercisable only by the Grantee or any guardian or legal
representative of the Grantee, and the Option shall not be
transferable except in the case of the death of the Grantee, by
will or the laws of descent and distribution, nor shall the
Option be subject to attachment, execution or other similar
process. In no event of (a) any attempt by the Grantee to
alienate, assign, pledge, hypothecate or otherwise dispose of the
Option, except as provided for herein, or (b) the levy of any
attachment, execution or similar process upon the rights or
interest hereby conferred, Todd may terminate the Option by
notice to the Grantee and it shall thereupon become null and
void.
9. Employment Not Affected.
Neither the granting of the Option nor its exercise shall be
construed as granting to the Grantee any right with respect to
continuance of employment with the Employer. Except as may
otherwise be limited by a written agreement between the Employer
and the Grantee, the right of the Employer to terminate at will
the Grantee's employment with it at any time (whether by
dismissal, discharge, retirement or otherwise) is specifically
reserved by Todd, as the Employer or on behalf of the Employer
(whichever the case may be), and acknowledged by Grantee.
10. Amendment of Option.
The Option may be amended by the Board or the Committee at
any time (i) if the Board or the Committee determines, in its
sole discretion, that amendment is necessary or advisable in the
light of any addition to or change in the Internal Revenue Code
of 1986 or in the regulations issued thereunder, or any federal
or state securities law or other law or regulation, which change
occurs after the date of Grant and by its terms applies to the
Option; or (ii) other than in the circumstances described in
clause (i), with the consent of the Grantee.
11. Notice.
Any notice to Todd provided for in this instrument shall be
addressed to it in care of its Secretary at its offices at 1801-
16th Avenue SW, Seattle, WA 98134, and any notice to the Grantee
shall be addressed to the Grantee at the current address shown on
the payroll records of the Employer. Any notice shall be deemed
to be duly given if and when properly addressed and posted by
registered or certified mail, postage prepaid.
12. Incorporation of Plan by Reference.
The Option is granted pursuant to the terms of the Plan, the
terms of which are incorporated herein by reference, and the
Option shall in all respects be interpreted in accordance with
the Plan. The Committee shall interpret and construe the Plan
and this instrument, and its interpretations and determinations
shall be conclusive and binding on the parties hereto and any
other person claiming an interest hereunder, with respect to any
issue arising hereunder or thereunder.
13. Notice of Disposition.
The Grantee agrees to give Todd immediate notice of any
sale, transfer, assignment or disposition of the shares acquired
upon exercise if such event occurs within one year from the date
of exercise.
14. Governing Law.
The validity, construction, interpretation and effect of
this instrument shall exclusively be governed by and determined
in accordance with the laws of the State of Washington, except to
the extent preempted by federal law, which shall to the extent
govern.
IN WITNESS WHEREOF, Todd has caused its duly authorized
officer to execute and attest this Grant of Incentive Stock
Option, and to apply the corporate seal hereto, and the Grantee
has placed his or her signature hereon, effective as of the Date
of Grant.
TODD SHIPYARDS CORPORATION ACCEPTED AND AGREED TO:
____________________________ _____________________________