THE TODD-AO NOTICE OF ANNUAL MEETING OF
CORPORATION STOCKHOLDERS
24 FEBRUARY 1999

To our Stockholders:

The Annual Meeting of Stockholders of the Todd-AO Corporation
("Todd-AO") will be held at 900 North Seward Street, Los Angeles, California,
on the 24th day of February 1999 at 10:30 a.m. for the following purposes:

1. To elect a Board of Directors;

2. To consider and approve Todd-AO's 1998 Stock Incentive Plan;

3. To consider and ratify the selection of Todd-AO's independent
auditors; and

4. To transact such other business as may properly come before the
meeting or any adjournment(s) thereof.

Only stockholders of record at the close of business on 20 January 1999
are entitled to notice of, and to vote at, the meeting.

All stockholders are requested to be present in person or by proxy. For
the convenience of those stockholders who do not expect to attend the meeting
in person and desire to have their shares voted, a form of proxy and an
envelope, for which no postage is required, are enclosed.

Please complete, sign, date and promptly mail the accompanying proxy
card in the return envelope furnished for that purpose, whether or not you
plan to attend the meeting. Your cooperation is appreciated since a majority
of the comon stock must be represented, either in person or by proxy, to
constitute a quorum for the conduct of business.

BY ORDER OF THE BOARD OF DIRECTORS

/s/ Judi M. Sanzo
---------------------------
Judi M. Sanzo, Secretary

21 January 1999

THE TODD-AO CORPORATION

PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
24 FEBRUARY 1999

INTRODUCTION

This Proxy Statement is furnished in connection with the solicitation of
proxies for use by the Board of Directors of The Todd-AO Corporation
("Todd-AO" or "the Company") at the Annual Meeting of Shareholders to be held
on 24 February 1999 at 10:30 a.m. or any adjournment(s) thereof. This Proxy
Statement and the form of proxy were first mailed to stockholders on or about
25 January 1999.

Solicitation of proxies in the accompanying form is made by the Board of
Directors and the cost thereof shall be borne by the Company. In addition to
the use of the mails, management may solicit proxies by telephone, facsimile
and personal interview. Brokers, nominees and other similar record holders
shall be requested to forward soliciting materials to persons who have a
beneficial interest in the Class A Stock registered in the name of such
nominees and shall be reimbursed by the Company for their reasonable expenses
incurred in doing so.

VOTING

Only stockholders of record as of the close of business on 20 January
1999 are entitled to notice of, and to vote at, the meeting. On that date,
there were outstanding 7,724,512 shares of Class A Stock and 1,747,178 shares
of Class B Stock. The holders of shares of Class A stock are entitled to one
vote for each share held. The holders of shares of Class B Stock are
entitled to ten votes for each share held. Stockholders are not entitled to
cumulate their votes in connection with the election of directors.

On the record date for this meeting, the Naify Interests owned of record
and beneficially 3,510,737 shares of Class A Stock (43.02% of the total
outstanding Class A Stock) and 1,703,639 shares of Class B Stock (97.51% of
the total outstanding Class B Stock). The Naify Interests represent over
eighty percent (80%) of the combined voting power of both classes of stock.

One third of the combined number of Class A and Class B Shares
outstanding on the record date shall constitute a quorum for the transaction
of business at the meeting. Other than the proposal relating to the
election of directors, the affirmative vote of at least a majority of the
combined shares present at the meeting, either in person or by proxy, is
required to approve each proposal. If a quorum is present, in person or by
proxy, the election of directors shall be determined by a plurality of the
votes of the shares represented at the meeting. Shares represented at the
meeting which abstain from voting

or withhold votes will be counted in determining the presence of a quorum but
will not effect the election of directors.

If the enclosed form of proxy is properly signed and returned to the
Company, the shares represented thereby will be voted at the meeting in
accordance with the instructions contained therein. If the proxy does not
specify how the shares represented thereby are to be voted, they will be
voted FOR the election of management nominees for directors and FOR Proposals
2 and 3. Any stockholder may revoke his or her proxy at any time before it
has been voted by either (i) delivering to the Company prior to or at the
meeting written notice of revocation or a signed proxy bearing a later date
or (ii) attending the meeting and voting his or her shares in person.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT

The following table sets forth information with respect to the
beneficial ownership of the Company's outstanding Common Stock as of 14
January 1999 by (i) each person known by the Company to be the beneficial
owner of more than 5% of the outstanding shares of Common Stock, (ii) each
director or executive officer of the Company who beneficially owns any
shares, and (iii) all directors and executive officers of the Company as a
group. Except as otherwise indicated, the persons listed below have sole
voting and investment power with respect to all shares of Common Stock owned
by them, except to the extent such power may be shared with a spouse.

NUMBER OF SHARES
BENEFICIALLY
OWNED PERCENT (2) OPTIONS(3)
-------------------------- -------------------- ----------
NAME (1) CLASS A CLASS B CLASS A CLASS B CLASS A
- -------- ----------- ----------- --------- --------- ---------

Arnold C. Childhouse (deceased)... 16,666 0 .22% 0% 16,666
M. David Cottrell................. 4,500 0 .06% 0% 4,000
Silas R. Cross.................... 19,250 0 .25% 0% 14,250
Clay M. Davis..................... 36,500 0 .47% 0% 25,500
J.R. DeLang....................... 72,000 0 .93% 0% 50,000
Rand Gladden...................... 15,134(4) 0 .20% 0% 4,000
David Haas........................ 30,000 0 .39% 0% 15,000
Coburn Haskell.................... 17,000 0 .22% 0% 17,000
Richard C. Hassanein.............. 29,100 0 .38% 0% 28,000
Salah M. Hassanein................ 858,043 0 11.02% 0% 236,000
Herbert L. Hutner................. 35,100 0 .45% 0% 25,000
Christopher D. Jenkins............ 72,000 0 .93% 0% 50,000
Robert I. Knudson................. 82,089 0 1.06% 0% 22,500
David P. Malm..................... 7,527(4) 0 .10% 0% 6,000
Richard O'Hare.................... 18,000 0 .23% 0% 18,000
A. Frank Pierce................... 15,000 0 .19% 0% 15,000
Sydney Pollack.................... 5,000 0 .06% 0% 5,000
Kathleen Reck..................... 6,000 0 .08% 0% 6,000
Judi M. Sanzo..................... 1,000 0 .01% 0% 4,000
William R. Strickley.............. 8,500 0 .11% 0% 8,000
Zelbie Trogden.................... 20,000 0 .26% 0% 20,000
Marshall Naify (8)................ 1,272,967(5) 678,839 16.04% 38.85% 210,150
Michael S. Naify (8).............. 181,085(7) 0 2.34% 0% 15,000
Robert A. Naify (8)............... 1,276,014(6) 906,290 16.08% 51.87% 210,150

NUMBER OF SHARES
BENEFICIALLY
OWNED PERCENT (2) OPTIONS (3)
-------------------------- -------------------- -----------
NAME (1) CLASS A CLASS B CLASS A CLASS B CLASS A
- -------- ----------- ----------- --------- --------- ----------

Other Naify Interests (8)......... 776,936 118,510 8.56% 6.78% 0
All directors and current
executive officers as a group
(22 persons)...................... 4,093,475 1,585,129 46.83% 90.75% 1,017,216

Notes to Security Ownership Table:

(1) The address of each of the beneficial owners identified is 900 N. Seward
Street, Hollywood, California 90038.

(2) Based on 7,724,512 shares of Class A Common Stock and 1,747,178 shares of
Class B Common Stock outstanding at 14 January 1999. Pursuant to the rules
of the Commission, certain shares of Common Stock which a person has the
right to acquire within 60 days of the date hereof pursuant to the exercise
of stock options are deemed to be outstanding for the purpose of computing
the percentage ownership of such person but are not deemed outstanding for
the purpose of computing the percentage ownership of any other person.

(3) Class A Common Stock options exercisable within 60 days.

(4) Includes 11,134 and 1,527 shares beneficially owned by Messrs. Gladden
and Malm respectively, which are issuable upon conversion of certain
convertible subordinated notes acquired in connection with the Company's
acquisition of Hollywood Digital.

(5) Includes 30,166 shares of Class A Common Stock held by a trust for which
Mr. Naify is both trustee and beneficiary. Excludes 109,652 shares of Class A
Common Stock held by an independent trustee for the benefit of three of Mr.
Naify's children. Mr. Naify disclaims beneficial ownership of the shares held
by the independent trustee.

(6) Includes 55,000 shares of Class A Common Stock held by a trust for which
Mr. Naify is both trustee and beneficiary. Excludes 457,913 shares of Class
A Common Stock held of record or beneficially by Mr. Naify's adult children
and grandchildren as to which he disclaims beneficial ownership.

(7) Excludes 4,816 shares of Class A Common Stock held by an independent
trustee for the benefit of his three children.

(8) The Naify Interests (consisting of Marshall Naify, Robert A. Naify,
various members of their families and trusts for the benefit of such members)
may be deemed to constitute a "group" for purposes of Sections 13(d) and
13(g) of the Securities Exchange Act of 1934. The total Class A and B Stock
beneficially owned by The Naify Interests as of 14 January 1999 is 3,510,737
(43.02%) and 1,703,639 (97.51%), respectively.

1. ELECTION OF DIRECTORS

At the meeting, a Board of fourteen directors shall be elected to hold
office until the next annual meeting of stockholders or until their
respective successors are duly elected and qualified. Each of the nominees
was elected at the Annual Meeting of Stockholders on 24 February 1998, except
for Mr. Sydney Pollack who was elected at a Board of Directors' meeting held
on 16 April 1998 to fill the vacancy resulting from the death of Mr. Arnold
Childhouse.

Election of each nominee requires the affirmative votes of a majority
of the total combined votes of Class A and Class B shares.

EACH PROXY RECEIVED WILL BE VOTED FOR THE ELECTION OF THE NOMINEES NAMED
BELOW UNLESS OTHERWISE SPECIFIED IN THE PROXY.

Director Nominees

SALAH M. HASSANEIN, age 77, was elected as a Director in 1962. In July 1996,
Mr. Hassanein was appointed the President and Chief Executive Officer of the
Company. From 1994 to 1996, he served as President and Chief Operating
Officer. Prior to 1994, Mr. Hassanein was the Company's Senior Executive
Vice President. Mr. Hassanein also served as President of Warner Bros.
International Theatres Co. from 1988 to June 30, 1994. Mr. Hassanein
previously served as Director and Executive Vice President of United Artists
Communications, Inc. ("UACI"), now known as United Artists Theatre Circuits,
Inc., a motion picture theatre company, and President of United Artists
Eastern Theatres, Inc. Mr. Hassanein is a principal of SMH Entertainment,
Inc. and a director of Software Technologies Corporation.

J.R. DELANG, age 42, was elected as a Director in 1993. Mr. DeLang has been
the Senior Vice President of the Company and the Executive Vice President of
the Company's subsidiary, Todd-AO Studios, since 1993. Mr. DeLang previously
served as Vice President of Sales and Marketing of Todd-AO Studios from 1988
to 1993 and Director of Sales and Marketing from 1987 to 1988.

DAVID HAAS, age 57, was elected a Director in October 1996. Mr. Haas has
been a financial consultant since 1995 and has assisted clients in financial
planning, financing and the negotiation and structuring of acquisitions.
From 1990 to 1994, Mr. Haas served as Senior Vice President and Controller of
Time Warner Inc. He is currently a director of Information Holdings, Inc.
and GRB Entertainment, Inc.

RICHARD C. HASSANEIN, age 47, was elected as a Director in 1993. Mr.
Hassanein has served as Vice President of the Company since 1993 and was
appointed President of the Company's subsidiary, Todd-AO Studios West, in
1997. Mr. Hassanein was Executive Vice President of Todd-AO Studios West
from 1995 to 1997. From 1991 to 1995, Mr.

Hassanein served as Executive Vice President of the Company's subsidiary,
Todd-AO Studios East. Previously, Mr. Hassanein was President of United Film
Distribution Co. He is the son of Salah M. Hassanein.

HERBERT L. HUTNER, age 89, was elected as a Director in 1987. Mr. Hutner is
an investor and a financial consultant.

CHRISTOPHER D. JENKINS, age 44, was elected as a Director in 1987. Mr.
Jenkins has been a Senior Vice President of the Company since 1987 and was
appointed President of Todd-AO Studios in 1990, having previously served as
Vice President from 1987 to 1990. Mr. Jenkins is currently a lead sound
mixer for the Company and has won two Academy Awards for sound.

ROBERT I. KNUDSON, age 73, was elected as a Director in 1983 and currently
serves as a consultant to the Company. Mr. Knudson was previously an
Executive Vice President of the Company and served as President of Todd-AO
Studios from 1981 until 1990. During his tenure as a lead sound mixer for the
Company, Mr. Knudson won three Academy Awards for sound.

DAVID P. MALM, age 34, was elected as a Director in 1997. Mr. Malm is
currently a partner of Halpern, Denny & Company, a Boston-based private
equity investment firm. Mr. Malm is a director of Tealuxe, Inc., E-Z
Serve/Swifty Mart Convenience Stores, Ecce Panis, Inc., H.C. Shaw Company,
and Chairman of Brown Broadcasting Service, Inc. Prior to forming Halpern,
Denny & Company in 1991, Mr. Malm was affiliated with Bain Capital, a private
equity investment firm, and Bain & Company, a corporate strategy-consulting
firm. He also previously worked in the Investment Banking Group at Morgan
Stanley & Company.

MARSHALL NAIFY, age 78, was elected a Director in 1964 and currently serves
as Co-Chairman of the Board. Mr. Naify served as Chairman of the Board
during the period of 1990 until July 1996. From 1995 until July 1996, Mr.
Naify also served as Co-Chief Executive Officer. Mr. Naify previously served
as Chairman of the Board and Co-Chief Executive Officer of UACI. He is an
investor and the brother of Robert A. Naify.

MICHAEL S. NAIFY, age 36, was elected as a Director in 1993. Mr. Naify was
previously Vice President of the Company, serving in that capacity from 1993
to 1994. He is the son of Marshall Naify.

ROBERT A. NAIFY, age 76, was elected a Director in 1959 and currently serves
as Co-Chairman of the Board. Mr. Naify served as Co-Chairman and Co-Chief
Executive Officer from 1995 until July 1996. Mr. Naify previously served as
President and Chief Executive Officer during the period of 1990 until 1994.
Mr. Naify also served as President and Co-Chief Executive Officer of UACI.
Mr. Naify is a director of Tele-Communications, Inc. He is an investor and
the brother of Marshall Naify.

A. FRANK PIERCE, age 68, was elected as a Director in October 1996. Mr.
Pierce currently acts as an international consultant providing services
related to motion picture distribution. From January 1993 to June 1996, Mr.
Pierce served as Senior Vice President of Europe Theatrical Distribution for
Time Warner Entertainment. From 1972 to 1993, he served as Vice President of
Europe Theatrical Distribution for Warner Bros. International. From 1955 to
1972, Mr. Pierce served in numerous international positions within the motion
picture industry, including Managing Director of Italy for Paramount Pictures
International and management positions in four Latin American countries for
Columbia Pictures International.

SYDNEY POLLACK, age 64, the renowned Academy Award-winning director, was
elected as a Director in 1998. Mr. Pollack's 17 films have received 46
Academy Award nominations, including four for Best Picture. His film Out of
Africa won seven Oscars including Best Picture and Best Director. In
addition to winning the New York Film Critics' Award for his 1982 film
Tootsie, Mr. Pollack won the Golden Globe for Best Director twice, the
National Society of Film Critics Award, and the NATO Director of the Year
Award. Mr. Pollack formed Mirage Enterprises in 1985, which produces motion
picture feature films. He is a founding member of The Sundance Institute,
The Chairman Emeritus of The American Cinematheque, and serves on the Board
of Directors of the Film Preservation Board and The Motion Picture and
Television Fund Foundation.

ZELBIE TROGDEN, age 62, was elected as a Director in 1994. Mr. Trogden has
been a financial consultant and was a director of Citadel Holding Corporation
and Fidelity Federal Bank from 1993 to 1994. Prior thereto, he held various
executive positions with Bank of America and Security Pacific National Bank
from 1960 to 1993.

MEETINGS

During the fiscal year ended 31 August 1998, the Board of Directors
held four meetings. The only director who failed to attend at least 75% of
the meetings of the Board of Directors was Marshall S. Naify. Sydney Pollack
failed to attend the only Board meeting called subsequent to his appointment
on 16 April 1998.

COMMITTEES

Todd-AO has an Executive Committee consisting of Messrs. Salah
Hassanein, Marshall Naify and Robert A. Naify. Mr. Marshall Naify serves as
the Chairman. The functions of the Executive Committee include acting on
matters which, by reason of time limitations, cannot be acted upon by the
Board of Directors and studying matters which are anticipated to be
considered by the Board in the future. During the fiscal year ended 31
August 1998, the Executive Committee held no formal meeting but met
informally on a number of occasions. Each of the Committee members attended
all informal meetings of the Executive Committee.

Todd-AO has an Audit Committee consisting of Messrs. David Haas, David
P. Malm, Herbert L. Hutner and Zelbie Trogden. Mr. Haas serves as the
Chairman. The Audit Committee makes recommendations to the Board concerning
the engagement of independent auditors, reviews the audit engagement, its
results and the Company's internal accounting controls, and directs
investigations into matters within the scope of its functions. The Audit
Committee met three times during the fiscal year ended 31 August 1998. Each
of the Committee members attended at least 75% of the meetings of the Audit
Committee.

Todd-AO also has a Compensation Committee consisting of Messrs. Arnold
C. Childhouse, Herbert L. Hutner and A. Frank Pierce. Mr. Hutner serves as
the Chairman. The Compensation Committee reviews the salaries, bonuses and
stock options provided to certain executive officers of the Company, makes
recommendations to the Board of Directors concerning executive compensation
and oversees the administration of the Compensation's stock option program.
The Compensation Committee met four times during the fiscal year ended 31
August 1998. Each of the Committee members attended at least 75% of the
meetings of the Compensation Committee, with the exception of Mr. Childhouse.
Upon the vacancy resulting from Mr. Childhouse's death, Mr. Trodgen was
elected by the Board of Directors to serve on the Compensation Committee.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

None of the members of the Compensation Committee is an employee of the
Company.

OTHER OFFICERS

M. David Cottrell, age 42, was appointed Vice President of
Administration for the Company in 1998. Mr. Cottrell was formerly Executive
Vice President and Chief Financial Officer for Todd-AO/Hollywood Digital from
1993 to 1998. Previously, he was Vice President of Finance for The Post
Group Inc.

Silas R. Cross, age 59, became a Vice President of the Company in 1988.
In 1995, he was appointed Treasurer and Assistant Secretary. Mr. Cross
previously served as Assistant Treasurer of UACI. Mr. Cross has served the
Company in various capacities since 1965.

Clay M. Davis, age 52, was appointed a Vice President of the Company in
1996. Mr. Davis previously served as Vice President of Engineering of Todd-AO
Studios since 1989.

Rand Gladden, age 47, was appointed Vice President of the Company and
President of Todd-AO Hollywood Digital in 1997. Mr. Gladden previously
served as President and CEO of Hollywood Digital Limited Partnership from
1994 to 1997. Previously, he was a Vice President of The Post Group.

Coburn T. Haskell, age 47, has served as Vice President and Controller
of the Company since 1995. Prior thereto, he served as Controller of Todd-AO
Studios from 1994 to 1995. Mr. Haskell joined the Company in 1990 as
Assistant Controller of Todd-AO Studios, having received his CPA
certification while employed by KPMG Peat Marwick from 1988 to 1990.
Previously, Mr. Haskell was Controller of American Fiber Optics Corporation.

Richard O'Hare, age 46, was appointed Vice President of the Company in
1997. He has served as President of Todd-AO Video Services since 1994 and
previously served as the President of Film Video Masters, its predecessor,
from 1988 until its acquisition by the Company in 1994. Previously, Mr.
O'Hare was Vice President of Twentieth Century Fox Film Corporation.

Kathleen N. Reck, age 57, was appointed Vice President Human Resources
of the Company in 1997. She has served as Director of Human Resources since
1986. Previously, Ms. Reck was an employee of Glen Glenn Sound.

Judi M. Sanzo, age 41, was appointed Vice President, General Counsel,
and Secretary of the Company in January, 1998. Prior to joining the Company,
Ms. Sanzo was in private practice where she specialized in litigation,
business counseling and administrative proceedings. She is a member of the
California and Massachusetts bars.

William "Randy" Strickley, age 49, was appointed Senior Vice President
and Chief Financial Officer of the Company in 1997. Mr. Strickley was Bank
of America's Entertainment and Media Group managing director with 25 years
experience in corporate and international banking.

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

Directors who are not employees of the Company, seven in total, each
receive $10,000 cash compensation annually for their services as directors.
For fiscal year ended 31 August 1998, Mr. Childhouse's estate received the
sum of $7,500 and Mr. Pollack received $5,000 for his interim service. The
remaining directors receive no compensation for their services as directors.

The following table shows, for fiscal years ended 31 August 1998, 1997
and 1996, all forms of compensation for the chief Executive Officer and each
of the most highly compensated executive officers of Todd-AO, whose total
annual salary and bonus exceeded $100,000 for the year ended 31 August 1998.

LONG-TERM
ANNUAL COMPENSATION COMPENSATION
----------------------- ------------
NO. OF SECURITIES ALL OTHER
FISCAL UNDERLYING COMPEN-
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS SATION($)
- --------------------------- ------ --------- --------- ------------ ------------

Salah M. Hassanein 1998 250,000 (2) 241,813 (3) -- --
President and Chief Executive Officer 1997 123,250 (2) 231,875 (3) 100,000 --
The Todd-AO Corporation 1996 100,000 (2) -- -- --

J.R. DeLang 1998 469,297 -- -- 15,000 (4)
Senior Vice-President 1997 403,490 -- 10,000 15,000 (4)
The Todd-AO Corporation 1996 335,442 -- -- 15,000 (4)

Christopher D. Jenkins 1998 962,027 (5) -- -- 6,068 (5)
President 1997 709,306 (5) -- 10,000 4,687 (5)
Todd-AO Studios 1996 575,631 (5) -- -- 3,400 (5)

Clay M. Davis 1998 253,815 -- -- 6,068 (6)
Vice President 1997 246,534 -- 15,000 4,687 (6)
The Todd-AO Corporation 1996 176,546 -- -- 3,460 (6)

Richard O'Hare 1998 204,677 -- -- 15,000 (7)
President 1997 210,922 -- 10,000 15,000 (7)
Todd-AO Video Services 1996 173,695 -- -- 17,228 (7)

Rand Gladden 1998 279,167 -- -- --
President 1997 52,949 -- 10,000 --
Todd-AO Hollywood Digital 1996 -- -- -- --

Notes to Summary Compensation Table:

(1) The column for "Other Annual Compensation" has been omitted because there
is no compensation required to be reported in such column. The aggregate
amount of perquisites and other personal benefits provided to each officer
listed above is less than 10% of the total annual salary of such officer.

(2) Amounts shown as salary include professional fees of $125,000 for 1998,
$87,500 for 1997 and $80,000 for 1996.

(3) Class A Common Stock bonus of 50,000 shares valued at grant date at
$241,813 for 1998 and 50,000 shares valued at grant date at $231,875 for 1997.

(4) 1998 and 1997 salary amounts include non-qualified stock option exercise
compensation of $49,198 and $82,913, respectively. Amounts shown as "All
Other Compensation" represent contributions made by the Company to its 401(k)
Plan for 1998, 1997 and 1996 on Mr. DeLang's behalf.

(5) 1998 and 1997 salary amounts include non-qualified stock option exercise
compensation of $55,385 and $73,975, respectively. Amounts shown as salary
also include compensation of $806,642, $535,331, and $475,631 for 1998, 1997
and 1996, respectively, attributable to services as a sound mixer. Amounts
shown as "All Other Compensation" represent contributions made by the Company
under a collective

bargaining agreement to the Motion Picture Industry Pension Plan on Mr.
Jenkins' behalf.

(6) 1998 and 1997 salary amounts include non-qualified stock option exercise
compensation of $27,693 and $36,988, respectively. Amounts shown as "All
Other Compensation" represent contributions made by the Company under a
collective bargaining agreement to the Motion Picture Industry Pension Plan
on Mr. Davis' behalf.

(7) Amounts shown as "All Other Compensation" represent contributions made by
the Company to its 401(k) Plan on Mr. O'Hare's behalf.

OPTION/SAR GRANTS TABLE

The following table shows all individual grants of stock options during
the fiscal year ended 31 August 1998 to each of the executive officers named
in the Summary Compensation Table.

OPTION GRANTS IN LAST FISCAL YEAR
-----------------------------------
POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL RATES OF STOCK
PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM
- ----------------------------------------------------------------------------------- -----------------------------
% OF TOTAL
OPTIONS
GRANTED TO
EMPLOYEE EXERCISE
OPTIONS IN FISCAL OR BASE EXPIRATION
NAME GRANTED (#) YEAR PRICE ($/SB) DATE 5% ($) 10% ($)
- ----------------------- ----------- ----------- ------------ ----------- -------------- ------------

Richard O'Hare 5,000 5.21% $9.83 8/31/2004 18,994 43,860

OPTION EXERCISES AND VALUE TABLE

The following table shows each exercise of stock options during the
fiscal year ended 31 August 1998 by each of the executive officers named in
the Summary Compensation Table, together with respective aggregate values of
unexercised options as at 31 August 1998.

AGGREGATED OPTION EXERCISES IN LAST FISCAL
YEAR
AND FY-END OPTION VALUES
--------------------------------------------
NUMBER OF VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
AT 31 AUGUST 1998 AT 31 AUGUST 1998
---------------------- ----------------------------
SHARES
ACQUIRED VALUE
ON EXERCISE REALIZED EXERCISABLE UNEXERCIS- EXERCISABLE UNEXERCIS-
NAME (#) ($) ABLE ABLE
- ------------------ ----------- --------- ------------ ----------- ------------ -------------

Salah M. Hassanein -- -- 194,000 82,000 $197,054 $45,122
J.R. DeLang 11,000 $49,198 43,600 10,400 $15,871 $2,587
Christopher D. Jenkins 11,000 $55,385 45,800 8,200 $13,457 $1,294

Clay M. Davis 5,500 $27,693 20,300 11,200 $6,555 $1,294
Richard O'Hare -- -- 15,000 11,000 $2,761 $0
Rand Gladden -- -- 2,000 8,000 $0 $0

EMPLOYMENT AGREEMENTS

The services of Salah M. Hassanein are provided to the Company by his
wholly-owned corporation, SMH Entertainment, Inc., at an annual rate of
$250,000. Mr. Hassanein is not employed pursuant to a written agreement, but
serves at the direction of and upon terms determined by the Board of
Directors.

The Company has employment agreements with Messrs. Jenkins, Davis and
Gladden. Under Mr. Jenkins' agreement (expiring December 31, 2000),
compensation for sound mixing services is paid on an hourly basis at four
times the minimum supervisor union rate. Mr. Jenkins receives an additional
$100,000 per year for management and administrative services. Mr. Davis'
agreement (expiring February 28, 1999) provides for a salary of $200,000,
$215,000 and $230,000 for the twelve months ending February 28, 1997, 1998
and 1999, respectively. Mr. Gladden's agreement (expiring January 1, 2001)
provides for a salary of $275,000, $300,000, and $325,000 for the twelve
months ending June 30, 1998, 1999, and 2000, respectively plus $175,000 for
the six months ending January 1, 2001. The Company is currently negotiating
agreements for Messrs. DeLang and O'Hare.

None of the foregoing agreements include any termination or
change-in-control payments. The Company's stock option plans provide that the
unvested portion of the awards will become vested and exercisable in
connection with any change-in-control.

REPORT OF THE COMPENSATION COMMITTEE

The Compensation Committee of the Board of Directors of Todd-AO (the
"Committee") determined and administered the compensation of the Company's
executive officers during fiscal year ended 31 August 1998. The Committee
consisted of Arnold C. Childhouse, Herbert L. Hutner (Chairman) and A. Frank
Pierce. Mr. Childhouse passed away on 12 March 1998, and his position on
this Committee was not filled until 12 December 1998 by Zelbie Trodgen.

COMPENSATION PHILOSOPHY

The Committee endeavored to ensure that the compensation programs for
executive officers of Todd-AO during fiscal year ended 31 August 1998 were
effective in attracting and retaining key executives responsible for the
success of the Company and in promoting its long-term interests and those of
its stockholders. The Committee sought to align total compensation for
senior management with corporate performance and the interests of the
stockholders. The Committee placed emphasis on variable, performance-based
components, such as stock option awards and bonuses, the value of which could
increase or decrease to reflect changes in corporate and individual
performances. These short- and long-term incentive compensation programs
were intended to reinforce management's commitment to enhancement of
profitability and stockholder value.

Base salaries for the executive officers were established at levels
considered appropriate in light of the duties and scope of responsibilities
of each officer's position and the salaries paid to comparable officers by
companies which are competitors of Todd-AO. The Committee focused primarily
on total annual compensation, including stock incentive awards, rather than
base salary alone, as the appropriate measure of executive officer
performance and contribution.

COMMITTEE ACTION

During fiscal year ended 31 August 1998, the Committee approved an
employment agreement for Judi M. Sanzo, which provided for annual
compensation of $125,000, $137,500 and $150,000 for the twelve month periods
ending 31 December 1998, 1999 and 2,000. She received a stock option for
5,000 Class A Shares. The factors considered by the Committee included Ms.
Sanzo's prior litigation experience, her years in practice, and areas of
expertise.

In February 1998, the Committee granted additional stock options to key
employees including executive officers. These options were designed to
retain and motivate these employees. The options become exercisable over a
five-year period at the rate of twenty percent (20%) per year. Any
unexercisable options are forfeited when employment terminates for any
reason. In determining the number of options to be granted to each employee,
the Committee considered several factors, including the number of options
previously awarded and held by the employee, the incentive being provided by
previous options granted to the employee, the employee's past performance and
performance expectations, and the overall parity with long-term incentives
being provided for similar positions by companies with which Todd-AO believes
its competes for employees.

In August 1998, the Committee considered and recommended that the Board
of Directors approve Todd-AO's 1998 Stock Incentive Plan, which is the
subject of Proposal 2 detailed at pp. 15-19. The Committee requested that a
stock incentive plan be created which would be versatile in nature and
self-replenishing in number of shares available for grant, would provide the
Board of Directors greater latitude in the selection

of particular stock incentives, including performance-based options, the
terms thereof and the vesting requirements.

COMPENSATION COMMITTEE
Arnold C. Childhouse
Herbert L. Hutner
A. Frank Pierce

SECTION 16(a) REPORTING

Under SEC rules, the Company's directors, executive officers and 10%
shareholders are required to file reports of ownership with the SEC and to
provide the Company with copies of such filings. Based solely upon the
review of the copies received and representations of such reporting persons,
the Company believes that, during fiscal year ended 31 August 1998, such SEC
filing requirements were satisfied.

STOCK PERFORMANCE GRAPH

The following graph compares the yearly percentage change in the
cumulative total shareholder return on the Company's Class A Common Stock
during the five years ended 31 August 1998, with the cumulative total return
on the NASDAQ Stock Market Index (U.S. Companies) and a selected peer group
index consisting of NASDAQ stocks with a Standard Industrial Classification
similar to the Company's.

LEGEND

SYMBOL TOTAL RETURNS INDEX FOR: 08/31/93 08/31/94 08/31/95 08/30/96 08/29/97 08/31/98
- ------------------------------- -------- -------- -------- -------- -------- --------

________ - THE TODD-AO CORPORATION 100.0 174.8 282.6 378.9 275.1 168.0
- -------- * Nasdaq Stock Market (US Companies) 100.0 104.1 140.2 158.1 220.5 209.7
- -- -- -- - NASDAQ Stocks (SIC 7810-7819 US + Foreign) 100.0 72.4 81.3 37.6 44.2 54.0
Motion Picture Production and Allied Services

2. 1998 STOCK INCENTIVE PLAN

Todd-AO's 1998 Stock Incentive Plan (the "1998 Plan") was adopted by the
Board of Directors on 21 August 1998 subject to approval by the stockholders.
The purposes of this 1998 Plan are to attract and retain the best available
personnel for positions of substantial responsibility, to provide additional
incentives to the Company's employees, directors and consultants, and to
promote the success of the business of Todd-AO. The Plan provides for the
grant of shares, options to purchase shares, stock appreciation rights
("SAR") and any other security with the value derived from the value of the
Company's Class A Common Stock. The following discussion constitutes a brief
description of the material features of the 1998 Plan. A copy of the 1998
Plan is appended to this proxy statement as Exhibit A.

ELIGIBILITY AND BENEFITS

The 1998 Plan provides for the grant to Company employees, directors and
consultants of stock options which entitle the optionee to purchase shares
from the Company at a fixed price over the term of the option. Options may
be granted either as incentive stock options (as that term is defined by the
Internal Revenue Code), non-qualified stock options or a combination thereof.
This 1998 Plan also provides for the issuance of restricted shares as bonus,
dividend and performance-based compensation (as that term is defined under
the Internal Revenue Code).

All of the Company's employees, directors and consultants (approximately
800 people) are eligible to receive awards under the 1998 Plan, but the Plan
is administered by a committee which determines the individuals to whom
awards are granted and the terms of the awards.

LIMITATION ON NUMBER OF SHARES AVAILABLE UNDER THE 1998 PLAN

The maximum number of shares that may be issued under this 1998 Plan
shall be twenty percent (20%) of all fully-diluted, issued and outstanding
shares of Class A Common Stock, less any outstanding stock options granted
but not exercised. In calculating the maximum number of shares available,
the 1998 Plan takes into consideration all shares which are the subject of
existing plans.

Todd-AO has the following option plans: 1986 Stock Option Plan, 1994
Stock Option Plan, 1995 Stock Option Plan and 1997 Stock Option Plan. The
Company does not presently intend to grant further options under the 1986
Plan. There are presently no options available for grant under the 1994,
1995 and 1997 Plans. No action with respect to these four existing plans is
scheduled to be taken at the meeting.

No stock awards may be granted under the 1998 Plan until the number of
options granted under the existing plans is less than twenty percent (20%) of
the total outstanding shares of Class A Common Stock and the total number of
shares that may be the subject of awards granted under the 1998 Plan plus the
number of stock options granted under

the existing plans may not, in the aggregate, exceed twenty percent (20%) of
the total outstanding shares of Class A Common Stock. As of its date of
adoption and applying the formula set out above, the 1998 Plan established
that the maximum number of shares available for grant as 536,783 shares.

Unlike Todd-AO's existing plans, the 1998 Plan is self-replenishing in
that the number of shares available for grant is adjusted annually to allow
for an increase which is proportionate to the number of outstanding shares of
Class A Common Stock. Beginning 1 September 1999 and on the first business
day of each fiscal year thereafter, the maximum number of shares available
under the 1998 Plan shall be increased by a number equal to ten percent (10%)
of the number of shares outstanding as of the end of the preceding fiscal
year.

LIMITATION ON NUMBER OF SHARES THAT MAY BE GRANTED TO ANY INDIVIDUAL

The maximum number of shares which may be granted as options or SARs to
any individual optionee or grantee in any fiscal year is capped at 25,000
shares.

ADMINISTRATION

With respect to grant of awards to directors or employees who are also
officers or directors of the Company, the Plan shall be administered by a
committee designated by the Board, which Committee shall consist of at least
two directors who are "Non-Employee Directors" within the meaning of Exchange
Act Rule 16b-3. Initially, the 1998 Plan shall be administered by the
Company's Compensation Committee, presently consisting of Messrs. Hutner,
Pierce and Trogden. The Committee shall be entitled to take any action
which it deems appropriate to comply with Exchange Act Rule 16b-3 and related
provisions, including without limitation the submission of any transaction to
the entire Board of Directors.

With respect to grant of awards to consultants or employees who are
neither directors nor officers of the Company, the Plan shall be administered
by a committee designated by the Board of Directors, which committee shall
be named the "Administration Committee." This Administration Committee, as
so designated by the Board, consists of Messrs. Salah Hassanein, Jenkins and
Knudson and shall be delegated all the powers and authorities delineated in
the 1998 Plan, subject to the following restrictions: (1) Decisions of the
Administration Committee must be unanimous or referred to the entire Board;
(2) The Administration Committee may only grant stock options and may not
grant any option to purchase more than 5,000 shares to any individual employee
in any one-year period; (3) All stock options granted by the Administration
Committee must vest over a five-year period at the equal rate of twenty
percent (20%) per year; and (4) All stock options granted by the
Administration Committee are to be reported to the Compensation Committee
and, upon recommendation of the Compensation Committee, to the full Board of
Directors at the next meeting following the date of grant.

The authority to issue any award of a restricted stock right, SAR, an
option to purchase more than 5,000 shares, an option which contains an
accelerated vesting period, or any other award intended as performance-based
compensation is specifically reserved to the Compensation Committee.

DESIGNATION AND CONDITIONS OF AWARD

Each award shall be designated in the Award Agreement. In the case of a
stock option, the option shall be designated as either an incentive stock
option or a non-qualified stock option. The appropriate Committee shall
determine the provisions, terms and conditions of each award, including but
not limited to, the vesting schedule, repurchase provisions, rights of first
refusal, forfeiture provisions, form of payment upon settlement of the award,
payment contingencies and satisfaction of any performance criteria. The
performance criteria established by the Compensation Committee may be based
on any one of, or a combination of the following factors: increase in share
price, earnings per share, total stockholder return, return on equity, return
on assets, return on investment, net operating income, cash flow, revenue,
economic value added, personal management objectives or other performance
measure approved by the Committee. Partial achievement of the specified
criteria may result in a payment or vesting corresponding to the degree of
achievement, if so specified in the Award Agreement.

TERM OF AWARD

The term of each award shall be the term stated in the Award Agreement.
The term of an incentive stock options shall be no more than ten (10) years
from the date of grant or, where the grantee owns stock representing more
than ten percent (10%) of the voting power of all classes of the Company's
stock, five (5) years. The date of grant of an award shall for all purposes
be the date on which the appropriate Committee makes the determination to
grant such award.

The 1998 Stock Incentive Plan shall become effective upon approval of
the stockholders of the Company and shall continue in effect for a term of
ten (10) years, unless sooner terminated. The Board of Directors may at any
time amend, suspend or terminate the 1998 Plan. The Company shall obtain
stockholder approval of any Plan amendment, as may be required by law.

To date, there have been no stock awards granted under the 1998 Plan.
Therefore, no action with respect to ratification of stock awards granted
under the 1998 Plan is scheduled to be taken at the meeting.

FEDERAL INCOME TAX CONSEQUENCES

The tax consequences of incentive stock options, non-qualified options
and restricted stock awards are quite complex. Therefore, the description of
tax consequences set forth below is necessarily general in nature and does
not purport to be complete. Moreover, statutory provisions are subject to
change, as are their interpretations, and their application may vary in
individual circumstances. Finally, the tax consequences under

applicable state and local income tax laws may not be the same as under
federal income tax laws.

Incentive stock options granted under the 1998 Plan are intended to
qualify as "Incentive Stock Options" within the meaning of Section 422 of the
Code. If an optionee makes no disposition of the shares acquired pursuant to
exercise of an incentive stock option within one (1) year after the transfer
of shares to such optionee and within two (2) years from grant of the option,
the optionee shall realize no taxable income as a result of the grant or
exercise of such option; any gain or loss that is subsequently realized may
be treated as long-term capital gain or loss, as the case may be. (The
optionee shall recognize, however, an item of tax preference in the amount of
the difference between the fair market value of the shares received upon
exercise and the exercise price for alternative minimum tax purposes.) Under
these circumstances, the Company shall not be entitled to a deduction for
federal income tax purposes with respect to the issuance of such incentive
stock options, the transfer of shares upon their exercise or the ultimate
disposition of such shares.

If shares subject to incentive stock options are disposed of prior to
the expiration of the above time periods, the optionee shall recognize
ordinary income in the year in which the disqualifying disposition occurs,
the amount of which shall generally be the lesser of (i) the excess of the
market value of the shares on the date of exercise over the option price and
(ii) the gain recognized on such disposition. Such amount shall ordinarily
be deductible by the Company for federal income tax purposes in the same
year, provided that the Company satisfies certain federal income tax
withholding requirements. In addition, the excess, if any, of the amount
realized on a disqualifying disposition over the market value of the shares
on the date of exercise shall be treated as capital gain.

Non-qualified options may also be granted under the 1998 Plan. An
optionee who exercises a non-qualified option shall recognize as taxable
ordinary income, at the time of exercise, an amount equal to the excess of
the fair market value of the shares on the date of exercise over the exercise
price. Such amount shall ordinarily be deductible by the Company in the same
year, provided that the Company satisfies certain federal income tax
withholding requirements.

Restricted stock awards may also be granted under the 1998 Plan. Unless
(s)he makes a timely election under Section 83(b) of the Code, a recipient of
a restricted stock award generally shall not recognize taxable income upon
the grant of shares of restricted stock. Such a recipient would recognize
ordinary income at the time that such shares become vested in an amount equal
to the fair market value of the shares at that time of vesting. If,
alternatively, (s)he makes a timely election under Section 83(b), the
recipient would recognize ordinary income equal to the fair market value of
the shares at the time of grant (determined without regard to any transfer
restrictions imposed on the shares, the vesting provisions or any
restrictions imposed by the securities laws). In either case, the Company
should be entitled to a deduction in an amount equal to the amount of
ordinary income recognized by the recipient in the same year that the
recipient recognized such

ordinary income, provided that the Company satisfies certain federal income
tax withholding requirements.

For fiscal years commencing after 1 September 1994, Section 162(m) of
the Code generally limits to $1 million the Company's federal income tax
deduction for compensation paid in any year to its chief executive officer
and its four highest paid executive officers, to the extent that such
compensation is not "performance-based." Under recently proposed Treasury
regulations, a stock option shall, in general, qualify as "performance-based"
compensation if (i) it has an exercise price of not less than the fair market
value of the underlying stock on the date of grant, (ii) it is granted under
a plan that limits the number of shares for which options may be granted to
any participant, which plan is approved by a majority of the stockholders
entitled to vote thereon, and (iii) it is granted by a compensation committee
consisting solely of at least two independent directors. Awards of
restricted stock, however, do not generally qualify as "performance-based"
compensation unless the vesting or purchase of the restricted stock is
contingent upon satisfying a separate performance goal. If a stock option
grant or restricted stock award to an executive referred to above is not
"performance-based," the amount that would otherwise be deductible by the
Company in respect of such grant option or award will be disallowed to the
extent that the executive's aggregate non-performance-based compensation paid
in the relevant year exceeds $1 million.

Adoption of Todd-AO's 1998 Stock Incentive Plan requires the affirmative
votes of a majority of the total combined votes of the Class A and Class B
shares. The Board of Directors recommends a vote FOR this proposal.

3. INDEPENDENT PUBLIC ACCOUNTANTS AND ANNUAL REPORT

Subject to ratification by the stockholders at the Annual Meeting, the
Board of Directors of Todd-AO, upon recommendation of its Audit Committee,
has selected Arthur Andersen LLP to audit the consolidated financial
statements of the Company and its subsidiaries for the fiscal year ending 31
August 1999. Arthur Andersen LLP has issued its report, including the
Company's Form 10-K, on the consolidated financial statements of the Company
for the fiscal year ended 31 August 1998. Arthur Andersen LLP has served the
Company in this capacity since 24 February 1998. Representatives of Arthur
Andersen LLP are expected to be present at the Annual Meeting, shall have the
opportunity to make a statement if they so desire and shall be available to
respond to appropriate questions asked by the stockholders.

The affirmative vote of a majority of the total combined votes of Class
A and Class B shares shall constitute ratification of the appointment of
Arthur Andersen LLP as the Company's independent auditors. The Board of
Directors recommends a vote FOR this proposal.

4. OTHER MATTERS

Neither the Board of Directors nor Company management intends to bring
before the meeting any business other than the matters referred to in the
Notice of Meeting and this Proxy Statement. If any other business should
properly come before the meeting, or any adjournment(s) thereof, the persons
named in the proxies shall vote on such matters according to their best
judgment.

STOCKHOLDER PROPOSALS FOR 2000 ANNUAL MEETING

Stockholders proposals intended to be presented at the 2000 Annual
Meeting of Stockholders must be received by the Company at its principal
offices no later than 30 November 1999 in order to be considered for
inclusion in the Company's Proxy Statement and Proxy relating to the 2000
Annual Meeting of Stockholders.

A COPY OF TODD-AO'S ANNUAL REPORT ON FORM 10-K FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION SHALL BE PROVIDED TO STOCKHOLDERS WITHOUT CHARGE UPON
WRITTEN REQUEST DIRECTED TO JUDI M. SANZO, SECRETARY.

By Order of the Board of Directors,

Judi M. Sanzo, Secretary

EXHIBIT A

THE TODD-AO CORPORATION

1998 STOCK INCENTIVE PLAN

1. PURPOSES OF THE PLAN. The purposes of this 1998 Stock Incentive Plan are
to attract and retain the best available personnel for positions of
substantial responsibility, to provide additional incentive to Employees,
Directors and Consultants and to promote the success of the business of The
Todd-AO Corporation (the "Company").

2. DEFINITIONS. As used herein, the following definitions shall apply:

(a) "ADMINISTRATOR" means the Board or any of the Committees
appointed to administer the Plan.

(b) "AFFILIATE" and "ASSOCIATE" shall have the respective
meanings ascribed to such terms in Rule 12b-2 promulgated under the Exchange
Act.

(c) "APPLICABLE LAWS" means the legal requirements relating to
the administration of stock incentive plans, if any, under applicable
provisions of federal securities laws, state corporate and securities laws,
the Code, the rules of any applicable stock exchange or national market
system, and the rules of any foreign jurisdiction applicable to Awards
granted to residents therein.

(d) "AWARD" means the grant of an Option, SAR, Dividend
Equivalent Right, Restricted Stock, Performance Unit, Performance Share, or
other right or benefit under the Plan.

(e) "AWARD AGREEMENT" means the written agreement evidencing the
grant of an Award executed by the Company and the Grantee, including any
amendments thereto.

(f) "BOARD" means the Board of Directors of the Company.

(g) "CHANGE IN CONTROL" means a change in ownership or control
of the Company effected through either of the following transactions:

(i) the direct or indirect acquisition by any person or
related group of persons (other than an acquisition from or by the
Company or by a Company-sponsored employee benefit plan or by a
person that directly or indirectly controls, is controlled by, or
is under common control with, the Company) of beneficial ownership
(within the meaning of Rule 13d-3 of the Exchange Act) of
securities possessing more than 50% of the total combined voting
power of the Company's outstanding securities pursuant to a tender
or exchange offer made directly to the

Company's stockholders which a majority of the Continuing Directors
who are not Affiliates or Associates of the offeror do not recommend
such stockholders accept,or

(ii) a change in the composition of the Board over a period
36 months or less such that a majority of the Board members
(rounded up to the next whole number) ceases, by reason of one or
more contested elections for Board membership, to be comprised of
individuals who are Continuing Directors.

(h) "CODE" means the Internal Revenue Code of 1986, as amended.

(i) "COMMITTEE" means any committee appointed by the Board to
administer the Plan.

(j) "COMMON STOCK" means the common stock, par value, $.01 per share,
of the Company.

(k) "COMPANY" means The Todd-AO Corporation, A Delaware corporation.

(1) "CONSULTANT" means any person who is engaged by the Company or any
Related Entity to render consulting or advisory services as an independent
contractor and is compensated for such services.

(m) "CONTINUING DIRECTORS" means members of the Board who either (i)
have been Board members continuously for a period of at least thirty-six (36)
months or (ii) have been Board members for less than thirty-six (36) months
and were elected or nominated for election as Board members by at least a
majority of the Board members described in clause (i) who were still in
office at the time such election or nomination was approved by the Board.

(n) "CONTINUOUS STATUS AS AN EMPLOYEE, DIRECTOR OR CONSULTANT" means
that the provision of services to the Company or a Related Entity in any
capacity of Employee, Director or Consultant is not interrupted or
terminated. Continuous Status as an Employee, Director or Consultant shall
not be considered interrupted in the case of (i) any approved leave of
absence or (ii) transfers between locations of the Company or among the
Company, any Related Entity, or any successor in any capacity of Employee,
Director or Consultant. An approved leave of absence shall include sick
leave, military leave, or any other authorized personal leave. For purposes
of Incentive Stock Options, no such leave may exceed ninety (90) days, unless
reemployment upon expiration of such leave is guaranteed by statute or
contract.

(o) "CORPORATE TRANSACTION" means any of the following
stockholder-approved transactions to which the Company is a party:

(i) a merger or consolidation in which the Company is not
the surviving entity, except for a transaction the principal
purpose of which is to change the state in which the Company is
incorporated;

(ii) the sale, transfer or other disposition of all or
substantially all of the assets of the Company (including the
capital stock of the Company's subsidiary

corporations) in connection with the complete liquidation or
dissolution of the Company; or

(iii) any reverse merger in which the Company is the
surviving entity but in which securities possessing more than 50%
of the total combined voting power of the Company's outstanding
securities are transferred to a person or persons different from
those who held such securities immediately prior to such merger.

(p) "COVERED EMPLOYEE" means an Employee who is a "covered employee"
under Section 162(m)(3) of the Code.

(q) "DIRECTOR" means a mem ber of the Board.

(r) "DIVIDEND EQUIVALENT RIGHT" means a right entitling the Grantee to
compensation measured by dividends paid with respect to Common Stock.

(s) "EMPLOYEE" means any person, including an Officer or Director, who
is an employee of the Company or any Related Entity. The payment of a
director's fee by the Company shall not be sufficient to constitute
"employment" by the Company.

(t) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.

(u) "EXISTING PLANS" means the following Todd-AO Corporation Plans:
1986 Stock Option Plan, 1994 Stock Option Plan, 1995 Stock Option Plan and
1997 Stock Option Plan.

(v) "FAIR MARKET VALUE" means, as of any date, the value of Common
Stock determined as follows:

(i) where there exists a public market for the Common
Stock, the Fair Market Value shall be (A) the closing price for a
Share for the last trading day prior to the time of determination
(or, if no closing price was reported on that date, on the last
trading date on which a closing price was reported) on the stock
exchange determined by the Administrator to be the primary market
for the Common Stock or the NASDAQ National Market, whichever is
applicable or (B) if the Common Stock is not traded on any such
exchange or national market system, the average of the closing bid
and asked prices of a Share on the NASDAQ Small Cap Market for the
day prior to the time of determination (or, if no such prices were
reported on that date, on the last date on which such prices were
reported), in each case, as reported in The Wall Street Journal or
such other source as the Administrator deems reliable; or

(ii) in the absence of an established market of the type
described in (i), above, for the Common Stock, the Fair Market
Value thereof shall be determined by the Administrator in good
faith.

(w) "GRANTEE" means an Employee, Director or Consultant who receives
an Award under the Plan.

(x) "INCENTIVE STOCK OPTION" means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code.

(y) "NON-QUALIFIED STOCK OPTION" means an Option not intended to
qualify as an Incentive Stock Option.

(z) "OFFICER" means a person who is an officer of the Company within
the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.

(aa) "OPTION" means a stock option granted pursuant to the Plan.

(bb) "PARENT" means a "parent corporation" whether now or hereafter
existing, as defined in Section 424(e) of the Code.

(cc) "PERFORMANCE - BASED COMPENSATION" means compensation qualifying
as "performance-based compensation" under Section 162(m) of the Code.

(dd) "PERFORMANCE SHARES" means Shares or an award denominated in Shares
which may be earned in whole or in part upon attainment of performance
criteria established by the Administrator.

(ee) "PERFORMANCE UNITS" means an award which may be earned in whole or
in part upon attainment of performance criteria established by the
Administrator and which may be settled for cash, Shares or other securities
or a combination of cash, Shares or other securities as established by the
Administrator.

(ff) "PLAN" means this 1998 Stock Incentive Plan.

(gg) "RELATED ENTITY" means any Parent, Subsidiary and any business,
corporation, partnership, limited liability company or other entity in which
the Company, a Parent or a Subsidiary holds an ownership interest, directly
or indirectly.

(hh) "RESTRICTED STOCK" means Shares issued under the Plan to the
Grantee for such consideration, if any, and subject to such restrictions on
transfer, rights of first refusal, repurchase provisions, forfeiture
provisions, and other terms and conditions as established by the
Administrator.

(ii) "RULE 16b-3" means Rule 16b-3 promulgated under the Exchange Act
or any successor thereto.

(jj) "SAR" means a stock appreciation right entitling the Grantee to
Shares or cash compensation, as established by the Administrator, measured by
appreciation in the value of Common Stock.

(kk) "SHARE" means a share of the Common Stock.

(ll) "SUBSIDIARY" means a "subsidiary corporation," whether now or
hereafter existing, as defined in Section 424(f) of the Code.

(mm) "SUBSIDIARY DISPOSITION" means the disposition by the Company of
its equity holdings in any Subsidiary effected by a merger or consolidation
involving that Subsidiary, the sale of all or substantially all of the assets
of that Subsidiary or the Company's sale or distribution of substantially all
of the outstanding capital stock of such Subsidiary.

3. STOCK SUBJECT TO THE PLAN.

(a) Subject to the provisions of Section 10, below, the maximum
aggregate number of Shares that may be issued pursuant to Awards initially
shall be twenty percent (20%) of all fully-diluted, issued and outstanding
shares of Common Stock, less any outstanding stock options granted but not
exercised, or 536,783 Shares. Commencing with the first business day of each
fiscal year thereafter beginning with September 1, 1999, such maximum
aggregate number of Shares shall be increased by a number equal to (10%) of
the number of Shares outstanding as of the end of the preceding fiscal year;
provided, however, (i) that no stock Awards may be granted under this Plan
until the number of options granted under the Existing Plans is less than 20%
of the total outstanding shares of Common Stock and (ii) the total number of
Shares that may be the subject of Awards granted hereunder plus the number of
Shares that are the subject of Awards previously granted hereunder plus the
number of stock options granted under the Existing Plans may not, in the
aggregate, exceed 20% of the total outstanding shares of Common Stock;
provided, however, that it shall not be violation of this Plan if the
Company, in purchasing back shares on the open market, has increased this
Plan's overall percentage over twenty percent (20%).

Notwithstanding the foregoing, subject to the provisions of Section 10,
below, the maximum aggregate number of Shares available for grant of
Incentive Stock Options shall be 16,750 Shares, and such number shall not be
subject to annual adjustment as described above. The Shares to be issued
pursuant to Awards may be authorized, but unissued or reacquired shares of
Common Stock;

(b) If an Award expires or becomes unexercisable without having been
exercised in full, or is surrendered pursuant to an Award exchange program,
or if any unissued Shares are retained by the Company upon exercise of an
Award in order to satisfy the exercise price for such Award or any
withholding taxes due with respect to such Award, such unissued or retained
Shares shall become available for future grant or sale under the Plan (unless
the Plan has terminated). Shares that actually have been issued under the
Plan pursuant to an Award shall not be returned to the Plan and shall not
become available for future distribution under the Plan, except that if
unvested Shares are forfeited, or repurchased by the Company at their
original purchase price, such Shares shall become available for future grant
under the Plan.

4. ADMINISTRATION OF THE PLAN.

(a) PLAN ADMINISTRATOR.

(i) ADMINISTRATION WITH RESPECT TO DIRECTORS AND OFFICERS. With
respect to grants of Awards to Directors or Employees who are also
Officers or Directors of the Company, the Plan shall be administered by
(A) the Board or (B) a Committee designated by the Board, which
Committee shall be constituted in such a manner as to satisfy the
Applicable Laws and to permit such grants and related transactions under
the Plan to be exempt from Section 16(b) of the Exchange Act in
accordance with Rule 16b-3. Once appointed, such Committee shall
continue to serve in its designated capacity until otherwise directed by
the Board.

(ii) ADMINISTRATION WITH RESPECT TO CONSULTANTS AND OTHER
EMPLOYEES. With respect to grants of Awards to Employees or Consultants
who are neither Directors nor Officers of the Company, the Plan shall be
administered by (A) the Board or (B) a Committee designated by the
Board, which Committee shall be constituted in such a manner as to
satisfy the Applicable Laws. Once appointed, such Committee shall
continue to serve in its designated capacity until otherwise directed by
the Board. The Board may authorize one or more Officers to grant such
Awards and may limit such authority as the Board determines from time to
time.

(iii) ADMINISTRATION WITH RESPECT TO COVERED EMPLOYEES.
Notwithstanding the foregoing, grants of Awards to any Covered Employee
intended to qualify as Performance-Based Compensation shall be made only
by a Committee (or subcommittee of a Committee) which is comprised
solely of two or more Directors eligible to serve on a committee making
Awards qualifying as Performance-Based Compensation. In the case of
such Awards granted to Covered Employees, references to the
"Administrator" or to a "Committee" shall be deemed to be references to
such Committee or subcommittee.

(iv) ADMINISTRATION ERRORS. In the event an Award is granted in a
manner inconsistent with the provisions of this subsection (a), such
Award shall be presumptively valid as of its grant date to the extent
permitted by the Applicable Laws.

(b) POWERS OF THE ADMINISTRATOR. Subject to Applicable Laws and the
provisions of the Plan (including any other powers given to the Administrator
hereunder), and except as otherwise provided by the Board, the Administrator
shall have the authority, in its discretion:

(i) to select the Employees, Directors and Consultants to whom
Awards may be granted from time to time hereunder;

(ii) to determine whether and to what extent Awards are granted
hereunder;

(iii) to determine the number of Shares or the amount of other
consideration to be covered by each Award granted hereunder;

(iv) to approve the form of the Award Agreement for use under the
Plan;

(v) to determine the terms and conditions of any Award granted
hereunder;

(vi) to amend the terms of any outstanding Award granted under
the Plan, including a reduction in the exercise price (or base amount on
which appreciation is measured) of any Award to reflect a reduction in
the Fair Market Value of the Common Stock since the grant date of the
Award, provided that any amendment that would adversely affect the
Grantee's rights under an outstanding Award shall not be made without
the Grantee's written consent;

(vii) to construe and interpret the terms of the Plan and Awards
granted pursuant to the Plan;

(viii) to establish additional terms, conditions, rules or
procedures to accommodate the rules or laws of applicable foreign
jurisdictions and to afford Grantees favorable treatment under such
laws; provided, however, that no Award shall be granted under any such
additional terms, conditions, rules or procedures with terms or
conditions which are inconsistent with the provisions of the Plan; and

(ix) to take such other action, not inconsistent with the terms
of the Plan, as the Administrator deems appropriate.

(c) EFFECT OF ADMINISTRATOR'S DECISION. All decisions,
determinations and interpretations of the Administrator shall be conclusive
and binding on all persons.

5. ELIGIBILITY. Awards other than Incentive Stock Options may be granted
to Employees, Directors and Consultants. Incentive Stock Options may be
granted only to Employees of the Company, a Parent or a Subsidiary. An
Employee, Director or Consultant who has been granted an Award may, if
otherwise eligible, be granted additional Awards. Awards may be granted to
such Employees, Directors or Consultants who are residing in foreign
jurisdictions as the Administrator may determine from time to time.

6. TERMS AND CONDITIONS OF AWARDS.

(a) TYPE OF AWARDS. The Administrator is authorized under the Plan to
award any type of arrangement to an Employee, Director or Consultant that is
not inconsistent with the provisions of the Plan and that by its terms
involves or might involve the issuance of (i) Shares, (ii) an Option, a SAR
or similar right with an exercise or conversion privilege at a fixed or
variable price related to the Common Stock and/or the passage of time, the
occurrence of one or more events, or the satisfaction of performance criteria
or other conditions, or (iii) any other security with the value derived from
the value of the Common Stock or other securities issued by a Related Entity.
Such awards include, without limitation, Options, SARs, sales or bonuses of
Restricted Stock, Dividend Equivalent Rights, Performance Units or
Performance Shares, and an Award may consist of one such security or benefit,
or two or more of them in any combination or alternative.

(b) DESIGNATION OF AWARD. Each Award shall be designated in the Award
Agreement. In the case of an Option, the Option shall be designated as either
an Incentive Stock Option or a Non-Qualified Stock Option. Notwithstanding
such designation, however, and to the extent that the aggregate Fair Market
Value of Shares subject to Options designated as Incentive Stock Options
which become exercisable for the first time by a Grantee during any calendar
year (under all plans of the Company or any Parent or Subsidiary) exceeds
$100,000, such excess Options, to the extent of the Shares covered thereby in
excess of the foregoing limitation, shall be treated as Non-Qualified Stock
Options. For this purpose, Incentive Stock Options shall be taken into
account in the order in which they were granted, and the Fair Market Value of
the Shares shall be determined as of the date the Option with respect to such
Shares is granted.

(c) CONDITIONS OF AWARD. Subject to the terms of the Plan, the
Administrator shall determine the provisions, terms, and conditions of each
Award including, but not limited to, the Award vesting schedule, repurchase
provisions, rights of first refusal, forfeiture provisions, form of payment
(cash, Shares, or other consideration) upon settlement of the Award, payment
contingencies, and satisfaction of any performance criteria. The performance
criteria established by the Administrator may be based on any one of, or
combination of, increase in share price, earnings per share, total
stockholder return, return on equity, return on assets, return on investment,
net operating income, cash flow, revenue, economic value added, personal
management objectives, or other measure of performance selected by the
Administrator. Partial achievement of the specified criteria may result in a
payment or vesting corresponding to the degree of achievement as specified in
the Award Agreement.

(d) DEFERRAL OF AWARD PAYMENT. The Administrator may establish one or
more programs under the Plan to permit selected Grantees the opportunity to
elect to defer receipt of consideration upon exercise of an Award,
satisfaction of performance criteria, or other event that absent the election
would entitle the Grantee to payment or receipt of Shares or other
consideration under an Award. The Administrator may establish the election
procedures, the timing of such elections, the mechanisms for payments of, and
accrual of interest or other earnings, if any, on amounts, Shares or other
consideration so deferred, and such other terms, conditions, rules and
procedures that the Administrator deems advisable for the administration of
any such deferral program.

(e) AWARD EXCHANGE PROGRAMS. The Administrator may establish one or
more programs under the Plan to permit selected Grantees to exchange an Award
under the Plan for one or more other types of Awards under the Plan on such
terms and conditions as determined by the Administrator from time to time.

(f) SEPARATE PROGRAMS. The Administrator may establish one or more
separate programs under the Plan for the purpose of issuing particular forms
of Awards to one or more classes of Grantees on such terms and conditions as
determined by the Administrator from time to time.

(g) INDIVIDUAL OPTION AND SAR LIMIT. The maximum number of Shares
with respect to which Options and SARs may be granted to any Employee in any
fiscal year of the Company shall

be 25,000 shares. The foregoing limitation shall be adjusted proportionately
in connection with any change in the Company's capitalization pursuant to
Section 10, below. To the extent required by Section 162(m) of the Code or
the regulations thereunder, in applying the foregoing limitation with respect
to an Employee, if any Option or SAR is canceled, the canceled Option or SAR
shall continue to count against the maximum number of Shares with respect to
which Options and SARs may be granted to the Employee. For this purpose, the
repricing of an Option (or in the case of a SAR, the base amount on which the
stock appreciation is calculated is reduced to reflect a reduction in the
Fair Market Value of the Common Stock) shall be treated as the cancellation
of the existing Option or SAR and the grant of a new Option or SAR.

(h) EARLY EXERCISE. The Award may, but need not, include a provision
whereby the Grantee may elect at any time while an Employee, Director or
Consultant to exercise any part or all of the Award prior to full vesting of
the Award. Any unvested Shares received pursuant to such exercise may be
subject to a repurchase right in favor of the Company or to any other
restriction the Administrator determines to be appropriate.

(i) TERM OF AWARD. The term of each Award shall be the term stated in
the Award Agreement, provided, however, that the term of an Incentive Stock
Option shall be no more than ten (10) years from the date of grant thereof.
However, in the case of an Incentive Stock Option granted to a Grantee who,
at the time the Option is granted, owns stock representing more than ten
percent of the voting power of all classes of stock of the Company or any
Parent or Subsidiary, the term of the Incentive Stock Option shall be 5 years
from the date of grant thereof or such shorter term as may be provided in the
Award Agreement.

(j) TRANSFERABILITY OF AWARDS. Incentive Stock Options may not be
sold, pledged, assigned, hypothecated, transferred, or disposed of in any
manner other than by will or by the laws of descent or distribution and may
be exercised, during the lifetime of the Grantee, only by the Grantee;
provided, however, that the Grantee may designate a beneficiary of the
Grantee's Incentive Stock Option in the event of the Grantee's death on a
beneficiary designation form provided by the Administrator. Other Awards
shall be transferable to the extent provided in the Award Agreement.

(k) TIME OF GRANTING AWARDS. The date of grant of an Award shall for
all purposes be the date on which the Administrator makes the determination
to grant such Award, or such other date as is determined by the
Administrator. Notice of the grant determination shall be given to each
Employee, Director or Consultant to whom an Award is so granted within a
reasonable time after the date of such grant.

7. AWARD EXERCISE OR PURCHASE PRICE. CONSIDERATION- TAXES AND RELOAD OPTIONS.

(a) EXERCISE OR PURCHASE. The exercise or purchase price, if any, for
an Award shall be as follows:

(i) In the case of an Incentive Stock Option: (a) granted to an
Employee who, at the time of t he grant of such Incentive Stock Option
owns stock representing more than ten percent (10%) of the voting power
of all classes of stock of the Company or any Parent or

Subsidiary, the per Share exercise price shall be not less than one
hundred ten percent (110%) of the Fair Market Value per Share on the
date of grant; (b) granted to any Employee other than an Employee
described in the preceding paragraph, the per Share exercise price shall
be not less than one hundred percent (100%) of the Fair Market Value per
Share on the date of grant.

(ii) In the case of a Non-Qualified Stock Option, the per Share
exercise price shall be not less than eighty-five percent (85%) of the
Fair Market Value per Share on the date of grant unless otherwise
determined by the Administrator.

(iii) In the case of Awards intended to qualify as Performance
Based Compensation, the exercise or purchase price, if any, shall be not
less than one hundred percent (100%) of the Fair Market Value per Share
on the date of grant unless otherwise determined by the Administrator.

(iv) In the case of other Awards, such price as is determined by
the Administrator.

(b) CONSIDERATION. Subject to Applicable Laws, the consideration to be
paid for the Shares to be issued upon exercise or purchase of an Award
including the method of payment, shall be determined by the Administrator
(and, in the case of an Incentive Stock Option, shall be determined at the
time of grant). In addition to any other types of consideration the
Administrator may determine, the Administrator is authorized to accept as
consideration for Shares issued under the Plan the following:

(i) cash;

(ii) check;

(iii) delivery of Grantee's promissory note with such recourse,
interest, security, and redemption provisions as the Administrator
determines as appropriate;

(iv) surrender of Shares or delivery of a properly executed form
of attestation of ownership of Shares as the Administrator may require
(including withholding of Shares otherwise deliverable upon exercise of
the Award) which have a Fair Market Value on the date of surrender or
attestation equal to the aggregate exercise price of the Shares as to
which said Award shall be exercised (but only to the extent that such
exercise of the Award would not result in an accounting compensation
charge with respect to the Shares used to pay the exercise price unless
otherwise determined by the Administrator);

(v) delivery of a properly executed exercise notice together
with such other documentation as the Administrator and the broker, if
applicable, shall require to effect an exercise of the Award and
delivery to the Company of the sale or loan proceeds required to pay the
exercise price; or

(vi) any combination of the foregoing methods of payment.

(c) TAXES. No Shares shall be delivered under the Plan to any Grantee
or other person until such Grantee or other person has made arrangements
acceptable to the Administrator for the satisfaction of any foreign, federal,
state, or local income and employment tax withholding obligations, including,
without limitation, obligations incident to the receipt of Shares or the
disqualifying disposition of Shares received on exercise of an Incentive
Stock Option. Upon exercise of an Award, the Company shall withhold or
collect from Grantee an amount sufficient to satisfy such tax obligations.

(d) RELOAD OPTIONS. In the event the exercise price or tax
withholding of an Option is satisfied by the Company or the Grantee's
employer withholding Shares otherwise deliverable to the Grantee, the
Administrator may issue the Grantee an additional Option, with terms
identical to the Award Agreement under which the Option was exercised, but at
an exercise price as determined by the Administrator in accordance with the
Plan.

8. EXERCISE OF AWARD.

(a) PROCEDURE FOR EXERCISE; RIGHTS AS A STOCKHOLDER.

(i) Any Award granted hereunder shall be exercisable at such
time and under such conditions as determined by the Administrator under
the terms of the Plan and specified in the Award Agreement.

(ii) An Award shall be deemed to be exercised when written notice
of such exercise has been given to the Company in accordance with the
terms of the Award by the person entitled to exercise the Award and full
payment for the Shares with respect to which the Award is exercised has
been received by the Company. Until the issuance (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company) of the stock certificate evidencing such
Shares, no right to vote or receive dividends or any other rights as a
stockholder shall exist with respect to Shares subject to an Award,
notwithstanding the exercise of an Option or other Award. The Company
shall issue (or cause to be issued) such stock certificate promptly upon
exercise of the Award. No adjustment will be made for a dividend or
other right for which the record date is prior to the date the stock
certificate is issued, except as provided in the Award Agreement or
Section 10, below.

(b) EXERCISE OF AWARD FOLLOWING TERMINATION OF EMPLOYMENT. DIRECTOR OR
CONSULTANT RELATIONSHIP.

(i) An Award may not be exercised after the termination date of
such Award set forth in the Award Agreement and may be exercised
following the termination of a Grantee's Continuous Status as an
Employee, Director or Consultant only to the extent provided in the
Award Agreement.

(ii) Where the Award Agreement permits a Grantee to exercise an
Award following the termination of the Grantee's Continuous Status as an
Employee, Director or

Consultant for a specified period, the Award shall terminate to the
extent not exercised on the last day of the specified period or the last
day of the original term of the Award, whichever occurs first;

(iii) Any Award designated as an Incentive Stock Option to the
extent not exercised within the time permitted by law for the exercise
of Incentive Stock Options following the termination of a Grantee's
Continuous Status as an Employee, Director or Consultant shall convert
automatically to a Non-Qualified Stock Option and thereafter shall be
exercisable as such to the extent exercisable by its terms for the
period specified in the Award Agreement.

(c) BUYOUT PROVISIONS. The Administrator may at any time offer to buy
out for a payment in cash or Shares, an Award previously granted, based on
such terms and conditions as the Administrator shall establish and
communicate to the Grantee at the time that such offer is made.

9. CONDITIONS UPON ISSUANCE OF SHARES.

(a) Shares shall not be issued pursuant to the exercise of an Award
unless the exercise of such Award and the issuance and delivery of such
Shares pursuant thereto shall comply with all Applicable Laws, and shall be
further subject to the approval of counsel for the Company with respect to
such compliance.

(b) As a condition to the exercise of an Award, the Company may
require the person exercising such Award to represent and warrant at the time
of any such exercise that the Shares are being purchased only for investment
and without any present intention to sell or distribute such Shares if, in
the opinion of counsel for the Company, such a representation is required by
any Applicable Laws.

10. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. Subject to any required
action by the stockholders of the Company, the number of Shares covered by
each outstanding Award, and the number of Shares which have been authorized
for issuance under the Plan but as to which no Awards have yet been granted
or which have been returned to the Plan, as well as the price per share of
Common Stock covered by each such outstanding Award, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of
Common Stock resulting from a stock split, reverse stock split, stock
dividend, combination or reclassification of the Common Stock, or any other
similar event resulting in an increase or decrease in the number of issued
shares of Common Stock. Except as expressly provided herein, no issuance by
the Company of shares of stock of any class, or securities convertible into
shares of stock of any class, shall affect, and no adjustment by reason
hereof shall be made with respect to, the number or price of Shares subject
to an Award.

11. CORPORATE TRANSACTIONS/CHANGES IN CONTROL/SUBSIDIARY DISPOSITIONS.

(a) The Administrator shall have the authority, exercisable either in
advance of any actual or anticipated Corporate Transaction, Change in Control
or Subsidiary Disposition or at the time of an actual Corporate Transaction,
Change in Control or Subsidiary Disposition and

exercisable at the time of the grant of an Award under the Plan or any time
while an Award remains outstanding, to provide for the full automatic vesting
and exercisability of one or more outstanding unvested Awards under the Plan
and the release from restrictions on transfer and repurchase or forfeiture
rights of such Awards in connection with a Corporate Transaction, Change in
Control or Subsidiary Disposition, on such terms and conditions as the
Administrator may specify. The Administrator also shall have the authority to
condition any such Award vesting and exercisability or release from such
limitations upon the subsequent termination of the Continuous Status as an
Employee or Consultant of the Grantee within a specified period following the
effective date of the Change in Control or Subsidiary Disposition. The
Administrator may provide that any Awards so vested or released from such
limitations in connection with a Change in Control or Subsidiary Disposition,
shall remain fully exercisable until the expiration or sooner termination of
the Award. Effective upon the consummation of a Corporate Transaction, all
outstanding Awards under the Plan shall terminate unless assumed by the
successor company or its Parent.

(b) The portion of any Incentive Stock Option accelerated under this
Section I in connection with a Corporate Transaction, Change in Control or
Subsidiary Disposition shall remain exercisable as an Incentive Stock Option
under the Code only to the extent the $100,000 dollar limitation of Section
422(d) of the Code is not exceeded. To the extent such dollar limitation is
exceeded, the accelerated excess portion of such Option shall be exercisable
as a Non-Qualified Stock Option.

12. TERM OF PLAN. The Plan shall become effective upon the earlier to occur
of its adoption by the Board or its approval by the stockholders of the
Company. It shall continue in effect for a term of ten (10) years unless
sooner terminated.

13. AMENDMENT, SUSPENSION OR TERMINATION OF THE PLAN.

(a) The Board may at any time amend, suspend or terminate the Plan.
To the extent necessary to comply with Applicable Laws, the Company shall
obtain stockholder approval of any Plan amendment in such a manner and to
such a degree as required.

(b) No Award may be granted during any suspension of the Plan or after
termination of the Plan.

(c) Any amendment, suspension or termination of the Plan shall not
affect Awards already granted, and such Awards shall remain in full force and
effect as if the Plan had not been amended, suspended or terminated, unless
mutually agreed otherwise between the Grantee and the Administrator, which
agreement must be in writing and signed by the Grantee and the Company.

14. RESERVATION OF SHARES.

(a) The Company, during the term of the Plan, will at all times
reserve and keep available such number of Shares as shall be sufficient to
satisfy the requirements of the Plan.

(b) The inability of the Company to obtain authority from any
regulatory body having jurisdiction, which authority is deemed by the
Company's counsel to be necessary to the lawful issuance and sale of any
Shares hereunder, shall relieve the Company of any liability in respect of
the failure to issue or sell such Shares as to which such requisite authority
shall not have been obtained.

15. NO EFFECT ON TERMS OF EMPLOYMENT. The Plan shall not confer upon any
Grantee any right with respect to continuation of employment or consulting
relationship with 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
consulting relationship at any time, with or without cause.

16. STOCKHOLDER APPROVAL. The grant of Incentive Stock Options under the
Plan shall be subject to approval by the stockholders of the Company within
twelve (12) months before or after the date the Plan is adopted. Such
stockholder approval shall be obtained in the degree and manner required
under Applicable Laws. The Administrator may grant Incentive Stock Options
under the Plan prior to approval by the stockholders, but until such approval
is obtained, no such Incentive Stock Option shall be exercisable. In the
event that stockholder approval is not obtained within the twelve (12) month
period provided above, all Incentive Stock Options previously granted under
the Plan shall terminate.

THE TODD-AO CORPORATION
ANNUAL MEETING OF STOCKHOLDERS FEBRUARY 24, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints Salah M. Hassanein, Silas R. Cross and Judi
M. Sanzo, and each of them, with power of substitution, as proxies of the
undersigned, to attend the Annual Meeting of Stockholders of The Todd-AO
Corporation to be held at 900 N. Seward Street, Hollywood, CA 90038 on 24
February 1999, at 10:30 A.M., and any adjournment(s) thereof, and to vote all
shares of Class A or Class B Stock of The Todd-AO Corporation which the
undersigned would be entitled to vote if personally present on the following:

(1) To elect a board of fourteen directors for the ensuing year.

/ / FOR all nominees listed below / / WITHOUT AUTHORITY
(except as marked to the contrary below) to vote for all nominees listed
below

(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A
LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW)

J. R. DeLang, David Haas, Richard C. Hassanein, Salah M. Hassanein, Herbert
L. Hutner, Christopher D. Jenkins, Robert I. Knudson, David P. Malm, Marshall
Naify, Michael S. Naify, Robert A. Naify, A. Frank Pierce, Sydney Pollack and
Zelbie Trogden.

(2) To consider and approve Todd-AO's 1998 Stock Incentive Plan.

/ / FOR / / AGAINST / / ABSTAIN

(3) To consider and ratify the selection of Todd-AO's independent auditors.

/ / FOR / / AGAINST / / ABSTAIN

(CONTINUED ON REVERSE SIDE)

(4) In their discretion, upon any and all such other matters as may properly
come before the meeting or any adjournment thereof.

/ / FOR / / AGAINST / / ABSTAIN

THIS PROXY WILL BE VOTED AS DIRECTED. IN THE ABSENCE OF DIRECTIONS, THIS
PROXY WILL BE VOTED FOR THE ELECTION OF DIRECTORS NOMINATED BY MANAGEMENT AND
FOR PROPOSALS 2, 3 and 4.
Dated __________________, 1999
______________________________
(Signature)
______________________________
(Signature)

Please sign exactly as name
appears at left. Joint owners
should each sign. Attorneys,
administrators, trustees, etc.
should so indicate when
signing.

STOCKHOLDERS ARE URGED TO MARK, DATE, SIGN AND RETURN THIS PROXY PROMPTLY IN THE
ENVELOPE PROVIDED, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.