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EXHIBIT 99.1
TEEKAY SHIPPING CORPORATION
AMENDED 1995 STOCK OPTION PLAN
1. PURPOSE
1.01 The purpose of the 1995 Stock Option Plan (the "Plan") is to provide an
effective long term incentive for selected key employees, directors,
officers and consultants of Teekay Shipping Corporation and related
companies including Teekay Shipping Limited (including its affiliates,
"Teekay Shipping"), which provides management services to Teekay Shipping
Corporation, to foster a greater proprietary interest in the continued
success of the Company.
2. DEFINITIONS
2.01 In this Plan:
(a) "Board" means the Board of Directors of Teekay Shipping Corporation;
(b) "Company" means Teekay Shipping Corporation, or any successor
corporation;
(c) "Committee" means the committee of the Board charged with the
responsibility of administering the Plan or, failing the designation
of a committee, Committee means the Board;
(d) "Consultant" means any person who acts as a consultant, advisor or
independent contractor to the Company or a Participating Related or
Subsidiary Company;
(e) "Director" means a member of the Board of Directors of Teekay
Shipping Corporation or a Participating Related or Subsidiary
Company. A Director who is an Employee will be governed by the Plan
as an Employee and will not be subject to any provisions which would
otherwise apply to Directors. In no event will benefits under the
Plan for a Director be additive to benefits for an Employee (or vice
versa) who is the same person;
(f) "Employee" means any person who is a full-time or permanent
part-time salaried employee on the payroll of Teekay Shipping
Corporation or any Participating Related or Subsidiary Company, but
shall specifically exclude temporary, seasonal or contract help;
(g) "Officer" means any person who is appointed as an Officer by the
Board of Directors of the Company or of a Participating Related or
Subsidiary company;
(h) "Options" means the rights granted to an Officer, Employee, Director
or Consultant to purchase Shares in accordance with the terms of the
Plan;
(i) "Participant" means an Officer, Employee, Director or Consultant who
has been granted Options to purchase Shares of the Company in
accordance with the terms of the Plan;
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(j) "Participating Related or Subsidiary Company" means a subsidiary of
Teekay Shipping Corporation or a related company designated by the
Board as having Officers, Employees, Directors or Consultants
eligible under the Plan;
(k) "Plan" means this 1995 Stock Option Plan of Teekay Shipping
Corporation;
(l) "Retirement" or "Retires" means the early or normal retirement of an
Employee within the retirement policy of the Company, whether or not
such Employee is a member of or entitled to benefits under any
retirement plan of the Company. With respect to a Director,
retirement means cessation of such person's term as a Director upon
the scheduled end of such term or earlier upon resignation;
(m) "Shares" or "Stock" means common shares of Teekay Shipping
Corporation;
(n) "Share Appreciation Rights (SAR)" means the increase in fair market
value of the common shares of Teekay Shipping Corporation from the
date of grant to date of exercise; and
(o) "Total Disability" means solely because of disease or injury, an
Employee is deemed by a qualified physician selected by the Company
to be unable to work at any occupation which the Employee is
reasonably qualified to perform. In the case of a Director, total
disability means solely because of disease or injury, a Director is
deemed by a qualified physician selected by the Company to be unable
to carry out his or her responsibilities as a Director.
3. ADMINISTRATION
3.01 The Plan shall be administered by the Committee.
3.02 The Committee shall:
(a) formulate guidelines and administrative provisions to implement and
run the Plan;
(b) decide all matters relating to the administration of the Plan
including the interpretation of the terms of the Plan. Any decision
of the Committee shall be conclusive unless otherwise determined by
the Board;
(c) design and approve any forms and agreements required to carry out
the provisions of the Plan;
(d) delegate to any person or persons administrative duties as the
Committee considers appropriate;
(e) determine the time at which Options shall be granted, the number of
Shares subject to each Option, the price at which the Option may be
exercised, the term during which the Option may be exercised and any
restrictions which limit exercise; and
(f) designate those individuals, subject to section 4.01, to whom Stock
Options may be granted.
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4. ELIGIBILITY
4.01 Unless expressly excluded herein, Officers, Employees, Directors and
Consultants of Teekay Shipping Corporation and Related or Subsidiary
Companies shall be eligible to become Participants.
5. SHARES SUBJECT TO THE PLAN AND DURATION OF THE PLAN
5.01 The number of Shares reserved and available for Options under the Plan
shall be 6,298,571 shares.
5.02 No increase in the number of Shares reserved for issuance under the Plan
is allowed without approval of the Board.
5.03 Any Shares which are subject to Options which are cancelled or forfeit
shall be available for the granting of Options thereafter under the Plan.
5.04 The Plan shall be effective upon the Initial Public Offering of the
Company and shall continue as long as Options under the Plan are
available.
6. SHARE APPRECIATION RIGHTS
6.01 In tandem with each Option granted under the Plan, the Committee may
grant an equal number of Share Appreciation Rights (SAR). SAR's are
subject to the same provisions covering price, vesting, term, exercise
and termination of employment as apply to the Options to which each is
contingently attached.
6.02 The purpose of the SAR's is to increase the flexibility of the
Participant and the Company in the exercise of an Option and the
administration of the Plan. The granting of an SAR in tandem with an
Option is not intended to increase the compensation Participants would
otherwise earn through the Plan. The exercise of either one automatically
cancels the right to exercise the other.
6.03 Each SAR carries with it the right of a Participant to receive payment
from the Company equal to the gain that would have been realized if the
related Share Option had been exercised and the shares resold at fair
market value on the date of exercise.
6.04 A Participant may elect to exercise an SAR if his or her intent is not to
retain ownership of the shares being exercised. At the time of exercise
the Participant is required to notify the Company of his or her intention
on the prescribed form.
6.05 The Participant may elect to receive an SAR award in cash, Shares or any
combination of the two.
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7. TERMS AND CONDITIONS OF OPTIONS
7.01 Each Option granted under the Plan shall be evidenced by a written
agreement between the Company and the Participant. The agreements shall
include the substance of the following provisions:
(a) the number of Shares for which the Options (and SAR's [if any]
granted in tandem) are granted;
(b) the price at which the Options (or SAR's) may be exercised;
(c) unless otherwise specified by the Committee, 25% of the Options (or
SAR's) granted will vest and be exercisable the day following one
year from the date of the grant of the Options, with a further 25%
of the Options (or SAR's) vesting and becoming exercisable the day
following each subsequent year from the date of the grant;
(d) an expiry date determined by the Committee which under no
circumstances will be later than ten years after the grant of the
Options (and SAR's granted in tandem);
(e) Options (or SAR's) may be exercised only upon submitting written
notice of exercise, accompanied by payment in full of the Option
price (if the Option is being exercised). Payment on exercise of an
Option may be made by the Participant in cash or certified cheque,
or such other forms of payment as may be permitted by the Committee
at any time prior to exercise of the Option; and
(f) Options and the rights and privileges conferred by the Plan may not
be transferred, assigned, pledged or hypothecated in any manner
(whether by operation of law or otherwise) other than by will or by
the applicable laws of descent and distribution and shall not be
subject to execution, attachment or similar process. Any attempt to
transfer, assign, pledge, hypothecate or otherwise dispose of any
Option, or of any right or privilege conferred hereby, contrary to
the provisions of this Plan, or the sale or levy or any attachment
or similar process upon the rights and privileges conferred hereby
shall be null and void. Notwithstanding the foregoing, if the
Committee permits, a Participant may, during the Participant's
lifetime, designate a person who may exercise the Option after the
Participant's death by giving written notice of such designation to
the Committee. Such designation may be changed from time to time by
a Participant by giving written notice to the Committee revoking any
earlier designation and making a new designation.
7.02 If a change in the Shares of Teekay Shipping Corporation occurs by reason
of subdivision, split, reverse split, stock dividend, or similar
recapitalization, then an equitable adjustment shall be made by the Board
for outstanding Options.
8. EFFECT OF LIQUIDATION, REORGANIZATION OR ACQUISITION
8.01 Except as provided in section 8.02, upon a merger (other than a merger of
the Company in which the holders of Stock immediately prior to the merger
have the same proportionate ownership of Stock in the surviving
corporation immediately after the merger), consolidation, acquisition of
property or stock, separation, reorganization (other than a mere
re-incorporation or the creation
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of a holding company) or liquidation of the Company, as a result of which
the shareholders of the Company receive cash, stock or other property in
exchange for or in connection with their shares of Stock, any Option shall
terminate, but the Participant shall have the right immediately prior to
any such merger, consolidation, acquisition of property or stock,
separation, reorganization or liquidation to exercise such Participant's
option in whole or in part whether or not the vesting requirements set
forth in the agreement relating to such Option have been satisfied.
8.02 If all the shareholders of the Company receive capital stock of another
corporation ("Exchange Stock") in exchange for their shares of Stock in
any transaction involving a merger, consolidation, acquisition of property
or stock, separation or reorganization, all Options granted hereunder
shall be converted into options to purchase shares of Exchange Stock
unless the Company and the corporation issuing the Exchange Stock, in
their sole discretion, determine that any or all such options granted
hereunder shall not be converted into options to purchase shares of
Exchange Stock but instead shall terminate in accordance with the
provisions of section 8.01. The amount and price of converted options
shall be determined by adjusting the amount and price of the Options
granted hereunder in the same proportion as used for determining the
number of shares of Exchange Stock the holders receive in such merger,
consolidation, acquisition of property or stock, separation or
reorganization. Unless accelerated by the Board, the vesting schedule set
forth in the Option agreement shall continue to apply to the options
granted for the Exchange Stock.
8.03 (a) A Participant shall have the right, upon and after the making of an
Offer, to exercise such Participant's Options (or related SAR's) in
whole or in part whether or not the vesting requirements set forth
in the Plan or in the agreement relating to the Options (or related
SAR's) have been satisfied. In the case of Options (or related
SAR's) where such vesting requirements have not been satisfied, the
exercise shall be solely for the purpose of permitting the
Participant to tender the Shares received upon such exercise
pursuant to the Offer.
(b) "Offer" means an offer:
(i) made generally to the holders of the Company's voting
securities, to the Participant or to a class of security
holders which include the Participant, in one or more
jurisdictions to purchase directly or indirectly voting
securities of the Company or
(ii) which is a tender offer, exchange offer or take-over bid in
any applicable jurisdiction (disregarding for that purpose any
minimum percentage of shares to be acquired to constitute such
offer or bid in such jurisdictions)
where the voting securities which are the subject of the Offer,
together with the offeror's then presently beneficially owned voting
securities, would in the aggregate exceed 25% of the outstanding
voting securities of the Company. If two or more persons,
corporations or entities make offers jointly or in concert or intend
to exercise jointly or in concert any voting rights attaching to the
securities to be acquired, then the voting securities beneficially
owned by each of them shall be included in the calculation of the
percentage of the outstanding voting securities of the Company
beneficially owned by each of them.
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Notwithstanding the foregoing, Offer does not include an Offer made
by the Company, any subsidiary or related company with the approval
of the Board or any employee benefit plan sponsored by the Company.
In this Section 8.03 and in Section 8.04, "beneficial ownership",
"beneficially owned", and words of similar import shall have the
meaning, with necessary grammatical changes, in Rule 13d-3 of the
Securities Exchange Act of 1934, as amended.
(c) The Company shall, immediately upon receipt of notice of the Offer,
notify each Participant of full particulars of the Offer.
(d) In lieu of or in combination with (but not in duplication of) the
right set out in Section 8.03(a), a Participant shall also have the
right, exercisable during the 30 (thirty) days after the Offer has
been consummated by the offeror taking up and paying for Shares
pursuant to the Offer, to surrender such Participant's Options (or
related SAR's) in whole or in part to the Company (whether or not
the Options (or related SAR's) are otherwise vested at the time).
The Participant shall in return be entitled to a cash distribution
from the Company in an amount equal to the excess of (i) the
Take-Over Price of the Shares at the time subject to such
surrendered Option (or related SAR) (or surrendered portion of such
Option (or related SAR)) over (ii) the aggregate exercise price
payable for such Shares. Such cash distribution shall be made within
five (5) days following the Option (or related SAR) surrender date.
Upon receipt of such cash distribution, the Option (or related SAR)
shall be cancelled with respect to the Shares subject to the
surrendered Option (or related SAR) (or surrendered portion of such
Option (or related SAR)) and the Participant shall cease to have any
further right to acquire Shares pursuant thereto. The Option (or
related SAR) shall however remain outstanding for the balance of the
Shares and the Company shall issue a new agreement for those
remaining Shares.
"Take-Over Price" shall mean the greater of (i) the Fair Market
Value per Share on the date the Option (or related SAR) is
surrendered to the Company in connection with the Offer and (ii) the
highest reported price per Share paid by the offeror in effecting
such Offer.
"Fair Market Value" per Share on any relevant date shall mean the
closing selling price per Share on the date in question on the stock
exchange or quotation system which is the primary market for the
Shares. If there is no closing selling price for the Shares on the
date in question, then the Fair Market Value shall mean the closing
selling price on the last preceding date for which such quotation
exists, if any, or as shall be determined by the Board based on the
advice of an independent investment banker.
(e) If, after consummation of the Offer by the offeror taking up and
paying for Shares pursuant to the Offer, there is an Involuntary
Termination of a Participant who holds Options (or related SAR's) in
respect of which Shares were not tendered or taken up and paid for
pursuant to the Offer nor surrendered pursuant to Section 8.03(d),
such Participant shall be entitled, notwithstanding Section 9.01, to
exercise such Options (or related SAR's) for a period of five years,
or
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such longer period as may be determined by the Board, following
Involuntary Termination, provided that such exercise may not be made
after the expiration of the right to exercise such Options (or
related SAR's) for any reason other than Involuntary Termination.
"Involuntary Termination" means the termination of a Participant's
service by reason of:
(i) Participant's involuntary dismissal or discharge for reasons
other than Misconduct; or
(ii) Participant's voluntary resignation following (a) a change in
Participant's position which materially reduces Participant's
level of responsibility (b) a reduction in Participant's level
of compensation (including base salary, fringe benefits or
participation in any corporate performance based bonus or
incentive programs) by more than 15% or (c) a relocation of
Participant's place of employment by more than 50 miles,
provided and only if such change, reduction or relocation is
effected without the Participant's consent.
"Misconduct" shall mean the commission of any act of fraud,
embezzlement or dishonesty by Participant, or unauthorized use or
disclosure by Participant of confidential information or trade
secrets of the Company (or any subsidiary or related company), or
any intentional misconduct by Participant adversely affecting the
business or affairs of the Company (or any subsidiary or related
company) in a material manner. The foregoing definition shall not be
deemed to be inclusive of all the acts or omissions which the
Company (or any subsidiary or related company) may consider as
grounds for the dismissal or discharge of Participant or any other
person in the service of the Company (or subsidiary or related
company).
8.04 (a) A Participant shall have the right, upon and after a Board Change or
a Control Purchase, to exercise such Participant's Options (or
related SAR's) in whole or in part whether or not the vesting
requirements set forth in the Plan or in the agreement relating to
the Options (or related SAR's) have been satisfied.
(b) "Board Change" means, during any period of two consecutive years or
less, persons who at the beginning of such period constituted the
entire Board of Directors ceased for any reason to constitute a
majority thereof unless the election or appointment, or the
nomination for election by the Company's shareholders, of each new
Director was approved by a vote of at least two-thirds of the
Directors then still in office who were Directors at the beginning
of the period.
(c) "Control Purchase" means any transaction in which any person,
corporation or entity shall become the beneficial owner directly or
indirectly of more than 25% of the outstanding voting securities of
the Company, and such person, corporation or entity shall vote any
of such securities at any meeting of the shareholders of the Company
in favour of a resolution passed at such meeting which was not
recommended by a majority of the "Continuing Directors" (as defined
in the Amended and Restated Articles of Incorporation of the
Company). If two or more persons, corporations or entities jointly
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or in concert beneficially own the securities or intend to exercise
jointly or in concert any voting rights attaching to the securities,
then the voting securities beneficially owned by each of them shall
be included in the calculation of the percentage of the outstanding
voting securities of the Company beneficially owned by each of them.
The foregoing definition does not apply to beneficial ownership by
the Company, any subsidiary or related company with the approval of
the Board or any employee benefit plan sponsored by the Company.
8.05 Notwithstanding anything to the contrary in the Plan or in the agreement
relating to the Options (or related SAR's), the Board or the Committee,
may, in its discretion, at any time, determine that a Participant shall
have the right to exercise such Participant's Options (or related SAR's)
in whole or in part whether or not the vesting requirements set forth in
the Plan or in the agreement relating to the Options (or related SAR's)
have been satisfied; and may, in its discretion rescind such determination
made by it but without depriving a Participant of the benefits to which he
or she would otherwise be entitled as a result of having exercised the
Options (or related SAR's) before the rescission of the determination.
9. TERMINATION OF EMPLOYMENT OR CEASING TO BE A DIRECTOR
9.01 If a Participant ceases to be an Officer, Employee, Director or Consultant
for any reason other than Disability, Retirement or Death, then all
options not yet vested shall immediately expire on the date the
Participant ceases to be an Officer, Employee, Director or Consultant and
any unexercised Options which are vested pursuant to the provisions of
section 7.01(c) must be exercised in accordance with terms of the granting
of the Options except that such exercise shall be, unless otherwise
provided by the Committee, on or before the earlier of the expiration of
90 days immediately following the date of ceasing to be an Officer,
Employee, Director or Consultant or the expiration date of such Options
pursuant to section 7.01(d), and thereafter any Options not exercised
shall expire.
9.02 If a Participant Retires or becomes Totally Disabled after the granting of
the Options, all vesting periods set forth in section 7.01(c) will be
waived and the Options will be exercisable at any time up to the earlier
of five years from the date of Retirement or Disability or the expiration
dates of such Options in accordance with the terms of the granting of the
Options, and thereafter any Options not exercised shall expire.
9.03 If a Participant dies during active service following the granting of
Options, all vesting periods set forth in section 7.01(c) will be waived
and such Options will expire two years from the date of death or the
expiration of the Options, whichever is earlier, and thereafter all
Options expire.
10. AMENDMENT AND TERMINATION
10.01 The Board may at any time amend, suspend or terminate the Plan in whole or
in part provided that no amendment, suspension or termination shall
adversely affect the vested rights of any Participant without the consent
of such Participant.
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10.02 Any amendment, suspension or termination of the Plan shall be communicated
to all participants within thirty (30) days of such amendment, suspension
or termination.
10.03 No amendment, suspension or termination of the Plan may contravene the
requirements of any securities commission, stock exchange, or regulatory
body of any jurisdiction to which the Plan or Teekay Shipping Corporation
is now or may hereafter be subject.
11. GENERAL
11.01 This Plan and any agreement entered into pursuant to section 7 hereof
shall be construed and interpreted according to the laws of the
Commonwealth of the Bahamas.
11.02 If any provision in this Plan is void, the remaining provisions shall be
binding as though the void parts were deleted.
11.03 Participation in the Plan does not confer upon the Officer, Employee,
Director or Consultant any right to continued employment (Employee),
status as a Director (Director), or appointment as an Officer or
Consultant. Participation in the Plan does not create any rights or
privileges of a shareholder of the Company with respect to any Shares
issuable upon exercise of any Option unless and until such Option has been
exercised.
11.04 For the purposes of the Plan, unless the context otherwise requires, words
importing the singular include the plural and vice versa, and words
importing the male gender include the female gender and vice versa.
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