Exhibit 10-7
Option Adjustment and Indemnification
Agreement
This Agreement is made and entered this ___ day of June 2006 by and
between Todd Shipyards Corporation (the "Company") and
_______________ ("Employee"). [Date of Agreement will be the
ex-dividend date.]
Witnesseth That
Whereas, the Company has heretofore granted to Employee options to
purchase shares of the Company's Common Stock pursuant to options
granted under the terms of the Incentive Stock Compensation Plan of
Todd Shipyards Corporation (the "Plan"); and
Whereas, the Plan, as amended and ratified by the Company's
shareholders, provides that the number of shares subject to option
and the exercise price per share applicable to such option(s) may
be equitably adjusted by the Compensation Committee of the
Company's Board of Directors in certain corporate transactions
including, without limitation, distribution of assets to
shareholders other than pursuant to a normal cash dividend;
and
Whereas, the Plan also permits the Company to indemnify Employee
against certain tax liabilities risks arising from any such
equitable adjustment (other than taxes arising upon the exercise,
or deemed exercise, of such option as adjusted); and
Whereas, the Board of Directors of the Company has declared an
extraordinary cash dividend in the amount of $4.00 per share of
Common Stock payable on June 20, 2006 to holders of record of such
Common Stock on the close of business on June 5, 2006, and the
Compensation Committee has determined that such extraordinary
dividend warrants an equitable adjustment of the terms of the
option(s) held by Employee under the Plan;
Now, Therefore, the Company covenants and agrees with Employee as
follows:
1.
Adjustment of Option . Under formulae adopted by the
Compensation Committee, the option granted to Employee on <
insert date of grant> to purchase _______ shares of
Common Stock at an
