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<SEC-DOCUMENT>/in/edgar/work/20000728/0000891020-00-001350/0000891020-00-001350.txt : 20000921
<SEC-HEADER>0000891020-00-001350.hdr.sgml : 20000921
ACCESSION NUMBER:		0000891020-00-001350
CONFORMED SUBMISSION TYPE:	S-8
PUBLIC DOCUMENT COUNT:		4
FILED AS OF DATE:		20000728
EFFECTIVENESS DATE:		20000728

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			TEEKAY SHIPPING CORP
		CENTRAL INDEX KEY:			0000911971
		STANDARD INDUSTRIAL CLASSIFICATION:	 [4412
]		IRS NUMBER:				000000000
		STATE OF INCORPORATION:			C5
		FISCAL YEAR END:			1231
</COMPANY-DATA>

		FILING VALUES:
			FORM TYPE:		S-8
			SEC ACT:		
			SEC FILE NUMBER:	333-42434
			FILM NUMBER:		680833
</FILING-VALUES>

			BUSINESS ADDRESS:	
				STREET 1:		EURO CANADIAN CENTRE,4TH FL.POBOX SS6293
				STREET 2:		MARLBOROUGH ST. & NAVY LYON RD
				CITY:			NASSAU BAHAMAS
				STATE:			C5
				ZIP:			00000
				BUSINESS PHONE:		8093228020
</BUSINESS-ADDRESS>

				MAIL ADDRESS:	
					STREET 1:		EURO CANADIAN CENTRE,4TH FL.POBOX SS6293
					STREET 2:		MARLBOROUGH ST. & NAVY LYON RD
					CITY:			NASSAU BAHAMAS
					STATE:			C5
					ZIP:			00000
</MAIL-ADDRESS>

					FORMER COMPANY:	
						FORMER CONFORMED NAME:	VIKING STAR SHIPPING INC
						DATE OF NAME CHANGE:	19930914
</FORMER-COMPANY>
</FILER>
</SEC-HEADER>
<DOCUMENT>
<TYPE>S-8
<SEQUENCE>1
<FILENAME>s-8.txt
<DESCRIPTION>FORM S-8
<TEXT>

<PAGE>   1

================================================================================

     AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 28, 2000
                                                    REGISTRATION NO. 333-
- --------------------------------------------------------------------------------

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                            ------------------------

                                    FORM S-8
                             REGISTRATION STATEMENT
                                     UNDER
                           THE SECURITIES ACT OF 1933
                            ------------------------

                          TEEKAY SHIPPING CORPORATION
             (Exact name of registrant as specified in its charter)

<TABLE>
<S>                                             <C>
      REPUBLIC OF THE MARSHALL ISLANDS                         NOT APPLICABLE
      (State or other jurisdiction of               (I.R.S. Employer Identification No.)
        incorporation or organization)
</TABLE>

                                    TK HOUSE
                             BAYSIDE EXECUTIVE PARK
                          WEST BAY STREET & BLAKE ROAD
                                     NASSAU
                                  THE BAHAMAS
          (Address of principal executive offices, including zip code)

                          TEEKAY SHIPPING CORPORATION
                         AMENDED 1995 STOCK OPTION PLAN
                           (Full title of the plans)

                             LAWCO OF OREGON, INC.
                                PERKINS COIE LLP
                       1211 S.W. FIFTH AVENUE, SUITE 1500
                          PORTLAND, OREGON 97204-3715
                           ATTENTION: KAREN M. DODGE
                                 (503) 727-2000
(Name, address and telephone number, including area code, of agent for service)
                            ------------------------

                                   COPIES TO:

                               DAVID S. MATHESON
                                PERKINS COIE LLP
                       1211 S.W. FIFTH AVENUE, SUITE 1500
                          PORTLAND, OREGON 97204-3715
                            ------------------------

                        CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
         TITLE OF SECURITIES            NUMBER TO BE    PROPOSED MAXIMUM       PROPOSED MAXIMUM          AMOUNT OF
          TO BE REGISTERED              REGISTERED(1)    OFFERING PRICE    AGGREGATE OFFERING PRICE   REGISTRATION FEE
<S>                                     <C>             <C>                <C>                        <C>
- ----------------------------------------------------------------------------------------------------------------------
Common Stock, par value $0.001 per
  share                                   2,350,000        $38.65625            $90,842,187.50           $23,982.34
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) Based on shares subject to outstanding options or reserved for future
    issuance pursuant to the amendment to the 1995 Stock Option Plan, together
    with an indeterminate number of additional shares which may be necessary to
    adjust the number of shares reserved for issuance pursuant to such employee
    benefit plan as the result of any future stock split, stock dividend or
    similar adjustment of the registrant's outstanding Common Stock.

(2) Estimated solely for the purpose of calculating the registration fee
    pursuant to Rule 457(c) under the Securities Act of 1933, as amended, based
    on the average of the high ($39.25) and low ($38.0625) sales prices for the
    Common Stock on July 25, 2000, as reported for such date on the New York
    Stock Exchange.

================================================================================
<PAGE>   2

                                    PART II

                 INFORMATION REQUIRED IN REGISTRATION STATEMENT

ITEM 3.  INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

     The following documents filed with the Securities and Exchange Commission
(the "Commission") are hereby incorporated by reference in this Registration
Statement:

        (a)   Transition Report of Teekay on Form 20-F for the transition period
from April 1, 1999 to December 31, 1999, which contains audited financial
statements of the registrant;

        (b)   The description of Teekay's Common Stock contained in the
Registration Statement on Form 20-F filed with the Commission on July 10, 1995,
including any amendments or reports filed for the purpose of updating such
description; and

        (c)   All other reports filed by the registrant pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), since the end of the transition period covered by the Transition Report
on Form 20-F referenced above.

     All documents filed by the registrant pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), after the date hereof, and prior to the filing of a post-effective
amendment which indicates that the securities offered hereby have been sold or
which deregisters the securities covered hereby then remaining unsold, shall
also be deemed to be incorporated by reference into this Registration Statement
and to be a part hereof commencing on the respective dates on which such
documents are filed.

ITEM 6.  INDEMNIFICATION OF DIRECTORS AND OFFICERS

     Teekay Shipping Corporation ("Teekay") is a Marshall Islands corporation.
The Marshall Islands Business Corporation Act ("MIBCA") provides that a Marshall
Islands corporation shall have the power to indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that he is or was a director or officer of the corporation,
or is or was serving at the request of the corporation as a director or officer
of another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon a
plea of no contest, or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe his conduct was unlawful. A Marshall Islands
corporation also has the power to indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action
or suit by or in the right of the corporation to procure a judgment in its favor
by reason of the fact that he is or was a director or officer of the
corporation, or is or was serving at the request of the corporation as a
director or officer of another corporation, partnership, joint venture, trust or
other enterprise against expenses (including attorneys' fees) actually and
reasonably incurred by him
<PAGE>   3

or in connection with the defense or settlement of such action or suit if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable for negligence or
misconduct in the performance of his duty to the corporation unless and only to
the extent that the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the court shall deem proper.

     To the extent that a director or officer of a Marshall Islands corporation
has been successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in the preceding paragraph, or in the defense of a claim,
issue or matter therein, he shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by him in connection
therewith. Expenses incurred in defending a civil or criminal action, suit or
proceeding may be paid in advance of the final disposition of such action, suit
or proceeding as authorized by the board of directors in the specific case upon
receipt of an undertaking by or on behalf of the director or officer to repay
such amount unless it shall ultimately be determined that he is entitled to be
indemnified by the corporation as authorized in the MIBCA.

     In addition, a Marshall Islands corporation has the power to purchase and
maintain insurance on behalf of any person who is or was a director or officer
of the corporation or is or was serving at the request of the corporation as a
director or officer against any liability asserted against him and incurred by
him in such capacity whether or not the corporation would have the power to
indemnify him against such liability under the provisions of the MIBCA.

     Section J of the Company's Articles of Incorporation, as amended, provides
that to the fullest extent permitted under the MIBCA, a director of the Company
shall not be liable to the Company or its shareholders for monetary damages for
breach of fiduciary duty as a director. Section 10.00 of the Company's Bylaws
provides that any person who is made party to a proceeding by virtue of being an
officer or director of the Company or, being or having been such a director or
officer or an employee of the Company, serving at the request of the Company as
a director, officer, employee or agent of another corporation or other
enterprise, shall be indemnified and held harmless to the fullest extent
permitted by the MIBCA against any and all expense, liability, loss (including
attorneys' fees, judgments, fines or penalties and amounts paid in settlement)
actually incurred or suffered by such person in connection with the proceeding.

     In addition, the Company has entered into separate Indemnification
Agreements with each of the Company's officers and directors listed in the
Registration Statement which provide for indemnification of the director or
officer against all expenses, judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative except to the extent that such person is
otherwise indemnified, such action, suit or proceeding arose out of such
person's intentional misconduct, knowing violation of law or out of a
transaction in which such director or officer is finally judicially determined
to have derived an improper personal benefit or if it shall be determined by a
final judgment or other final adjudication that such indemnification was not
lawful.
<PAGE>   4

ITEM 8.  EXHIBITS

<TABLE>
<CAPTION>
Exhibit
Number                             Description
- -------    ------------------------------------------------------------
<C>        <S>
   5.1     Opinion of Watson, Farley & Williams regarding legality of
           the Common Stock being registered

  23.1     Consent of Ernst & Young, Chartered Accountants

  23.2     Consent of Watson, Farley & Williams (included in opinion
           filed as Exhibit 5.1)

  24.1     Power of Attorney (see signature page)

  99.1     Teekay Shipping Corporation Amended 1995 Stock Option Plan
</TABLE>

ITEM 9.  UNDERTAKINGS

A.       The undersigned registrant hereby undertakes:

         (1)   To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:

               (i)    To include any prospectus required by Section 10(a)(3) of
the Securities Act;

               (ii)   To reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this Registration
Statement; and

               (iii)  To include any material information with respect to the
plan of distribution not previously disclosed in this Registration Statement or
any material change to such information in this Registration Statement;

provided, however, that paragraphs (1)(i) and (1)(ii) above do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 or Section 15(d) of the Exchange Act that are incorporated by
reference in this Registration Statement.

         (2)   That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.

         (3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.

B.        The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefits plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in this Registration Statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
<PAGE>   5
 C.       Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
<PAGE>   6

                                   SIGNATURES

     Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Vancouver, Province of British Columbia, on the 26th
day of July, 2000.

                                          TEEKAY SHIPPING CORPORATION

                                          By: /s/ Bjorn Moller
                                            ------------------------------------
                                              Bjorn Moller
                                              President and Chief Executive
                                              Officer

                               POWER OF ATTORNEY

     Each person whose individual signature appears below hereby authorizes
Bjorn Moller and Peter S. Antturi, or either of them, as attorneys-in-fact with
full power of substitution, to execute in the name and on the behalf of each
person, individually and in each capacity stated below, and to file, any and all
amendments to this Registration Statement, including any and all post-effective
amendments.

     Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated below on the 26th day of July, 2000.

<TABLE>
<CAPTION>
                      SIGNATURE                                              TITLE
                      ---------                                              -----
<C>                                                      <S>


                  /s/ Bjorn Moller                       President, Chief Executive Officer and
- -----------------------------------------------------    Director (Principal Executive Officer)
                    Bjorn Moller


                /s/ Peter S. Antturi                     Vice President, Chief Financial Officer,
- -----------------------------------------------------    Treasurer and Director (Principal Financial
                  Peter S. Antturi                       and Accounting Officer)


                   /s/ C. Sean Day                       Director and Chairman of the Board
- -----------------------------------------------------
                     C. Sean Day


                 /s/ Axel Karlshoej                      Director and Chairman Emeritus
- -----------------------------------------------------
                   Axel Karlshoej


                  /s/ Bruce C. Bell                      Director and Secretary
- -----------------------------------------------------
                    Bruce C. Bell


               /s/ Michael D. Dingman                    Director
- -----------------------------------------------------
                 Michael D. Dingman


                 /s/ Morris L. Feder                     Director
- -----------------------------------------------------
                   Morris L. Feder


                 /s/ Steve G.K. Hsu                      Director
- -----------------------------------------------------
                   Steve G.K. Hsu


               /s/ Thomas Kuo-Yuen Hsu                   Director
- -----------------------------------------------------
                 Thomas Kuo-Yuen Hsu


                  /s/ Leif O. Hoegh                      Director
- -----------------------------------------------------
                    Leif O. Hoegh
</TABLE>

<PAGE>   7

                               INDEX TO EXHIBITS

<TABLE>
<CAPTION>
Exhibit
Number                           Description
- -------  ------------------------------------------------------------
<C>      <S>
  5.1    Opinion of Watson, Farley & Williams regarding legality of
         the Common Stock being registered

 23.1    Consent of Ernst & Young, Chartered Accountants

 23.2    Consent of Watson, Farley & Williams (included in opinion
         filed as Exhibit 5.1)

 24.1    Power of Attorney (see signature page)

 99.1    Teekay Shipping Corporation Amended 1995 Stock Option Plan
</TABLE>


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-5.1
<SEQUENCE>2
<FILENAME>ex5-1.txt
<DESCRIPTION>OPINION OF SPECIAL COUNSEL
<TEXT>

<PAGE>   1

                                                                     EXHIBIT 5.1

                     [WATSON, FARLEY & WILLIAMS LETTERHEAD]

July 28, 2000

Teekay Shipping Corporation
TK House
Bayside Executive Park
West Bay street & Blake Road
Nassau
THE BAHAMAS

Ladies and Gentlemen:

     We have acted as special counsel on matters of Marshall Islands law for
Teekay Shipping Corporation, a Marshall Islands corporation (the "Company"), in
connection with the preparation of a Registration Statement on Form S-8 (the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Act"), which you are filing with the Securities and Exchange Commission with
respect to 2,350,000 shares of Common Stock, par value $0.001 per share, which
may be issued pursuant to the Company's 1995 Stock Option Plan, as amended to
date (the "Plan").

     In so acting, we have examined a copy of the Registration Statement and
originals, or copies certified to our satisfaction, of all such corporate
records of the Company, agreements and other documents, certificates of public
officials and officers and representatives of the Company and appropriate
persons, and such other documents as we have deemed necessary as a basis for the
opinions hereinafter expressed.

     We have assumed without independent investigation, (i) the genuineness of
all signatures, the authenticity of all documents submitted to us as originals,
the conformity to original documents of all documents submitted to us as
photostatic or facsimile copies, and the authenticity of the originals of such
copies and (ii) the accuracy of the factual representations made to us by
officers and other representatives of the Company, whether evidenced by
certificates or otherwise.

     Based upon and subject to the foregoing, we are of the opinion that any
shares that may be issued pursuant to the Plan have been duly authorized and
that, upon the execution by the proper officers of the Company and the
registration by its registrar of such shares, the sale thereof by the Company in
accordance with the terms of the Plan, the receipt of consideration therefor in
accordance with the terms of the Plan, such shares will be validly issued, fully
paid and nonassessable.

     This opinion is limited to the law of the Republic of The Marshall Islands.
In rendering this opinion, we have relied upon our independent examination of
the Associations Law of the Republic of The Marshall Islands 1990, as amended,
made available to us by Marshall Islands Maritime & Corporate Administrators,
Inc.

<PAGE>   2

     We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving such consent, we do not admit that we are in
the category of persons whose consent is required under Section 7 of the Act.


                                          Very truly yours,


                                          /s/ Watson, Farley & Williams


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.1
<SEQUENCE>3
<FILENAME>ex23-1.txt
<DESCRIPTION>CONSENT OF AUDITORS
<TEXT>

<PAGE>   1

                                                                    EXHIBIT 23.1

                CONSENT OF ERNST & YOUNG, CHARTERED ACCOUNTANTS

We consent to the incorporation by reference in the Registration Statement (Form
S-8) of Teekay Shipping Corporation of our report dated February 11, 2000, with
respect to the consolidated financial statements and schedule of Teekay and its
Subsidiaries included in the Transition Report (Form 20-F) for the transition
period from April 11, 1999 to December 31, 1999, filed with the Securities and
Exchange Commission.



                                          ERNST & YOUNG, Chartered Accountants



Nassau, Bahamas
July 28, 2000


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>4
<FILENAME>ex99-1.txt
<DESCRIPTION>AMENDED 1995 STOCK OPTION PLAN
<TEXT>

<PAGE>   1

                                                                    EXHIBIT 99.1

                          TEEKAY SHIPPING CORPORATION

                         AMENDED 1995 STOCK OPTION PLAN

1.    PURPOSE

1.01  The purpose of the 1995 Stock Option Plan (the "Plan") is to provide an
      effective long term incentive for selected key employees, directors,
      officers and consultants of Teekay Shipping Corporation and related
      companies including Teekay Shipping Limited (including its affiliates,
      "Teekay Shipping"), which provides management services to Teekay Shipping
      Corporation, to foster a greater proprietary interest in the continued
      success of the Company.

2.    DEFINITIONS

2.01  In this Plan:

      (a)   "Board" means the Board of Directors of Teekay Shipping Corporation;

      (b)   "Company" means Teekay Shipping Corporation, or any successor
            corporation;

      (c)   "Committee" means the committee of the Board charged with the
            responsibility of administering the Plan or, failing the designation
            of a committee, Committee means the Board;

      (d)   "Consultant" means any person who acts as a consultant, advisor or
            independent contractor to the Company or a Participating Related or
            Subsidiary Company;

      (e)   "Director" means a member of the Board of Directors of Teekay
            Shipping Corporation or a Participating Related or Subsidiary
            Company. A Director who is an Employee will be governed by the Plan
            as an Employee and will not be subject to any provisions which would
            otherwise apply to Directors. In no event will benefits under the
            Plan for a Director be additive to benefits for an Employee (or vice
            versa) who is the same person;

      (f)   "Employee" means any person who is a full-time or permanent
            part-time salaried employee on the payroll of Teekay Shipping
            Corporation or any Participating Related or Subsidiary Company, but
            shall specifically exclude temporary, seasonal or contract help;

      (g)   "Officer" means any person who is appointed as an Officer by the
            Board of Directors of the Company or of a Participating Related or
            Subsidiary company;

      (h)   "Options" means the rights granted to an Officer, Employee, Director
            or Consultant to purchase Shares in accordance with the terms of the
            Plan;

      (i)   "Participant" means an Officer, Employee, Director or Consultant who
            has been granted Options to purchase Shares of the Company in
            accordance with the terms of the Plan;
<PAGE>   2
      (j)   "Participating Related or Subsidiary Company" means a subsidiary of
            Teekay Shipping Corporation or a related company designated by the
            Board as having Officers, Employees, Directors or Consultants
            eligible under the Plan;

      (k)   "Plan" means this 1995 Stock Option Plan of Teekay Shipping
            Corporation;

      (l)   "Retirement" or "Retires" means the early or normal retirement of an
            Employee within the retirement policy of the Company, whether or not
            such Employee is a member of or entitled to benefits under any
            retirement plan of the Company. With respect to a Director,
            retirement means cessation of such person's term as a Director upon
            the scheduled end of such term or earlier upon resignation;

      (m)   "Shares" or "Stock" means common shares of Teekay Shipping
            Corporation;

      (n)   "Share Appreciation Rights (SAR)" means the increase in fair market
            value of the common shares of Teekay Shipping Corporation from the
            date of grant to date of exercise; and

      (o)   "Total Disability" means solely because of disease or injury, an
            Employee is deemed by a qualified physician selected by the Company
            to be unable to work at any occupation which the Employee is
            reasonably qualified to perform. In the case of a Director, total
            disability means solely because of disease or injury, a Director is
            deemed by a qualified physician selected by the Company to be unable
            to carry out his or her responsibilities as a Director.

3.    ADMINISTRATION

3.01  The Plan shall be administered by the Committee.

3.02  The Committee shall:

      (a)   formulate guidelines and administrative provisions to implement and
            run the Plan;

      (b)   decide all matters relating to the administration of the Plan
            including the interpretation of the terms of the Plan. Any decision
            of the Committee shall be conclusive unless otherwise determined by
            the Board;

      (c)   design and approve any forms and agreements required to carry out
            the provisions of the Plan;

      (d)   delegate to any person or persons administrative duties as the
            Committee considers appropriate;

      (e)   determine the time at which Options shall be granted, the number of
            Shares subject to each Option, the price at which the Option may be
            exercised, the term during which the Option may be exercised and any
            restrictions which limit exercise; and

      (f)   designate those individuals, subject to section 4.01, to whom Stock
            Options may be granted.

                                       -2-
<PAGE>   3

4.     ELIGIBILITY

4.01   Unless expressly excluded herein, Officers, Employees, Directors and
       Consultants of Teekay Shipping Corporation and Related or Subsidiary
       Companies shall be eligible to become Participants.

5.     SHARES SUBJECT TO THE PLAN AND DURATION OF THE PLAN

5.01   The number of Shares reserved and available for Options under the Plan
       shall be 6,298,571 shares.

5.02   No increase in the number of Shares reserved for issuance under the Plan
       is allowed without approval of the Board.

5.03   Any Shares which are subject to Options which are cancelled or forfeit
       shall be available for the granting of Options thereafter under the Plan.

5.04   The Plan shall be effective upon the Initial Public Offering of the
       Company and shall continue as long as Options under the Plan are
       available.

6.     SHARE APPRECIATION RIGHTS

6.01   In tandem with each Option granted under the Plan, the Committee may
       grant an equal number of Share Appreciation Rights (SAR). SAR's are
       subject to the same provisions covering price, vesting, term, exercise
       and termination of employment as apply to the Options to which each is
       contingently attached.

6.02   The purpose of the SAR's is to increase the flexibility of the
       Participant and the Company in the exercise of an Option and the
       administration of the Plan. The granting of an SAR in tandem with an
       Option is not intended to increase the compensation Participants would
       otherwise earn through the Plan. The exercise of either one automatically
       cancels the right to exercise the other.

6.03   Each SAR carries with it the right of a Participant to receive payment
       from the Company equal to the gain that would have been realized if the
       related Share Option had been exercised and the shares resold at fair
       market value on the date of exercise.

6.04   A Participant may elect to exercise an SAR if his or her intent is not to
       retain ownership of the shares being exercised. At the time of exercise
       the Participant is required to notify the Company of his or her intention
       on the prescribed form.

6.05   The Participant may elect to receive an SAR award in cash, Shares or any
       combination of the two.

                                       -3-
<PAGE>   4

7.    TERMS AND CONDITIONS OF OPTIONS

7.01  Each Option granted under the Plan shall be evidenced by a written
      agreement between the Company and the Participant. The agreements shall
      include the substance of the following provisions:

      (a)   the number of Shares for which the Options (and SAR's [if any]
            granted in tandem) are granted;

      (b)   the price at which the Options (or SAR's) may be exercised;

      (c)   unless otherwise specified by the Committee, 25% of the Options (or
            SAR's) granted will vest and be exercisable the day following one
            year from the date of the grant of the Options, with a further 25%
            of the Options (or SAR's) vesting and becoming exercisable the day
            following each subsequent year from the date of the grant;

      (d)   an expiry date determined by the Committee which under no
            circumstances will be later than ten years after the grant of the
            Options (and SAR's granted in tandem);

      (e)   Options (or SAR's) may be exercised only upon submitting written
            notice of exercise, accompanied by payment in full of the Option
            price (if the Option is being exercised). Payment on exercise of an
            Option may be made by the Participant in cash or certified cheque,
            or such other forms of payment as may be permitted by the Committee
            at any time prior to exercise of the Option; and

      (f)   Options and the rights and privileges conferred by the Plan may not
            be transferred, assigned, pledged or hypothecated in any manner
            (whether by operation of law or otherwise) other than by will or by
            the applicable laws of descent and distribution and shall not be
            subject to execution, attachment or similar process. Any attempt to
            transfer, assign, pledge, hypothecate or otherwise dispose of any
            Option, or of any right or privilege conferred hereby, contrary to
            the provisions of this Plan, or the sale or levy or any attachment
            or similar process upon the rights and privileges conferred hereby
            shall be null and void. Notwithstanding the foregoing, if the
            Committee permits, a Participant may, during the Participant's
            lifetime, designate a person who may exercise the Option after the
            Participant's death by giving written notice of such designation to
            the Committee. Such designation may be changed from time to time by
            a Participant by giving written notice to the Committee revoking any
            earlier designation and making a new designation.

7.02  If a change in the Shares of Teekay Shipping Corporation occurs by reason
      of subdivision, split, reverse split, stock dividend, or similar
      recapitalization, then an equitable adjustment shall be made by the Board
      for outstanding Options.

8.    EFFECT OF LIQUIDATION, REORGANIZATION OR ACQUISITION

8.01  Except as provided in section 8.02, upon a merger (other than a merger of
      the Company in which the holders of Stock immediately prior to the merger
      have the same proportionate ownership of Stock in the surviving
      corporation immediately after the merger), consolidation, acquisition of
      property or stock, separation, reorganization (other than a mere
      re-incorporation or the creation

                                       -4-
<PAGE>   5

      of a holding company) or liquidation of the Company, as a result of which
      the shareholders of the Company receive cash, stock or other property in
      exchange for or in connection with their shares of Stock, any Option shall
      terminate, but the Participant shall have the right immediately prior to
      any such merger, consolidation, acquisition of property or stock,
      separation, reorganization or liquidation to exercise such Participant's
      option in whole or in part whether or not the vesting requirements set
      forth in the agreement relating to such Option have been satisfied.

8.02  If all the shareholders of the Company receive capital stock of another
      corporation ("Exchange Stock") in exchange for their shares of Stock in
      any transaction involving a merger, consolidation, acquisition of property
      or stock, separation or reorganization, all Options granted hereunder
      shall be converted into options to purchase shares of Exchange Stock
      unless the Company and the corporation issuing the Exchange Stock, in
      their sole discretion, determine that any or all such options granted
      hereunder shall not be converted into options to purchase shares of
      Exchange Stock but instead shall terminate in accordance with the
      provisions of section 8.01. The amount and price of converted options
      shall be determined by adjusting the amount and price of the Options
      granted hereunder in the same proportion as used for determining the
      number of shares of Exchange Stock the holders receive in such merger,
      consolidation, acquisition of property or stock, separation or
      reorganization. Unless accelerated by the Board, the vesting schedule set
      forth in the Option agreement shall continue to apply to the options
      granted for the Exchange Stock.

8.03  (a)   A Participant shall have the right, upon and after the making of an
            Offer, to exercise such Participant's Options (or related SAR's) in
            whole or in part whether or not the vesting requirements set forth
            in the Plan or in the agreement relating to the Options (or related
            SAR's) have been satisfied. In the case of Options (or related
            SAR's) where such vesting requirements have not been satisfied, the
            exercise shall be solely for the purpose of permitting the
            Participant to tender the Shares received upon such exercise
            pursuant to the Offer.

      (b)   "Offer" means an offer:

            (i)   made generally to the holders of the Company's voting
                  securities, to the Participant or to a class of security
                  holders which include the Participant, in one or more
                  jurisdictions to purchase directly or indirectly voting
                  securities of the Company or

            (ii)  which is a tender offer, exchange offer or take-over bid in
                  any applicable jurisdiction (disregarding for that purpose any
                  minimum percentage of shares to be acquired to constitute such
                  offer or bid in such jurisdictions)

            where the voting securities which are the subject of the Offer,
            together with the offeror's then presently beneficially owned voting
            securities, would in the aggregate exceed 25% of the outstanding
            voting securities of the Company. If two or more persons,
            corporations or entities make offers jointly or in concert or intend
            to exercise jointly or in concert any voting rights attaching to the
            securities to be acquired, then the voting securities beneficially
            owned by each of them shall be included in the calculation of the
            percentage of the outstanding voting securities of the Company
            beneficially owned by each of them.

                                       -5-
<PAGE>   6
            Notwithstanding the foregoing, Offer does not include an Offer made
            by the Company, any subsidiary or related company with the approval
            of the Board or any employee benefit plan sponsored by the Company.

            In this Section 8.03 and in Section 8.04, "beneficial ownership",
            "beneficially owned", and words of similar import shall have the
            meaning, with necessary grammatical changes, in Rule 13d-3 of the
            Securities Exchange Act of 1934, as amended.

      (c)   The Company shall, immediately upon receipt of notice of the Offer,
            notify each Participant of full particulars of the Offer.

      (d)   In lieu of or in combination with (but not in duplication of) the
            right set out in Section 8.03(a), a Participant shall also have the
            right, exercisable during the 30 (thirty) days after the Offer has
            been consummated by the offeror taking up and paying for Shares
            pursuant to the Offer, to surrender such Participant's Options (or
            related SAR's) in whole or in part to the Company (whether or not
            the Options (or related SAR's) are otherwise vested at the time).
            The Participant shall in return be entitled to a cash distribution
            from the Company in an amount equal to the excess of (i) the
            Take-Over Price of the Shares at the time subject to such
            surrendered Option (or related SAR) (or surrendered portion of such
            Option (or related SAR)) over (ii) the aggregate exercise price
            payable for such Shares. Such cash distribution shall be made within
            five (5) days following the Option (or related SAR) surrender date.
            Upon receipt of such cash distribution, the Option (or related SAR)
            shall be cancelled with respect to the Shares subject to the
            surrendered Option (or related SAR) (or surrendered portion of such
            Option (or related SAR)) and the Participant shall cease to have any
            further right to acquire Shares pursuant thereto. The Option (or
            related SAR) shall however remain outstanding for the balance of the
            Shares and the Company shall issue a new agreement for those
            remaining Shares.

            "Take-Over Price" shall mean the greater of (i) the Fair Market
            Value per Share on the date the Option (or related SAR) is
            surrendered to the Company in connection with the Offer and (ii) the
            highest reported price per Share paid by the offeror in effecting
            such Offer.

            "Fair Market Value" per Share on any relevant date shall mean the
            closing selling price per Share on the date in question on the stock
            exchange or quotation system which is the primary market for the
            Shares. If there is no closing selling price for the Shares on the
            date in question, then the Fair Market Value shall mean the closing
            selling price on the last preceding date for which such quotation
            exists, if any, or as shall be determined by the Board based on the
            advice of an independent investment banker.

      (e)   If, after consummation of the Offer by the offeror taking up and
            paying for Shares pursuant to the Offer, there is an Involuntary
            Termination of a Participant who holds Options (or related SAR's) in
            respect of which Shares were not tendered or taken up and paid for
            pursuant to the Offer nor surrendered pursuant to Section 8.03(d),
            such Participant shall be entitled, notwithstanding Section 9.01, to
            exercise such Options (or related SAR's) for a period of five years,
            or

                                       -6-
<PAGE>   7
            such longer period as may be determined by the Board, following
            Involuntary Termination, provided that such exercise may not be made
            after the expiration of the right to exercise such Options (or
            related SAR's) for any reason other than Involuntary Termination.

            "Involuntary Termination" means the termination of a Participant's
            service by reason of:

            (i)   Participant's involuntary dismissal or discharge for reasons
                  other than Misconduct; or

            (ii)  Participant's voluntary resignation following (a) a change in
                  Participant's position which materially reduces Participant's
                  level of responsibility (b) a reduction in Participant's level
                  of compensation (including base salary, fringe benefits or
                  participation in any corporate performance based bonus or
                  incentive programs) by more than 15% or (c) a relocation of
                  Participant's place of employment by more than 50 miles,
                  provided and only if such change, reduction or relocation is
                  effected without the Participant's consent.

            "Misconduct" shall mean the commission of any act of fraud,
            embezzlement or dishonesty by Participant, or unauthorized use or
            disclosure by Participant of confidential information or trade
            secrets of the Company (or any subsidiary or related company), or
            any intentional misconduct by Participant adversely affecting the
            business or affairs of the Company (or any subsidiary or related
            company) in a material manner. The foregoing definition shall not be
            deemed to be inclusive of all the acts or omissions which the
            Company (or any subsidiary or related company) may consider as
            grounds for the dismissal or discharge of Participant or any other
            person in the service of the Company (or subsidiary or related
            company).

8.04  (a)   A Participant shall have the right, upon and after a Board Change or
            a Control Purchase, to exercise such Participant's Options (or
            related SAR's) in whole or in part whether or not the vesting
            requirements set forth in the Plan or in the agreement relating to
            the Options (or related SAR's) have been satisfied.

      (b)   "Board Change" means, during any period of two consecutive years or
            less, persons who at the beginning of such period constituted the
            entire Board of Directors ceased for any reason to constitute a
            majority thereof unless the election or appointment, or the
            nomination for election by the Company's shareholders, of each new
            Director was approved by a vote of at least two-thirds of the
            Directors then still in office who were Directors at the beginning
            of the period.

      (c)   "Control Purchase" means any transaction in which any person,
            corporation or entity shall become the beneficial owner directly or
            indirectly of more than 25% of the outstanding voting securities of
            the Company, and such person, corporation or entity shall vote any
            of such securities at any meeting of the shareholders of the Company
            in favour of a resolution passed at such meeting which was not
            recommended by a majority of the "Continuing Directors" (as defined
            in the Amended and Restated Articles of Incorporation of the
            Company). If two or more persons, corporations or entities jointly

                                       -7-
<PAGE>   8
            or in concert beneficially own the securities or intend to exercise
            jointly or in concert any voting rights attaching to the securities,
            then the voting securities beneficially owned by each of them shall
            be included in the calculation of the percentage of the outstanding
            voting securities of the Company beneficially owned by each of them.
            The foregoing definition does not apply to beneficial ownership by
            the Company, any subsidiary or related company with the approval of
            the Board or any employee benefit plan sponsored by the Company.

8.05  Notwithstanding anything to the contrary in the Plan or in the agreement
      relating to the Options (or related SAR's), the Board or the Committee,
      may, in its discretion, at any time, determine that a Participant shall
      have the right to exercise such Participant's Options (or related SAR's)
      in whole or in part whether or not the vesting requirements set forth in
      the Plan or in the agreement relating to the Options (or related SAR's)
      have been satisfied; and may, in its discretion rescind such determination
      made by it but without depriving a Participant of the benefits to which he
      or she would otherwise be entitled as a result of having exercised the
      Options (or related SAR's) before the rescission of the determination.

9.    TERMINATION OF EMPLOYMENT OR CEASING TO BE A DIRECTOR

9.01  If a Participant ceases to be an Officer, Employee, Director or Consultant
      for any reason other than Disability, Retirement or Death, then all
      options not yet vested shall immediately expire on the date the
      Participant ceases to be an Officer, Employee, Director or Consultant and
      any unexercised Options which are vested pursuant to the provisions of
      section 7.01(c) must be exercised in accordance with terms of the granting
      of the Options except that such exercise shall be, unless otherwise
      provided by the Committee, on or before the earlier of the expiration of
      90 days immediately following the date of ceasing to be an Officer,
      Employee, Director or Consultant or the expiration date of such Options
      pursuant to section 7.01(d), and thereafter any Options not exercised
      shall expire.

9.02  If a Participant Retires or becomes Totally Disabled after the granting of
      the Options, all vesting periods set forth in section 7.01(c) will be
      waived and the Options will be exercisable at any time up to the earlier
      of five years from the date of Retirement or Disability or the expiration
      dates of such Options in accordance with the terms of the granting of the
      Options, and thereafter any Options not exercised shall expire.

9.03  If a Participant dies during active service following the granting of
      Options, all vesting periods set forth in section 7.01(c) will be waived
      and such Options will expire two years from the date of death or the
      expiration of the Options, whichever is earlier, and thereafter all
      Options expire.

10.   AMENDMENT AND TERMINATION

10.01 The Board may at any time amend, suspend or terminate the Plan in whole or
      in part provided that no amendment, suspension or termination shall
      adversely affect the vested rights of any Participant without the consent
      of such Participant.

                                       -8-
<PAGE>   9

10.02 Any amendment, suspension or termination of the Plan shall be communicated
      to all participants within thirty (30) days of such amendment, suspension
      or termination.

10.03 No amendment, suspension or termination of the Plan may contravene the
      requirements of any securities commission, stock exchange, or regulatory
      body of any jurisdiction to which the Plan or Teekay Shipping Corporation
      is now or may hereafter be subject.

11.   GENERAL

11.01 This Plan and any agreement entered into pursuant to section 7 hereof
      shall be construed and interpreted according to the laws of the
      Commonwealth of the Bahamas.

11.02 If any provision in this Plan is void, the remaining provisions shall be
      binding as though the void parts were deleted.

11.03 Participation in the Plan does not confer upon the Officer, Employee,
      Director or Consultant any right to continued employment (Employee),
      status as a Director (Director), or appointment as an Officer or
      Consultant. Participation in the Plan does not create any rights or
      privileges of a shareholder of the Company with respect to any Shares
      issuable upon exercise of any Option unless and until such Option has been
      exercised.

11.04 For the purposes of the Plan, unless the context otherwise requires, words
      importing the singular include the plural and vice versa, and words
      importing the male gender include the female gender and vice versa.

                                       -9-
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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