FORM OF STOCK OPTION AGREEMENT
FOR THE GRANT OF
NON-QUALIFIED STOCK OPTIONS UNDER THE
GULF ISLAND FABRICATION, INC.
LONG-TERM INCENTIVE PLAN
THIS AGREEMENT is entered into and effective as of ________________, by and
between Gulf Island Fabrication, Inc., a Louisiana corporation (the "Company"),
and ____________ (the "Optionee").
WHEREAS Optionee is a key employee of the Company and the Company considers
it desirable and in its best interest that Optionee be given an inducement to
acquire a proprietary interest in the Company and an incentive to advance the
interests of the Company by possessing an option to purchase shares of the
common stock of the Company, no par value per share (the "Common Stock") in
accordance with the Gulf Island Fabrication, Inc. Long-Term Incentive Plan (the
"Plan").
NOW, THEREFORE, in consideration of the premises, it is agreed by and
between the parties as follows:
X.
Xxxxx of Option
The Company hereby grants to Optionee effective as of the date hereof (the
"Date of Grant") the right, privilege and option to purchase ________ shares of
Common Stock (the "Option") at an exercise price of $________ per share (the
"Exercise Price"). The Option shall be exercisable at the time specified in
Section II below. The Option is a non-qualified stock option and shall not be
treated as an incentive stock option under Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code").
II.
Time of Exercise
2.1 Subject to the provisions of the Plan and the other provisions of this
Section II, the Option shall become exercisable as to one-fifth of the shares
covered thereby on the first anniversary of the Date of Grant, an additional
one-fifth of the shares covered thereby on the second anniversary of the Date of
Grant, an additional one-fifth of the shares covered thereby on the third
anniversary of the Date of Grant, an additional one-fifth of the shares covered
thereby on the fourth anniversary of the Date of Grant, and an additional one-
fifth of the shares covered thereby on the fifth anniversary of the Date of
Grant.
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2.2 During Optionee's lifetime, the Option may be exercised only by him or
his guardian if he has been declared incompetent. In the event of death, the
Option may be exercised as provided herein by the Optionee's estate or by the
person to whom such right devolves as a result of the Optionee's death.
2.3 If an Optionee ceases to be an employee because of death, disability
within the meaning of Section 22(e)(3) of the Code ("Disability") or retirement,
the Option must be exercised, to the extent otherwise exercisable at the time of
termination of employment, within one year from the date on which the Optionee
ceases to be an employee, but in no event later than ten years following the
Date of Grant.
2.4 If Optionee's employment is terminated, other than as a result of
death, disability or retirement, the Option shall terminate immediately.
2.5 The Option shall expire and may not be exercised later than ten years
following the Date of Grant.
III.
Method of Exercise of Option
3.1 Optionee may exercise all or a portion of the Option by delivering to
the Company a signed written notice of his intention to exercise the Option,
specifying therein the number of shares to be purchased. Upon receiving such
notice, and after the Company has received full payment of the Exercise Price,
the appropriate officer of the Company shall cause the transfer of title of the
shares purchased to Optionee on the Company's stock records and cause to be
issued to Optionee a stock certificate for the number of shares being acquired.
Optionee shall not have any rights as a shareholder until the stock certificate
is issued to him.
3.2 The Option may be exercised by the payment of the Exercise Price in
cash, in shares of Common Stock held for six months or in a combination of cash
and shares of Common Stock held for six months. The Optionee may also pay the
Exercise Price by delivering a properly executed exercise notice together with
irrevocable instructions to a broker approved by the Compensation Committee
(with a copy to the Company) to promptly deliver to the Company the amount of
sale or loan proceeds to pay the Exercise Price.
IV.
No Contract of Employment Intended
Nothing in this Agreement shall confer upon Optionee any right to continue
in the employment of the Company or any of its subsidiaries, or to interfere in
any way with the right of
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the Company or any of its subsidiaries to terminate Optionee's employment
relationship with the Company or any of its subsidiaries at any time.
V.
Binding Effect
This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective heirs, executors, administrators and
successors.
VI.
Non-Transferability
The Option granted hereby may not be transferred, assigned, pledged or
hypothecated in any manner, by operation of law or otherwise, other than by
will, by the laws of descent and distribution or pursuant to a domestic
relations order, as defined in the Code, and shall not be subject to execution,
attachment or similar process.
VII.
Inconsistent Provisions
The Option granted hereby is subject to the provisions of the Plan as in
effect on the date hereof and as it may be amended. In the event any provision
of this Agreement conflicts with such a provision of the Plan, the Plan
provision shall control.
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be
executed on the day and year first above written.
GULF ISLAND FABRICATION, INC.
By:
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Member
Compensation Committee
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Optionee
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