STATE OF NORTH CAROLINA
COUNTY OF BEAUFORT
EMPLOYEE STOCK OPTION AGREEMENT
(Incentive Stock Option)
THIS EMPLOYEE STOCK OPTION AGREEMENT (the "Agreement") is made
as of this 19th day of December, 2001 (the "Date of Grant"), by and
between FOUNTAIN POWERBOAT INDUSTRIES, INC., a Nevada corporation (the
"Company"), and XXXXXXX X. XXXXXXX, a resident of Beaufort County, North
Carolina (the "Optionee").
WHEREAS, on January 12, 1999, the Company's Board of Directors
adopted the 1999 EMPLOYEE STOCK OPTION PLAN (the "Plan"), subject to the
approval of the Company's shareholders; and, the Company's shareholders
approved the Plan on March 2, 1999; and,
WHEREAS, the Plan provides that the Stock Option Committee (the
"Committee") of the Company's Board of Directors (the "Board"), or the
Board itself, from time to time may grant to officers and employees of the
Company and its subsidiaries the right or option to purchase shares of the
Company's $.01 par value common stock ("Common Stock") on the terms and
conditions set forth in the Plan; and
WHEREAS, the Optionee currently is an employee of the Company
and its subsidiary, Fountain Powerboats, Inc., and the Board has selected
the Optionee as an employee to whom it will grant an option to purchase
Common Stock under the Plan;
NOW, THEREFORE, in consideration of the premises and the
agreements of the parties set forth herein, the Company and the Optionee
hereby agree as follow:
1. Grant of Option. Pursuant to and subject to the terms and
conditions contained in the Plan and this Agreement, the Company hereby
grants to the Optionee the right and option (the "Option") to purchase
from the Company all or any number of an aggregate of FIFTEEN THOUSAND
(15,000) shares of Common Stock (the "Option Stock") which may be
authorized but unissued shares or shares acquired by the Company on the
open market or in private transactions. The Option is intended to be an
Incentive Stock Option (an "ISO") as that term is defined in the Plan.
The Option is granted under and pursuant to the Plan, a
copy of which is attached as Exhibit A hereto and the terms and conditions
of which are incorporated herein by reference. Capitalized terms used in
this Agreement which are defined in the Plan shall have the same meanings
herein as are assigned to them in the Plan. In the event any provision of
this Agreement conflicts or is inconsistent with a term or condition of
the Plan, then the Plan provision shall be controlling and shall supersede
the provision of this Agreement.
2. Date of Grant of Option. For purposes of the Plan and this
Agreement, the Date of Grant of the Option shall be the date of this
Agreement.
3. Exercise Price. The Exercise Price to be paid by the
Optionee for the purchase of the Option Stock upon exercise of the Option
shall be ONE AND 45/100s DOLLARS ($1.45) per share.
4. Exercise Schedule. Subject to any further restrictions
contained in the Plan or this Agreement, the Option will become
exercisable on the following dates as to the indicated number of shares of
the Option Stock:
Option Stock Available
Date For Exercise
December 19, 2001 15,000 shares
5. Method of Exercise. To exercise the Option in whole or in
part, the Optionee must deliver written notice of such exercise (a "Notice
of Exercise") to the President or Secretary of the Company. Such written
notice shall be substantially in the form attached hereto as Exhibit B and
shall specify the number of shares of Option Stock to be purchased. A
Notice of Exercise shall not be effective (and the Company shall have no
obligation to sell any Option Stock to the Optionee pursuant to such
Notice) unless it satisfies the terms and conditions contained in the Plan
and this Agreement and actually is received by the Company prior to the
expiration or any earlier termination of the Option as specified herein.
Notwithstanding anything contained herein to the contrary,
the Optionee may not exercise the Option to purchase less than one hundred
(100) shares, unless the Committee otherwise approves or unless the
partial exercise is for all remaining shares of Option Stock available
under the Option; and, in no event may the Option be exercised at any time
as to a fractional share. Following receipt from the Optionee of a valid
and effective Notice of Exercise and full payment of the Exercise Price
relating to a number of the shares of Option Stock being purchased, a
stock certificate representing that number of shares shall be issued and
delivered by the Company to the Optionee as soon as practicable; provided
however that, the Company shall have the right and discretion to hold any
shares purchased upon exercise of the Option in escrow for a period ending
on the later of (i) two years from the Date of Grant of the Option, or
(ii) one year after issuance of the stock upon exercise of the Option, for
the sole purpose of informing the Company of a disqualifying disposition
within the meaning of Section 422 of the Internal Revenue Code of 1986.
During any such escrow period, the Optionee shall have all rights of a
shareholder with respect to the Option Stock purchased, including but not
limited to the right to vote, receive dividends on and to sell such stock.
6. Payment. The Exercise Price of Option Stock being
purchased upon an exercise of the Option (in part or in whole) shall be
paid by the Optionee in full at the time of such exercise. Such payment
shall be made in the manner described in the Plan and shall accompany the
Notice of Exercise. The Option shall not be considered to have been
properly exercised as to any Option Stock, and no Option Stock shall be
issued or delivered, until full payment of the Exercise Price therefor has
been made.
7. Expiration or Termination.
(a) Expiration Date. Notwithstanding anything contained
herein to the contrary, to the extent the Option shall not previously have
been exercised in the manner required by, or otherwise terminated as
provided in, the Plan or this Agreement, it shall expire and terminate at
5:00 P.M. on the "Expiration Date" which, for purposes of this Agreement,
shall be December 18, 2006.
(b) Other Termination. The Option otherwise shall
terminate prior to the Expiration Date in the events and upon the
occurrences described in the Plan.
(c) Effect of Termination or Expiration of Option. Upon
the expiration or termination of all or any portion of the Option, it
shall, without any further act by the Company or the Optionee, no longer
be exercisable or of any force or effect and shall no longer confer any
rights to any person to purchase shares of Common Stock under the Plan or
this Agreement.
8. Effect of Agreement on Employment Status of Optionee.
Neither the Plan, this Agreement nor the grant of the Option is intended
or shall be deemed or interpreted to constitute an employment agreement or
to confer upon the Optionee any right of employment with the Company,
Fountain or any of their respective subsidiaries, including without
limitation any right to continue in their employ or to interfere with,
restrict or otherwise limit in any way their right to discharge or
terminate the employment of the Optionee at any time for any reason
whatsoever, with or without Cause.
9. Rights as a Shareholder. Neither the Optionee nor any
other person shall have any rights as a stockholder of the Company with
respect to any shares of Option Stock until the Option has been validly
exercised in the manner described in the Plan and this Agreement, full
payment of the Exercise Price has been made for such shares, and a stock
certificate representing the Option Stock purchased upon such exercise has
been registered on the Company's stock records in the name of and
delivered to the Optionee or other person entitled thereto. Except to the
extent of adjustments made as described in the Plan, no adjustment on
behalf of the Optionee shall be made for dividends (ordinary or
extraordinary, whether in cash, securities or other property),
distributions or other rights for which the record date for determining
the shareholders entitled to receive the same is prior to the date of
registration and delivery of the stock certificate(s) representing the
Option Stock.
10. Listing and Registration of Option Shares. If, in the
opinion of legal counsel for the Company, the issuance or sale of any
shares of Option Stock upon the exercise of the Option would not be lawful
without registration under the Securities Act of 1933 (the "1933 Act") or
without some other action being taken or for any other reason, or would
require the Company to obtain approval from any governmental authority or
regulatory body having jurisdiction deemed by such counsel to be necessary
to such issuance or sale, then, notwithstanding anything contained herein
to the contrary, the Company shall not be obligated to issue or sell any
Option Stock to the Optionee or any other authorized person unless a
registration statement that complies with the provisions of the 1933 Act
in respect of such shares is in effect at the time thereof, or all other
required or appropriate action has been taken under and pursuant to the
terms and provisions of the 1933 Act or other applicable law, or the
Company receives evidence satisfactory to such counsel that the issuance
and sale of such shares, in the absence of an effective registration
statement or other action, would not constitute a violation of the 1933
Act or other applicable law, or unless any such required approval shall
have been obtained. The Company is in no event obligated to register any
such shares, to comply with any exemption from registration requirements
or to take any other action which may be required in order to permit, or
to remedy or remove any prohibition or limitation on, the issuance or sale
of such shares to the Optionee or other authorized person.
THE COMPANY HAS NOT FILED A REGISTRATION STATEMENT UNDER
THE 1933 ACT WITH RESPECT TO THE OPTION STOCK COVERED BY THE OPTION. IN
THE ABSENCE OF SUCH A REGISTRATION STATEMENT, OPTION STOCK PURCHASED BY
OPTIONEE UPON THE EXERCISE OF THE OPTION WILL BE "RESTRICTED SECURITIES"
AND MAY NOT BE RESOLD OR TRANSFERRED BY THE OPTIONEE EXCEPT AS PERMITTED
UNDER THE 1933 ACT PURSUANT TO REGISTRATION OR AN AVAILABLE EXEMPTION FROM
REGISTRATION. Certificates evidencing Option Stock issued to Optionee
upon the exercise of the Option may bear a legend with respect to the
restricted nature of those shares, and, as a condition of the exercise of
the Option, the Company may require that the Optionee execute one or more
undertakings in such form as it shall prescribe to the effect that such
shares are being acquired for investment purposes only and not with a view
to the distribution or resale thereof.
11. Payment of Taxes. The Optionee shall be responsible for
all federal, state, local or other taxes of any nature as shall be imposed
pursuant to any law or governmental regulation or ruling on the Option or
the exercise thereof or on any income which the Optionee is deemed to
recognize in connection with the Option. If the Company shall determine
to its reasonable satisfaction that the Company is required to pay or
withhold the whole or any part of any estate, inheritance, income, or
other tax with respect to or in connection with the Option or the exercise
thereof, or on the Optionee's resale of any shares of Option Stock, then
the Company and Fountain shall have the full power and authority to
withhold and pay such tax out of any shares of Option Stock being
purchased by the Optionee or from the Optionee's salary or any other funds
otherwise payable to the Optionee, or, prior to and as a condition of
exercising such Option, the Company may require that the Optionee pay to
it in cash the amount of any such tax which it, in good faith, deems
itself required to withhold.
12. Limit on Grant of ISOs. Notwithstanding anything contained
in this Agreement to the contrary (including the number of shares of
Option Stock provided for herein), the aggregate Fair Market Value
(determined as of the Date of Grant) of the Option Stock for which the
Option may be exercised for the first time in any calendar year (including
ISOs granted under all option plans of the Company) shall not exceed
$100,000; and, if this Agreement covers a number of shares of Option Stock
that would result in the Option exceeding that limitation, then the
Committee shall have the right and discretion to reduce the number of
Option Shares, and/or to modify the Exercise Schedule, provided above such
that the Option qualifies as an ISO.
13. Nontransferability. The Option is not assignable or
transferable except by will or by the laws of descent and distribution,
and, during the lifetime of the Optionee, the Option may be exercised only
by him or her. More particularly, but without limiting the generality of
the foregoing, the Option may not be sold, assigned, transferred (except
as noted herein), pledged or hypothecated in any way and shall not be
subject to execution, attachment or similar process.
14. Notices. Except as otherwise provided herein, any notice
which the Company or the Optionee may be required or permitted to give to
the other under the Plan or this Agreement shall be in writing and shall
be deemed duly given when delivered personally or deposited in the United
States mail, first class postage prepaid, and properly addressed. Notice,
if to the Company, shall be sent to its President at the address of the
Company's then current corporate office. Any notice sent by mail by the
Company to the Optionee shall be sent to the most current address of the
Optionee as reflected on the records of the Company or its Subsidiaries as
of the time said notice is required. If the Optionee has died, any such
notice shall be given to the Optionee's personal representative if such
representative has delivered to the Company evidence satisfactory to the
Company of such representative's status as such and has informed the
Company of the address of such representative by notice pursuant to this
Paragraph 14.
Notwithstanding anything contained herein to the contrary,
a Notice of Exercise shall be effective only upon actual receipt thereof
by the Company as provided in Paragraph 5 above.
15. References to Committee. Optionee acknowledges that,
pursuant to its terms, the Plan may be administered from time to time by
the Board or by the Committee and that, during such time as the Plan is
administered by the Board, then all references in this Agreement to the
Committee shall be deemed to refer to the Board.
16. Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such a manner as to be valid and
enforceable under applicable law, but, in the event that any provision
hereof shall be held to be invalid or unenforceable, the remaining
provisions shall continue to be in full force and effect and this
Agreement shall continue to be binding on the parties hereto as if such
invalid or unenforceable provision or part hereof had not been included
herein.
17. Modification of Agreement; Waiver. Except as otherwise
provided herein, this Agreement may be modified, amended, suspended, or
terminated, and any terms or conditions may be waived, but only by written
instrument signed by each of the parties hereto. No waiver hereunder
shall constitute a waiver with respect to any subsequent occurrence or
other transaction hereunder or of any other provision hereof.
18. Captions and Headings; Gender and Number. Captions and
paragraph headings used herein are for convenience only, do not modify or
affect the meaning of any provision herein, are not a part hereof, and
shall not serve as a basis for interpretation or in construction of this
Agreement. As used herein, the masculine gender shall include the
feminine and neuter, the singular number the plural, and vice versa,
whenever such meanings are appropriate.
19. Governing Law; Venue and Jurisdiction. The validity,
interpretation and administration of this Agreement, and the rights of any
and all persons having or claiming to have any interest hereunder, shall
be determined exclusively in accordance with the laws of the State of
Nevada. Without limiting the generality of the foregoing, the period
within which any action in connection with this Agreement must be
commenced shall be governed by the laws of the State of Nevada, without
regard to the place where the act or omission complained of took place,
the residence of any party to such action, or the place where the action
may be brought or maintained. The parties hereto agree that any suit or
action relating to this Agreement shall be instituted and prosecuted in
the courts of Beaufort County, North Carolina, and each party hereby does
waive any right or defense relating to such jurisdiction and venue.
20. Binding Effect. This Agreement shall be binding upon and
shall inure to the benefit of the Company, its successors and assigns, and
shall be binding upon and inure to the benefit of the Optionee, his heirs,
legatees, personal representatives, executors, and administrators.
21. Entire Agreement. This Agreement (which incorporates the
terms and conditions of the Plan) constitutes and embodies the entire
understanding and agreement of the parties hereto with respect to the
Option. Except as otherwise provided hereunder, there are no other
agreements or understandings, written or oral, in effect between the
parties hereto relating to the matters addressed herein.
22. Counterparts. This Agreement may be executed in any number
of counterparts, each of which when executed and delivered shall be deemed
an original, but all of which taken together shall constitute one and the
same instrument.
IN WITNESS WHEREOF, the Company has caused this instrument to be
executed in its corporate name by its President, or one of its Vice
Presidents, and attested by its Secretary or one of its Assistant
Secretaries, and its corporate seal to be hereto affixed, all by authority
of its Board of Directors first duly given, and the Optionee has hereunto
set his or her hand and adopted as his or her seal the typewritten word
"SEAL" appearing beside his or her name, all done this the day and year
first above written.
FOUNTAIN POWERBOAT INDUSTRIES, INC.
[CORPORATE SEAL]
By:/s/ X. X. Xxxxxxxx, Xx.
President and Chief Executive Officer
ATTEST:
/s/ Xxxxx X. Xxxxx
Secretary
OPTIONEE:
/s/ Xxxxxxx X. Xxxxxxx (SEAL)
Xxxxxxx X. Xxxxxxx
98-0253(A)
NBMAIN\473473.1
Exhibit B
NOTICE OF EXERCISE OF
EMPLOYEE STOCK OPTION
To: The Board of Directors of Fountain Powerboat Industries, Inc.
The undersigned hereby elects to purchase shares of Common Stock of
Fountain Powerboat Industries, Inc. (the "Company") pursuant to the Option
granted to the undersigned pursuant to the Company's 1999 Employee Stock
Option Plan (the "Plan") and that certain Stock Option Agreement between
the Company and the undersigned dated _____________________.
The undersigned elects to purchase ____________ whole shares of
Common Stock having an aggregate Exercise Price of $ ______________
which is tendered herewith:
[ ] in cash in the amount of $ _______________ ;
[ ] by bank check or money order in the amount of $ ________ ;
[ ] _______________________________________ .
This the ____ day of ______________ , ______.
_________________________________________ Optionee
98-0253(A)
NBMAIN\505849 v1
