Exhibit 10.3
1995 STOCK OPTION PLAN
OF
FOUNTAIN POWERBOAT INDUSTRIES, INC.
STOCK OPTION AGREEMENT
This Stock Option Agreement (the "Agreement") is made by and
between Fountain Powerboat Industries, Inc., a Nevada corporation
(the "Company"), and Reginald M. Fountain, Jr. (the "Employee
Optionee") as of the date set forth on the signature page hereto.
R E C I T A L S
A. The Board of Directors of the Company (the "Board") has
established the 1995 Stock Option Plan of the Company (the
"Plan"), for the purpose of providing to Employees and Directors
of the Company an opportunity to acquire shares of the Company's
$.01 par value common stock (the "Shares"); and
B. The Board and the Compensation Committee of the Board
(the "Committee") appointed to administer the Plan has determined
that it would be to the advantage and best interest of the
Company and its shareholders to grant the non-qualified stock
option, or incentive stock option provided for herein (the
"Option") to the Employee Optionee as an inducement to remain in
the service of the Company and as an incentive for increased
efforts during such service, and has advised the Company thereof
and instructed it to issue the Option.
A G R E E M E N T
NOW, THEREFORE, in consideration of the mutual covenants
contained herein and other good and valuable consideration
receipt of which is hereby acknowledged, the parties hereto do
hereby agree as follows:
ARTICLE I
DEFINITIONS
Whenever the following terms are used in this Agreement,
they shall have the meaning specified below unless the context
clearly indicates to the contrary. Capitalized terms used herein
and not otherwise defined shall have the meaning set forth in the
Plan. The masculine pronoun shall include the feminine and
neuter, and the singular the plural, where the context so
indicates.
Section 1.1 - Code
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
Section 1.2 - Company
"Company" shall mean Fountain Powerboat Industries, Inc. In
addition, "Company" shall mean any corporation assuming, or
issuing new employee stock options in substitution for the Option
and Incentive Stock Options, outstanding under the Plan, in a
transaction to which Section 425 (a) of the Code applies.
Section 1.3 - Option
"Option" shall mean the option to purchase $.01 par value
common stock of the Company granted under this Agreement.
Section 1.4 - Plan
"Plan" shall mean the 1995 Stock Option Plan of the Company.
Section 1.5 - Secretary
"Secretary" shall mean the Secretary of the Company.
Section 1.6 - Securities Act
"Securities Act" shall mean the Securities Act of 1933, as
amended.
ARTICLE II
GRANT OF OPTION
Section 2.1 - Grant of Option
In consideration of the Employee Optionee's agreement to
render faithful and efficient services to the Company and for
other good and valuable consideration, on the date set forth on
the Signature Page hereof (the "Date of Grant"), the Company
irrevocably grants to the Employee Optionee the option to
purchase any part or all of an aggregate of the number of Shares
set forth on the Signature Page hereof and upon the terms and
conditions set forth in this Agreement.
Section 2.2 - Purchase Price
The purchase price of the Shares covered by the Option shall
be the amount set forth on the Signature Page hereof and shall be
without commission or other charge (the "Purchase Price").
Section 2.3 - Reservation of Rights
Nothing in the Plan or in this or any Stock Option Agreement
shall confer upon the Employee Optionee any right to continue in
the employ of the Company or any subsidiary thereof or shall
interfere with or restrict in any way the rights of the Company,
which are hereby expressly reserved, to discharge the Employee
Optionee at any time for any reason whatsoever, with or without
cause.
Section 2.4 - Adjustments in Option
In the event that the outstanding Shares subject to the
Option are changed into or exchanged for a different number or
kind of shares of the Company or other securities of the Company
by reason of merger, consolidation, recapitalization,
reclassification, stock split up, stock dividend, or combination
of shares, the Committee shall make an appropriate and equitable
adjustment in the number and kind of shares as to which
the option, or portions thereof then unexercised, shall be
exercisable, to the end that after such event the Employee
Optionee's proportionate interest shall be maintained as before
the occurrence of such event. Such adjustment in the option shall
be made without change in the total price applicable to the
unexercised portion of the Option (except for any change in the
aggregate price resulting from rounding-off of share quantities
or prices) and with any necessary corresponding adjustment in the
Purchase Price. Any such adjustment made by the Committee shall
be final and binding upon the Employee Optionee, the Company, and
all other interested persons.
ARTICLE III
PERIOD OF EXERCISABILITY
Section 3.1 - Commencement of Exercisability
The option shall become exercisable immediately.
Section 3.2 - Duration of Exercisability
Each option which becomes exercisable pursuant to Section
3.1 shall remain exercisable until the expiration date set forth
on the signature page of this Agreement or until it becomes
unexercisable under the Plan, whichever is sooner.
Section 3.3 - Option Not Transferable
Neither the Option nor any interest or right therein shall
be liable for the debts, contracts, or engagements of the
Employee Optionee or his successors in interest or shall be
subject to disposition by transfer, alienation, anticipation,
pledge, encumbrance, assignment, or any other means whether such
disposition be voluntary or involuntary or by operation of law,
by judgment, levy, attachment, garnishment or any other legal or
equitable proceedings (including bankruptcy), and any attempted
disposition thereof shall be null and void and of no effect;
provided, however, that this Section 3.3 shall not prevent
transfers by will or by the applicable laws of descent and
distribution.
ARTICLE IV
EXERCISE OF OPTION
Section 4.1 - Person Eligible to Exercise
During the lifetime of the Employee Optionee, only he or she
may exercise the Option or any portion thereof. After the death
of the Employee Optionee, any exercisable portion of the Option
may, prior to the time when the option becomes unexercisable, be
exercised by his or her personal representative or by any person
empowered to do so under the Employee Optionee's will or under
the then applicable laws of descent and distribution.
Section 4.2 - Partial Exercise
Any exercisable portion of the Option or the entire Option,
if then wholly exercisable, may be exercised in whole or in part
at any time prior to the time when the Option or portion thereof
becomes unexercisable under the Plan; provided, however, that
each partial exercise shall be for not less than one hundred
(100) Shares (or minimum installment set forth in Section 3.1, if
a smaller number of Shares) and shall be for whole Shares only.
Section 4.3 - Manner of Exercise
The Option, or any exercisable portion thereof, may be
exercised solely by delivery to the Secretary or the Secretary's
office of all of the following prior to the time when the Option
or such portion becomes unexercisable under the Plan:
(a) Notice in writing signed by the Employee Optionee or
the other person then entitled to exercise the Option or portion
thereof, stating that the Option or portion thereof is thereby
exercised, such notice complying with all applicable rules
established by the Committee; and
(b) (i) Full payment (in cash or by check) for the Shares
with respect to which such Option or portion is
exercised; or
(ii) Shares of any class of the Company's stock owned
by the Employee Optionee duly endorsed for transfer to
the Company with a fair market value on the date of
delivery equal to the aggregate Option price of the
Shares with respect to which such Option or portion is
thereby exercised; or
(iii) Any combination of the consideration provided
in the foregoing subsections (i) and (ii); and
(c) Full payment to the Company of all amounts which, under
federal, state or local law, it is required to withhold upon
exercise of the Option; and
(d) In the event the Option or portion thereof shall be
exercised pursuant to Section 4.1 by any person or persons other
than the Employee Optionee, appropriate proof of the right of
such person or persons to exercise the Option.
Section 4.4 - Conditions to Issuance of Stock Certificates
The Shares deliverable upon the exercise of the Option, or
any portion thereof, may be either previously authorized but
unissued Shares or issued Shares which have then been reacquired
by the Company. Such Shares shall be fully paid and
non-assessable. The Company shall not be required to issue or
deliver any certificate or certificates for Shares purchased upon
the exercise of the Option or portion thereof prior to
fulfillment of all of the following conditions:
(a) The completion of any registration or other
qualification of such Shares under any state or federal law or
under rulings or regulations of the Securities and Exchange
Commission or of any other governmental regulatory body, which
the Committee shall, in its absolute discretion, deem necessary
or advisable;
(b) The obtaining of any approval or other clearance from
any state or federal governmental agency which the Committee
shall, in its absolute discretion, determine to be necessary or
advisable;
(c) The payment to the Company of all amounts which, under
federal, state, or local law, it is required to withhold upon
exercise of the option; and
(d) The lapse of such reasonable period of time following
the exercise of the option as the Committee may from time to time
establish for reasons of administrative convenience.
Section 4.5 - Rights as Stockholder
The holder of the Option shall not be, nor have any rights
or privileges of, a stockholder of the Company in respect of any
Shares purchasable upon the exercise of any part of the Option
unless and until certificates representing such Shares shall have
been issued by the Company to such holder.
ARTICLE V
OTHER PROVISIONS
Section 5.1 - Administration
The Committee shall have the power to interpret this
Agreement. All actions taken and all interpretations and
determinations made by the Committee in good faith shall be final
and binding upon the Employee Optionee, the Company and all other
interested persons. No member of the Committee shall be
personally liable for any action, determination or interpretation
made in good faith with respect to the Plan or the Option. In its
absolute discretion, the Board may at any time and from time to
time exercise any and all rights and duties of the Committee
under this Agreement.
Section 5.2 - Shares to Be Reserved
The Company shall at all times during the term of the Option
reserve and keep available such number of Shares as will be
sufficient to satisfy the requirements of this Agreement.
Section 5.3 - Notices
Any notice to be given under the terms of this Agreement to
the Company shall be addressed to the Company in care of its
Secretary, and any notice to be given to the Employee Optionee
shall be addressed to him or her at the address set forth on the
Signature Page hereof. By a notice given pursuant to this Section
5.3, either party may hereafter designate a different address for
delivery of notices. Any notice which is required to be given to
the Employee Optionee shall, if the Employee Optionee is then
deceased, be given to the Employee Optionee's personal
representative if such representative has previously informed the
Company of his status and address by written notice under this
Section 5.3. Any notice shall be deemed duly given when enclosed
in a properly sealed envelope or wrapper addressed as aforesaid
and deposited (with postage prepaid) in a post office or branch
post office regularly maintained by the United States Postal
Service.
Section 5.4 - Titles
Titles are provided herein for convenience only and are not
to serve as a basis for interpretation or construction of this
Agreement.
Section 5.5 - Construction
This Agreement shall be administered, interpreted, and
enforced under the laws of the State of Nevada.
SIGNATURE PAGE
1995 STOCK OPTION PLAN
OF
FOUNTAIN POWERBOAT INDUSTRIES, INC.
Non-Qualified Option: Yes
Purchase Price: $7.00
Number of Shares: 300,000
Date of Grant: August 4, 1995
Vesting: Immediate as to entire option
Expiration Date: August 4, 2005
I have read the Stock Option Agreement indicated above which
was adopted for use in connection with the 1995 Stock Option
Plan. As the Employee Optionee, I hereby agree to all of the
terms of the Agreement and the Plan.
EMPLOYEE OPTIONEE
/s/ R. M. Fountain, Jr.
R. M. Fountain, Jr.
The Company hereby agrees to all of the terms of the Agreement.
FOUNTAIN POWERBOAT INDUSTRIES, INC.
/s/ R. M. Fountain, Jr.
R. M. Fountain, Jr.
Chairman, President, Chief
Executive Officer,
and Chief Operating Officer
Attest:
/s/ Carol J. Price
Carol J. Price
Assistant Secretary
CORPORATE SEAL