RESOLUTIONS OF THE
BOARD OF DIRECTORS
OF
FOUNTAIN POWERBOAT INDUSTRIES, INC.
April 14, 2004
ADOPTION OF CODE OF ETHICS FOR EXECUTIVE OFFICERS AND
DIRECTORS
WHEREAS, Fountain Powerboat Industries, Inc. (the
"Corporation") is required to comply with the listing
standards of The Nasdaq Stock Market ("Nasdaq") which, as
recently amended, require that "listed companies" have
codes of ethics that apply to their directors, officers and
employees and that satisfy the requirements of codes of
conduct for principal executive officers and principal
financial and accounting officers described in Section 406
of the Sarbanes-Oxley Act of 2002; and
WHEREAS, as part of the Corporation's compliance with
Nasdaq's amended listing requirements, the Board of
Directors desires to adopted a separate Code of Ethics for
its directors and executive officers, including for
purposes of such Code the Corporation's principal executive
officer and principal financial and accounting officers.
NOW, THEREFORE, IT IS RESOLVED, that the Board of
Directors of the Corporation hereby adopts a Code of Ethics
in the form attached as Exhibit A to these Resolutions;
and, it is further
RESOLVED, that the Code of Ethics so adopted apply to
(1) the Corporation's and Fountain Powerboats, Inc.'s
directors, and (2) all persons who are deemed to be
executive officers of the Corporation, including including
for purposes of such Code the Corporation's principal
executive officer and principal financial and accounting
officers.
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EXHIBIT A
FOUNTAIN POWERBOAT INDUSTRIES, INC.
CODE OF ETHICS FOR
DIRECTORS AND EXECUTIVE OFFICERS
Purpose
This Code of Ethics (the "Code") applies to the
directors and all persons who are deemed to be executive
officers of Fountain Powerboat Industries, Inc. (the
"Company"). The Code has been adopted by the Company's
Board of Directors and is intended to serve as the code of
ethics for the Company's principal executive officer and
principal financial officers described in Section 406 of
the Sarbanes-Oxley Act of 2002 and, for purposes of this
Code, references to the Company's executive officers will
be considered to include, without limitation, all persons
required to be covered by the code of ethics described in
that Section. This Code also is intended to serve as the
code of conduct for directors required by the listing
requirements of The Nasdaq Stock Market. As used herein,
references to the Company include its subsidiaries, and
directors of any such subsidiary will be subject to the
Code.
The Code is intended by the Board of Directors to
promote:
* honest and ethical conduct;
* the ethical handling of actual or apparent conflicts
of interests between personal and professional
relationships;
* full, fair, accurate, timely and understandable
disclosure in reports and documents that the Company
files with the Securities and Exchange Commission
("SEC");
* compliance with applicable governmental laws, rules
and regulations; and
* prompt internal reporting to the Audit Committee of
the Board of Directors of violations of the Code,
illegal or unethical behavior by officers, directors
or employees, or accounting or auditing concerns.
The Board believes the Code should be an evolving set
of principles to guide the conduct of directors and
executive officers. Therefore, the Code is subject to
modification by the Board from time to time as
circumstances warrant. Any modifications of or waivers
from the Code may be made only by the Board. The Board
will promptly disclose changes to and waivers from the Code
as required by applicable law, including the rules and
regulations promulgated by the SEC.
In the case of the Company's executive officers, this
Code applies in addition to and not as a substitute for any
employee code of conduct that is in effect from time to
time and applicable to the Company's employees in general.
Additionally, this Code shall apply to the Company's
directors and executive officers in addition to duties and
responsibilities imposed on them as directors and officers
by law.
Ethical Behavior
In representing and performing his or her duties for
the Company, each director and executive officer is
expected to:
* conduct his or her affairs with uncompromising
honesty and integrity;
* adhere to the highest moral and ethical standards;
* be honest and ethical in dealing with all employees,
clients, vendors and third parties; and
* at all times avoid illegal discrimination, libel,
slander or harassment.
Conflicts of Interest
Each director and executive officer is expected to
refrain from engaging in activities that conflict with,
have the potential to conflict with, or give the appearance
of conflicting with, the best interests of the Company and
its stockholders. Any activity or personal interest of a
director or executive officer, or of any member of a
director's or executive officer's immediate family, that
may influence the director's or officer's judgment,
decisions, or actions on behalf of or with respect to the
Company, or that may raise even the appearance of a
conflict of interest, must be disclosed to the Audit
Committee. The Audit Committee, in consultation with the
Board, will determine if there is a conflict of interest
and, if so, how to resolve the conflict without
compromising the Company's interests.
Personal activities and interests include, but are
not limited to, any activity or interest in which a
director, executive officer or member of a director's or
executive officer's immediate family has a beneficial
interest (i.e. a monetary interest, or an interest in which
he or she can exercise or influence decision making) and
any person or entity with which a director, executive
officer or member of a director's or executive officer's
immediate family has a substantial business relationship.
An "immediate family member" includes a director's or
executive officer's spouse, parents, children, siblings,
parents-in-law, children-in-law, siblings-in-law and anyone
else who shares such person's home.
Material conflicts or potential material conflicts of
interest will be reviewed by the Audit Committee. In
certain cases, activities that may result in conflicts of
interest may be permitted if the Audit Committee determines
that they are not harmful to the Company. Prompt and full
disclosure is always the first step towards identifying and
resolving any potential conflict of interest or problem.
Books and Records
The Company requires honest and accurate recording
and reporting of information in order to make responsible
business decisions. All of the Company's books, records,
accounts and financial statements must:
* be maintained accurately and in reasonable detail;
* completely and accurately reflect the Company's
assets, liabilities and transactions; and
* conform both to applicable legal requirements and to
the Company's system of internal controls.
Unrecorded or "off the books" funds, assets or
liabilities may not be maintained unless permitted by
applicable law or regulation. In addition, no transaction
shall be structured, carried out or recorded in a manner
such that the substance of the transaction is hidden or
mischaracterized. If a director or executive officer
discovers a material error or inaccuracy in the Company's
books, records, accounts or financial statements, that fact
should immediately be reported to the Audit Committee and,
if applicable, the Company's independent auditors or legal
advisors.
Records should be retained or destroyed according to
the Company's record retention policies. In the event of
litigation or government investigation, the Company's legal
advisors should be consulted prior to the destruction of
any records related thereto.
Public Disclosure
It is the policy of the Board of Directors that
management of the Company develop and maintain disclosure
policies and procedures to ensure that the Company makes
full, fair, accurate, timely and understandable disclosure
in reports and documents that it files with, or submits to,
the SEC and in its other public communications. The
Company's Chief Executive Officer and Chief Financial
Officer each must read each of the Company's SEC reports
and press releases prior to the time it is filed, furnished
or issued to the SEC or public, as applicable. If any
material inaccuracy, misstatement, or omission of
information with respect to any such report or press
release is discovered after it has been filed, furnished or
issued, that fact must be immediately disclosed to the
Audit Committee and, if applicable, the Company's
independent auditors.
Compliance with Laws, Rules and Regulations
The Company's business depends on the trust and
confidence placed in it by its customers. Obedience to the
laws and regulations that apply to the Company's business,
both in letter and in spirit, is the foundation on which
the Company's ethical standards and, in turn, customer
trust and confidence are built. Each director and
executive officer must respect and obey the laws of the
United States and the states in which we operate. If a law
conflicts with a policy in this Code, the director or
executive officer must comply with the law. If a local
custom or policy conflicts with this Code, the director or
executive officer must comply with this Code.
Internal Reporting
If a director or executive officer knows or has a
reasonable suspicion that (1) any director or senior or
executive officer of the Company has committed any
criminal, illegal, dishonest or fraudulent act or has
engaged in any behavior that is unethical or violates the
Code, or (2) has concerns regarding any accounting,
internal control or auditing matters that may affect the
Company, he or she should report that to the Audit
Committee. There are two reporting methods as follows:
* The individual may contact the Company's Audit
Committee either in person, by telephone, in writing
or in any other method through any member of the
Audit Committee. The individual may do so
anonymously if desired. The members of the Audit
Committee are listed in the Company's annual proxy
statement or may be determined from the Secretary of
the Company at
(252) 975-7017; or
* The individual may contact the Company's Employee
Conduct Hotline at (800) 853-9099, which also
provides the option for the individual to remain
anonymous.
If a matter has been reported and remains unresolved,
the matter should be reported to the Company's legal
advisors.
No Retaliation
Company policy prohibits any retaliation against any
director, executive officer or employee for reporting in
good faith any violations of this Code, any illegal or
unethical behavior, or any other misconduct, by others, or
for reporting in good faith any accounting or auditing
concerns.
Waivers
Any waiver of this Code must be approved by the Board
of Directors in writing and must be promptly disclosed as
required by any applicable law. A waiver is defined as a
material departure from a provision of the Code. An
implicit waiver is defined as the failure to take action
within a reasonable period of time regarding a material
departure from a provision of the Code that has been made
known to an executive officer of the Company. The Company
expects full compliance with this Code. The Company does
not intend to grant or to permit waivers from the
requirements of this Code.
Certificate of Compliance
I, the undersigned director or executive officer of
the Company, hereby acknowledge that I have carefully read
and understand this Code of Ethics, and I agree to fully
and completely comply with this Code of Ethics. If I am an
executive officer, I recognize that failure to adhere to
this Code will be grounds for disciplinary action which may
include up to and including termination of employment.
Date: ____, 20__
___________________
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