CODE OF BUSINESS CONDUCT AND ETHICS
FOR
FOUNTAIN POWERBOATS, INC.
April 2004
TABLE OF CONTENTS
I. INTRODUCTION 1
II. STATEMENT OF POLICY 1
III. CONFIDENTIAL INFORMATION 2
IV. CONFLICTS OF INTEREST 3
V. PERSONAL ETHICS 4
VI. POLITICAL ACTIVITIES 5
VII. CIVIC RESPONSIBILITIES 5
VIII. COMPLIANCE CERTIFICATE 5
IX. COMPLIANCE WITH LAWS, RULES, AND REGULATIONS 6
X. ADMINISTRATION 8
XI. CONCLUSION 9
I. INTRODUCTION
This Code of Business Conduct and Ethics (the
"Code") of Fountain Powerboats, Inc. (the
"Company") is a guide to help our employees
competently and ethically do their jobs. This
Code also will help you perform your job without
feeling the pressure of indecision when
confronted by particular types of situations.
If a situation arises where it is difficult to
determine the right choice or you feel pressured
to act improperly, discuss the matter with your
supervisor or manager. If you are uncomfortable
discussing the situation with your supervisor or
manager or after the discussion are still
uncomfortable with the situation, please contact
the Human Resources Director.
This Code is intended to deter wrongdoing and to
promote:
1) Honest and ethical conduct;
2) Ethical handling of actual or apparent
conflicts of interest between personal and
professional relationships;
3) Compliance with applicable governmental
laws, rules, and regulations;
4) Prompt internal reporting of violations of
the Code, illegal or unethical behavior by
officers or employees, or accounting or
auditing concerns; and
5) Accountability for adherence to the Code.
It is not practical to attempt to cover in this
Code all possible situations with which you may
be confronted. You must always make the choice
of honesty and integrity-the right choice-to
avoid even the slightest appearance or suspicion
of a conflict of interest or wrongdoing.
Failure to meet the expectations described in
this Code and the Company's policies and
practices may result in disciplinary action, up
to and including termination.
II. STATEMENT OF POLICY
The Company's reputation for integrity is a
valuable asset and it is determined largely by
the ethics of the employees of the Company.
Each employee must prudently manage his or her
personal and business affairs to avoid
situations that might lead to a conflict of
interest, or even the appearance or suspicion of
a conflict of interest, between the employee's
self-interest and his or her duty to the
Company. A person's position with the Company
must never be used, directly or indirectly, for
private gain, to advance personal interests, or
to obtain favors or unauthorized benefits for
himself or herself, a member of his or her
immediate family, or any other person.
For clear understanding as you read this Code,
"employee" refers to any person employed with
the Company. "Immediate family" includes an
employee's spouse, parent, child, brother,
sister, grandparent, grandchild, in-law, or any
other person living in the employee's primary
household.
III. CONFIDENTIAL INFORMATION
A. Not to be Disclosed to Others. To maintain
the trust of the Company's customers, the
public, and the Company's employees,
employees must never compromise the Company's
standard of confidentiality. Therefore,
employees must protect the privacy of the
Company's confidential information, which is
any information acquired during your
employment that is not available to the
public. Confidential information
specifically includes personal information
about the Company's shareholders, directors,
officers, and employees. In addition, your
responsibilities include knowing what
information is confidential and obtaining
clarification when in doubt; using
confidential information only for its
intended use in carrying out your duties as a
Company employee; obtaining prior approval
from your supervisor or manager to disclose
confidential information; and revealing
confidential information only to authorized
persons when that information is essential
for them to perform their jobs and you are
authorized to do so.
B. Use of Information for Personal Gain.
Employees must not use confidential
information in any manner for their personal
advantage or to provide advantage to others.
For instance, information obtained as the
result of employment with the Company that
relates to a customer's business must never
constitute the basis of a personal
transaction, whether directly or indirectly,
in such business by a Company employee.
Similarly, this type of insider information
must never form the basis of investment
advice to others. Any transaction by an
employee that may affect, in any manner,
whether directly or indirectly, a customer's
business will form the basis of suspicion and
must be avoided. Additionally, financial
information concerning the Company must not
be released to anyone unless:
1) It has been previously published in
reports to shareholders; or
2) It has otherwise been made generally
available to the public; and
3) It has had time to be absorbed by the
public (usually 10 business days after
publication to the general public).
IV. CONFLICTS OF INTEREST
A. Outside Employment and Engaging in Outside
Business Ventures. Each employee is expected
to devote his or her full time, ability, and
loyalty to the Company's interests during
regular hours of employment and for whatever
additional time that properly may be required
by an employee's job.
The participation, directly or indirectly, by
an employee in any business venture with a
customer, supplier, or competitor of the
Company subjects the employee and the Company
to possible conflicts of interest.
Therefore, a business association of any kind
by an employee or any immediate family member
living in the employee's primary household
with a customer, supplier, or competitor must
be disclosed to and approved by the
Management Committee.
B. Personal Investments and Disclosure of
Material Interest. Neither you nor any
member of your immediate family living in
your primary household may hold a "material
interest", directly or indirectly, in the
stock or business of a known customer,
supplier, or competitor without the prior
approval of the Management Committee.
Generally, a "material interest" for which
disclosures are required involves the
following situations:
1) For publicly traded companies, any type
of interest (whether by ownership or by
serving in any official capacity) in a
business entity in which you have
ownership interest of 5% or more of any
class of voting securities.
2) For closely-held or privately-held
companies or certain other business
arrangements, any type of interest
(whether by ownership or by serving in
any official capacity) in a business
entity in which you have: a) ownership
interest representing 5% or more; b)
voting authority of 5% or more of any
class of voting securities (regardless
of fair market value; c) control over
the election of one or more managing
members, trustees, or directors; or d)
controlling influence over the
management or policies of any such
entity.
You or members of your immediate family
living in your primary household may invest
in shares of publicly traded corporations,
provided the investment does not violate this
Code and the total number of shares owned
does not constitute a material interest in
the corporation.
C. Gifts, Fees, and Entertainment to or from
Customers or Suppliers. Except in connection
with and specifically pursuant to programs
officially authorized by the Company, an
employee may not accept, directly or
indirectly, any money, objects of value, or
premiums from any person or company that has
done or sought or is doing or seeking
business with the Company. All employees
must disclose authorized transactions of this
nature to the Human Resources Director.
Providing excessive gifts or entertainment to
others who may represent potential business
is prohibited. Employees may accept only
business-related meals, entertainment, gifts,
or favors when authorized by management and
when the value involved is not significant
and clearly will not create an obligation to
the donor.
D. Competition. An employee must avoid
situations where he or she is or may appear
to be in competition with the Company. The
following are examples of the types of
activities which are considered to be in this
category:
1) Using one's position to prevent or
hinder the Company from lawfully
competing with others.
2) Using the Company's personnel,
facilities, or funds for the pursuit of
an unauthorized, non-company interest
or business.
3) Providing any service that the Company
normally renders to its customers or
potential customers.
4) Diverting business or personnel away
from the Company.
5) Otherwise improperly profiting,
directly or indirectly, at the
Company's expense.
V. PERSONAL ETHICS
A. Self-Dealing. Employees and any immediate
family members living in their primary
household may not engage in any transaction
which constitutes self-dealing or otherwise
trade on their positions with the Company, or
accept, from anyone doing or seeking to do
business with the Company, a business
opportunity not generally available to other
persons or which is made available because of
such employee's position with the Company.
B. Individual Behavior. The Company's image and
reputation can be no better than the image
and reputation of its employees, and the
Company expects all of its employees to
conduct their personal lives in a manner so
as not to bring discredit upon the Company.
VI. POLITICAL ACTIVITIES
A. Use of the Company Funds and Property. The
use of the Company's funds or assets for
political campaign contributions, whether
local, state, or federal, is prohibited by
law. This covers not only direct
contributions but also indirect support of
candidates or political parties by practices
such as the purchase of tickets for dinners
or other fund raising events, the loan of
employees to political parties or committees,
and the furnishing of transportation,
printing, or duplicating services or other
types of services to a campaign.
Participation by employees in any election
campaign must be undertaken only during off-
duty hours and at their own expense without
any use whatsoever of the Company's
facilities or equipment. There are potential
criminal penalties if you use Company assets
or money for political purposes.
B. Political Sponsorship. To avoid any
impression of political sponsorship or
endorsement by the Company, the name and
address of the Company may not be used in
mailed political material or fund raising,
nor may the Company be identified in any
political advertisement or literature.
C. Employee Candidates and Appointees. Any
employee who desires to run for an elected
public office, or to accept an appointment to
a government office, must discuss the matter
in advance with his or her supervisor or
manager and the Human Resources Director to
make certain that the duties of the office
and the time away from the job will not
conflict with the Company's expectations
relative to his or her job performance and to
get prior approval.
VII. CIVIC RESPONSIBILITIES
Employees are encouraged to participate in civic
organizations, provided such participation does
not unduly interfere with their duties and is
not detrimental to the Company.
VIII. COMPLIANCE CERTIFICATE
Supervisors and managers of the Company are
responsible for circulating copies of this Code
or otherwise reviewing its contents with their
subordinates. Periodically, each employee will
be requested to sign and submit the Certificate
of Compliance attached to this Code, as directed
by the Human Resources Director. FAILURE TO
ADHERE TO THE POLICIES AND OTHER MATTERS
SPECIFIED AND COVERED IN THIS CODE WILL BE
GROUNDS FOR DISCIPLINARY ACTION, UP TO AND
INCLUDING TERMINATION.
New employees will be presented a copy of this
Code as a part of their employment orientation.
Prior to the commencement of employment, they
will be expected to read this Code and sign and
submit to the Human Resources Director the
Certificate of Compliance attached to this Code.
IX. COMPLIANCE WITH LAWS, RULES, AND REGULATIONS
Your job is to be aware of and to comply with
the laws, rules, regulations, and legal
requirements affecting you and your job. The
Company cares how results are obtained, not just
that they are obtained. It is the policy of the
Company to comply with all federal, state, and
local laws, rules, and regulations applicable to
the Company. Particular attention is directed
to the laws, rules, and regulations relating to
discrimination, antitrust, safety, and the
environment. If any uncertainty arises as to
whether a course of action is within the letter
and spirit of the law, advice should be obtained
from the Company's Human Resources Director.
The following are general guidelines for
compliance with certain laws and regulations due
to their particular importance to the Company's
business activities. The special emphasis on
these laws does not limit the general admonition
to comply with all laws, rules, and regulations
applicable to the Company. This Code envisions
a level of ethical business conduct above the
minimum required by law.
A. Discrimination and Harassment. The Company
is committed to providing a workplace free of
discrimination and harassment based on race,
color, religion, age, sex, national origin,
disability, veteran status, or any other
legally protected status. Similarly,
offensive or hostile working conditions
created by such harassment or discrimination
will not be tolerated. Each employee of the
Company must not engage in conduct that
constitutes discrimination or harassment.
B. Antitrust Activities. The purpose of
antitrust laws is to provide a level playing
field to economic competitors and to promote
fair competition. No employee, under any
circumstances or in any context, may enter
into any understanding or agreement, whether
expressed or implied, formal or informal,
written or oral, with an actual or potential
competitor, which would illegally limit or
restrict in any way either party's business
or market activities. This prohibition
includes any understanding or agreement
relating to prices, costs, profits, products,
services, terms, or conditions of sale,
market share, or customer or supplier
classification or selection. It is the
Company's policy to comply with all
applicable antitrust laws and our employees
are required to do the same.
C. Environment, Health, and Safety. The Company
is committed to operating in a manner that is
protective of human health and safety and the
environment. It is our policy to comply, in
all material respects, with applicable
health, safety, and environmental laws,
rules, and regulations. Each employee is
expected to comply with our policies,
programs, standards, and procedures and all
applicable health, safety, and environmental
laws and regulations.
D. Reporting Obligations. The Company is
committed to ensuring full, fair, accurate,
timely, and understandable disclosures in any
periodic reports that it is required to
submit to any regulatory entities and in its
public communications.
E. Summary. As an employee, you are responsible
for understanding and obeying all laws,
rules, and regulations that govern your
function with the Company. Sources of this
information include your supervisor or
manager, the Human Resources Director, and
the policies and procedures established by
the Company. If you have any questions
concerning applicable laws, rules, and
regulations that govern your function within
the Company, contact your supervisor or
manager or the Human Resources Director.
X. ADMINISTRATION
All employees who suspect violations of the
letter or spirit of this Code have an obligation
to report their concerns to the Human Resources
Director. Matters of concern include pressure
exerted by suppliers, customers, Company
personnel, or others to use Company resources in
an unauthorized manner or to take or enable
other actions inconsistent with authorized
Company procedures and policies or this Code.
Employees may also report their suspicions or
specific incidents to any member of the
Company's Management Committee or Board of
Directors.
There are two reporting methods:
1) The individual may contact the Human
Resources Director either in person, by
telephone, in writing or in any method. The
individual may do so anonymously if desired.
The members of the Management Committee and
Board of Directors may be determined from the
Human Resources Director at (252) 975-7017;
or
2) 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.
All allegations of improper or illegal behavior
will be investigated promptly and thoroughly.
The investigation shall remain as confidential
as practicable and those conducting the
investigation shall respect the privacy of all
persons involved.
No adverse action shall be taken or permitted
against anyone for communicating legitimate
concerns to the appropriate persons. An
investigation will be conducted whether the
employee identifies himself or herself or if
matters are submitted anonymously.
This Code is subject to amendment and may be
reviewed and updated periodically. Any waivers
of a provision of this Code for an officer must
be approved by the Company's board of directors
and disclosed in a Form 8-K within five days.
XI. CONCLUSION
While this Code is not exhaustive, we hope that
it will provide guidance for you. Adherence to
the Code by all employees will ensure the
maintenance of the high ethical standards toward
which the Company strives. Failure to meet your
responsibilities as described in this Code, the
Company's policies and practices, and applicable
laws, rules, and regulations may result not only
in disciplinary action up to and including
termination, but also personal fines and
imprisonment.
From time-to-time, all of us will be confronted
with situations not clearly covered by this
Code. When these matters arise, supervisors and
managers should discuss such matters with the
Human Resources Director, and other employees
should consult with their supervisors or
managers. Supervisors and managers must follow
up with the Human Resources Director.
The policies contained in this Code are
guidelines to employment with the Company, do
not create contractual rights or obligations of
employment, and are subject to all employment
remaining at-will.
CODE OF BUSINESS CONDUCT AND ETHICS OF FOUNTAIN POWERBOATS,
INC.
Please print or type applicable information.
EMPLOYEE NAME:
________________________________________________
EMPLOYEE NUMBER:
______________________________________________________
DEPARTMENT: ______________________________
CERTIFICATE OF COMPLIANCE
I, the undersigned, hereby acknowledge that I
carefully have read the Code of Business Conduct and Ethics
of Fountain Powerboats, Inc. and that I understand it and
agree to comply fully and completely with it. I recognize
that failure by an employee of Fountain Powerboats, Inc. to
adhere to the policies and other matters specified and
covered in the Code of Business Conduct and Ethics will be
grounds for discipline, up to and including dismissal from
employment.
______________________ ___________________________
Signature Date