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 12th day of January, 1999 (the "Date of Grant"), by and between
FOUNTAIN POWERBOAT INDUSTRIES, INC., a Nevada corporation (the "Company"), and
ANTHONY J. ROMERSA, 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
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 a full-time 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 THIRTY THOUSAND (30,000) 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 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. Approval by Shareholders. This Agreement and the Option
described herein are expressly made subject to approval of the Plan by the
Company=s shareholders at the Company=s next annual meeting of shareholders
following the date hereof. Notwithstanding anything contained herein to the
contrary, the Option may not be exercised prior to receipt of such approval,
and, in the event such approval is not obtained, then this Agreement and the
Option shall, without any action by the Company or the Optionee, become void
and unenforceable and of no further force or effect.
3. 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.
4. 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 FIVE
AND NO/100s DOLLARS ($5.00) per share.
5. 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
__________________ ______________
June 30, 1999 5,000 shares
September 30, 1999 5,000 shares
December 31, 1999 5,000 shares
March 31, 2000 5,000 shares
June 30, 2000 5,000 shares
September 30, 2000 5,000 shares
Notwithstanding anything contained herein to the contrary, the Option may
not be exercised at any time as to a fractional share.
6. 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 A 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 Date or any
earlier termination of the Option.
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. 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.
7. 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.
8. 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 January
11, 2004.
(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.
9. 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, including without
limitation any right to continue in the employ of the Company, or to interfere
with, restrict or otherwise limit in any way the right of the Company to
discharge or terminate the employment of the Optionee at any time for any
reason whatsoever, with or without Cause.
10. Rights as a Shareholder. Neither the Optionee nor any other
person shall have any rights as a stockholder 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.
11. 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 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.
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.
12. 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 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.
13. 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.
14. Nontransferability. The Option shall not be assignable or
transferable except by will or by the laws of descent and distribution, and,
during the lifetime of the Optionee, 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.
15. 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 15.
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 6 above.
16. 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.
17. 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.
18. 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.
19. 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.
20. 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.
21. 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.
22. 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 and satisfies
the provisions of Paragraph 3(c) of the Employment Agreement dated August 24,
1998, between Optionee, the Company and Fountain Powerboats, Inc. 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.
23. 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:
ATTEST:
President and Chief Executive Officer
Secretary
OPTIONEE:
(SEAL)
Anthony J. Romersa
98-0253(A)
NBMAIN\349669.1
EXHIBIT A
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\349669.1