STATE OF NORTH CAROLINA
COUNTY OF BEAUFORT
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (the "Agreement") is made as of this
_____ day of February, 2001 (the "Date of Grant"), by and between FOUNTAIN
POWERBOAT INDUSTRIES, INC., a Nevada corporation (the "Company"), and
XXXXX X. XXXXX, a resident of Counce, Tennessee (the "Optionee").
WHEREAS, the Company's Board of Directors has approved the grant
to the Optionee of an option to purchase shares of the Company's common
stock ("Common Stock") and desires to enter into this Stock Option
Agreement to set forth the terms and conditions of that option.
NOW, THEREFORE, in consideration of the premises and the
agreements of the parties set forth herein, and for valuable
consideration, the receipt of which hereby is acknowledged by the Company,
the Company and the Optionee hereby agree as follow:
1. Grant of Option. Pursuant to and subject to the terms and
conditions contained in 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 TWENTY-FIVE THOUSAND (25,000) 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.
2. Date of Grant of Option. For purposes of this Agreement, the
Option is granted effective as of the date of this Agreement (the "Date of
Grant").
3. Exercise Price. The price to be paid by the Optionee for the
purchase of the Option Stock upon exercise of the Option shall be ONE AND
344/1000s DOLLARS ($1.344) per share (the "Exercise Price").
4. Exercise Schedule. Subject to any further restrictions
contained in this Agreement, the Option will become exercisable on the
following dates as to the indicated number of shares of the Option Stock:
Date Stock Option
Available For Exercise
________________ _____________________
December 31, 2001 12,500 shares
December 31, 2002 12,500 shares
Notwithstanding anything contained herein to the contrary, the Option
may not be exercised at any time as to a fractional share.
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 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 this
Agreement and actually is received by the Company prior to its expiration
or earlier termination 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 Company's Board of Directors otherwise approves
or unless the partial exercise is for all remaining shares of Option Stock
available under the Option. As soon as practicable 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; 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 date one year following the date of issuance of the stock upon
exercise of the Option. 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 and to receive
dividends on 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 form of cash, or in such other manner as shall be acceptable to the
Company, 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 of Option. 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
this Agreement, it shall expire and terminate at 5:00 P.M. on December 12,
2007 (the "Expiration Date"). Upon the expiration 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 this Agreement.
8. Effect of Agreement on Service as a Director. Neither this
Agreement nor the grant of the Option is intended or shall be deemed or
interpreted to confer upon the Optionee any right to be renominated for
election as a director of the Company or to continue to serve as a
director.
9. 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 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 this Agreement, 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. Adjustment of Options.
(a) Changes in Capitalization; Stock Splits and Dividends. In
the event of (i) any dividend payable by the Company in shares of Common
Stock, or (ii) any recapitalization, reclassification, split-up,
consolidation or combination of, or other change in or offering of rights
to the holders of, Common Stock, or (iii) an exchange of the outstanding
shares of Common Stock for a different number or class of shares of stock
or other securities of the Company in connection with a merger,
consolidation or other reorganization of or involving the Company
(provided the Company shall be the surviving or resulting corporation in
any such merger or consolidation), then, to the extent that it, in its
discretion, shall determine an adjustment to be appropriate in order to
reflect such event or transaction, and in such manner as it shall
determine to be appropriate, the Board of Directors shall adjust the
number and class or kind of shares which may be issued under this
Agreement and of the securities which shall be subject to the Option
and/or the Exercise Price applicable to the Option, all computed on a
basis prior to such event. However, in no event shall any such adjustment
change the aggregate Exercise Price for Option Stock to be purchased upon
the exercise of the Option.
Any such adjustments made shall be consistent with changes in
the Company's outstanding Common Stock resulting from the above events
and, when made, shall be final, conclusive and binding on all persons,
including, without limitation, the Company, its shareholders and the
Optionee or other person having any interest in the Option so adjusted.
Any fractional shares resulting from any such adjustment shall be
eliminated.
(b) Dissolution; Merger or Consolidation; Sale of Assets. In
the event of a dissolution or liquidation of the Company, the sale of
substantially all the Company's assets, a merger or consolidation of the
Company with or into any other corporation or entity, or a statutory share
exchange in which the Company's outstanding shares are acquired by any
other corporation in exchange for its shares (or any other such
reorganization or similar transaction) in which the Company is not the
surviving or resulting corporation, and if a provision is not made in such
transaction for the continuance of this Agreement or the assumption of the
Option by any successor to the Company or for the substitution for the
Option of a new option covering shares of any successor corporation or a
parent or subsidiary thereof, then, in such event, and to the extent the
Option has not previously been exercised, all rights of the Optionee
pursuant to this Agreement shall terminate and be of no further effect
immediately prior to the effective time of such dissolution, liquidation,
sale, merger, consolidation, share exchange or other reorganization (or at
such other time and pursuant to such rules and regulations as the Board of
Directors shall determine and promulgate to the Optionee). However, to
the extent the Option shall not previously have been exercised, and
notwithstanding any provisions of this Agreement to the contrary, the
Option shall become exercisable, and may be exercised, in full immediately
prior to the effective time of any such event. The Board of Directors
shall give the Optionee at least thirty (30) days prior written notice of
the effective time of an event which gives rise to an immediate purchase
right under this Paragraph 10.
(c) Miscellaneous. The grant of the Option shall not affect in
any way the right or power of the Company to (i) enter into or effect any
adjustment, recapitalization, reclassification, reorganization or any
other change in the Company's capital or business structure or its
business, (ii) to merge or consolidate, or to dissolve, liquidate, sell or
transfer all or any part of its business or assets, or (iii) to issue
bonds, debentures, preferred or other preference stock ahead of or
affecting Common Stock or the rights thereof.
11. Legal Restrictions on Exercise and Resale of Option Stock. The
Optionee, by his acceptance of the Option, represents, covenants and
agrees that: (i) the Option, and the Option Stock issuable upon exercise
of the Option, are being acquired for investment purposes only and not
with a view to the sale or distribution hereof; (ii) he is knowledgeable
about the business and affairs of the Company and has been given, or given
access to, such information regarding the Company as he considers
necessary in order to make an informed decision regarding a purchase of
the Option Stock upon exercise of the Option; (iii) that the Option Stock
has not been registered under the Securities Act of 1933 (the "Act") and
that, absent an effective registration statement under the Act covering
the Option Stock issued upon exercise of the Option, or an available
exemption from registration, that stock will be "restricted stock" under
the Act and may not be sold, transferred, assigned, hypothecated or
otherwise disposed of by the Optionee.
At the Company's discretion, 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 in the following
form or in such other form as the Company may specify:
THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE UNITED STATES
SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION
OF ANY STATE BECAUSE THEY ARE BELIEVED TO BE EXEMPT FROM
REGISTRATION UNDER SECTION 4(2) OF THE ACT. THE SECURITIES ARE
"RESTRICTED" AND MAY NOT BE RESOLD OR TRANSFERRED EXCEPT AS
PERMITTED UNDER THE ACT PURSUANT TO REGISTRATION OR AN AVAILABLE
EXEMPTION FROM REGISTRATION.
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 and that the Optionee understands the restricted nature of the
shares and will comply with the transfer restrictions applicable to the
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 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 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 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 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.
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 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. 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.
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 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. 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.
16. 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.
17. 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.
18. 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.
19. 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.
20. Entire Agreement. This Agreement 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.
21. 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/ Xxxxx X. Xxxxx (SEAL)
Xxxxx X. Xxxxx
NBMAIN\452391.1
EXHIBIT A
NOTICE OF EXERCISE OF
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 and that certain Stock Option Agreement between
the Company and the undersigned dated ________________, 2001.
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
NBMAIN\505851 v1
