SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
TRAVIS BOATS & MOTORS, INC.
(Exact name of issuer as specified in its charter)
Texas 74-2024798
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5000 Plaza on the Lake, Suite 250, Austin, Texas 78746
(Address of Principal Executive Offices)
TRAVIS BOATS & MOTORS, INC.
1995 INCENTIVE PLAN
STOCK OPTION AGREEMENT FOR MICHAEL B. PERRINE
STOCK OPTION AGREEMENT FOR RON SPRADLING
STOCK OPTION AGREEMENT FOR MARK T. WALTON
Mark T. Walton Copies to:
Travis Boats & Motors, Inc. J. Rowland Cook, Esq.
5000 Plaza on the Lake, Suite 250 Julie Frey, Esq.
Austin, Texas 78746 Jenkens & Gilchrist, A Professional
(512) 347-8787 Corporation
Fax: (512) 329-0480 600 Congress Avenue, Suite 2200
Austin, Texas 78701
(512) 499-3800
Fax: (512) 404-3520
CALCULATION OF REGISTRATION FEE
Proposed
Proposed Maximum
Title of Maximum Aggregate Amount of
Securities Amount to be Offering Price Offering Registration
Registered Registered (1) Per Share (2) Price (2) Fee (2)
- -------------- -------------- --------------- --------- ------------
Common Stock, 333,865 $ 22.75 $3,609,153.52 $1,064.70
$.01 par value
(1) Shares (including related rights to acquire shares) issuable pursuant
to incentive stock options, non-qualified stock options, stock appreciation
rights, restricted stock awards, and performance units under the Travis Boats
& Motors, Inc. 1995 Incentive Plan and the individual stock option
agreements listed above (the "Option Agreements").
(2) Estimated solely for the purpose of calculating the registration fee.
Pursuant to Rule 457(h), the offering price and registration fee are computed
on the basis of the average of the bid and asked closing prices of the
Common Stock, as reported on the NASDAQ National Market System on
December 8, 1997.
(3) Calculated pursuant to Rule 457 (c) and (h). The prices per share of
the Common Stock offered hereunder pursuant to the 1995 Incentive Plan
(the "Plan") and the Option Agreements is based on (i) 73,834 shares of
Common Stock allocated for issuance under the Plan, but not yet subject to
an award, at a price of $22.75 per share, which is the average of the
high and low selling price per share of Common Stock on the NASDAQ
National Market System on December 8, 1997; and (ii) 260,031 shares of Common
Stock reserved for issuance under the Plan and under the Option Agreements
and subject to options granted thereunder at an average exercise price of
$7.42 per share.
<PAGE>
EXPLANATORY NOTE
The information required by Items 1 and 2 of Part I of Form S-8 to be
contained in the Section 10(a) prospectus is omitted from this Registration
Statement in accordance with Rule 428 of the Securities Act of 1933, as
amended, and the Note to Part I of Form S-8.
Included in Part I of this Registration Statement on Form S-8 is a
reoffer prospectus concerning reoffers and resales of certain of the shares of
Common Stock registered hereby, which is filed in reliance on General
Instruction C to Form S-8.
<PAGE>
133,867 Shares
TRAVIS BOATS & MOTORS, INC.
Common Stock
This Prospectus relates to an aggregate of 133,867 shares (the
"Shares") of common stock, par value $.01 per share ("Common Stock"), of
Travis Boats & Motors, Inc. (the "Company"). The Common Stock is
currently traded over-the-counter on the Nasdaq National Market ("Nasdaq")
under the symbol TRVS. On December 8, 1997, the closing sale price of the
Common Stock on the Nasdaq was $22.625 per share.
The Shares may be offered from time to time by persons (collectively,
the "Selling Shareholders") who acquired the Shares in a transaction or chain
of transactions not involving a public offering. The Selling Shareholders have
indicated that the Shares may be sold in the over-the-counter market or
otherwise at prevailing market prices or negotiated prices or by a combination
of the foregoing methods of sale. No underwriter has been engaged to
participate in the offering of the Shares. The Company will receive no portion
of the proceeds of any sales of Shares by the Selling Shareholders. See "Plan
of Distribution."
THESE SECURITIES INVOLVE CERTAIN RISKS.
SEE "RISK FACTORS" BEGINNING ON PAGE 4.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
ADMINISTRATOR, NOR HAS THE COMMISSION OR ANY SUCH ADMINISTRATOR
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is December 9, 1997.
<PAGE>
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission
(the "Commission") a Registration Statement (of which this Prospectus is a
part) under the Securities Act of 1933, as amended (the "Securities Act"),
with respect to the Shares. This Prospectus does not contain all the
information set forth in the Registration Statement, certain portions of which
have been omitted as permitted by the rules and regulations of the
Commission. For further information with respect to the Company and the
Shares, reference is made to such Registration Statement and exhibits.
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information
with the Commission. The Registration Statement, the exhibits forming a part
thereof, and the reports, proxy statements and other information can be
inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Room 1024, Washington, D.C.
20549, and at the following regional offices of the Commission: 7 World
Trade Center, 13th Floor, New York, New York 10048 and Northwest
Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661. The Commission maintains a web site (http:\\www.sec.gov) that
contains reports, proxy and information statements and other information
regarding registrants, such as the Company, that file electronically with the
Commission. The Company's Common Stock is traded on the Nasdaq
National Market. Reports, proxy statements and other information concerning
the Company can also be inspected at the office of the Nasdaq Stock Market,
1735 K Street, N.W., Washington, D.C. 20006-1500.
The statements contained in this Prospectus that are not historical facts,
including but not limited to, statements found in the "The Company" and
"Risk Factors," are forward-looking statements as that term is defined in
Section 21E of the Exchange Act that involve a number of risks and
uncertainties. The actual results of the future events described in the
forward-looking statements in this Prospectus could differ materially from
those stated in such forward-looking statements. Among the factors that could
cause actual results to differ materially are: general economic conditions,
competition and government regulations, as well as the risks and uncertainties
discussed in this Prospectus, including without limitation, the matters
discussed in "Risk Factors" and the uncertainties set forth from time to time
in the Company's other public reports, filings, and public statements.
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission
are incorporated herein by reference:
(1) the Company's Annual Report on Form 10-K for the
fiscal year ended September 30, 1996;
(2) the Company's Quarterly Reports on Form 10-Q for the
quarters ended December 31, 1996, March 31, 1997 and
June 30, 1997;
(3) the description of the Common Stock set forth in the
Registration Statement on Form 8-A, filed with the
Commission on May 23, 1996, including any
amendment or report filed for the purpose of updating
such description; and
(4) all documents filed by the Company with the
Commission pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of this offering
of the Shares, from the date of filing of such documents.
Any statement contained in a previously filed document incorporated
by reference shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any
accompanying Prospectus supplement, or in any other subsequently filed
document which also is or is deemed to be incorporated by reference, modifies
or supersedes such statement. Any such statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this Prospectus.
The Company undertakes to provide without charge to each person to
whom this Prospectus is delivered, upon written or oral request of such
person, a copy of any or all documents incorporated herein by reference, other
than exhibits. All requests for copies of such documents should be directed
to: Michael B. Perrine, Chief Financial Officer, Travis Boats & Motors, Inc.,
5000 Plaza on the Lake, Suite 250, Austin, Texas 78746.
THE COMPANY
The Company is a leading multi-state superstore retailer of recreational
boats, motors, trailers and related marine accessories in the southern United
States. The Company, which currently operates 20 stores under the name
Travis Boating Center in Texas, Arkansas, Louisiana, Alabama, Tennessee,
Mississippi and Florida, differentiates itself from competitors by providing
customers a unique superstore shopping experience that showcases a broad
selection of high quality boats, motors, trailers and related marine
accessories at firm, clearly posted low prices. Each superstore also offers
complete customer service and support, including inhouse financing programs
and full-service repair facilities staffed by factory-trained mechanics.
<PAGE>
Since its founding as a single retail store in Austin, Texas, the
Company has grown through both acquisitions and the establishment of new
store locations. During the 1980s, the Company expanded into San Antonio,
Texas with the construction of a new store. The Company subsequently
acquired boat retailers operating in Midland, Dallas and Abilene, Texas.
During this initial expansion period, the Company began developing the
systems necessary to manage a multi-store operation and leveraging the
economies of scale associated with volume purchasing. The Company's
success in this area led to the proprietary Travis Edition packaging concept
and the Company's pricing philosophy. Since 1995, the Company has opened or
acquired additional stores in Arkansas, Louisiana, Alabama, Tennessee,
Mississippi and Florida as set forth below:
In September 1995, the Company acquired substantially all of the
assets of Red River Marine, Inc., a boat retailer which operated stores in the
resort communities of Hot Springs and Heber Springs, Arkansas.
In December 1995, the Company acquired substantially all of the assets
of Clay's Boats and Motors, Inc., which operated a single store in New Iberia,
Louisiana.
In October 1996, the Company acquired substantially all of the assets
of North Alabama Watersports, Inc., which operated a single store in
Florence, Alabama.
In November 1996, the Company acquired substantially all of the
assets of Tri-Lakes Marine, Inc., which operated stores in Winchester,
Tennessee and Huntsville, Alabama.
In February 1997, the Company acquired substantially all of the assets
of Bent's Marine, Inc., which operated a single store in Metairie, Louisiana.
In August 1997, the Company acquired selected assets from McLeod
Marine, Inc. of Pascagoula, Mississippi.
In September 1997, the Company acquired all of the outstanding stock
of Adventure Marine and Outdoors, Inc., which operated a store in Fort
Walton Beach, Florida, Adventure Marine South, Inc., which operated a store
in Key Largo, Florida, and Adventure Boat Brokerage, Inc. which operated
a store in Fort Walton Beach, Florida.
In November 1997, the Company acquired substantially all of the
assets of Southeastern Marine Group, Inc., which operated a single store in
Hendersonville, Tennessee.
The Company's principal executive office is located at 5000 Plaza on
the Lake, Suite 250, Austin, Texas 78746, and its phone number is (512) 347-
8787.
<PAGE>
RISK FACTORS
This Prospectus includes "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. All statements other than statements of historical
information provided herein are forward-looking and may contain information
about financial results, economic conditions, trends and known uncertainties.
The Company cautions the reader that actual results could differ materially
from those expected by the Company, depending on the outcome of certain
factors, including, without limitation, the risk factors discussed in this
section. Readers are cautioned not to place undue reliance on these forward
looking statements which speak only as of the date hereof. The Company under-
takes no obligation to release publicly the result of any revisions to these
forward-looking statements which may be made to reflect events or circumstances
after the date hereof, including, without limitation, changes in the Company's
business strategy or planned capital expenditures, or to reflect the
occurrence of unanticipated events.
Impact of Seasonality and Weather on Operations
The Company's business, as well as the entire recreational boating
industry, is highly seasonal. Strong sales typically begin in January with the
onset of the public boat and recreation shows, and continue through July.
Over the previous three-year period, the average net sales for the quarterly
periods ended March 31 and June 30 represented in excess of approximately
28% and 39%, respectively, of the Company's average annual net sales. If,
for any reason, the Company's sales were to be substantially below those
normally expected during these periods, the Company's business, financial
condition and results of operations would be materially and adversely affected.
The Company generally realizes significantly lower sales in the quarterly
period ending December 31, resulting in operating losses during that quarter.
The Company's business is also significantly affected by weather
patterns which may adversely impact the Company's operating results. For
example, drought conditions or merely reduced rainfall levels, as well as
excessive rain, may force area lakes to close or render boating dangerous or
inconvenient, thereby curtailing customer demand for the Company's
products. In addition, unseasonably cool weather and prolonged winter
conditions may lead to a shorter selling season in certain locations. Although
the Company's geographic expansion has reduced, and is expected to continue
to reduce, the overall impact on the Company of adverse weather conditions
in any one market area, such conditions will continue to represent potential,
material adverse risks to the Company and its future financial performance.
Due to the foregoing factors, among others, the Company's operating results
in some future quarters may be below the expectations of stock market analysts
and investors. In such event, there could be an immediate and significant
adverse effect on the trading price of the Common Stock.
Impact of General Economic Conditions and Discretionary Consumer Spending
The Company's operations are dependent upon a number of factors
relating to or affecting consumer spending. The Company's operations may
be adversely affected by unfavorable local regional or national economic
developments or uncertainties regarding future economic prospects that reduce
consumer spending in the markets served by the Company's stores. Consumer
spending on non-essential goods such as recreational boats can also be
adversely affected due to declines in consumer confidence levels, even if
prevailing economic conditions are positive. In an economic downturn,
consumer discretionary spending levels are also reduced, often resulting in
disproportionately large declines in the sale of high-dollar items such as
recreational boats. For example, during the Company's 1988-1990 fiscal
years, the Texas economy was severely depressed due to declines in the
financial, oil and gas and real estate markets. While the Company remained
profitable during these periods, its operating performance declined. There can
be no assurance that a similar economic downturn might not recur in Texas or
<PAGE>
any other market or that the Company could remain profitable during any such
period. Similarly, rising interest rates could have a negative impact on
consumers' ability or willingness to obtain financing from third-party lenders,
which could also adversely affect the ability of the Company to sell its
products. Changes in federal and state tax laws including, without limitation,
the imposition or proposed adoption of luxury or similar taxes on certain
consumer products, also influence consumers' decision to purchase products
offered by the Company and could have a negative effect on the Company's
sales. Local influences such as corporate downsizing, military base closings
and the Mexican peso devaluation have adversely affected and may continue
to influence the Company's operations in certain markets.
Dependence Upon Expansion
A significant portion of the Company's growth has resulted from, and
will continue to be increasingly dependent upon, the addition of new stores
and continued sales and profitability from existing stores. Since October
1991, at which time the Company operated five stores in Texas, the Company
has opened or acquired 15 new store locations in Texas, Arkansas, Louisiana,
Alabama, Tennessee, Mississippi and Florida. During the nine month period
ended June 30, 1997 and fiscal 1996, these new stores collectively accounted
for approximately 70.2% and 45.7%, respectively, of the Company's
aggregate net sales. Comparable store sales increased approximately 3.5%
and 4.3% for the nine months ended June 30, 1997 and fiscal 1996,
respectively. Recent rates of comparable store sales and net income growth
are not necessarily indicative of the comparable store performance that may
be achieved by the company in the foreseeable future.
The Company intends to continue to pursue a strategy of growth into
new markets through acquiring existing boat retailers, converting compatible
facilities to Travis Boating Centers and building new store facilities.
Accomplishing these goals for expansion will depend upon a number of
general factors, including the identification of new markets in which the
Company can obtain approval to sell its existing or substantially similar
product lines, the Company's financial capabilities, the hiring, training and
retention of qualified personnel and the timely integration of new stores into
existing operations. The acquisition strategy will further depend upon the
Company's ability to locate suitable acquisition candidates at a reasonable
cost and to dispose, timely and effectively, of the acquired entity's
remaining inventory, as well as the ability of the Company to sell its Travis
Edition product line to the customer base of the previous owner. There can
be no assurance that the Company can identify suitable acquisition candidates
or complete acquisitions on terms and conditions favorable to the Company.
The strategy of growth through conversion of compatible facilities to
Travis Boating Centers or the construction of new Travis Boating Centers will
further depend upon the Company's ability (i) to locate and construct suitable
facilities at a reasonable cost in those new markets in which the Company
believes it can obtain adequate market penetration at standard operating
margins without the acquisition of an existing dealer, (ii) to obtain the
reliable data necessary to determine the size and product preferences of such
potential markets and (iii) to introduce successfully its Travis Edition line.
There can be no assurance that the Company will be able to open and operate new
stores on a timely or profitable basis. Moreover, the costs associated with
opening such stores may adversely affect the Company's profitability.
<PAGE>
Management of Growth
The Company has undergone a period of rapid growth. Management
has expended and expects to continue to expend significant time and effort in
acquiring and opening new stores. There can be no assurance that the
Company's systems, procedures and controls will be adequate to support the
Company's expanding operations. The inability of the Company to manage
its growth properly could have a material adverse effect on the Company's
business, financial condition and results of operations.
The Company's planned growth will also impose significant added
responsibilities on members of senior management, including the need to
identify, recruit and integrate new senior level managers, and the ability to
maintain or expand Travis Edition's and Travis Boating Center's successful
appeal to consumers. There is no assurance that any additions to management
can be readily and successfully achieved or that the Company will be able to
continue to grow its business.
Reliance on Manufacturers and Other Key Vendors
The Company's success is dependent upon its relationship with, and
favorable pricing arrangements from, a limited number of major
manufacturers. In the event these arrangements were to change or terminate
for any reason, including changes in competitive, regulatory or marketing
practices, the Company's business, financial condition and results of opera-
tions could be adversely affected.
As is typical in the industry, the Company deals with each of its
manufacturers pursuant to an annually renewable, non-exclusive, dealer
agreement that does not contain any contractual provisions concerning product
pricing or required purchasing levels. Pricing is generally established on a
model year basis, but is subject to change at the manufacturer's sole
discretion.
The Company purchased approximately 100% of its new outboard motors for use
on its Travis Edition lines of recreational boats in the nine months ended
June 30, 1997 and fiscal 1996,respectively, from Outboard Marine Corporation
("OMC"), the manufacturer of Johnson outboard motors. Unlike the Company's
other dealer agreements, the Company's agreement with OMC is multi-year in
nature. The current agreement, which is in the first of five years, sets
forth an established discount level from the then prevailing dealer net price
over the entire term of the agreement. This dealer agreement may be canceled
by either party if the volume of product purchased or available to be purchased
is not maintained at pre-established levels. If the Company's contract with
OMC were canceled or modified, it could have a material adverse effect on the
Company's business, financial condition and results of operations.
Approximately 31.5% and 22.7 % of the Company's net inventory
purchases in the nine months ended June 30, 1997 and in fiscal 1996,
respectively, were from a single boat supplier. The Company also currently
purchases a high percentage of the annual production of a limited number of
additional boat manufacturers. To ensure adequate inventory levels to support
the Company's expansion, it may be necessary for such manufacturers to
increase production levels or allocate a greater percentage of their production
to the Company. In the event that the operations of the Company's
manufacturers were interrupted or discontinued, the Company could
experience temporary inventory shortfalls, or disruptions or delays with
respect to any unfilled purchase orders then outstanding. Although the
Company believes that adequate alternate sources would be available that could
replace a manufacturer as a product resource, there can be no assurance that
such alternate sources will be available at the time of any such interruption
or that alternative products will be available at comparable quality and
prices.
The unanticipated failure of any manufacturer or supplier to meet the
Company's requirements with regard to volume or design specifications, the
Company's inability to locate acceptable alternative manufacturers or
suppliers, the Company's failure to have dealer agreements renewed or to meet
certain volume requirements with regard to purchasing, or any substantial
increase in the manufacturer's pricing to the Company, could have a material
adverse effect on the Company's business, financial condition and results of
operations.
<PAGE>
Limitations to Market Entry
Under certain of its dealer agreements, the Company must obtain
permission from its manufacturers to sell products in new markets. While the
Company has received permission to sell Johnson motors and various boat
lines in its immediate expansion markets, manufacturers have not granted such
permission to the Company in each of its broader target markets. While the
Company believes it can sell products of other manufacturers in new markets,
there can be no assurance that all of the Company's current manufacturers will
grant permission for the Company to sell in new markets, or if unable to
obtain such permission, that the Company can obtain suitable alternative
sources of supply.
Unlike other states the Company has targeted for expansion, the State
of Oklahoma has had restrictions on the location of competing marine dealers
that limit the ability of new entrants in the retail boat industry to compete
in Oklahoma. There can be no assurance that other states will not pass
similar or other restrictions limiting new competition.
Income from Financing, Insurance and Extended Service Contracts
A substantial portion of the Company's income results from the
origination and placement of customer financing and the sale of insurance
products and extended service contracts (collectively, "F&I Products"), the
most significant component of which is the income resulting from the
Company's origination of customer financing. For example in fiscal 1996,
F&I Products accounted for approximately 4.2 % of net sales and
approximately 16.4% of gross profit. During the nine months ended June 30,
1997, F&I products accounted for approximately 4.4% of net sales and
approximately 16.7% of gross profit. The Company's lenders may choose to
pursue this business directly, rather than through intermediaries such as the
Company. Moreover, lenders may impose terms in their boat financing
arrangements with the Company that may be materially unfavorable to the
Company or its customers. For these and other reasons, the Company could
experience a significant reduction in income resulting from reduced demand
for its customer financing programs. In addition, if profit margins are
reduced on sales of F&I Products, or if these products are no longer
available, it would have a material adverse effect on the Company's business,
financial condition and results of operations. Furthermore, although
optional extended service contracts sold by the Company are from third party
providers that have further reinsured their warranty exposure and the Company
has never experienced any claims due to the default of a third party extended
service contract provider, the Company may experience significant breach of
warranty claims as a result of the failure of a third party extended service
contract provider or their reinsurers that may, in the aggregate, be material
to the Company's business.
Availability of Financing
The Company currently has significant floor plan and other inventory
lines of credit from financial institutions and other lenders, which the
company believes reflect competitive terms and conditions. While the Company
believes it will continue to obtain comparable financing from these or other
lenders, there can be no assurance that such financing will be available to the
Company. The failure to obtain sufficient financing on favorable terms and
conditions could have a material adverse effect on the business, financial
condition and results of operations of the Company.
<PAGE>
Dependence on Key Personnel
The Company believes its success depends, in large part, upon the
continued services of key management personnel, including Mark T. Walton,
Chairman of the Board and President; Ronnie L. Spradling, Executive Vice
President--New Store Development; and Michael B. Perrine, Chief Financial
Officer, Secretary and Treasurer; and other key employees. Although the
Company has employment agreements through TBC Management, Ltd. (an
affiliated partnership of the Company) with each of Messrs. Walton,
Spradling and Perrine expiring in June 1999, the loss of any of these
individuals could materially and adversely affect the Company, including its
business expansion plans. The Company maintains and is the beneficiary of
key-man life insurance policies on Messrs. Walton and Perrine in the amount
of $1.0 million each, and on Mr. Spradling in the amount of $500,000.
Product and Service Liability Risks
Products sold or serviced by the Company may expose it to potential
liability for personal injury or property damage claims relating to the use of
those products. Additionally, as a result of the Company's activities in
custom packaging its Travis Edition lines, the Company may be included as a
defendant in product liability claims relating to defects in manufacture or
design. Historically, the resolution of product liability claims has not
materially affected the Company's business. the Company generally requires
manufacturers from which it purchases products to supply proof of product
liability insurance. Although the Company maintains third-party product
liability insurance that it believes to be adequate, there can be no assurance
that the Company will not experience legal claims in excess of its insurance
coverage, or claims that are ultimately not covered by insurance.
Furthermore, if any significant claims are made against the Company, the
Company's business, financial condition and results of operations may be
adversely affected by related negative publicity.
Control by Officers and Directors
The executive officers and directors of the Company beneficially own or
control voting rights on approximately 46.8% of the issued and outstanding
shares of the Company's Common Stock as of June 30, 1997. As a result of such
ownership, such officers and directors will have the power effectively to
control the Company, including the election of directors, the determination of
matters requiring stockholder approval and other matters pertaining to corpor-
ate governance.
Volatility of Stock Price
Prior to the Company's initial public offering in June 1996, there was
no public trading market for the Company's Common Stock. There can be no
assurance of an ongoing active trading market or that the market price of the
Common Stock will not decline. It is anticipated that there will be limited
float in the market due to the relatively low number of shares owned by the
public and consequently, fluctuations in the market price for the Common
Stock could be significant. Recent market conditions for newly public
companies, as well as the Company's quarterly variations in operating results
due to seasonality and other factors, are likely to result in significant
fluctuations in the market price for the Common Stock. Future
announcements concerning the Company or its competitors, including
government regulations, litigation or changes in earnings estimates or
descriptive materials published by analysts, may also cause the market price
of the Common Stock to fluctuate substantially. These fluctuations, as well
as general economic, political and market conditions, such as recessions, may
adversely affect the market price of the Common Stock.
<PAGE>
Shares Eligible for Future Sale
Sales of substantial amounts of the Company's Common Stock in the
public market, or the perception that such sales may occur, could have a
material adverse effect on the market price of the Common Stock. The executive
officers and directors of the Company, beneficially own or control voting
rights on approximately 1,974,000 shares of Common Stock as of June 30, 1997.
No prediction can be made as to the effect, if any, that future sales of shares
or the availability of shares for future sale, will have on the market price
of the Common Stock prevailing from time to time.
Anti-takeover Effect of Articles and Bylaw Provisions
The Company's Articles of Incorporation provide that up to 1,000,000
shares of preferred stock may be issued by the Company from time to time in
one or more series. The Board of Directors is authorized to determine the
rights, preferences, privileges and restrictions granted to and imposed upon
any unissued series of preferred stock and to fix the number of shares of any
series of preferred stock and the designation of any such series, without any
vote or action by the Company's stockholders. The Board of Directors may
authorize and issue the voting power or other rights of the holders of Common
Stock. In addition, the issuance of preferred stock could have the effect of
delaying, deferring or preventing a change in control of the Company. The
Company's Articles of Incorporation also allow the Board of Directors to fix
the number of directors in the Bylaws with no minimum or maximum number
of directors required. The Company's Bylaws currently provide that the Board
of Directors shall be divided into three classes of two or three directors
each, with each class elected for three-year terms expiring in successive
years. The effect of these provisions may be to delay or prevent a tender
offer or takeover attempt that a stockholder might consider to be in the
stockholder's best interest, including attempts that might result in a
premium over the market price for the shares held by the stockholders.
SELLING SHAREHOLDERS
The following tables sets forth information, as of November 24, 1997,
regarding the Selling Shareholders, their recent relationships with the
Company and its affiliates, their ownership of Common Stock before and after
this offering, and the number of Shares to be offered for the account of each.
Common Stock Common Stock
beneficially beneficially
owned Prior owned
to Offering Shares of After Offering
Selling Common Stock
Shareholder Number Percent Offered Number Percent
- -------------- ------- ------- ------------ ------- -------
Mark T. Walton 375,574(1) 8.9% 20,267 375,574(1) 8.9%
President and
Chairman
of the Board
Michael B. 34,133(2) * 66,667 34,133(2) *
Perrine
Chief Financial
Officer, Secretary
Treasurer
Ron Spradling 251,417(3) 5.6% 46,933 251,417(3) 5.6%
Executive Vice
President - New
Store Development
(1) Includes 8,106 shares subject to options exercisable within 60 days of
December 9, 1997.
(2) Includes 26,666 shares subject to options exercisable within 60 days of
December 9, 1997.
(3) Includes 18,774 shares subject to options exercisable within 60 days of
December 9, 1997.
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PLAN OF DISTRIBUTION
The Shares will be acquired by the Selling Shareholders upon exercise
of options they received pursuant to Stock Option Agreements. The Company
has been advised by the Selling Shareholders that they (or, subject to
applicable law, their pledgees, donees, distributees, transferees or other
successors in interest) intend to sell all or a portion of the Shares offered
by this Prospectus from time to time (i) on the Nasdaq National Market, (ii)
otherwise than on the Nasdaq National Market, in negotiated transactions at
fixed prices which may be changed, at market prices prevailing at the time of
sale or at prices reasonably related thereto or at negotiated prices, or (iii)
by a combination of the foregoing methods of sale (any of which may involve
crosses and block transactions). The Selling Shareholders may effect such
transactions by selling the Shares to or through broker-dealers, and such
broker-dealers may receive compensation in the form of discounts, concessions
or commissions from the Selling Shareholders and/or the purchasers of the
Shares for which such broker-dealers may act as agent or to whom they may
sell as principal, or both. The Company is not aware as of the date of this
Prospectus of any agreements between any of the Selling Shareholders and any
broker-dealers with respect to the sale of the Shares offered by this
Prospectus.
In connection with distributions of the Shares or otherwise, the Selling
Shareholders may enter into hedging transactions with broker-dealers. In
connection with such transactions, broker-dealers may engage in short sales of
the Shares registered hereunder in the course of hedging the positions they
assume with Selling Shareholders. The Selling Shareholders may also sell
Shares short and deliver the Shares to close out such short positions. The
Selling Shareholders may also enter into option or other transactions with
broker-dealers which require the delivery to the broker-dealer of the Shares
registered hereunder, which the broker-dealer may resell pursuant to this
Prospectus. The Selling Shareholders may also pledge the Shares registered
hereunder to a broker or dealer and upon a default, the broker or dealer may
effect sales of the pledged Shares pursuant to this Prospectus.
The Selling Shareholders and any broker, dealer or other agent
executing sell orders on behalf of the Selling Shareholders may be deemed to
be "underwriters" within the meaning of the Securities Act, in which event
commissions received by any such broker, dealer or agent and profit on any
resale of the Shares may be deemed to be underwriting commissions under the
Securities Act. Such commissions received by a broker, dealer or agent may
be in excess of customary compensation. The Shares may also be sold in
accordance with Section 4(1) of the Securities Act or Rule 144 and Rule 145
under the Securities Act.
Information as to whether underwriters who may be selected by the
Selling Shareholders, or any other broker-dealer, is acting as principal or
agent for the Selling Shareholders, the compensation to be received by
underwriters who may be selected by the Selling Shareholders, or any broker-
dealer, acting as principal or agent for the Selling Shareholders and the
compensation to be received by other broker-dealers, will, to the extent
required, be set forth in a supplement to this Prospectus (the "Prospectus
Supplement"). Any dealer or broker participating in any distribution of the
Shares may be required to deliver a copy of this Prospectus, including the
Prospectus Supplement, if any, to any person who purchases any of the Shares
from or through such dealer or broker.
All expenses of registration incurred in connection with the offering
will be borne by the Company. All selling and other expenses incurred by the
Selling Shareholders will be borne by the Selling Shareholders.
<PAGE>
The Selling Shareholders will be subject to applicable provisions of the
Exchange Act and the rules and regulations thereunder, including without
limitation, Rule 102 under Regulation M, which provisions may limit the
timing of purchases and sales of any of the Common Stock by the Selling
Shareholders. Rule 102 under Regulation M provides, with certain
exceptions, that it is unlawful for a selling shareholder or its affiliated
purchaser to, directly or indirectly, bid for or purchase or attempt to induce
any person to bid for or purchase, for an account in which the selling
shareholder or affiliated purchaser has a beneficial interest in any securities
that are the subject of the distribution during the applicable restricted
period under Regulation M. All of the foregoing may affect the marketability
of the Common Stock. The Company will require each Selling Shareholder
and his or her broker if applicable, to provide a letter that acknowledges
his compliance with Regulation M under the Exchange Act before authorizing
the transfer of such Selling Shareholder's Shares.
It is anticipated that the Selling Shareholders may offer all of the
Shares for sale. Further, because it is possible that a significant number of
Shares could be sold at the same time hereunder, such sales, or the possibility
thereof, may have a depressive effect on the market price of the Company's
Common Stock.
LEGAL MATTERS
The validity of the Shares offered hereby will be passed upon for the
Company by Jenkens & Gilchrist, A Professional Corporation, Austin, Texas.
EXPERTS
The consolidated financial statements of Travis Boats & Motors, Inc.
appearing in Travis Boats & Motors, Inc.'s Annual Report (Form 10-K) for
the year ended September 30, 1996, have been audited by Ernst & Young
LLP, independent auditors, as set forth in their report thereon included
therein and incorporated herein by reference. Such financial statements are,
and audited financial statements to be included in subsequently filed
documents will be, incorporated herein in reliance upon the reports of Ernst
& Young LLP pertaining to such financial statements (to the extent covered by
consents filed with the Securities and Exchange Commission) given upon the
authority of such firm as experts in accounting and auditing.
<PAGE>
____________________________________________________________________________
No dealer, salesman, or other person
has been authorized to give any information
or to make any representations other than
those contained in this Prospectus and, if 133,867 Shares
given or made, such information or
representations must not be relied upon as TRAVIS BOATS & MOTORS,INC.
having been authorized by the Company or
the Selling Shareholders. Common Stock
This Prospectus does not constitute an
offer to sell or a solicitation of an
offer to buy any securities other than the
Shares nor does it constitute an offer or
solicitation by anyone in any jurisdiction
in which such offer or solicitation would
be unlawful or to any person to whom it is
unlawful to make such offer or solicitation.
Neither the delivery of this Prospectus nor
any offer or sale made hereunder at any time
shall imply that information herein is correct
as of any time subsequent to the date hereof.
_______________
TABLE OF CONTENTS
Available Information..................2 __________
Incorporation of Certain Documents
by Reference........................2 PROSPECTUS
The Company............................3 __________
Risk Factors...........................4
Selling Shareholders...................8
Plan of Distribution...................9 December 9, 1997
Legal Matters.........................10
Experts...............................11
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The documents listed in (a) through (c) below are hereby incorporated
by reference into this Registration Statement. All documents subsequently
filed by the Company or the Travis Boats & Motors, Inc. 1995 Incentive Plan
(the "Plan") pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") after the date of this
Registration Statement and prior to the filing of any post-effective amendment
to the Registration Statement which indicate that all shares of the Company's
Common Stock, $.01 par value per share, offered hereunder have been sold
or that deregister all such shares then remaining unsold shall be deemed to be
incorporated herein by reference and to be a part hereof from the date of
filing of such documents.
(a) The Company's Annual Report on Form 10-K for the fiscal year
ended September 30, 1996.
(b) All other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act since September 30, 1996.
(c) The description of the Common Stock contained in the
Company's Form 8-A filed on May 23, 1996 for registration of the Common
Stock pursuant to Section 12(g) of the Exchange Act, including any
amendment or report filed for the purpose of updating such description.
Item 4. Description of Securities
Not applicable.
Item 5. Interest of Named Experts and Counsel
None.
Item 6. Indemnification of Directors and Officers
The Company has entered into indemnification agreements with all of
its directors and executive officers, which, among other things, require the
Company to indemnify directors against liability arising from stockholder
claims of a breach of duty by a director if a director votes against a
transaction that would result in a change of control of the Company. The
Company's Articles of Incorporation also provide that its directors shall not
be liable for monetary damages caused by an act or omission occurring in their
capacity as directors. This provision does not eliminate the duty of care,
and, in appropriate circumstances, equitable remedies such as injunctive or
other forms of non-monetary relief will remain available under Texas law. In
addition, each director will continue to be subject to liability for breach of
the director's duty of loyalty to the Company, for acts or omissions for which
a director is made expressly liable by applicable statute. The limitations
on liability provided for in the Company's Articles of Incorporation do not
affect a director's responsibilities under any other law, such as the federal
securities laws or state or federal environmental laws. The Company believes
that these provisions will assist the Company in attracting and retaining
qualified individuals to serve as executive officers and directors.
<PAGE>
Item 7. Exemption from Registration Claimed
Restricted securities to be reoffered or resold pursuant to this
registration statement were offered and sold in reliance upon Section 4(2) of
the Securities Act, and Rule 701 promulgated thereunder, as not involving any
public offering. Such securities were offered and sold to a limited number of
persons, each of whom was an officer, director or employee of the Company.
Item 8. Exhibits
4.2* Travis Boats & Motors, Inc. 1995 Incentive Plan
4.3* Stock Option Agreement for Michael B. Perrine
4.4* Stock Option Agreement for Mark T. Walton
4.5* Stock Option Agreement for Ron Spradling
5* Opinion of Jenkens & Gilchrist, A Professional Corporation
23.1* Consent of Jenkens & Gilchrist, A Professional Corporation
(See Exhibit 5)
23.2* Consent of Ernst & Young LLP
25* Power of Attorney (included on the signature page of the
Registration Statement)
* filed herewith
Item 9. Undertakings.
A. The undersigned registrant hereby undertakes the following:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(a) to include any prospectus required by Section 10(a)(3) of the Securities
Act of 1933;
(b) to reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate, represent
a fundamental change in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement.
(c) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
<PAGE>
Provided, however, that paragraphs A.1(a) and A.1.(b) do not apply
if the registration statement is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registration pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933 (the "Securities Act"), each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof; and
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered that remain unsold at the termination of the
offering.
B. The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
C. The undersigned registrant undertakes to deliver or cause to be delivered
with the prospectus, to each person to whom the prospectus is sent or given, the
latest annual report to security holders that is incorporated by reference in
the prospectus and furnished pursuant to and meeting the requirements of Rule
14a-3 or Rule 14c-3 under the Exchange Act; and, where interim financial
information required to be presented by Article 3 of Regulation S-X are not set
forth in the prospectus, to deliver, or cause to be delivered to each person
to whom the prospectus is sent or given, the latest quarterly report that is
specifically incorporated by reference in the prospectus to provide such interim
financial information.
D. Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question of whether such indemnification by it
is against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of
the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Austin, State of Texas, on this 8th day of
December 1997.
TRAVIS BOATS & MOTORS, INC.
(registrant)
By: _________/s/_________________
Mark T. Walton
Chairman of the Board
and President
POWER OF ATTORNEY
The Company and each person whose signature appears below hereby
designates and appoints Mark T. Walton and Michael B. Perrine and each of
them, as its or his attorneys-in-fact (the "Attorneys-in-Fact") with full power
to act alone, and to execute in the name and on behalf of the Company and
each such person, individually in each capacity stated below, one or more
amendments (including post-effective amendments) to this Registration
Statement, which amendments may make such changes in this Registration
Statement as either Attorney-in-Fact deems appropriate, and to file each such
amendment to this Registration Statement together with all exhibits thereto and
any and all documents in connection therewith.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
Signatures Title Date
- ------------------- ------------------------------ ---------------------
/s/
Mark T. Walton Chairman of the Board December 2, 1997
and President,
(Principal Executive Officer)
/s/
Michael B. Perrine Chief Financial Officer, December 2, 1997
Treasurer and Secretary
(Principal Accounting and
Financial Officer)
Ronnie L. Spradling Director and Executive December 2, 1997
Vice President-
New Store Development
/s/
E. D. Bohls Vice Chairman of the Board December 2, 1997
/s/
Joseph E. Simpson Director December 2, 1997
/s/
Robert C. Siddons Director December 2, 1997
Steven W. Gurasich, Director December 2, 1997
Jr.
Zach McClendon Director December 2, 1997
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Exhibit
- ------- -------
5 Opinion of Jenkens & Gilchrist, A Professional Corporation
23.1 Consent of Jenkens & Gilchrist, A Professional Corporation
(See Exhibit 5.1)
23.2 Consent of Ernst & Young LLP
25 Power of Attorney (included on the signature page of the
Registration Statement)
<PAGE>
EXHIBIT 4.2
TRAVIS BOATS & MOTORS, INC.
1995 INCENTIVE PLAN
TABLE OF CONTENTS
<PAGE>
SECTION 1. DEFINITIONS 1
SECTION 2. SHARES OF STOCK SUBJECT TO THE PLAN
2.1 Maximum Number of Shares
2.2 Limitation of Shares
2.3 Description of Shares
2.4 Registration and Listing of Shares
SECTION 3. ADMINISTRATION OF THE PLAN
3.1 Committee
3.2 Duration, Removal, Etc
3.3 Meetings and Actions of Committee
3.4 Committee's Powers
SECTION 4. ELIGIBILITY AND PARTICIPATION
4.1 Eligible Individuals
4.2 Grant of Awards
4.3 Date of Grant
4.4 Award Agreements
4.5 Limitation for Incentive Options
4.6 No Right to Award
SECTION 5. TERMS AND CONDITIONS OF OPTIONS
5.1 Number of Shares
5.2 Vesting
5.3 Expiration of Options
5.4 Exercise Price
5.5 Method of Exercise
5.6 Incentive Option Exercises
5.7 Medium and Time of Payment
5.8 Payment with Sale Proceeds
5.9 Payment of Taxes
5.10 Limitation on Aggregate Value of Shares That
May Become First Exercisable During Any Calendar
Year Under an Incentive Option
5.11 No Fractional Shares
5.12 Modification, Extension, and Renewal of Options
5.13 Other Agreement Provisions
SECTION 6. STOCK APPRECIATION RIGHTS
6.1 Form of Right
6.2 Rights Related to Options
(a) Exercise and Transfer
(b) Value of Right
6.3 Right Without Option
(a) Number of Shares
(b) Vesting
(c) Expiration of Rights
(d) Value of Right
6.4 Limitations on Rights
6.5 Payment of Rights
6.6 Payment of Taxes
6.7 Other Agreement Provisions
SECTION 7. RESTRICTED STOCK AWARDS
7.1 Restrictions
(a) Transferability
(b) Conditions to Removal of Restrictions
(c) Legend
(d) Possession
(e) Other Conditions
7.2 Expiration of Restrictions
7.3 Rights as Stockholder
7.4 Payment of Taxes
7.5 Other Agreement Provisions
SECTION 8. AWARDS TO NON-EMPLOYEE DIRECTORS
8.1 Ineligibility for Other Awards
8.2 Automatic Grant of Awards
8.3 Vesting
8.4 Available Stock
SECTION 9. ADJUSTMENT PROVISIONS
9.1 Adjustment of Awards and Authorized Stock
9.2 Changes in Control
9.3 Restructuring Without Change in Control
9.4 Notice of Restructuring
SECTION 10. ADDITIONAL PROVISIONS
10.1 Termination of Employment
10.2 Other Loss of Eligibility - Non Employees
10.3 Death
10.4 Disability
10.5 Leave of Absence
10.6 Transferability of Awards
10.7 Forfeiture and Restrictions on Transfer
10.8 Delivery of Certificates of Stock
10.9 Conditions to Delivery of Stock
10.10 Certain Directors and Officers
10.11 Securities Act Legend
10.12 Legend for Restrictions on Transfer
10.13 Rights as a Stockholder
10.14 Furnish Information
10.15 Obligation to Exercise
10.16 Adjustments to Awards
10.17 Remedies
10.18 Information Confidential
10.19 Consideration
SECTION 11. DURATION AND AMENDMENT OF PLAN
11.1 Duration
11.2 Amendment
SECTION 12. GENERAL
12.1 Application of Funds
12.2 Right of the Corporation and Subsidiaries to
Terminate Employment
12.3 No Liability for Good Faith Determinations
12.4 Other Benefits
12.5 Exclusion From Pension and Profit-Sharing Compensation
12.6 Execution of Receipts and Releases
12.7 Unfunded Plan
12.8 No Guarantee of Interests
12.9 Payment of Expenses
12.10 Corporation Records
12.11 Information
12.12 No Liability of Corporation
12.13 Corporation Action
12.14 Severability
12.15 Notices
12.16 Successors
12.17 Headings
12.18 Governing Law
12.19 Word Usage
<PAGE>
TRAVIS BOATS & MOTORS, INC.
1995 INCENTIVE PLAN
SCOPE AND PURPOSE OF PLAN
Travis Boats & Motors, Inc., a Texas corporation ("Travis Boats" or
"Corporation") has adopted this 1995 Incentive Plan (the "Plan") to provide
for the granting of:
(a) Incentive Options (hereafter defined) to certain Key Employees
(hereafter defined);
(b) Nonstatutory Options (hereafter defined) to certain Key Employees,
Non-Employee Directors (hereafter defined) and other persons;
(c) Restricted Stock Awards (hereafter defined) to certain Key
Employees and other persons; and
(d) Stock Appreciation Rights (hereafter defined) to certain Key
Employees and other persons.
The purpose of the Plan is to provide an incentive for Key Employees and
directors of the Corporation or its Subsidiaries (hereafter defined) to aid
the Corporation in attracting able persons to enter the service of the
Corporation and its Subsidiaries, to extend to them the opportunity to
acquire a proprietary interest in the Corporation so that they will apply
their best efforts for the benefit of the Corporation, and to remain in the
service of the Corporation or its Subsidiaries. This Plan has been adopted
by the Board of Directors and stockholders of the Corporation prior to the
registration of any of securities of the Corporation under the Exchange Act
(hereafter defined) and accordingly amounts paid under the Plan are exempt
from the provisions of Section 162(m) of the Code (hereafter defined).
SECTION 1. DEFINITIONS
1.1 "Acquiring Person" means any Person other than the Corporation, any
Subsidiary of the Corporation, any employee benefit plan of the Corporation
or of a Subsidiary of the Corporation or of a corporation owned directly or
indirectly by the stockholders of the Corporation in substantially the same
proportions as their ownership of Stock of the Corporation, or any trustee or
other fiduciary holding securities under an employee benefit plan of the
Corporation or of a Subsidiary of the Corporation or of a corporation owned
directly or indirectly by the stockholders of the Corporation in
substantially the same proportions as their ownership of Stock of the
Corporation.
1.2 "Affiliate" means (a) any Person who is directly or
indirectly the beneficial owner of at least 10% of the voting power of
the Voting Securities or (b) any Person controlling, controlled by, or
under common control with the Company or any Person contemplated in
clause (a) of this Subsection 1.2.
1.3 "Award" means the grant of any form of Option, Restricted
Stock Award, or Stock Appreciation Right under the Plan, whether
granted individually, in combination, or in tandem, to a Holder
pursuant to the terms, conditions, and limitations that the Committee
may establish in order to fulfill the objectives of the Plan.
<PAGE>
1.4 "Award Agreement" means the written agreement between the
Corporation and a Holder evidencing the terms, conditions, and
limitations of the Award granted to that Holder.
1.5 "Board of Directors" means the board of directors of the
Corporation.
1.6 "Business Day" means any day other than a Saturday, a Sunday,
or a day on which banking institutions in the State of Texas are
authorized or obligated by law or executive order to close.
1.7 "Change in Control" means the event that is deemed to have
occurred if:
(a) any Acquiring Person is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Corporation representing fifty
percent or more of the combined voting power of the then
outstanding Voting Securities of the Corporation; or
(b) members of the Incumbent Board cease for any reason to
constitute at least a majority of the Board of Directors; or
(c) a public announcement is made of a tender or exchange
offer by any Acquiring Person for fifty percent or more of the
outstanding Voting Securities of the Corporation, and the Board of
Directors approves or fails to oppose that tender or exchange
offer in its statements in Schedule 14D-9 under the Exchange Act;
or
(d) the stockholders of the Corporation approve a merger or
consolidation of the Corporation with any other corporation or
partnership (or, if no such approval is required, the consummation
of such a merger or consolidation of the Corporation), other than
a merger or consolidation that would result in the Voting
Securities of the Corporation outstanding immediately before the
consummation thereof continuing to represent (either by remaining
outstanding or by being converted into Voting Securities of the
surviving entity or of a parent of the surviving entity) a
majority of the combined voting power of the Voting Securities of
the surviving entity (or its parent) outstanding immediately after
that merger or consolidation; or
(e) the stockholders of the Corporation approve a plan of
complete liquidation of the Corporation or an agreement for the
sale or disposition by the Corporation of all or substantially all
the Corporation's assets (or, if no such approval is required, the
consummation of such a liquidation, sale, or disposition in one
transaction or series of related transactions) other than a
liquidation, sale, or disposition of all or substantially all the
Corporation's assets in one transaction or a series of related
transactions to a corporation owned directly or indirectly by the
stockholders of the Corporation in substantially the same
proportions as their ownership of Stock of the Corporation.
1.8 "Code" means the Internal Revenue Code of 1986, as amended.
1.9 "Committee" means the Committee, which Committee shall
administer this Plan and is further described under Section 3.
1.10 "Convertible Securities" means evidences of indebtedness,
shares of capital stock, or other securities that are convertible into
or exchangeable for shares of Stock, either immediately or upon the
arrival of a specified date or the happening of a specified event.
<PAGE>
1.11 "Corporation" means Travis Boats & Motors, Inc.
1.12 "Date of Grant" has the meaning given it in Subsection 4.3.
1.13 "Disability" has the meaning given it in Subsection 10.4.
1.14 "Disinterested Person" has the meaning given it in Rule 16b-
3(c)(2)(i).
1.15 "Effective Date" means December 14, 1995.
1.16 "Eligible Individuals" means (a) Key Employees, (b) Non-
Employee Directors only for purposes of Nonstatutory Options pursuant
to Section 8, and (c) any other Person that the Committee designates as
eligible for an Award (other than for Incentive Options) because the
Person performs, or has performed, valuable services for the
Corporation or any of its Subsidiaries (other than services in
connection with the offer or sale of securities in a capital-raising
transaction) and the Committee determines that the Person has a direct
and significant effect on the financial development of the Corporation
or any of its Subsidiaries. Notwithstanding the foregoing provisions
of this Subsection 1.16, to ensure that the requirements of the fourth
sentence of Subsection 3.1 are satisfied, the Board of Directors may
from time to time specify individuals who shall not be eligible for the
grant of Awards or equity securities under any plan of the Corporation
or its Affiliates. Nevertheless, the Board of Directors may at any
time determine that an individual who has been so excluded from
eligibility shall become eligible for grants of Awards and grants of
such other equity securities under any plans of the Corporation or its
Affiliates so long as that eligibility will not impair the Plan's
satisfaction of the conditions of Rule 16b-3.
1.17 "Employee" means any employee of the Corporation or of any of
its Subsidiaries, including officers and directors of the Corporation
who are also employees of the Corporation or of any of its
Subsidiaries.
1.18 "Exchange Act" means the Securities Exchange Act of 1934 and
the rules and regulations promulgated thereunder, or any successor law,
as it may be amended from time to time.
1.19 "Exercise Notice" has the meaning given it in Subsection 5.5.
1.20 "Exercise Price" has the meaning given it in Subsection 5.4.
1.21 "Fair Market Value" means, for a particular day:
(a) If shares of Stock of the same class are listed or
admitted to unlisted trading privileges on any national or
regional securities exchange at the date of determining the Fair
Market Value, then the last reported sale price, regular way, on
the composite tape of that exchange on the last Business Day
before the date in question or, if no such sale takes place on
that Business Day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to
securities listed or admitted to unlisted trading privileges on
that securities exchange; or
<PAGE>
(b) If shares of Stock of the same class are not listed or
admitted to unlisted trading privileges as provided in Subsection
1.21(a) and sales prices for shares of Stock of the same class in
the over-the-counter market are reported by the National
Association of Securities Dealers, Inc. Automated Quotations, Inc.
("NASDAQ") National Market System (or such other system then in
use) at the date of determining the Fair Market Value, then the
last reported sales price so reported on the last Business Day
before the date in question or, if no such sale takes place on
that Business Day, the average of the high bid and low asked
prices so reported; or
(c) If shares of Stock of the same class are not listed or
admitted to unlisted trading privileges as provided in Subsection
1.21(a) and sales prices for shares of Stock of the same class are
not reported by the NASDAQ National Market System (or a similar
system then in use) as provided in Subsection 1.21(b), and if bid
and asked prices for shares of Stock of the same class in the
over-the-counter market are reported by NASDAQ (or, if not so
reported, by the National Quotation Bureau Incorporated) at the
date of determining the Fair Market Value, then the average of the
high bid and low asked prices on the last Business Day before the
date in question; or
(d) If shares of Stock of the same class are not listed or
admitted to unlisted trading privileges as provided in Subsection
1.21(a) and sales prices or bid and asked prices therefor are not
reported by NASDAQ (or the National Quotation Bureau Incorporated)
as provided in Subsection 1.21(b) or Subsection 1.21(c) at the
date of determining the Fair Market Value, then the value
determined in good faith by the Committee, which determination
shall be conclusive for all purposes; or
(e) If shares of Stock of the same class are listed or
admitted to unlisted trading privileges as provided in Subsection
1.21(a) or sales prices or bid and asked prices therefor are
reported by NASDAQ (or the National Quotation Bureau Incorporated)
as provided in Subsection 1.22(b) or Subsection 1.22(c) at the
date of determining the Fair Market Value, but the volume of
trading is so low that the Board of Directors determines in good
faith that such prices are not indicative of the fair value of the
Stock, then the value determined in good faith by the Committee,
which determination shall be conclusive for all purposes
notwithstanding the provisions of Subsections 1.21(a), (b), or
(c).
For purposes of valuing Incentive Options, the Fair Market Value of
Stock shall be determined without regard to any restriction other than
one that, by its terms, will never lapse. For purposes of the
redemption provided for in Subsection 9.3(d)(v), Fair Market Value
shall have the meaning and shall be determined as set forth above;
provided, however, that the Committee, with respect to any such
redemption, shall have the right to determine that the Fair Market
Value for purposes of the redemption should be an amount measured by
the value of the shares of Stock, other securities, cash, or property
otherwise being received by holders of shares of Stock in connection
with the Restructuring and upon that determination the Committee shall
have the power and authority to determine Fair Market Value for
purposes of the redemption based upon the value of such shares of
stock, other securities, cash, or property. Any such determination by
the Committee, as evidenced by a resolution of the Committee, shall be
conclusive for all purposes.
<PAGE>
1.22 "Fiscal Year" means the fiscal year of the Corporation ending
on September 30 of each year.
1.23 "Holder" means an Eligible Individual to whom an outstanding
Award has been granted.
1.24 "Incumbent Board" means the individuals who, as of the
Effective Date, constitute the Board of Directors and any other
individual who becomes a director of the Corporation after that date
and whose election or appointment by the Board of Directors or
nomination for election by the Corporation's stockholders was approved
by a vote of at least a majority of the directors then comprising the
Incumbent Board.
1.25 "Incentive Option" means an incentive stock option as defined
under Section 422 of the Code and regulations thereunder.
1.26 "Key Employee" means any Employee whom the Committee
identifies as having a direct and significant effect on the performance
of the Corporation or any of its Subsidiaries.
1.27 "Non-Employee Director" means a director of the Corporation
who while a director is not an Employee.
1.28 "Nonstatutory Option" means a stock option that does not
satisfy the requirements of Section 422 of the Code or that is
designated at the Date of Grant or in the applicable Award Agreement to
be an option other than an Incentive Option.
1.29 "Non-Surviving Event" means an event of Restructuring as
described in either Subsection 1.36(b) or Subsection 1.36(c).
<PAGE>
1.30 "Normal Retirement" means the separation of the Holder from
employment with the Corporation and its Subsidiaries with the right to
receive an immediate benefit under a retirement plan approved by the
Corporation. If no such plan exists, Normal Retirement shall mean
separation of the Holder from employment with the Corporation and its
Subsidiaries at age 62 or later.
1.31 "Option" means either an Incentive Option or a Nonstatutory
Option, or both.
1.32 "Person" means any person or entity of any nature whatsoever,
specifically including (but not limited to) an individual, a firm, a
company, a corporation, a partnership, a trust, or other entity. A
Person, together with that Person's affiliates and associates (as
"affiliate" and "associate" are defined in Rule 12b-2 under the
Exchange Act for purposes of this definition only), and any Persons
acting as a partnership, limited partnership, joint venture,
association, syndicate, or other group (whether or not formally
organized), or otherwise acting jointly or in concert or in a
coordinated or consciously parallel manner (whether or not pursuant to
any express agreement), for the purpose of acquiring, holding, voting,
or disposing of securities of the Corporation with that Person, shall
be deemed a single "Person."
1.33 "Plan" means the Corporation's 1995 Incentive Plan, as it may
be amended from time to time.
1.34 "Restricted Stock" means Stock that is nontransferable or
subject to substantial risk of forfeiture until specific conditions are
met.
1.35 "Restricted Stock Award" means the grant or purchase, on the
terms and conditions of Section 7 or that the Committee otherwise
determines, of Restricted Stock.
1.36 "Restructuring" means the occurrence of any one or more of
the following:
(a) The merger or consolidation of the Corporation with any
Person, whether effected as a single transaction or a series of
related transactions, with the Corporation remaining the
continuing or surviving entity of that merger or consolidation and
the Stock remaining outstanding and not changed into or exchanged
for stock or other securities of any other Person or of the
Corporation, cash, or other property;
(b) The merger or consolidation of the Corporation with any
Person, whether effected as a single transaction or a series of
related transactions, with (i) the Corporation not being the
continuing or surviving entity of that merger or consolidation or
(ii) the Corporation remaining the continuing or surviving entity
of that merger or consolidation but all or a part of the
outstanding shares of Stock are changed into or exchanged for
stock or other securities of any other Person or the Corporation,
cash, or other property; or
(c) The transfer, directly or indirectly, of all or
substantially all of the assets of the Corporation (whether by
sale, merger, consolidation, liquidation, or otherwise) to any
Person, whether effected as a single transaction or a series of
related transactions.
<PAGE>
1.37 "Rule 16b-3" means Rule 16b-3 under Section 16(b) of the
Exchange Act as adopted in Exchange Act Release No. 34-29131 (April 26,
1991), or any successor rule, as it may be amended from time to time.
1.38 "Securities Act" means the Securities Act of 1933 and the
rules and regulations promulgated thereunder, or any successor law, as
it may be amended from time to time.
1.39 "Stock" means the common stock, $.01 par value per share, of
Travis Boats or any other securities that are substituted for the Stock
as provided in Section 9.
1.40 "Stock Appreciation Right" means the right to receive an
amount equal to the excess of the Fair Market Value of a share of Stock
(as determined on the date of exercise) over, as appropriate, the
Exercise Price of a related Option or the Fair Market Value of the
Stock on the Date of Grant of the Stock Appreciation Right.
1.41 "Subsidiary" means, with respect to any Person, any
corporation, or other entity of which a majority of the Voting
Securities is owned, directly or indirectly, by that Person.
1.42 "Total Shares" has the meaning given it in Subsection 9.2.
1.43 "Voting Securities" means any securities that are entitled to
vote generally in the election of directors, in the admission of
general partners or in the selection of any other similar governing
body.
SECTION 2. SHARES OF STOCK SUBJECT TO THE PLAN
2.1 Maximum Number of Shares. Subject to the provisions of
Subsection 2.2 and Section 9, the aggregate number of shares of Stock
that may be issued or transferred pursuant to Awards under the Plan
shall be 150,000 shares.
2.2 Limitation of Shares. For purposes of the limitations
specified in Subsection 2.1, the following principles shall apply:
(a) the following shall count against and decrease the
number of shares of Stock that may be issued for purposes of
Subsection 2.1: (i) shares of Stock subject to outstanding
Options, outstanding shares of Restricted Stock, and shares
subject to outstanding Stock Appreciation Rights granted
independent of Options (based on a good faith estimate by the
Corporation or the Committee of the maximum number of shares for
which the Stock Appreciation Right may be settled (assuming
payment in full in shares of Stock)), and (ii) in the case of
Options granted in tandem with Stock Appreciation Rights, the
greater of the number of shares of Stock that would be counted if
one or the other alone was outstanding (determined as described in
clause (i) above);
<PAGE>
(b) the following shall be added back to the number of
shares of Stock that may be issued for purposes of Subsection 2.1:
(i) shares of Stock with respect to which Options, Stock
Appreciation Rights granted independent of Options, or Restricted
Stock Awards expire, are cancelled, or otherwise terminate without
being exercised, converted, or vested, as applicable, and (ii) in
the case of Options granted in tandem with Stock Appreciation
Rights, shares of Stock as to which an Option has been surrendered
in connection with the exercise of a related ("tandem") Stock
Appreciation Right, to the extent the number surrendered exceeds
the number issued upon exercise of the Stock Appreciation Right;
provided that, in any case, the holder of such Awards did not
receive any dividends or other benefits of ownership with respect
to the underlying shares being added back, other than voting
rights and the accumulation (but not payment) of dividends of
Stock;
(c) shares of Stock subject to Stock Appreciation Rights
granted independent of Options (calculated as provided in clause
(a) above) that are exercised and paid in cash shall be added back
to the number of shares of Stock that may be issued for purposes
of Subsection 2.1, provided that the Holder of such Stock
Appreciation Right did not receive any dividends or other benefits
of ownership, other than voting rights and the accumulation (but
not payment) of dividends, of the shares of Stock subject to the
Stock Appreciation Right;
(d) shares of Stock that are transferred by a Holder of an
Award (or withheld by the Corporation) as full or partial payment
to the Corporation of the purchase price of shares of Stock
subject to an Option or the Corporation's or any Subsidiary's tax
withholding obligations shall not be added back to the number of
shares of Stock that may be issued for purposes of Subsection 2.1
and shall not again be subject to Awards; and
(e) if the number of shares of Stock counted against the
number of shares that may be issued for purposes of Subsection 2.1
is based upon an estimate made by the Corporation or the Committee
as provided in clause (a) above and the actual number of shares of
Stock issued pursuant to the applicable Award is greater or less
than the estimated number, then, upon such issuance, the number of
shares of Stock that may be issued pursuant to Subsection 2.1
shall be further reduced by the excess issuance or increased by
the shortfall, as applicable.
Notwithstanding the provisions of this Subsection 2.2, no Stock shall
be treated as issuable under the Plan to Eligible Individuals subject
to Section 16 of the Exchange Act if otherwise prohibited from issuance
under Rule 16b-3.
2.3 Description of Shares. The shares to be delivered under the
Plan shall be made available from (a) authorized but unissued shares of
Stock, (b) Stock held in the treasury of the Corporation, or (c)
previously issued shares of Stock reacquired by the Corporation,
including shares purchased on the open market, in each situation as the
Board of Directors or the Committee may determine from time to time at
its sole option.
2.4 Registration and Listing of Shares. From time to time, the
Board of Directors and appropriate officers of the Corporation shall
and are authorized to take whatever actions are necessary to file
required documents with governmental authorities, stock exchanges, and
other appropriate Persons to make shares of Stock available for
issuance pursuant to the exercise of Awards.
<PAGE>
SECTION 3. ADMINISTRATION OF THE PLAN
3.1 Committee. The Committee shall administer the Plan with
respect to all Eligible Individuals who are subject to Section 16(b) of
the Exchange Act, but shall not have the power to appoint members of
the Committee or to terminate, modify, or amend the Plan. The Board of
Directors may administer the Plan with respect to all other Eligible
Individuals, or may delegate all or part of that duty to the Committee.
Except for references in Subsections 3.1, 3.2 and 3.3, and unless the
context otherwise requires, references herein to the Committee shall
also refer to the Board of Directors as administrator of the Plan for
Eligible Individuals who are subject to Section 16(b) of the Exchange
Act. The Committee shall be constituted so that, as long as Stock is
registered under Section 12 of the Exchange Act, each member of the
Committee shall be a Disinterested Person and so that the Plan in all
other applicable respects will qualify transactions related to the Plan
for the exemptions from Section 16(b) of the Exchange Act provided by
Rule 16b-3, to the extent exemptions thereunder may be available. No
discretion regarding Awards to Eligible Individuals who are subject to
Section 16(b) of the Exchange Act shall be afforded to a person who is
not a Disinterested Person. The number of Persons that shall
constitute the Committee shall be determined from time to time by a
majority of all the members of the Board of Directors and, unless that
majority of the Board of Directors determines otherwise or Rule 16b-3
is amended to require otherwise, shall be no less than two Persons.
Persons elected to serve on the Committee as Disinterested Persons
shall not be eligible to receive Awards or equity securities under any
plan of the Corporation or its affiliates while they are serving as
members of the Committee; shall not have received Awards or such equity
securities under any plan of the Corporation or its affiliates within
one year before their appointment to the Committee becomes effective;
and shall not be eligible to receive Awards or such equity securities
under any plan of the Corporation or its affiliates for such period
following service on the Committee as may be required by Rule 16b-3 for
that person to remain a Disinterested Person, in each case except for
Awards or equity securities granted as provided in paragraphs
(c)(2)(i)(A), (B), (C), or (D) of Rule 16b-3. Notwithstanding the
foregoing, the Board of Directors may designate the Compensation
Committee (regardless of its composition) of the Board of Directors to
serve as the Committee hereunder, provided that the Stock is not
registered under Section 12 of the Exchange Act.
3.2 Duration, Removal, Etc. The members of the Committee shall
serve at the discretion of the Board of Directors, which shall have the
power, at any time and from time to time, to remove members from or add
members to the Committee. Removal from the Committee may be with or
without cause. Any individual serving as a member of the Committee
shall have the right to resign from membership in the Committee by at
least three days' written notice to the Board of Directors. The Board
of Directors, and not the remaining members of the Committee, shall
have the power and authority to fill all vacancies on the Committee.
The Board of Directors shall promptly fill any vacancy that causes the
number of members of the Committee to be below two or any other number
that Rule 16b-3 may require from time to time.
<PAGE>
3.3 Meetings and Actions of Committee. The Board of Directors
shall designate which of the Committee members shall be the chairman of
the Committee. If the Board of Directors fails to designate a
Committee chairman, the members of the Committee shall elect one of the
Committee members as chairman, who shall act as chairman until he
ceases to be a member of the Committee or until the Board of Directors
elects a new chairman. The Committee shall hold its meetings at those
times and places as the chairman of the Committee may determine. At
all meetings of the Committee, a quorum for the transaction of business
shall be required and a quorum shall be deemed present if at least a
majority of the members of the Committee are present. At any meeting
of the Committee, each member shall have one vote. All decisions and
determinations of the Committee shall be made by the majority vote or
majority decision of all of its members present at a meeting at which
a quorum is present; provided, however, that any decision or
determination reduced to writing and signed by all of the members of
the Committee shall be as fully effective as if it had been made at a
meeting that was duly called and held. The Committee may make any
rules and regulations for the conduct of its business that are not
inconsistent with the provisions of the Plan, the Articles or
Certificate of Incorporation of the Corporation, the by-laws of the
Corporation, and Rule 16b-3 so long as it is applicable, as the
Committee may deem advisable.
3.4 Committee's Powers. Subject to the express provisions of the
Plan and Rule 16b-3, the Committee shall have the authority, in its
sole and absolute discretion, to (a) adopt, amend, and rescind
administrative and interpretive rules and regulations relating to the
Plan; (b) determine the Eligible Individuals to whom, and the time or
times at which, Awards shall be granted; (c) determine the amount of
cash and the number of shares of Stock, Stock Appreciation Rights, or
Restricted Stock Awards, or any combination thereof, that shall be the
subject of each Award; (d) determine the terms and provisions of each
Award Agreement (which need not be identical), including provisions
defining or otherwise relating to (i) the term and the period or
periods and extent of exercisability of the Options, (ii) the extent to
which the transferability of shares of Stock issued or transferred
pursuant to any Award is restricted, (iii) the effect of termination of
employment of the Holder on the Award, and (iv) the effect of approved
leaves of absence (consistent with any applicable regulations of the
Internal Revenue Service); (e) accelerate, pursuant to Section 9, the
time of exercisability of any Option that has been granted;
(f) construe the respective Award Agreements and the Plan; (g) make
determinations of the Fair Market Value of the Stock pursuant to the
Plan; (h) delegate its duties under the Plan to such agents as it may
appoint from time to time, provided that the Committee may not delegate
its duties with respect to making Awards to, or otherwise with respect
to Awards granted to, Eligible Individuals who are subject to Section
16(b) of the Exchange Act; and (i) make all other determinations,
perform all other acts, and exercise all other powers and authority
necessary or advisable for administering the Plan, including the
delegation of those ministerial acts and responsibilities as the
Committee deems appropriate. Subject to Rule 16b-3, the Committee may
correct any defect, supply any omission, or reconcile any inconsistency
in the Plan, in any Award, or in any Award Agreement in the manner and
to the extent it deems necessary or desirable to carry the Plan into
effect, and the Committee shall be the sole and final judge of that
necessity or desirability. The determinations of the Committee on the
matters referred to in this Subsection 3.4 shall be final and
conclusive.
<PAGE>
SECTION 4. ELIGIBILITY AND PARTICIPATION
4.1 Eligible Individuals. Awards may be granted pursuant to the
Plan only to persons who are Eligible Individuals at the time of the
grant thereof.
4.2 Grant of Awards. Subject to the express provisions of the
Plan, the Committee shall determine which Eligible Individuals shall be
granted Awards from time to time. In making grants, the Committee
shall take into consideration the contribution the potential Holder has
made or may make to the success of the Corporation or its Subsidiaries
and such other considerations as the Board of Directors may from time
to time specify. The Committee shall also determine the number of
shares subject to each of the Awards and shall authorize and cause the
Corporation to grant Awards in accordance with those determinations.
4.3 Date of Grant. The date on which the Committee completes all
action resolving to offer an Award to an individual, including the
specification of the number of shares of Stock to be subject to the
Award, shall be the date on which the Award covered by an Award
Agreement is granted (the "Date of Grant"), even though certain terms
of the Award Agreement may not be determined at that time and even
though the Award Agreement may not be executed until a later time. In
no event shall a Holder gain any rights in addition to those specified
by the Committee in its grant, regardless of the time that may pass
between the grant of the Award and the actual execution of the Award
Agreement by the Corporation and the Holder. Notwithstanding the above
provisions of this Subsection 4.3, the Date of Grant of an Award
granted pursuant to Subsection 8.2(a) shall be the Effective Date, the
Date of Grant of an Award granted pursuant to Subsection 8.2(b) shall
be the date on which the Holder's election to the Board of Directors is
effective, and the Date of Grant of an Award granted pursuant to
Subsection 8.2(c) shall be the date on which such Award is granted as
provided in such Subsection.
4.4 Award Agreements. Each Award granted under the Plan shall be
evidenced by an Award Agreement that is executed by the Corporation and
the Eligible Individual to whom the Award is granted and incorporating
those terms that the Committee shall deem necessary or desirable. More
than one Award may be granted under the Plan to the same Eligible
Individual and be outstanding concurrently. In the event an Eligible
Individual is granted both one or more Incentive Options and one or
more Nonstatutory Options, those grants shall be evidenced by separate
Award Agreements, one for each of the Incentive Option grants and one
for each of the Nonstatutory Option grants.
4.5 Limitation for Incentive Options. Notwithstanding any
provision contained herein to the contrary, (a) a person shall not be
eligible to receive an Incentive Option unless he is an Employee of the
Corporation or a corporate Subsidiary (but not a partnership
Subsidiary) and (b) a person shall not be eligible to receive an
Incentive Option if, immediately before the time the Option is granted,
that person owns (within the meaning of Sections 422 and 424(d) of the
Code) stock possessing more than ten percent of the total combined
voting power or value of all classes of outstanding stock of the
Corporation or a Subsidiary. Nevertheless, Subsection 4.5(b) shall not
apply if, at the time the Incentive Option is granted, the Exercise
Price of the Incentive Option is at least one hundred ten percent of
Fair Market Value and the Incentive Option is not, by its terms,
exercisable after the expiration of five years from the Date of Grant.
<PAGE>
4.6 No Right to Award. The adoption of the Plan shall not be
deemed to give any Person a right to be granted an Award.
SECTION 5. TERMS AND CONDITIONS OF OPTIONS
All Options granted under the Plan shall comply with, and the
related Award Agreements shall be deemed to include and be subject to,
the terms and conditions set forth in this Section 5 (to the extent
each term and condition applies to the form of Option) and also to the
terms and conditions set forth in Sections 9 and 10; provided, however,
that the Committee may authorize an Award Agreement that expressly
contains terms and provisions that differ from the terms and provisions
set forth in Subsections 9.2, 9.3, and 9.4 and any of the terms and
provisions of Section 10 (other than Subsections 10.9 and 10.10).
5.1 Number of Shares. Each Award Agreement shall state the total
number of shares of Stock to which it relates.
5.2 Vesting. Each Award Agreement shall state the time or
periods in which, or the conditions upon satisfaction of which, the
right to exercise the Option or a portion thereof shall vest and the
number of shares of Stock for which the right to exercise the Option
shall vest at each such time, period, or fulfillment of condition.
5.3 Expiration of Options. No Option shall be exercised after
the expiration of a period of ten years commencing on the Date of Grant
of the Option; provided, however, that any portion of a Nonstatutory
Option that pursuant to the terms of the Award Agreement under which
such Nonstatutory Option is granted shall not become exercisable until
the date which is the tenth anniversary of the Date of Grant of such
Nonstatutory Option may be exercisable for a period of 30 days
following the date on which such portion becomes exercisable.
5.4 Exercise Price. Each Award Agreement shall state the
exercise price per share of Stock (the "Exercise Price"); provided,
however, that the exercise price per share of Stock subject to an
Incentive Option shall not be less than the greater of (a) the par
value per share of the Stock or (b) 100% of the Fair Market Value per
share of the Stock on the Date of Grant of the Option.
5.5 Method of Exercise. The Option shall be exercisable only by
written notice of exercise (the "Exercise Notice") delivered to the
Corporation during the term of the Option, which notice shall (a) state
the number of shares of Stock with respect to which the Option is being
exercised, (b) be signed by the Holder of the Option or, if the Holder
is dead or becomes affected by a Disability, by the person authorized
to exercise the Option pursuant to Subsections 10.3 and 10.4, (c) be
accompanied by the Exercise Price for all shares of Stock for which the
Option is being exercised, and (d) include such other information,
instruments, and documents as may be required to satisfy any other
condition to exercise contained in the Award Agreement. The Option
shall not be deemed to have been exercised unless all of the
requirements of the preceding provisions of this Subsection 5.5 have
been satisfied.
5.6 Incentive Option Exercises. Except as otherwise provided in
Subsection 10.4, during the Holder's lifetime, only the Holder may
exercise an Incentive Option.
<PAGE>
5.7 Medium and Time of Payment. The Exercise Price of an Option
shall be payable in full upon the exercise of the Option (a) in cash or
by an equivalent means acceptable to the Committee, (b) on the
Committee's prior consent, with shares of Stock owned by the Holder
(including shares received upon exercise of the Option or restricted
shares already held by the Holder) and having a Fair Market Value at
least equal to the aggregate Exercise Price payable in connection with
such exercise, or (c) by any combination of clauses (a) and (b). If
the Committee elects to accept shares of Stock in payment of all or any
portion of the Exercise Price, then (for purposes of payment of the
Exercise Price) those shares of Stock shall be deemed to have a cash
value equal to their aggregate Fair Market Value determined as of the
date the certificate for such shares is delivered to the Corporation.
If the Committee elects to accept shares of restricted Stock in
payment of all or any portion of the Exercise Price, then an equal
number of shares issued pursuant to the exercise shall be restricted on
the same terms and for the restriction period remaining on the shares
used for payment.
5.8 Payment with Sale Proceeds. In addition, at the request of
the Holder and to the extent permitted by applicable law, the Committee
may (but shall not be required to) approve arrangements with a
brokerage firm under which that brokerage firm, on behalf of the
Holder, shall pay to the Corporation the Exercise Price of the Option
being exercised and the Corporation shall promptly deliver the exer-
cised shares of Stock to the brokerage firm. To accomplish this trans-
action, the Holder must deliver to the Corporation an Exercise Notice
containing irrevocable instructions from the Holder to the Corporation
to deliver the Stock certificates representing the shares of Stock
directly to the broker. Upon receiving a copy of the Exercise Notice
acknowledged by the Corporation, the broker shall sell that number of
shares of Stock or loan the Holder an amount sufficient to pay the
Exercise Price and any withholding obligations due. The broker then
shall deliver to the Corporation that portion of the sale or loan
proceeds necessary to cover the Exercise Price and any withholding
obligations due. The Committee shall not approve any transaction of
this nature if the Committee believes that the transaction would give
rise to the Holder's liability for short-swing profits under Section
16(b) of the Exchange Act.
5.9 Payment of Taxes. The Committee may, in its discretion,
require a Holder to pay to the Corporation (or the Corporation's
Subsidiary if the Holder is an employee of a Subsidiary of the
Corporation), at the time of the exercise of an Option or thereafter,
the amount that the Committee deems necessary to satisfy the
Corporation's or its Subsidiary's current or future obligation to
withhold federal, state, or local income or other taxes that the Holder
incurs by exercising an Option. In connection with the exercise of an
Option requiring tax withholding, a Holder may (a) direct the
Corporation to withhold from the shares of Stock to be issued to the
Holder the number of shares necessary to satisfy the Corporation's
obligation to withhold taxes, that determination to be based on the
shares' Fair Market Value as of the date of exercise; (b) deliver to
the Corporation sufficient shares of Stock (based upon the Fair Market
Value as of the date of such delivery) to satisfy the Corporation's tax
withholding obligations, which tax withholding obligation is based on
the shares' Fair Market Value as of the later of the date of exercise
or the date as of which the shares of Stock issued in connection with
such exercise become includible in the income of the Holder; or (c)
deliver sufficient cash to the Corporation to satisfy its tax
withholding obligations. Holders who elect to use such a stock
withholding feature must make the election at the time and in the
manner that the Committee prescribes. The Committee may, at its sole
option, deny any Holder's request to satisfy withholding obligations
through Stock instead of cash. In the event the Committee subsequently
determines that the aggregate Fair Market Value (as determined above)
of any shares of Stock withheld or delivered as payment of any tax
withholding obligation is insufficient to discharge that tax
withholding obligation, then the Holder shall pay to the Corporation,
immediately upon the Committee's request, the amount of that deficiency
in the form of payment requested by the Committee.
<PAGE>
5.10 Limitation on Aggregate Value of Shares That May Become First
Exercisable During Any Calendar Year Under an Incentive Option. Except
as is otherwise provided in Subsection 9.3, with respect to any
Incentive Option granted under this Plan, the aggregate Fair Market
Value of shares of Stock subject to an Incentive Option and the
aggregate Fair Market Value of shares of Stock or stock of any
Subsidiary (or a predecessor of the Corporation or a Subsidiary)
subject to any other incentive stock option (within the meaning of
Section 422 of the Code) of the Corporation or its Subsidiaries (or a
predecessor corporation of any such corporation) that first become
purchasable by a Holder in any calendar year may not (with respect to
that Holder) exceed $100,000, or such other amount as may be prescribed
under Section 422 of the Code or applicable regulations or rulings from
time to time. As used in the previous sentence, Fair Market Value
shall be determined as of the Date of Grant of the Incentive Option.
For purposes of this Subsection 5.10, "predecessor corporation" means
(a) a corporation that was a party to a transaction described in
Section 424(a) of the Code (or which would be so described if a
substitution or assumption under that Section had been effected) with
the Corporation, (b) a corporation which, at the time the new incentive
stock option (within the meaning of Section 422 of the Code) is
granted, is a Subsidiary of the Corporation or a predecessor
corporation of any such corporations, or (c) a predecessor corporation
of any such corporations. Failure to comply with this provision shall
not impair the enforceability or exercisability of any Option, but
shall cause the excess amount of shares to be reclassified in
accordance with the Code.
5.11 No Fractional Shares. The Corporation shall not in any case
be required to sell, issue, or deliver a fractional share with respect
to any Option. In lieu of the issuance of any fractional share of
Stock, the Corporation shall pay to the Holder an amount in cash equal
to the same fraction (as the fractional Stock) of the Fair Market Value
of a share of Stock determined as of the date of the applicable
Exercise Notice.
5.12 Modification, Extension, and Renewal of Options. Subject to
the terms and conditions of and within the limitations of the Plan,
Rule 16b-3, and any consent required by the last sentence of this
Subsection 5.12, the Committee may (a) modify, extend, or renew
outstanding Options granted under the Plan, (b) accept the surrender of
Options outstanding hereunder (to the extent not previously exercised)
and authorize the granting of new Options in substitution for
outstanding Options (to the extent not previously exercised), and (c)
amend the terms of an Incentive Option at any time to include
provisions that have the effect of changing the Incentive Option to a
Nonstatutory Option. Nevertheless, without the consent of the Holder,
the Committee may not modify any outstanding Options so as to specify
a higher or lower Exercise Price or accept the surrender of outstanding
Incentive Options and authorize the granting of new Options in
substitution therefor specifying a higher or lower Exercise Price. In
addition, no modification of an Option granted hereunder shall, without
the consent of the Holder, alter or impair any rights or obligations
under any Option theretofore granted to such Holder under the Plan
except, with respect to Incentive Options, as may be necessary to
satisfy the requirements of Section 422 of the Code or as permitted in
clause (c) of this Subsection 5.12.
<PAGE>
5.13 Other Agreement Provisions. The Award Agreements authorized
under the Plan shall contain such provisions in addition to those
required by the Plan (including without limitation restrictions or the
removal of restrictions upon the exercise of the Option and the
retention or transfer of shares thereby acquired) as the Committee may
deem advisable. Each Award Agreement shall identify the Option
evidenced thereby as an Incentive Option or Nonstatutory Option, as the
case may be, and no Award Agreement shall cover both an Incentive
Option and a Nonstatutory Option. Each Award Agreement relating to an
Incentive Option granted hereunder shall contain such limitations and
restrictions upon the exercise of the Incentive Option to which it
relates as shall be necessary for the Incentive Option to which such
Award Agreement relates to constitute an incentive stock option, as
defined in Section 422 of the Code.
SECTION 6. STOCK APPRECIATION RIGHTS
All Stock Appreciation Rights granted under the Plan shall
comply with, and the related Award Agreements shall be deemed to
include and be subject to, the terms and conditions set forth in this
Section 6 (to the extent each term and condition applies to the form of
Stock Appreciation Right) and also the terms and conditions set forth
in Sections 9 and 10; provided, however, that the Committee may
authorize an Award Agreement related to a Stock Appreciation Right that
expressly contains terms and provisions that differ from the terms and
provisions set forth in Subsections 9.2, 9.3, and 9.4 and any of the
terms and provisions of Section 10 (other than Subsection 10.10).
6.1 Form of Right. A Stock Appreciation Right may be granted to
an Eligible Individual (a) in connection with an Option, either at the
time of grant or at any time during the term of the Option, or
(b) independent of an Option.
6.2 Rights Related to Options. A Stock Appreciation Right
granted pursuant to an Option shall entitle the Holder, upon exercise,
to surrender that Option or any portion thereof, to the extent
unexercised, and to receive payment of an amount computed pursuant to
Subsection 6.2(b). That Option shall then cease to be exercisable to
the extent surrendered. Stock Appreciation Rights granted in
connection with an Option shall be subject to the terms of the Award
Agreement governing the Option, which shall comply with the following
provisions in addition to those applicable to Options:
(a) Exercise and Transfer. Subject to Subsection 10.9, a
Stock Appreciation Right granted in connection with an Option
shall be exercisable only at such time or times and only to the
extent that the related Option is exercisable and shall not be
transferable except to the extent that the related Option is
transferable.
(b) Value of Right. Upon the exercise of a Stock
Appreciation Right related to an Option, the Holder shall be
entitled to receive payment from the Corporation of an amount
determined by Multiplying:
(i) The difference obtained by subtracting the Exercise
Price of a share of Stock specified in the related Option
from the Fair Market Value of a share of Stock on the date of
exercise of the Stock Appreciation Right, by
(ii) The number of shares as to which that Stock
Appreciation Right has been exercised.
<PAGE>
6.3 Right Without Option. A Stock Appreciation Right granted
independent of an Option shall be exercisable as determined by the
Committee and set forth in the Award Agreement governing the Stock
Appreciation Right, which Award Agreement shall comply with the
following provisions:
(a) Number of Shares. Each Award Agreement shall state the
total number of shares of Stock to which the Stock Appreciation
Right relates.
(b) Vesting. Each Award Agreement shall state the time or
periods in which the right to exercise the Stock Appreciation
Right or a portion thereof shall vest and the number of shares of
Stock for which the right to exercise the Stock Appreciation Right
shall vest at each such time or period.
(c) Expiration of Rights. Each Award Agreement shall state
the date at which the Stock Appreciation Rights shall expire if
not previously exercised.
(d) Value of Right. Each Stock Appreciation Right shall
entitle the Holder, upon exercise thereof, to receive payment of
an amount determined by multiplying:
(i) The difference obtained by subtracting the Fair
Market Value of a share of Stock on the Date of Grant of the
Stock Appreciation Right from the Fair Market Value of a
share of Stock on the date of exercise of that Stock
Appreciation Right, by
(ii) The number of shares as to which the Stock
Appreciation Right has been exercised.
6.4 Limitations on Rights. Notwithstanding Subsections 6.2(b)
and 6.3(d), the Committee may limit the amount payable upon exercise of
a Stock Appreciation Right. Any such limitation must be determined as
of the Date of Grant and be noted on the Award Agreement evidencing the
Holder's Stock Appreciation Right.
6.5 Payment of Rights. Payment of the amount determined under
Subsection 6.2(b) or 6.3(d) and Subsection 6.4 may be made, in the sole
discretion of the Committee unless specifically provided otherwise in
the Award Agreement, solely in whole shares of Stock valued at Fair
Market Value on the date of exercise of the Stock Appreciation Right,
solely in cash, or in a combination of cash and whole shares of Stock.
If the Committee decides to make full payment in shares of Stock and
the amount payable results in a fractional share, payment for the
fractional share shall be made in cash.
<PAGE>
6.6 Payment of Taxes. The Committee may, in its discretion,
require a Holder to pay to the Corporation (or the Corporation's
Subsidiary if the Holder is an employee of a Subsidiary of the
Corporation), at the time of the exercise of a Stock Appreciation Right
or thereafter, the amount that the Committee deems necessary to satisfy
the Corporation's or its Subsidiary's current or future obligation to
withhold federal, state, or local income or other taxes that the Holder
incurs by exercising a Stock Appreciation Right. In connection with
the exercise of a Stock Appreciation Right requiring tax withholding,
a Holder may (a) direct the Corporation to withhold from the shares of
Stock to be issued to the Holder the number of shares necessary to
satisfy the Corporation's obligation to withhold taxes, that
determination to be based on the shares' Fair Market Value as of the
date of exercise; (b) deliver to the Corporation sufficient shares of
Stock (based upon the Fair Market Value as of the date of such
delivery) to satisfy the Corporation's tax withholding obligations,
which tax withholding obligation is based on the shares' Fair Market
Value as of the later of the date of exercise or the date of which the
shares of Stock issued in connection with such exercise become
includible in the income of the Holder; or (c) deliver sufficient cash
to the Corporation to satisfy its tax withholding obligations. Holders
who elect to have Stock withheld pursuant to (a) or (b) above must make
the election at the time and in the manner that the Committee
prescribes. The Committee may, in its sole discretion, deny any
Holder's request to satisfy withholding obligations through Stock
instead of cash. In the event the Committee subsequently determines
that the aggregate Fair Market Value (as determined above) of any
shares of Stock withheld or delivered as payment of any tax withholding
obligation is insufficient to discharge that tax withholding
obligation, then the Holder shall pay to the Corporation, immediately
upon the Committee's request, the amount of that deficiency in the form
of payment requested by the Commission.
6.7 Other Agreement Provisions. The Award Agreements authorized
relating to Stock Appreciation Rights shall contain such provisions in
addition to those required by the Plan (including without limitation
restrictions or the removal of restrictions upon the exercise of the
Stock Appreciation Right and the retention or transfer of shares
thereby acquired) as the Committee may deem advisable.
SECTION 7. RESTRICTED STOCK AWARDS
All Restricted Stock Awards granted under the Plan shall comply
with and be subject to, and the related Award Agreements shall be
deemed to include, the terms and conditions set forth in this Section
7 and also to the terms and conditions set forth in Sections 9 and 10;
provided, however, that the Committee may authorize an Award Agreement
related to a Restricted Stock Award that expressly contains terms and
provisions that differ from the terms and provisions set forth in
Subsections 9.2, 9.3, and 9.4 and the terms and provisions set forth in
Section 10 (other than Subsections 10.9 and 10.10).
7.1 Restrictions. All shares of Restricted Stock Awards granted
or sold pursuant to the Plan shall be subject to the following
conditions:
(a) Transferability. The shares may not be sold,
transferred, or otherwise alienated or hypothecated until the
restrictions are removed or expire.
(b) Conditions to Removal of Restrictions. Conditions to
removal or expiration of the restrictions may include, but are not
required to be limited to, continuing employment or service as a
director, officer, or Key Employee or achievement of performance
objectives described in the Award Agreement.
<PAGE>
(c) Legend. Each certificate representing Restricted Stock
Awards granted pursuant to the Plan shall bear a legend making
appropriate reference to the restrictions imposed.
(d) Possession. The Committee may require the Corporation
to retain physical custody of the certificates representing
Restricted Stock Awards during the restriction period and may
require the Holder of the Award to execute stock powers in blank
for those certificates and deliver those stock powers to the
Corporation, or the Committee may require the Holder to enter into
an escrow agreement providing that the certificates representing
Restricted Stock Awards granted or sold pursuant to the Plan shall
remain in the physical custody of an escrow holder until all
restrictions are removed or expire.
(e) Other Conditions. The Committee may impose other
conditions on any shares granted or sold as Restricted Stock
Awards pursuant to the Plan as it may deem advisable, including
without limitation (i) restrictions under the Securities Act or
Exchange Act, (ii) the requirements of any securities exchange
upon which the shares or shares of the same class are then listed,
and (iii) any state securities law applicable to the shares.
7.2 Expiration of Restrictions. The restrictions imposed in
Subsection 7.1 on Restricted Stock Awards shall lapse as determined by
the Committee and set forth in the applicable Award Agreement, and the
Corporation shall promptly deliver to the Holder of the Restricted
Stock Award a certificate representing the number of shares for which
restrictions have lapsed, free of any restrictive legend relating to
the lapsed restrictions. Each Restricted Stock Award may have a
different restriction period as determined by the Committee in its sole
discretion. The Committee may, in its discretion, prospectively reduce
the restriction period applicable to a particular Restricted Stock
Award.
7.3 Rights as Stockholder. Subject to the provisions of
Subsections 7.1 and 10.10, the Committee may, in its discretion,
determine what rights, if any, the Holder shall have with respect to
the Restricted Stock Awards granted or sold, including the right to
vote the shares and receive all dividends and other distributions paid
or made with respect thereto.
7.4 Payment of Taxes. The Committee may, in its discretion,
require a Holder to pay to the Corporation (or the Corporation's
Subsidiary if the Holder is an employee of a Subsidiary of the
Corporation) the amount that the Committee deems necessary to satisfy
the Corporation's or its Subsidiary's current or future obligation to
withhold federal, state, or local income or other taxes that the Holder
incurs by reason of the Restricted Stock Award. The Holder may
(a) direct the Corporation to withhold from the shares of Stock to be
issued to the Holder the number of shares necessary to satisfy the
Corporation's obligation to withhold taxes, that determination to be
based on the shares' Fair Market Value as of the date on which tax
withholding is to be made; (b) deliver to the Corporation sufficient
shares of Stock (based upon the Fair Market Value as of the date of
such delivery) to satisfy the Corporation's tax withholding
obligations, which tax withholding obligation is based on the shares'
Fair Market Value as of the later of the date of issuance or the date
as of which the shares of Stock issued become includible in the income
of the Holder; or (c) deliver sufficient cash to the Corporation to
satisfy its tax withholding obligations. Holders who elect to have
Stock withheld pursuant to (a) or (b) above must make the election at
the time and in the manner that the Committee prescribes. The
Committee may, in its sole discretion, deny any Holder's request to
satisfy withholding obligations through Stock instead of cash. In the
event the Committee subsequently determines that the aggregate Fair
Market Value (as determined above) of any shares of Stock withheld or
delivered as payment of any tax withholding obligation is insufficient
to discharge that tax withholding obligation, then the Holder shall pay
to the Corporation, immediately upon the Committee's request, the
amount of that deficiency.
<PAGE>
7.5 Other Agreement Provisions. The Award Agreements relating to
Restricted Stock Awards shall contain such provisions in addition to
those required by the Plan as the Committee may deem advisable.
SECTION 8. AWARDS TO NON-EMPLOYEE DIRECTORS
Except as otherwise provided in this Section 8 or the applicable
Award Agreement, Awards granted pursuant to this Section 8 shall be
subject to the conditions of Section 5 to the extent permitted under
Rule 16b-3.
8.1 Ineligibility for Other Awards. Non-Employee Directors shall
not be eligible to receive any Awards under the Plan other than the
Awards specified in this Section 8.
8.2 Automatic Grant of Awards. Unless any Non-Employee Director
(or director nominee) shall have given written notice to the
Corporation that he or she declines to accept any Award pursuant to
this Subsection 8.2 on or prior to the Date of Grant of such Award,
each person who becomes a non-Employee Director after the Effective
Date of this Plan shall automatically be granted, as of the Effective
Date or as the date such person joins the Board of Directors, as the
case may be, Options to purchase 10,000 shares of Stock. Such Options
shall have a per share Exercise Price equal to the Fair Market Value of
the Stock on the date of Grant.
8.3 Vesting. Options granted pursuant to Section 8.2 shall vest
pursuant to the following schedule, and shall be exercisable for a
period of ten years from the date of Grant of the Option:
Vesting Date Percentage of Shares Vested
First Anniversary of Grant 20%
Second Anniversary of Grant 40%
Third Anniversary of Grant 60%
Fourth Anniversary of Grant 80%
Fifth Anniversary of Grant 100%
8.4 Available Stock. The automatic Awards specified in
Subsection 8.2 shall be made in the amounts specified in Subsection 8.2
only if the number of shares of Stock available to be issued,
transferred or exercised pursuant to Awards under this Plan (as
calculated in Section 2) is sufficient to make all automatic grants
required to be made by Subsection 8.2 on the Date of Grant of those
automatic Awards. In the event that the number of shares of Stock that
are available to be issued, transferred, or exercised pursuant to
Awards under the Plan on the Date of Grant of the automatic Awards
described in Subsection 8.2 is insufficient to permit the grant of the
entire number of shares specified in Subsection 8.2, then the number of
available shares shall be apportioned equally among the automatic
Awards made on that date, and the number of shares apportioned to each
automatic Award shall be the amount of shares automatically subject to
that automatic Award.
SECTION 9. ADJUSTMENT PROVISIONS
9.1 Adjustment of Awards and Authorized Stock. The terms of an
Award and the number of shares of Stock authorized pursuant to
Subsection 2.1 and Section 8 for issuance under the Plan shall be
subject to adjustment from time to time, in accordance with the
following provisions:
<PAGE>
(a) If at any time, or from time to time, the Corporation
shall subdivide as a whole (by reclassification, by a Stock split,
by the issuance of a distribution on Stock payable in Stock, or
otherwise) the number of shares of Stock then outstanding into a
greater number of shares of Stock, then (i) the maximum number of
shares of Stock available for the Plan as provided in Subsection
2.1 shall be increased proportionately, and the kind of shares or
other securities available for the Plan shall be appropriately
adjusted, (ii) the number of shares of Stock (or other kind of
shares or securities) that may be acquired under any Award shall
be increased proportionately, and (iii) the price (including
Exercise Price) for each share of Stock (or other kind of shares
or securities) subject to then outstanding Awards shall be reduced
proportionately, without changing the aggregate purchase price or
value as to which outstanding Awards remain exercisable or subject
to restrictions.
(b) If at any time, or from time to time, the Corporation
shall consolidate as a whole (by reclassification, reverse Stock
split, or otherwise) the number of shares of Stock then
outstanding into a lesser number of shares of Stock, then (i) the
maximum number of shares of Stock available for the Plan as
provided in Subsection 2.1 shall be decreased proportionately, and
the kind of shares or other securities available for the Plan
shall be appropriately adjusted, (ii) the number of shares of
Stock (or other kind of shares or securities) that may be acquired
under any Award shall be decreased proportionately, and (iii) the
price (including Exercise Price) for each share of Stock (or other
kind of shares or securities) subject to then outstanding Awards
shall be increased proportionately, without changing the aggregate
purchase price or value as to which outstanding Awards remain
exercisable or subject to restrictions.
(c) Whenever the number of shares of Stock subject to
outstanding Awards and the price for each share of Stock subject
to outstanding Awards are required to be adjusted as provided in
this Subsection 9.1, the Committee shall promptly prepare a notice
setting forth, in reasonable detail, the event requiring
adjustment, the amount of the adjustment, the method by which such
adjustment was calculated, and the change in price and the number
of shares of Stock, other securities, cash, or property
purchasable subject to each Award after giving effect to the
adjustments. The Committee shall promptly give each Holder such
a notice.
(d) Adjustments under Subsections 9(a) and (b) shall be made
by the Committee, and its determination as to what adjustments
shall be made and the extent thereof shall be final, binding, and
conclusive. No fractional interest shall be issued under the Plan
on account of any such adjustments.
9.2 Changes in Control. Any Award Agreement may provide that,
upon the occurrence of a Change in Control, one or more of the
following apply: (a) each Holder of an Option shall immediately be
granted corresponding Stock Appreciation Rights; (b) all outstanding
Stock Appreciation Rights and Options shall immediately become fully
vested and exercisable in full, including that portion of any Stock
Appreciation Right or Option that pursuant to the terms and provisions
of the applicable Award Agreement had not yet become exercisable (the
total number of shares of Stock as to which a Stock Appreciation Right
or Option is exercisable upon the occurrence of a change in Control is
referred to herein as the "Total Shares"); and (c) the restriction
period of any Restricted Stock Award shall immediately be accelerated
and the restrictions shall expire. An Award Agreement does not have to
provide for any of the foregoing. If a Change in Control involves a
Restructuring or occurs in connection with a series of related
<PAGE>
transactions involving a Restructuring and if such Restructuring is in
the form of a Non-Surviving Event and as a part of such Restructuring
shares of Stock, other securities, cash, or property shall be issuable
or deliverable in exchange for Stock, then the Holder of an Award shall
be entitled to purchase or receive (in lieu of the Total Shares that
the Holder would otherwise be entitled to purchase or receive), as
appropriate for the form of Award, the number of shares of Stock, other
securities, cash, or property to which that number of Total Shares
would have been entitled in connection with such Restructuring (and,
for Options, at an aggregate exercise price equal to the Exercise Price
that would have been payable if that number of Total Shares had been
purchased on the exercise of the Option immediately before the
consummation of the Restructuring). Nothing in this Subsection 9.2
shall impose on a Holder the obligation to exercise any Award
immediately before or upon the Change of Control, or cause Holder to
forfeit the right to exercise the Award during the remainder of the
original term of the Award because of a Change in Control.
9.3 Restructuring Without Change in Control. In the event a
Restructuring shall occur at any time while there is any outstanding
Award hereunder and that Restructuring does not occur in connection
with a Change in Control or a series of related transactions involving
a Change in Control, then:
(a) no outstanding Option or Stock Appreciation Right shall
immediately become fully vested and exercisable in full merely
because of the occurrence of the Restructuring;
(b) no Holder of an Option shall automatically be granted
corresponding Stock Appreciation Rights;
(c) the restriction period of any Restricted Stock Award
shall not immediately be accelerated and the restrictions expire
merely because of the occurrence of the Restructuring; and
(d) at the option of the Committee, the Committee may (but
shall not be required to) cause the Corporation to take any one or
more of the following actions:
(i) accelerate in whole or in part the time of the
vesting and exercisability of any one or more of the
outstanding Stock Appreciation Rights and Options so as to
provide that those Stock Appreciation Rights and Options
shall be exercisable before, upon, or after the consummation
of the Restructuring;
(ii) grant each Holder of an Option corresponding Stock
Appreciation Rights;
(iii) accelerate in whole or in part the expiration
of some or all of the restrictions on any Restricted Stock
Award;
(iv) if the Restructuring is in the form of a Non-
Surviving Event, cause the surviving entity to assume in
whole or in part any one or more of the outstanding Awards
upon such terms and provisions as the Committee deems
desirable; or
<PAGE>
(v) redeem in whole or in part any one or more of the
outstanding Awards (whether or not then exercisable) in
consideration of a cash payment, as such payment may be
reduced for tax withholding obligations as contemplated in
Subsections 5.9, 6.6, or 7.4, as applicable, in an amount
equal to:
(A) for Options and Stock Appreciation Rights
granted in connection with Options, the excess of (1)
the Fair Market Value, determined as of the date
immediately preceding the consummation of the
Restructuring, of the aggregate number of shares of
Stock subject to the Award and as to which the Award is
being redeemed over (2) the Exercise Price for that
number of shares of Stock;
(B) for Stock Appreciation Rights not granted in
connection with an Option, the excess of (1) the Fair
Market Value, determined as of the date immediately
preceding the consummation of the Restructuring, of the
aggregate number of shares of Stock subject to the Award
and as to which the Award is being redeemed over (2) the
Fair Market Value of that number of shares of Stock on
the Date of Grant; and
(C) for Restricted Stock Awards, the Fair Market
Value, determined as of the date immediately preceding
the consummation of the Restructuring, of the aggregate
number of shares of Stock subject to the Award and as to
which the Award is being redeemed.
The Corporation shall promptly notify each Holder of any election or
action taken by the Corporation under this Subsection 9.3. In the
event of any election or action taken by the Corporation pursuant to
this Subsection 9.3 that requires the amendment or cancellation of any
Award Agreement as may be specified in any notice to the Holder
thereof, that Holder shall promptly deliver that Award Agreement to the
Corporation in order for that amendment or cancellation to be
implemented by the Corporation and the Committee. The failure of the
Holder to deliver any such Award Agreement to the Corporation as
provided in the preceding sentence shall not in any manner affect the
validity or enforceability of any action taken by the Corporation and
the Committee under this Subsection 9.3, including without limitation
any redemption of an Award as of the consummation of a Restructuring.
Any cash payment to be made by the Corporation pursuant to this
Subsection 9.3 in connection with the redemption of any outstanding
Awards shall be paid to the Holder thereof currently with the delivery
to the Corporation of the Award Agreement evidencing that Award;
provided, however, that any such redemption shall be effective upon the
consummation of the Restructuring notwithstanding that the payment of
the redemption price may occur subsequent to the consummation. If all
or any portion of an outstanding Award is to be exercised or
accelerated upon or after the consummation of a Restructuring that does
not occur in connection with a Change in Control and is in the form of
a Non-Surviving Event, and as a part of that Restructuring shares of
stock, other securities, cash, or property shall be issuable or
deliverable in exchange for Stock, then the Holder of the Award shall
thereafter be entitled to purchase or receive (in lieu of the number of
shares of Stock that the Holder would otherwise be entitled to purchase
or receive) the number of shares of Stock, other securities, cash, or
property to which such number of shares of Stock would have been
entitled in connection with the Restructuring (and, for Options, upon
payment of the aggregate exercise price equal to the Exercise Price
that would have been payable if that number of Total Shares had been
purchased on the exercise of the Option immediately before the
consummation of the Restructuring) and such Award shall be subject to
adjustments that shall be as nearly equivalent as may be practical to
the adjustments provided for in this Section 9.
<PAGE>
9.4 Notice of Restructuring. The Corporation shall attempt to
keep all Holders informed with respect to any Restructuring or of any
potential Restructuring to the same extent that the Corporation's
stockholders are informed by the Corporation of any such event or
potential event.
SECTION 10. ADDITIONAL PROVISIONS
10.1 Termination of Employment. If a Holder is an Eligible
Individual because the Holder is an Employee and if that employment
relationship is terminated for any reason other than (a) that Holder's
death or (b) that Holder's Disability (hereafter defined), then any and
all Awards held by such Holder in such Holder's capacity as an Employee
as of the date of the termination that are not yet exercisable (or for
which restrictions have not lapsed) shall become null and void as of
the date of such termination; provided, however, that the portion, if
any, of such Awards that are exercisable as of the date of termination
shall be exercisable for a period of the lesser of (a) the remainder of
the term of the Award or (b) the date which is 30 days after the date
of termination. Any portion of an Award not exercised upon the
expiration of the lesser of the period specified above shall be null
and void unless the Holder dies during such period, in which case the
provisions of Subsection 10.3 shall govern.
10.2 Other Loss of Eligibility - Non Employees. If a Holder is an
Eligible Individual because the Holder is serving in a capacity other
than as an Employee and if that capacity is terminated for any reason
other than the Holder's death or Disability, then that portion, if any,
of any and all Awards held by the Holder that were granted because of
that capacity which are not yet exercisable (or for which restrictions
have not lapsed) as of the date of the termination shall become null
and void as of the date of the termination; provided, however, that the
portion, if any, of any and all Awards held by the Holder that are then
exercisable as of the date of the termination shall be exercisable for
a period of the lesser of (a) the remainder of the term of the Award or
(b) 30 days following the date such capacity is terminated. If a
Holder is an Eligible Individual because the Holder is serving in a
capacity other than as an Employee and if that capacity is terminated
by reason of the Holder's death or Disability, then the portion, if
any, of any and all Awards held by the Holder that are not yet
exercisable (or for which restrictions have not lapsed) as of the date
of that termination for death or Disability shall become exercisable
(and the restrictions thereon, if any, shall lapse) and all such Awards
held by that Holder as of the date of termination that are exercisable
(either as a result of this sentence or otherwise) shall be exercisable
for a period of the lesser of (a) the remainder of the term of the
Award or (b) the date which is 30 days after the date of termination.
Any portion of an Award not exercised upon the expiration of the
periods specified in (a) or (b) of the preceding two sentences shall be
null and void upon the expiration of such period, as applicable.
10.3 Death. Upon the death of a Holder, any and all Awards held
by the Holder that are not yet exercisable (or for which restrictions
have not lapsed) as of the date of the Holder's death shall become
exercisable as provided below and any restrictions shall immediately
lapse as of the date of death; provided, however, that the Awards held
by the Holder as of the date of death shall be exercisable by that
Holder's legal representatives, heirs, legatees, or distributees for a
period of 30 days following the date of the Holder's death. Any
portion of an Award not exercised upon the expiration of such period
shall be null and void. Except as expressly provided in this
Subsection 10.3, no Award held by a Holder shall be exercisable after
the death of that Holder.
<PAGE>
10.4 Disability. If a Holder is an Eligible Individual because
the Holder is an Employee and if that employment relationship is
terminated by reason of the Holder's Disability, then the portion, if
any, of any and all Awards held by the Holder that are not yet
exercisable (or for which restrictions have not lapsed) as of the date
of that termination for Disability shall become exercisable as provided
below and any restrictions shall immediately lapse as of the date of
termination; provided, however, that the Awards held by the Holder as
of the date of that termination shall be exercisable by the Holder, his
guardian or his legal representative for a period of 30 days following
the date of such termination. Any portion of an Award not exercised
upon the expiration of such period shall be null and void unless the
Holder dies during such period, in which event the provisions of
Subsection 10.3 shall govern. "Disability" shall have the meaning
given it in the employment agreement of the Holder; provided, however,
that if that Holder has no employment agreement, "Disability" shall
mean, as determined by the Board of Directors in the sole discretion
exercised in good faith of the Board of Directors, a physical or mental
impairment of sufficient severity that either the Holder is unable to
continue performing the duties he performed before such impairment or
the Holder's condition entitles him to disability benefits under any
insurance or employee benefit plan of the Corporation or its
Subsidiaries and that impairment or condition is cited by the
Corporation as the reason for termination of the Holder's employment.
10.5 Leave of Absence. With respect to an Award, the Committee
may, in its sole discretion, determine that any Holder who is on leave
of absence for any reason will be considered to still be in the employ
of the Corporation for any or all purposes of the Plan and the Award
Agreement of such Holder.
10.6 Transferability of Awards. In addition to such other terms
and conditions as may be included in a particular Award Agreement, an
Award requiring exercise shall be exercisable during a Holder's
lifetime only by that Holder or by that Holder's guardian or legal
representative. An Award requiring exercise shall not be transferrable
other than by will or the laws of descent and distribution.
10.7 Forfeiture and Restrictions on Transfer. Each Award
Agreement may contain or otherwise provide for conditions giving rise
to the forfeiture of the Stock acquired pursuant to an Award or
otherwise and may also provide for those restrictions on the
transferability of shares of the Stock acquired pursuant to an Award or
otherwise that the Committee in its sole and absolute discretion may
deem proper or advisable. The conditions giving rise to forfeiture may
include, but need not be limited to, the requirement that the Holder
render substantial services to the Corporation or its Subsidiaries for
a specified period of time. The restrictions on transferability may
include, but need not be limited to, options and rights of first
refusal in favor of the Corporation and stockholders of the Corporation
other than the Holder of such shares of Stock who is a party to the
particular Award Agreement or a subsequent holder of the shares of
Stock who is bound by that Award Agreement.
<PAGE>
10.8 Delivery of Certificates of Stock. Subject to Subsection
10.9, the Corporation shall promptly issue and deliver a certificate
representing the number of shares of Stock as to which (a) an Option
has been exercised after the Corporation receives an Exercise Notice
and upon receipt by the Corporation of the Exercise Price and any tax
withholding as may be requested, (b) a Stock Appreciation Right has
been exercised (to the extent the Committee determines to pay such
Stock Appreciation Right in shares of Stock pursuant to Subsection 6.5)
and upon receipt by the Corporation of any tax withholding as may be
requested, and (c) restrictions have lapsed with respect to a
Restricted Stock Award and upon receipt by the Corporation of any tax
withholding as may be requested. The value of the shares of Stock or
cash transferable because of an Award under the Plan shall not bear any
interest owing to the passage of time, except as may be otherwise
provided in an Award Agreement. If a Holder is entitled to receive
certificates representing Stock received for more than one form of
Award under the Plan, separate Stock certificates shall be issued with
respect to Incentive Options and Nonstatutory Options.
10.9 Conditions to Delivery of Stock. Nothing herein or in any
Award granted hereunder or any Award Agreement shall require the
Corporation to issue any shares with respect to any Award if that
issuance would, in the opinion of counsel for the Corporation,
constitute a violation of the Securities Act or any similar or
superseding statute or statutes, any other applicable statute or
regulation, or the rules of any applicable securities exchange or
securities association, as then in effect. At the time of any exercise
of an Option or Stock Appreciation Right, or at the time of any grant
of a Restricted Stock Award, the Corporation may, as a condition
precedent to the exercise of such Option or Stock Appreciation Right or
vesting of any Restricted Stock Award, require from the Holder of the
Award (or in the event of his death, his legal representatives, heirs,
legatees, or distributees) such written representations, if any,
concerning the Holder's intentions with regard to the retention or
disposition of the shares of Stock being acquired pursuant to the Award
and such written covenants and agreements, if any, as to the manner of
disposal of such shares as, in the opinion of counsel to the
Corporation, may be necessary to ensure that any disposition by that
Holder (or in the event of the Holder's death, his legal
representatives, heirs, legatees, or distributees) will not involve a
violation of the Securities Act or any similar or superseding statute
or statutes, any other applicable state or federal statute or
regulation, or any rule of any applicable securities exchange or
securities association, as then in effect.
<PAGE>
10.10 Certain Directors and Officers. With respect to Holders
who are directors or officers of the Corporation or any of its
Subsidiaries and who are subject to Section 16(b) of the Exchange Act,
Awards and all rights under the Plan shall be exercisable during the
Holder's lifetime only by the Holder or the Holder's guardian or legal
representative, but not for at least six months after grant, unless (a)
the Board of Directors expressly authorizes that an Award shall be
exercisable before the expiration of the six-month period or (b) the
death or disability of the Holder occurs before the expiration of the
six-month period. In addition, no such officer or director shall
exercise any Stock Appreciation Right or have shares of Stock withheld
to pay tax withholding obligations within the first six months of the
term of an Award. Any election by any such officer or director to have
tax withholding obligations satisfied by the withholding of shares of
Stock shall be irrevocable and shall be communicated to the Committee
during the period beginning on the third day following the date of
release of quarterly or annual summary statements of sales and earnings
and ending on the twelfth business day following such date (the "Window
Period") or by an irrevocable election communicated to the Committee at
least six months before the date of exercise of the Award for which
such withholding is desired. Any election by such an officer or
director to receive cash in full or partial settlement of a Stock
Appreciation Right, as well as any exercise by such individual of a
Stock Appreciation Right for such cash, in either case to the extent
permitted under the applicable Award Agreement or otherwise permitted
by the Committee, shall be made during the Window Period or within any
other periods that the Committee shall specify from time to time.
10.11 Securities Act Legend. Certificates for shares of
Stock, when issued, may have the following legend, or statements of
other applicable restrictions (including, without limitation,
restrictions required under any Federal, state or foreign law),
endorsed thereon and may not be immediately transferable:
THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR ANY STATE SECURITIES LAWS. THE SHARES MAY NOT BE OFFERED
FOR SALE, SOLD, PLEDGED, TRANSFERRED, OR OTHERWISE DISPOSED
OF UNTIL THE HOLDER HEREOF PROVIDES EVIDENCE SATISFACTORY TO
THE ISSUER (WHICH, IN THE DISCRETION OF THE ISSUER, MAY
INCLUDE AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER)
THAT SUCH OFFER, SALE, PLEDGE, TRANSFER, OR OTHER DISPOSITION
WILL NOT VIOLATE APPLICABLE FEDERAL OR STATE LAWS.
This legend shall not be required for shares of Stock issued pursuant
to an effective registration statement under the Securities Act.
10.12 Legend for Restrictions on Transfer. Each certificate
representing shares issued to a Holder pursuant to an Award granted
under the Plan shall, if such shares are subject to any transfer
restriction, including a right of first refusal, provided for under
this Plan or an Award Agreement, bear a legend that complies with
applicable law with respect to the restrictions on transferability
contained in this Subsection 10.12, such as:
<PAGE>
THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO RESTRICTIONS ON TRANSFERABILITY IMPOSED BY THAT
CERTAIN INSTRUMENT ENTITLED "TRAVIS BOATS & MOTORS, INC. 1995
INCENTIVE PLAN" AS ADOPTED BY TRAVIS BOATS & MOTORS, INC.
(THE "CORPORATION"), AND AN AGREEMENT THEREUNDER BETWEEN THE
CORPORATION AND THE INITIAL HOLDER THEREOF DATED
________________, 199_, AND MAY NOT BE TRANSFERRED, SOLD, OR
OTHERWISE DISPOSED OF EXCEPT AS THEREIN PROVIDED. THE
CORPORATION WILL FURNISH A COPY OF SUCH INSTRUMENT AND
AGREEMENT TO THE RECORD HOLDER OF THIS CERTIFICATE WITHOUT
CHARGE ON REQUEST TO THE CORPORATION AT ITS PRINCIPAL PLACE
OF BUSINESS OR REGISTERED OFFICE.
10.13 Rights as a Stockholder. A Holder shall have no right
as a stockholder with respect to any shares covered by his Award until
a certificate representing those shares is issued in his name. No
adjustment shall be made for dividends (ordinary or extraordinary,
whether in cash or other property) or distributions or other rights for
which the record date is before the date that certificate is issued,
except as contemplated by Section 9 hereof. Nevertheless, dividends,
dividend equivalent rights and voting rights may be extended to and
made part of any Award denominated in Stock or units of Stock, subject
to such terms, conditions and restrictions as the Committee may
establish. The Committee may also establish rules and procedures for
the crediting of interest on deferred cash payments and dividend
equivalents for deferred payment denominated in Stock or units of
Stock.
10.14 Furnish Information. Each Holder shall furnish to the
Corporation all information requested by the Corporation to enable it
to comply with any reporting or other requirement imposed upon the
Corporation by or under any applicable statute or regulation.
10.15 Obligation to Exercise. The granting of an Award
hereunder shall impose no obligation upon the Holder to exercise the
same or any part thereof.
10.16 Adjustments to Awards. Subject to the general
limitations set forth in Sections 5, 6, and 9, the Committee may make
any adjustment in the Exercise Price of, the number of shares subject
to, or the terms of a Nonstatutory Option or Stock Appreciation Right
by canceling an outstanding Nonstatutory Option or Stock Appreciation
Right and regranting a Nonstatutory Option or Stock Appreciation Right.
Such adjustment shall be made by amending, substituting, or regranting
an outstanding Nonstatutory Option or Stock Appreciation Right. Such
amendment, substitution, or regrant may result in terms and conditions
that differ from the terms and conditions of the original Nonstatutory
Option or Stock Appreciation Right. The Committee may not, however,
impair the rights of any Holder of previously granted Nonstatutory
Options or Stock Appreciation Rights without that Holder's consent. If
such action is effected by amendment, such amendment shall be deemed
effective as of the Date of Grant of the amended Award.
10.17 Remedies. The Corporation shall be entitled to recover
from a Holder reasonable attorneys' fees incurred in connection with
the enforcement of the terms and provisions of the Plan and any Award
Agreement whether by an action to enforce specific performance or for
damages for its breach or otherwise.
<PAGE>
10.18 Information Confidential. As partial consideration for
the granting of each Award hereunder, the Holder shall agree with the
Corporation that he will keep confidential all information and
knowledge that he has relating to the manner and amount of his
participation in the Plan; provided, however, that such information may
be disclosed as required by law and may be given in confidence to the
Holder's spouse, tax or financial advisors, or to a financial
institution to the extent that such information is necessary to secure
a loan. In the event any breach of this promise comes to the attention
of the Committee, it shall take into consideration that breach in
determining whether to recommend the grant of any future Award to that
Holder, as a factor mitigating against the advisability of granting any
such future Award to that Person.
10.19 Consideration. No Option or Stock Appreciation Right
shall be exercisable and no restriction on any Restricted Stock Award
shall lapse with respect to a Holder unless and until the Holder
thereof shall have paid cash or property to, or performed services for,
the Corporation or any of its Subsidiaries that the Committee believes
is equal to or greater in value than the par value of the Stock subject
to such Award.
SECTION 11. DURATION AND AMENDMENT OF PLAN
11.1 Duration. No Awards may be granted hereunder after the date
that is ten years from the earlier of (a) the date the Plan is adopted
by the Board of Directors and (b) the date the Plan is approved by the
stockholders of the Corporation.
11.2 Amendment. The Board of Directors may, insofar as permitted
by law, with respect to any shares which, at the time, are not subject
to Awards, suspend or discontinue the Plan or revise or amend it in any
respect whatsoever and may amend any provision of the Plan or any Award
Agreement to make the Plan or the Award Agreement, or both, comply with
Section 16(b) of the Exchange Act and the exemptions from that Section
in the regulations thereunder. The Board of Directors may also amend,
modify, suspend, or terminate the Plan for the purpose of meeting or
addressing any changes in other legal requirements applicable to the
Corporation or the Plan or for any other purpose permitted by law. The
Plan may not be amended without the consent of the holders of a
majority of the shares of Stock then outstanding to (a) increase
materially the aggregate number of shares of Stock that may be issued
under the Plan (except for adjustments pursuant to Section 9 hereof),
(b) increase materially the benefits accruing to Eligible Individuals
under the Plan, or (c) modify materially the requirements about
eligibility for participation in the Plan; provided, however, that such
amendments may be made without the consent of stockholders of the
Corporation if changes occur in law or other legal requirements
(including Rule 16b-3) that would permit such changes. In connection
with any amendment of the Plan, the Board of Directors shall be
authorized to incorporate such provisions as shall be necessary for
amounts paid under the Plan to be exempt from Section 162(m) of the
Code.
SECTION 12. GENERAL
12.1 Application of Funds. The proceeds received by the
Corporation from the sale of shares pursuant to Awards may be used for
any general corporate purpose.
<PAGE>
12.2 Right of the Corporation and Subsidiaries to Terminate
Employment. Nothing contained in the Plan, or in any Award Agreement,
shall confer upon any Holder the right to continue in the employ of the
Corporation or any Subsidiary or interfere in any way with the rights
of the Corporation or any Subsidiary to terminate the Holder's
employment at any time.
12.3 No Liability for Good Faith Determinations. Neither the
members of the Board of Directors nor any member of the Committee shall
be liable for any act, omission or determination taken or made in good
faith with respect to the Plan or any Award granted under it; and
members of the Board of Directors and the Committee shall be entitled
to indemnification and reimbursement by the Corporation in respect of
any claim, loss, damage, or expense (including attorneys' fees, the
costs of settling any suit, provided such settlement is approved by
independent legal counsel selected by the Corporation, and amounts paid
in satisfaction of a judgment, except a judgment based on a finding of
bad faith) arising therefrom to the full extent permitted by law and
under any directors' and officers' liability or similar insurance
coverage that may from time to time be in effect. This right to
indemnification shall be in addition to, and not a limitation on, any
other indemnification rights any member of the Board of Directors or
the Committee may have.
12.4 Other Benefits. Participation in the Plan shall not preclude
the Holder from eligibility in any other stock or stock option plan of
the Corporation or any Subsidiary or any old age benefit, insurance,
pension, profit sharing retirement, bonus, or other extra compensation
plans that the Corporation or any Subsidiary has adopted, or may, at
any time, adopt for the benefit of its Employees. Neither the adoption
of the Plan by the Board of Directors nor the submission of the Plan to
the stockholders of the Corporation for approval shall be construed as
creating any limitations on the power of the Board of Directors to
adopt such other incentive arrangements as it may deem desirable,
including, without limitation, the granting of stock options and the
awarding of stock and cash otherwise than under the Plan and such
arrangements may be either generally applicable or applicable only in
specific cases.
12.5 Exclusion From Pension and Profit-Sharing Compensation. By
acceptance of an Award (regardless of form), as applicable, each Holder
shall be deemed to have agreed that the Award is special incentive
compensation that will not be taken into account in any manner as
salary, compensation, or bonus in determining the amount of any payment
under any pension, retirement, or other employee benefit plan of the
Corporation or any Subsidiary, unless any pension, retirement, or other
employee benefit plan of the Corporation or Subsidiary expressly
provides that such Award shall be so considered for purposes of
determining the amount of any payment under any such plan. In
addition, each beneficiary of a deceased Holder shall be deemed to have
agreed that the Award will not affect the amount of any life insurance
coverage, if any, provided by the Corporation or a Subsidiary on the
life of the Holder that is payable to the beneficiary under any life
insurance plan covering employees of the Corporation or any Subsidiary.
12.6 Execution of Receipts and Releases. Any payment of cash or
any issuance or transfer of shares of Stock to the Holder, or to his
legal representative, heir, legatee, or distributee, in accordance with
the provisions hereof, shall, to the extent thereof, be in full
satisfaction of all claims of such persons hereunder. The Committee may
require any Holder, legal representative, heir, legatee, or
distributee, as a condition precedent to such payment, to execute a
release and receipt therefor in such form as it shall determine.
12.7 Unfunded Plan. Insofar as it provides for Awards of cash and
Stock, the Plan shall be unfunded. Although bookkeeping accounts may
be established with respect to Holders who are entitled to cash, Stock,
or rights thereto under the Plan, any such accounts shall be used
merely as a bookkeeping convenience. The Corporation shall not be
required to segregate any assets that may at any time be represented by
cash, Stock, or rights thereto, nor shall the Plan be construed as
providing for such segregation, nor shall the Corporation nor the Board
of Directors nor the Committee be deemed to be a trustee of any cash,
Stock, or rights thereto to be granted under the Plan. Any liability
of the Corporation to any Holder with respect to a grant of cash,
Stock, or rights thereto under the Plan shall be based solely upon any
contractual obligations that may be created by the Plan and any Award
Agreement; no such obligation of the Corporation shall be deemed to be
secured by any pledge or other encumbrance on any property of the
Corporation. Neither the Corporation nor the Board of Directors nor the
Committee shall be required to give any security or bond for the
performance of any obligation that may be created by the Plan.
12.8 No Guarantee of Interests. Neither the Committee nor the
Corporation guarantees the Stock of the Corporation from loss or
depreciation.
12.9 Payment of Expenses. All expenses incident to the
administration, termination, or protection of the Plan, including, but
not limited to, legal and accounting fees, shall be paid by the
Corporation or its Subsidiaries; provided, however, the Corporation or
a Subsidiary may recover any and all damages, fees, expenses, and costs
arising out of any actions taken by the Corporation to enforce its
right to purchase Stock under this Plan.
12.10 Corporation Records. Records of the Corporation or its
Subsidiaries regarding the Holder's period of employment, termination
of employment and the reason therefor, leaves of absence, re-
employment, and other matters shall be conclusive for all purposes
hereunder, unless determined by the Committee to be incorrect.
12.11 Information. The Corporation and its Subsidiaries
shall, upon request or as may be specifically required hereunder,
furnish or cause to be furnished all of the information or
documentation which is necessary or required by the Committee to
perform its duties and functions under the Plan.
12.12 No Liability of Corporation. The Corporation assumes no
obligation or responsibility to the Holder or his legal
representatives, heirs, legatees, or distributees for any act of, or
failure to act on the part of, the Committee.
12.13 Corporation Action. Any action required of the
Corporation shall be by resolution of its Board of Directors or by a
person authorized to act by resolution of the Board of Directors.
<PAGE>
12.14 Severability. In the event that any provision of this
Plan, or the application hereof to any Person or circumstance, is held
by a court of competent jurisdiction to be invalid, illegal, or
unenforceable in any respect under present or future laws effective
during the effective term of any such provision, such invalid, illegal,
or unenforceable provision shall be fully severable; and this Plan
shall then be construed and enforced as if such invalid, illegal, or
unenforceable provision had not been contained in this Plan; and the
remaining provisions of this Plan shall remain in full force and effect
and shall not be affected by the illegal, invalid, or unenforceable
provision or by its severance from this Plan. Furthermore, in lieu of
each such illegal, invalid, or unenforceable provision, there shall be
added automatically as part of this Plan a provision as similar in
terms to such illegal, invalid, or unenforceable provision as may be
possible and be legal, valid, and enforceable. If any of the terms or
provisions of this Plan conflict with the requirements of Rule 16b-3
(as those terms or provisions are applied to Eligible Individuals who
are subject to Section 16(b) of the Exchange Act), then those
conflicting terms or provisions shall be deemed inoperative to the
extent they so conflict with the requirements of Rule 16b-3 and, in
lieu of such conflicting provision, there shall be added automatically
as part of this Plan a provision as similar in terms to such
conflicting provision as may be possible and not conflict with the
requirements of Rule 16b-3. If any of the terms or provisions of this
Plan conflict with the requirements of Section 422 of the Code (with
respect to Incentive Options), then those conflicting terms or
provisions shall be deemed inoperative to the extent they so conflict
with the requirements of Section 422 of the Code and, in lieu of such
conflicting provision, there shall be added automatically as part of
this Plan a provision as similar in terms to such conflicting provision
as may be possible and not conflict with the requirements of Section
422 of the Code. With respect to Incentive Options, if this Plan does
not contain any provision required to be included herein under Section
422 of the Code, that provision shall be deemed to be incorporated
herein with the same force and effect as if that provision had been set
out at length herein; provided, however, that, to the extent any Option
that is intended to qualify as an Incentive Option cannot so qualify,
that Option (to that extent) shall be deemed a Nonstatutory Option for
all purposes of the Plan.
12.15 Notices. Whenever any notice is required or permitted
hereunder, such notice must be in writing and personally delivered or
sent by mail. Any notice required or permitted to be delivered
hereunder shall be deemed to be delivered on the date on which it is
actually received by the Corporation addressed to the attention of the
Corporate Secretary at the Corporation's office as specified in the
applicable Award Agreement. The Corporation or a Holder may change, at
any time and from time to time, by written notice to the other, the
address which it or he had previously specified for receiving notices.
Until changed in accordance herewith, the Corporation and each Holder
shall specify as its and his address for receiving notices the address
set forth in the Award Agreement pertaining to the shares to which such
notice relates. Any person entitled to notice hereunder may waive such
notice.
12.16 Successors. The Plan shall be binding upon the Holder,
his legal representatives, heirs, legatees, and distributees, upon the
Corporation, its successors and assigns and upon the Committee and its
successors.
<PAGE>
12.17 Headings. The titles and headings of Sections and
Subsections are included for convenience of reference only and are not
to be considered in construction of the provisions hereof.
12.18 Governing Law. All questions arising with respect to
the provisions of the Plan shall be determined by application of the
laws of the State of Texas without giving effect to any conflict of law
provisions thereof, except to the extent Texas law is preempted by
federal law. Questions arising with respect to the provisions of an
Award Agreement that are matters of contract law shall be governed by
the laws of the state specified in the Award Agreement, except to the
extent that Texas corporate law subconflicts with the contract law of
such state, in which event Texas law shall govern irrespective of any
conflict of law laws. The obligation of the Corporation to sell and
deliver Stock hereunder is subject to applicable federal, state and
foreign laws and to the approval of any governmental authority required
in connection with the authorization, issuance, sale, or delivery of
such Stock.
12.19 Word Usage. Words used in the masculine shall apply to
the feminine where applicable, and wherever the context of this Plan
dictates, the plural shall be read as the singular and the singular as
the plural.
IN WITNESS WHEREOF, Travis Boats, acting by and through its duly
authorized officer, has executed this instrument this 14th day of
December, 1995.
TRAVIS BOATS & MOTORS, INC.,
a Texas corporation
By: _________/s/__________
Name: Mark T. Walton
Title: President
<PAGE>
EXHIBIT 4.3
OPTION AGREEMENT
This Option Agreement (this "Agreement") is executed to be effective as
of the 17th day of May, 1995, by and between Travis Boats & Motors, Inc. a
Texas corporation (the "Company"), and Michael B. Perrine, an employee of the
Company (the "Employee").
R E C I T A L S:
The Company desires to grant to the Employee an Option to purchase
shares of its Common Stock, $0.10 par value (the "Common Stock") pursuant to
the terms and conditions contained in this Agreement.
A G R E E M E N T:
The parties agree as follows:
1. Grant of Option. The Company hereby irrevocably grants
to the Employee the right and option to purchase all or any
part of an aggregate of 3,125 shares of Common Stock, on the
terms and conditions and subject to all the limitations set
forth herein.
2. Purchase Price. The purchase price of the shares of
Common Stock covered by the Option (the "Shares") shall be
$112.00 per share.
3. Exercise of Option. Subject to the other terms and
conditions of this Agreement, the Option granted hereby shall
vest and become exercisable only on and after the dates set
forth below as to the number of Shares set forth opposite such
dates below:
Vesting Dates Number of Shares Vested
May 17, 1996 20%
May 17, 1997 40%
May 17, 1998 60%
May 17, 1999 80%
May 17, 2000 100%
4. Term of Option. The Option shall terminate ten years
from the date of this Agreement, but shall be subject to
earlier termination as provided herein.
If the Employee ceases to be an employee of the Company for any reason
other than death or Disability, as defined below, or termination of the
Employee, the Option may be exercised within 45 days after the date the
Employee ceases to be an employee or, if earlier, the date upon which the
Option terminates, as originally prescribed by this Agreement. In such
event, the Option shall be exercisable only to the extent that the right to
purchase shares under this Agreement has vested at the date of such cessation
of employment.
<PAGE>
In the event the Employee's employment is terminated by the Company for
"cause" (as defined below), all of the Employee's unexercised Options shall
terminate immediately.
If the Employee's employment is terminated without cause, the Options
granted pursuant to this Agreement shall immediately become fully vested and
exercisable. The termination of the Employee's employment shall not operate
to terminate this Agreement and the Employee shall have the right to exercise
the vested but unexercised portion of the Options granted hereunder at any
time during the term of this Agreement.
In the event of the Disability of the Employee, the Option shall be
exercisable within 45 days after the date of such Disability or the date upon
which the Option terminates as originally prescribed by this Agreement,
whichever is earlier. In such event, the Option shall be exercisable to the
extent that the right to purchase the Shares hereunder has accrued on the
date the Employee becomes Disabled and is in effect as of such determination
date.
In the event of the death of the Employee while an employee of the
Company or of an Affiliate, the Option, to the extent exercisable but not
exercised as of the date of death, may be exercised by the Employee's legal
representatives or any person who acquired the Employee's rights to the
Option by will or by the laws of descent and distribution. In such event,
the Option must be exercised, if at all, within one year after the date of
death of the Employee or, if earlier, the date upon which the Option
terminates, as originally prescribed by this Agreement.
The term "cause," as used in this Agreement, shall mean:
(a) The Employee's willful and repeated failure to perform his/her
duties;
(b) habitual abuse of drugs or alcohol;
(c) conviction of a felony or an unlawful act; or
(d) acts of gross disloyalty to the Company, including but not
limited to theft, embezzlement or intentional unauthorized
disclosure of confidential information.
"Disability" shall mean, as determined by the Board of Directors in the
sole discretion exercised in good faith of the Board of Directors, a physical
or mental impairment of sufficient severity that either the Optionee is
unable to continue performing the duties he performed before such impairment
or the Optionee's condition entitles him to disability benefits under any
insurance or employee benefit plan of the Company and that impairment or
condition is cited by the Company as the reason for termination of the
Optionee's employment.
"Disability"
<PAGE>
5. Exercise of Option and Issue of Shares. The Option may
be exercised in whole or in part (to the extent that it is
exercisable in accordance with its terms) by giving written
notice to the Company, together with the tender of the Option
price. Such written notice shall be signed by the person
exercising the Option, shall state the number of Shares with
respect to which the Option is being exercised, shall contain
any representation required by paragraph 6 below and shall
otherwise comply with the terms and conditions of this
Agreement. The Company shall pay all transfer or original
issue taxes with respect to the issue of the Shares pursuant
hereto and all other fees and expenses necessarily incurred by
the Company in connection herewith. Except as specifically
set forth herein, the holder acknowledges that any income or
other taxes due from him or her with respect to this Option or
the shares issuable pursuant to this Option shall be the
responsibility of the holder and that the Company may, in
accordance with the Internal Revenue Code, require the holder
to pay additional withholding taxes in respect of the amount
that is considered compensation includable in such holders'
gross income. The holder of this Option shall have rights as
a shareholder only with respect to any Shares covered by the
Option after due exercise of the Option and tender of the full
exercise price for the shares being purchased pursuant to such
exercise.
6. Adjustment of Awards and Authorized Stock. The terms of
this Agreement shall be subject to adjustment from time to
time, in accordance with the following provisions:
a. If at any time, or from time to time, the Company shall
subdivide as a whole (by reclassification, by a stock split, by the
issuance of a distribution on Common Stock payable in Common Stock, or
otherwise) the number of shares of Common Stock then outstanding into a
greater number of shares of Common Stock, then (i) the number of shares
of Common Stock (or other kind of shares or securities) that may be
acquired shall be increased proportionately, and (ii) the purchase price
for each share of Common Stock (or other kind of shares or securities)
shall be reduced proportionately, without changing the aggregate
purchase price for the shares.
b. If at any time, or from time to time, the Company shall
consolidate as a whole (by reclassification, reverse stock split, or
otherwise) the number of shares of Common Stock then outstanding into a
lesser number of shares of Common Stock, then (i) the number of shares
of Common Stock (or other kind of shares or securities) that may be
acquired shall be decreased proportionately, and (ii) the purchase price
for each share of Common Stock (or other kind of shares or securities)
shall be increased proportionately, without changing the aggregate
purchase price.
c. Adjustments made pursuant to this Section 6 shall be made by
the Company, and its determination as to what adjustments shall be made
and the extent thereof shall be final, binding, and conclusive. No
fractional interests shall be issued on account of any such adjustments.
7. Change in Control. Upon the occurrence of a Change in
Control (as defined below) of the Company, the options granted
hereunder shall immediately become fully vested and
exercisable (the total number of shares of Common Stock as to
which an Option is exercisable upon the occurrence of a Change
<PAGE>
in Control is referred to herein as the "Total Shares"). If,
in connection with the Change in Control, other securities,
cash, or property shall be issuable or deliverable in exchange
for Common Stock, then the Employee shall be entitled to
purchase or receive (in lieu of the Total Shares that the
Employee would otherwise be entitled to purchase or receive),
the number of shares of Common Stock, other securities, cash,
or property to which that number of Total Shares would have
been entitled in connection with the Change in Control at an
aggregate exercise price equal to the purchase price that
would have been payable if that number of Total Shares had
been purchased on the exercise of the option immediately
before the consummation of the Change in Control.
Nothing in this Section 7 shall impose on the Employee the obligation to
exercise any option immediately before or upon the Change of Control, or
cause the Employee to forfeit the right to exercise the option during the
remainder of the original term of this Agreement because of a Change in
Control.
A "Change in Control" shall be deemed to have occurred if (i) any
"person" (as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended) is or becomes the "beneficial owner" (as
such term is defined in Rule 13d-3 under the Act), directly or indirectly, of
securities of the Company representing 25% or more of the combined voting
power of the outstanding securities of the Company, (other than (A) a person
owning 25% or more as of the date of this Agreement, (B) a person who becomes
the owner of 25% or more by reason of the Company's acquisition of
outstanding shares of the Company's stock, (C) as a result of an initial
public offering on the Company's common stock, or (D) a trustee or other
fiduciary holding securities under an employee benefit plan of the Company),
or (ii) during any period of two consecutive years, individuals who at the
beginning of such period constitute the board of directors of the Company and
any new director whose election by the board of directors or nomination for
election by the Company's shareholders was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who either were
directors at the beginning of the period or whose election or nomination for
election was previously so approved, cease for any reason to constitute a
majority thereof, or (iii) the shareholders of the Company approve (x) a
merger or consolidation of the Company with any other entity (other than a
merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either
by remaining outstanding or by being converted into voting securities of the
surviving entity) at least 80% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately
after such merger or consolidation), (y) a plan of complete liquidation of
the Company or (z) an agreement or agreements for the sale or disposition, in
a single transaction or series of related transactions, by the Company of all
or substantially all of the property and assets of the Company.
8. Purchase for Investment. Unless the offering and sale of
the Shares to be issued upon the particular exercise of the
Option shall have been effectively registered under the
Securities Act of 1933, as amended, or any successor
legislation (the "Act"), the Company shall be under no
obligation to issue the Shares covered by such exercise unless
and until the following conditions have been fulfilled.
<PAGE>
The person(s) who exercise the Option shall represent to the Company, at
the time of such exercise, that such person(s) are acquiring such Shares for
his or her own account, for investment and not with a view to, or for sale in
connection with, the distribution of any such Shares, in which event the
person(s) acquiring such Shares shall be bound by the provisions of the
following legend which shall be endorsed upon the certificate(s) evidencing
their option Shares issued pursuant to such exercise;
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN
ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE
FEDERAL SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES
LAWS OF ANY STATE. WITHOUT SUCH REGISTRATION, SUCH SECURITIES
MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE
TRANSFERRED, EXCEPT UPON DELIVERY TO THE COMPANY OF AN OPINION
OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS
NOT REQUIRED FOR SUCH TRANSFER OR THE SUBMISSION TO THE
COMPANY OF SUCH OTHER EVIDENCE AS MAY BE SATISFACTORY TO THE
COMPANY TO THE EFFECT THAT ANY SUCH TRANSFER SHALL NOT BE IN
VIOLATION OF THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS OR ANY RULE OR REGULATION
PROMULGATED THEREUNDER."
Without limiting the generality of the foregoing, the Company may delay
issuance of the Shares until completion of any action or obtaining of any
consent, which the Company deems necessary under any applicable law
(including without limitation state securities or "blue sky" laws).
9. Non-Assignability. The Option shall not be transferable
by the Employee otherwise than by will or by the laws of
descent and distribution and shall be exercisable, during the
Employee's lifetime, only by the Employee or his or her
guardian or legal representative. The Option shall not be
assigned, pledged or hypothecated in any way (whether by
operation of law or otherwise) and shall not be subject to
execution, attachment or similar process. Any attempted
transfer, assignment, pledge, hypothecation or other
disposition of the Option or of any rights granted hereunder
contrary to the provisions of this paragraph 7, or the levy of
any attachment or similar process upon the Option or such
rights, shall be null and void.
10. Notices. Any notices required or permitted by the terms
of this Agreement shall be given by personal delivery or
registered or certified mail, return receipt requested,
addressed as follows:
To the Company: 13045 Research Boulevard
Austin, Texas 78750
Attn: Mark T. Walton
To the Employee, to the
address shown below,
or to such other address or addresses of which notice in the same manner has
previously been given. Any such notice shall be deemed to have been given
when given in accordance with these provisions.
11. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS, AND NOT THE
LAWS OF CONFLICT, OF THE STATE OF TEXAS.
<PAGE>
12. Benefit of Agreement. This Agreement shall be for the
benefit of and shall be binding upon the heirs, executors,
administrators and successors of the parties hereto.
EXECUTED as of the date set forth above.
TRAVIS BOATS & MOTORS, INC.
By: /s/ Mark T. Walton
Mark T. Walton, President
/s/ Michael B. Perrine
Michael B. Perrine
Address:
7308 Kapok Lane
Austin, Texas 78759
<PAGE>
EXHIBIT 4.4
OPTION AGREEMENT
This Option Agreement (this "Agreement") is executed to be effective as
of the 17th day of May, 1995, by and between Travis Boats & Motors, Inc. a
Texas corporation (the "Company"), and Mark T. Walton, an employee of the
Company (the "Employee").
R E C I T A L S:
The Company desires to grant to the Employee an Option to purchase
shares of its Common Stock, $0.10 par value (the "Common Stock") pursuant to
the terms and conditions contained in this Agreement.
A G R E E M E N T:
The parties agree as follows:
1. Grant of Option. The Company hereby irrevocably grants
to the Employee the right and option to purchase all or any
part of an aggregate of 950 shares of Common Stock, on the
terms and conditions and subject to all the limitations set
forth herein.
2. Purchase Price. The purchase price of the shares of
Common Stock covered by the Option (the "Shares") shall be
$112.00 per share.
3. Exercise of Option. Subject to the other terms and
conditions of this Agreement, the Option granted hereby shall
vest and become exercisable only on and after the dates set
forth below as to the number of Shares set forth opposite such
dates below:
Vesting Dates Number of Shares Vested
May 17, 1996 20%
May 17, 1997 40%
May 17, 1998 60%
May 17, 1999 80%
May 17, 2000 100%
<PAGE>
4. Term of Option. The Option shall terminate ten years
from the date of this Agreement, but shall be subject to
earlier termination as provided herein.
If the Employee ceases to be an employee of the Company for any reason
other than death or Disability, as defined below, or termination of the
Employee, the Option may be exercised within 45 days after the date the
Employee ceases to be an employee or, if earlier, the date upon which the
Option terminates, as originally prescribed by this Agreement. In such
event, the Option shall be exercisable only to the extent that the right to
purchase shares under this Agreement has vested at the date of such cessation
of employment.
In the event the Employee's employment is terminated by the Company for
"cause" (as defined below), all of the Employee's unexercised Options shall
terminate immediately.
If the Employee's employment is terminated without cause, the Options
granted pursuant to this Agreement shall immediately become fully vested and
exercisable. The termination of the Employee's employment shall not operate
to terminate this Agreement and the Employee shall have the right to exercise
the vested but unexercised portion of the Options granted hereunder at any
time during the term of this Agreement.
In the event of the Disability of the Employee, the Option shall be
exercisable within 45 days after the date of such Disability or the date upon
which the Option terminates as originally prescribed by this Agreement,
whichever is earlier. In such event, the Option shall be exercisable to the
extent that the right to purchase the Shares hereunder has accrued on the
date the Employee becomes Disabled and is in effect as of such determination
date.
In the event of the death of the Employee while an employee of the
Company or of an Affiliate, the Option, to the extent exercisable but not
exercised as of the date of death, may be exercised by the Employee's legal
representatives or any person who acquired the Employee's rights to the
Option by will or by the laws of descent and distribution. In such event,
the Option must be exercised, if at all, within one year after the date of
death of the Employee or, if earlier, the date upon which the Option
terminates, as originally prescribed by this Agreement.
The term "cause," as used in this Agreement, shall mean:
(a) The Employee's willful and repeated failure to perform his/her
duties;
(b) habitual abuse of drugs or alcohol;
(c) conviction of a felony or an unlawful act; or
(d) acts of gross disloyalty to the Company, including but not
limited to theft, embezzlement or intentional unauthorized
disclosure of confidential information.
<PAGE>
"Disability" shall mean, as determined by the Board of Directors in the
sole discretion exercised in good faith of the Board of Directors, a physical
or mental impairment of sufficient severity that either the Optionee is
unable to continue performing the duties he performed before such impairment
or the Optionee's condition entitles him to disability benefits under any
insurance or employee benefit plan of the Company and that impairment or
condition is cited by the Company as the reason for termination of the
Optionee's employment.
"Disability"
5. Exercise of Option and Issue of Shares. The Option may
be exercised in whole or in part (to the extent that it is
exercisable in accordance with its terms) by giving written
notice to the Company, together with the tender of the Option
price. Such written notice shall be signed by the person
exercising the Option, shall state the number of Shares with
respect to which the Option is being exercised, shall contain
any representation required by paragraph 6 below and shall
otherwise comply with the terms and conditions of this
Agreement. The Company shall pay all transfer or original
issue taxes with respect to the issue of the Shares pursuant
hereto and all other fees and expenses necessarily incurred by
the Company in connection herewith. Except as specifically
set forth herein, the holder acknowledges that any income or
other taxes due from him or her with respect to this Option or
the shares issuable pursuant to this Option shall be the
responsibility of the holder and that the Company may, in
accordance with the Internal Revenue Code, require the holder
to pay additional withholding taxes in respect of the amount
that is considered compensation includable in such holders'
gross income. The holder of this Option shall have rights as
a shareholder only with respect to any Shares covered by the
Option after due exercise of the Option and tender of the full
exercise price for the shares being purchased pursuant to such
exercise.
6. Adjustment of Awards and Authorized Stock. The terms of
this Agreement shall be subject to adjustment from time to
time, in accordance with the following provisions:
a. If at any time, or from time to time, the Company shall
subdivide as a whole (by reclassification, by a stock split, by the
issuance of a distribution on Common Stock payable in Common Stock, or
otherwise) the number of shares of Common Stock then outstanding into a
greater number of shares of Common Stock, then (i) the number of shares
of Common Stock (or other kind of shares or securities) that may be
acquired shall be increased proportionately, and (ii) the purchase price
for each share of Common Stock (or other kind of shares or securities)
shall be reduced proportionately, without changing the aggregate
purchase price for the shares.
b. If at any time, or from time to time, the Company shall
consolidate as a whole (by reclassification, reverse stock split, or
otherwise) the number of shares of Common Stock then outstanding into a
lesser number of shares of Common Stock, then (i) the number of shares
of Common Stock (or other kind of shares or securities) that may be
acquired shall be decreased proportionately, and (ii) the purchase price
for each share of Common Stock (or other kind of shares or securities)
shall be increased proportionately, without changing the aggregate
purchase price.
<PAGE>
c. Adjustments made pursuant to this Section 6 shall be made by
the Company, and its determination as to what adjustments shall be made
and the extent thereof shall be final, binding, and conclusive. No
fractional interests shall be issued on account of any such adjustments.
7. Change in Control. Upon the occurrence of a Change in
Control (as defined below) of the Company, the options granted
hereunder shall immediately become fully vested and
exercisable (the total number of shares of Common Stock as to
which an Option is exercisable upon the occurrence of a Change
in Control is referred to herein as the "Total Shares"). If,
in connection with the Change in Control, other securities,
cash, or property shall be issuable or deliverable in exchange
for Common Stock, then the Employee shall be entitled to
purchase or receive (in lieu of the Total Shares that the
Employee would otherwise be entitled to purchase or receive),
the number of shares of Common Stock, other securities, cash,
or property to which that number of Total Shares would have
been entitled in connection with the Change in Control at an
aggregate exercise price equal to the purchase price that
would have been payable if that number of Total Shares had
been purchased on the exercise of the option immediately
before the consummation of the Change in Control.
Nothing in this Section 7 shall impose on the Employee the obligation to
exercise any option immediately before or upon the Change of Control, or
cause the Employee to forfeit the right to exercise the option during the
remainder of the original term of this Agreement because of a Change in
Control.
A "Change in Control" shall be deemed to have occurred if (i) any
"person" (as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended) is or becomes the "beneficial owner" (as
such term is defined in Rule 13d-3 under the Act), directly or indirectly, of
securities of the Company representing 25% or more of the combined voting
power of the outstanding securities of the Company, (other than (A) a person
owning 25% or more as of the date of this Agreement, (B) a person who becomes
the owner of 25% or more by reason of the Company's acquisition of
outstanding shares of the Company's stock, (C) as a result of an initial
public offering on the Company's common stock, or (D) a trustee or other
fiduciary holding securities under an employee benefit plan of the Company),
or (ii) during any period of two consecutive years, individuals who at the
beginning of such period constitute the board of directors of the Company and
any new director whose election by the board of directors or nomination for
election by the Company's shareholders was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who either were
directors at the beginning of the period or whose election or nomination for
election was previously so approved, cease for any reason to constitute a
majority thereof, or (iii) the shareholders of the Company approve (x) a
merger or consolidation of the Company with any other entity (other than a
merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either
by remaining outstanding or by being converted into voting securities of the
surviving entity) at least 80% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately
after such merger or consolidation), (y) a plan of complete liquidation of
the Company or (z) an agreement or agreements for the sale or disposition, in
a single transaction or series of related transactions, by the Company of all
or substantially all of the property and assets of the Company.
<PAGE>
8. Purchase for Investment. Unless the offering and sale of
the Shares to be issued upon the particular exercise of the
Option shall have been effectively registered under the
Securities Act of 1933, as amended, or any successor
legislation (the "Act"), the Company shall be under no
obligation to issue the Shares covered by such exercise unless
and until the following conditions have been fulfilled.
The person(s) who exercise the Option shall represent to the Company, at
the time of such exercise, that such person(s) are acquiring such Shares for
his or her own account, for investment and not with a view to, or for sale in
connection with, the distribution of any such Shares, in which event the
person(s) acquiring such Shares shall be bound by the provisions of the
following legend which shall be endorsed upon the certificate(s) evidencing
their option Shares issued pursuant to such exercise;
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN
ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE
FEDERAL SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES
LAWS OF ANY STATE. WITHOUT SUCH REGISTRATION, SUCH SECURITIES
MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE
TRANSFERRED, EXCEPT UPON DELIVERY TO THE COMPANY OF AN OPINION
OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS
NOT REQUIRED FOR SUCH TRANSFER OR THE SUBMISSION TO THE
COMPANY OF SUCH OTHER EVIDENCE AS MAY BE SATISFACTORY TO THE
COMPANY TO THE EFFECT THAT ANY SUCH TRANSFER SHALL NOT BE IN
VIOLATION OF THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS OR ANY RULE OR REGULATION
PROMULGATED THEREUNDER."
Without limiting the generality of the foregoing, the Company may delay
issuance of the Shares until completion of any action or obtaining of any
consent, which the Company deems necessary under any applicable law
(including without limitation state securities or "blue sky" laws).
9. Non-Assignability. The Option shall not be transferable
by the Employee otherwise than by will or by the laws of
descent and distribution and shall be exercisable, during the
Employee's lifetime, only by the Employee or his or her
guardian or legal representative. The Option shall not be
assigned, pledged or hypothecated in any way (whether by
operation of law or otherwise) and shall not be subject to
execution, attachment or similar process. Any attempted
transfer, assignment, pledge, hypothecation or other
disposition of the Option or of any rights granted hereunder
contrary to the provisions of this paragraph 7, or the levy of
any attachment or similar process upon the Option or such
rights, shall be null and void.
<PAGE>
10. Notices. Any notices required or permitted by the terms
of this Agreement shall be given by personal delivery or
registered or certified mail, return receipt requested,
addressed as follows:
To the Company: 13045 Research Boulevard
Austin, Texas 78750
Attn: Mark T. Walton
To the Employee, to the
address shown below,
or to such other address or addresses of which notice in the same manner has
previously been given. Any such notice shall be deemed to have been given
when given in accordance with these provisions.
11. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS, AND NOT THE
LAWS OF CONFLICT, OF THE STATE OF TEXAS.
12. Benefit of Agreement. This Agreement shall be for the
benefit of and shall be binding upon the heirs, executors,
administrators and successors of the parties hereto.
EXECUTED as of the date set forth above.
TRAVIS BOATS & MOTORS, INC.
By: /s/ E. D. Bohls
Name: E. D. Bohls
Its: Vice Chairman
/s/ Mark T. Walton
Mark T. Walton
Address:
<PAGE>
EXHIBIT 4.5
OPTION AGREEMENT
This Option Agreement (this "Agreement") is executed to be effective as
of the 17th day of May, 1995, by and between Travis Boats & Motors, Inc. a
Texas corporation (the "Company"), and Ronnie L. Spradling, an employee of
the Company (the "Employee").
R E C I T A L S:
The Company desires to grant to the Employee an Option to purchase
shares of its Common Stock, $0.10 par value (the "Common Stock") pursuant to
the terms and conditions contained in this Agreement.
A G R E E M E N T:
The parties agree as follows:
1. Grant of Option. The Company hereby irrevocably grants
to the Employee the right and option to purchase all or any
part of an aggregate of 2200 shares of Common Stock, on the
terms and conditions and subject to all the limitations set
forth herein.
2. Purchase Price. The purchase price of the shares of
Common Stock covered by the Option (the "Shares") shall be
$112.00 per share.
3. Exercise of Option. Subject to the other terms and
conditions of this Agreement, the Option granted hereby shall
vest and become exercisable only on and after the dates set
forth below as to the number of Shares set forth opposite such
dates below:
Vesting Dates Number of Shares Vested
May 17, 1996 20%
May 17, 1997 40%
May 17, 1998 60%
May 17, 1999 80%
May 17, 2000 100%
4. Term of Option. The Option shall terminate ten years
from the date of this Agreement, but shall be subject to
earlier termination as provided herein.
If the Employee ceases to be an employee of the Company for any reason
other than death or Disability, as defined below, or termination of the
Employee, the Option may be exercised within 45 days after the date the
Employee ceases to be an employee or, if earlier, the date upon which the
Option terminates, as originally prescribed by this Agreement. In such
event, the Option shall be exercisable only to the extent that the right to
purchase shares under this Agreement has vested at the date of such cessation
of employment.
<PAGE>
In the event the Employee's employment is terminated by the Company for
"cause" (as defined below), all of the Employee's unexercised Options shall
terminate immediately.
If the Employee's employment is terminated without cause, the Options
granted pursuant to this Agreement shall immediately become fully vested and
exercisable. The termination of the Employee's employment shall not operate
to terminate this Agreement and the Employee shall have the right to exercise
the vested but unexercised portion of the Options granted hereunder at any
time during the term of this Agreement.
In the event of the Disability of the Employee, the Option shall be
exercisable within 45 days after the date of such Disability or the date upon
which the Option terminates as originally prescribed by this Agreement,
whichever is earlier. In such event, the Option shall be exercisable to the
extent that the right to purchase the Shares hereunder has accrued on the
date the Employee becomes Disabled and is in effect as of such determination
date.
In the event of the death of the Employee while an employee of the
Company or of an Affiliate, the Option, to the extent exercisable but not
exercised as of the date of death, may be exercised by the Employee's legal
representatives or any person who acquired the Employee's rights to the
Option by will or by the laws of descent and distribution. In such event,
the Option must be exercised, if at all, within one year after the date of
death of the Employee or, if earlier, the date upon which the Option
terminates, as originally prescribed by this Agreement.
The term "cause," as used in this Agreement, shall mean:
(a) The Employee's willful and repeated failure to perform his/her
duties;
(b) habitual abuse of drugs or alcohol;
(c) conviction of a felony or an unlawful act; or
(d) acts of gross disloyalty to the Company, including but not
limited to theft, embezzlement or intentional unauthorized
disclosure of confidential information.
"Disability" shall mean, as determined by the Board of Directors in the
sole discretion exercised in good faith of the Board of Directors, a physical
or mental impairment of sufficient severity that either the Optionee is
unable to continue performing the duties he performed before such impairment
or the Optionee's condition entitles him to disability benefits under any
insurance or employee benefit plan of the Company and that impairment or
condition is cited by the Company as the reason for termination of the
Optionee's employment.
"Disability"
5. Exercise of Option and Issue of Shares. The Option may
be exercised in whole or in part (to the extent that it is
exercisable in accordance with its terms) by giving written
notice to the Company, together with the tender of the Option
price. Such written notice shall be signed by the person
exercising the Option, shall state the number of Shares with
respect to which the Option is being exercised, shall contain
any representation required by paragraph 6 below and shall
<PAGE>
otherwise comply with the terms and conditions of this
Agreement. The Company shall pay all transfer or original
issue taxes with respect to the issue of the Shares pursuant
hereto and all other fees and expenses necessarily incurred by
the Company in connection herewith. Except as specifically
set forth herein, the holder acknowledges that any income or
other taxes due from him or her with respect to this Option or
the shares issuable pursuant to this Option shall be the
responsibility of the holder and that the Company may, in
accordance with the Internal Revenue Code, require the holder
to pay additional withholding taxes in respect of the amount
that is considered compensation includable in such holders'
gross income. The holder of this Option shall have rights as
a shareholder only with respect to any Shares covered by the
Option after due exercise of the Option and tender of the full
exercise price for the shares being purchased pursuant to such
exercise.
6. Adjustment of Awards and Authorized Stock. The terms of
this Agreement shall be subject to adjustment from time to
time, in accordance with the following provisions:
a. If at any time, or from time to time, the Company shall
subdivide as a whole (by reclassification, by a stock split, by the
issuance of a distribution on Common Stock payable in Common Stock, or
otherwise) the number of shares of Common Stock then outstanding into a
greater number of shares of Common Stock, then (i) the number of shares
of Common Stock (or other kind of shares or securities) that may be
acquired shall be increased proportionately, and (ii) the purchase price
for each share of Common Stock (or other kind of shares or securities)
shall be reduced proportionately, without changing the aggregate
purchase price for the shares.
b. If at any time, or from time to time, the Company shall
consolidate as a whole (by reclassification, reverse stock split, or
otherwise) the number of shares of Common Stock then outstanding into a
lesser number of shares of Common Stock, then (i) the number of shares
of Common Stock (or other kind of shares or securities) that may be
acquired shall be decreased proportionately, and (ii) the purchase price
for each share of Common Stock (or other kind of shares or securities)
shall be increased proportionately, without changing the aggregate
purchase price.
c. Adjustments made pursuant to this Section 6 shall be made by
the Company, and its determination as to what adjustments shall be made
and the extent thereof shall be final, binding, and conclusive. No
fractional interests shall be issued on account of any such adjustments.
7. Change in Control. Upon the occurrence of a Change in
Control (as defined below) of the Company, the options granted
hereunder shall immediately become fully vested and
exercisable (the total number of shares of Common Stock as to
which an Option is exercisable upon the occurrence of a Change
in Control is referred to herein as the "Total Shares"). If,
in connection with the Change in Control, other securities,
cash, or property shall be issuable or deliverable in exchange
for Common Stock, then the Employee shall be entitled to
purchase or receive (in lieu of the Total Shares that the
Employee would otherwise be entitled to purchase or receive),
the number of shares of Common Stock, other securities, cash,
or property to which that number of Total Shares would have
been entitled in connection with the Change in Control at an
aggregate exercise price equal to the purchase price that
would have been payable if that number of Total Shares had
been purchased on the exercise of the option immediately
before the consummation of the Change in Control.
<PAGE>
Nothing in this Section 7 shall impose on the Employee the obligation to
exercise any option immediately before or upon the Change of Control, or
cause the Employee to forfeit the right to exercise the option during the
remainder of the original term of this Agreement because of a Change in
Control.
A "Change in Control" shall be deemed to have occurred if (i) any
"person" (as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended) is or becomes the "beneficial owner" (as
such term is defined in Rule 13d-3 under the Act), directly or indirectly, of
securities of the Company representing 25% or more of the combined voting
power of the outstanding securities of the Company, (other than (A) a person
owning 25% or more as of the date of this Agreement, (B) a person who becomes
the owner of 25% or more by reason of the Company's acquisition of
outstanding shares of the Company's stock, (C) as a result of an initial
public offering on the Company's common stock, or (D) a trustee or other
fiduciary holding securities under an employee benefit plan of the Company),
or (ii) during any period of two consecutive years, individuals who at the
beginning of such period constitute the board of directors of the Company and
any new director whose election by the board of directors or nomination for
election by the Company's shareholders was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who either were
directors at the beginning of the period or whose election or nomination for
election was previously so approved, cease for any reason to constitute a
majority thereof, or (iii) the shareholders of the Company approve (x) a
merger or consolidation of the Company with any other entity (other than a
merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either
by remaining outstanding or by being converted into voting securities of the
surviving entity) at least 80% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately
after such merger or consolidation), (y) a plan of complete liquidation of
the Company or (z) an agreement or agreements for the sale or disposition, in
a single transaction or series of related transactions, by the Company of all
or substantially all of the property and assets of the Company.
8. Purchase for Investment. Unless the offering and sale of
the Shares to be issued upon the particular exercise of the
Option shall have been effectively registered under the
Securities Act of 1933, as amended, or any successor
legislation (the "Act"), the Company shall be under no
obligation to issue the Shares covered by such exercise unless
and until the following conditions have been fulfilled.
The person(s) who exercise the Option shall represent to the Company, at
the time of such exercise, that such person(s) are acquiring such Shares for
his or her own account, for investment and not with a view to, or for sale in
connection with, the distribution of any such Shares, in which event the
person(s) acquiring such Shares shall be bound by the provisions of the
following legend which shall be endorsed upon the certificate(s) evidencing
their option Shares issued pursuant to such exercise;
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN
ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE
FEDERAL SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES
LAWS OF ANY STATE. WITHOUT SUCH REGISTRATION, SUCH SECURITIES
MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE
TRANSFERRED, EXCEPT UPON DELIVERY TO THE COMPANY OF AN OPINION
OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS
NOT REQUIRED FOR SUCH TRANSFER OR THE SUBMISSION TO THE
COMPANY OF SUCH OTHER EVIDENCE AS MAY BE SATISFACTORY TO THE
COMPANY TO THE EFFECT THAT ANY SUCH TRANSFER SHALL NOT BE IN
VIOLATION OF THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS OR ANY RULE OR REGULATION
PROMULGATED THEREUNDER."
<PAGE>
Without limiting the generality of the foregoing, the Company may delay
issuance of the Shares until completion of any action or obtaining of any
consent, which the Company deems necessary under any applicable law
(including without limitation state securities or "blue sky" laws).
9. Non-Assignability. The Option shall not be transferable
by the Employee otherwise than by will or by the laws of
descent and distribution and shall be exercisable, during the
Employee's lifetime, only by the Employee or his or her
guardian or legal representative. The Option shall not be
assigned, pledged or hypothecated in any way (whether by
operation of law or otherwise) and shall not be subject to
execution, attachment or similar process. Any attempted
transfer, assignment, pledge, hypothecation or other
disposition of the Option or of any rights granted hereunder
contrary to the provisions of this paragraph 7, or the levy of
any attachment or similar process upon the Option or such
rights, shall be null and void.
10. Notices. Any notices required or permitted by the terms
of this Agreement shall be given by personal delivery or
registered or certified mail, return receipt requested,
addressed as follows:
To the Company: 13045 Research Boulevard
Austin, Texas 78750
Attn: Mark T. Walton
To the Employee, to the
address shown below,
or to such other address or addresses of which notice in the same manner has
previously been given. Any such notice shall be deemed to have been given
when given in accordance with these provisions.
11. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS, AND NOT THE
LAWS OF CONFLICT, OF THE STATE OF TEXAS.
12. Benefit of Agreement. This Agreement shall be for the
benefit of and shall be binding upon the heirs, executors,
administrators and successors of the parties hereto.
EXECUTED as of the date set forth above.
TRAVIS BOATS & MOTORS, INC.
By: /s/ Mark T. Walton
Mark T. Walton, President
/s/ Ronnie L. Spradling
Ronnie L. Spradling
Address:
1010 Rising Star Lane
Paron, AR 72122
<PAGE>
EXHIBIT 5.1
[LETTERHEAD OF JENKENS & GILCHRIST]
December 4, 1997
Travis Boats & Motors, Inc.
5000 Plaza on the Lake, Suite 250
Austin, Texas 78746
Ladies and Gentlemen:
We have acted as counsel to Travis Boats & Motors, Inc., a Texas
corporation (the "Company"), in connection with the registration under the
Securities Act of 1933, as amended (the "Act"), of 283,865 of the Company's
Common Stock, $.01 par value per share (the "Shares") issued or issuable
upon the exercise of options granted under the Company's 1995 Incentive
Plan, pursuant to a Registration Statement on Form S-8, as filed with the
Securities and Exchange Commission on December 8, 1997 (the
"Registration Statement").
In connection with this opinion, we have examined and are familiar
with originals or copies, certified or otherwise, of such documents and records
of the Company and such statutes, regulations and other instruments as we
have deemed necessary or advisable for the purposes of this opinion, including
(i) the Registration Statement, (ii) the Restated Articles of Incorporation of
the Company, as filed with the Secretary of State of the State of Texas and
(iii) the Bylaws of the Company.
We have assumed that all signatures on all documents presented to us
are genuine, that all documents submitted to us as originals are accurate and
complete, that all documents submitted to us as copies are true and correct
copies of the originals thereof, that all information submitted to us was
accurate and complete and that all persons executing and delivering originals
or copies of documents examined by us were competent to execute and deliver
such documents.
Based on the foregoing and having due regard for legal considerations
we deem relevant, we are of the opinion that the Shares, when sold as
described in the Registration Statement, will be legally issued, fully paid and
nonassessable.
This opinion is limited in all respects to the laws of the State of Texas
and the United States of America.
This opinion may be filed as an exhibit to the Registration Statement.
Sincerely,
JENKENS & GILCHRIST,
A Professional Corporation
By: ____/s/______________
J. Rowland Cook
For the Corporation
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-8) pertaining to the Travis Boats & Motors, Inc.
1995 Incentive Plan, Stock Option Agreement for Michael B. Perrine, Stock
Option Agreement for Ron Spradling and Stock Option Agreement for Mark T.
Walton, and to the incorporation by reference therein of our report dated Nov-
ember 25, 1996, except for Note 2 as to which the date is December 2, 1996,
with respect to the consolidated financial statements of Travis Boats & Motors,
Inc. included in its Annual Report(Form 10-K) for the year ended September 30,
1996, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Austin, Texas
December 8, 1997
