Exhibit 10.6
FOUNTAIN POWERBOAT INDUSTRIES, INC.
OPTION AGREEMENT
Dated March 17, 1995
Fountain Powerboat Industries, Inc., a Nevada
corporation (the "Company") hereby grants to Mark L. Spencer
("Holder") an Option (the "Option") to purchase 20,000 shares of
the Company's Common Stock (the "Shares") at a purchase price and
on the terms set forth herein.
1. Exercise.
a. Purchase Price. This Option, or any portion
hereof, is exercisable at a purchase price of $5.375 per
Share (the "Purchase Price").
b. Time of Exercise. Subject to Section 2(c),
this Option may be exercised in whole or in part (but not in
fractional shares) at the office of the Company, at any time or
from time to time, commencing on the date above; provided, however,
that this Option shall expire and be null and void if not exercised
in the manner herein provided at 5:00 p.m. local time, on the
earlier of (i) March 17, 2005, or (ii) two years after Termination
of Employment (the "Expiration Date"). For purposes of this
Agreement, Termination of Employment shall mean the close of business
on the day preceding the first date on which the Holder is no longer for
any reason whatsoever employed by the Company or a subsidiary of
the Company or is no longer a member of the Board of Directors of
the Company whether such termination is with or without cause,
including, but not by way of limitation, a termination by
resignation, discharge, death or retirement, but excluding
terminations where there is a simultaneous reemployment by the
Company. A leave of absence shall constitute a Termination of
Employment if, and to the extent that, such leave of absence
interrupts employment for the purposes of Section 422 (a) (2) of
the Internal Revenue Code and the then applicable Regulations and
Revenue Rulings under said Section.
c. Manner of Exercise. This Option is exercisable
at the Purchase Price, payable, in cash or by check, to the order
of the Company, subject to adjustment as provided in Section 2
hereof. Upon surrender of this Option, or a portion hereof,with the
annexed Subscription Form duly executed, together with payment of
the Purchase Price for the Shares purchased (and any applicable
transfer taxes) at the Company's principal executive offices, the
Holder shall be entitled to receive a certificate or certificates
for the Shares so purchased.
d. Delivery of Stock Certificates. As soon as
practicable, but not exceeding 30 days, after complete or partial
exercise of this Option, the Company, at its expense, shall cause
to be issued in the name of the Holder (or upon payment by the
Holder of any applicable transfer taxes, the Holder's assigns) a
certificate or certificates for the number of fully paid and
non-assessable Shares to which the Holder shall be entitled upon
such exercise, together with such other stock or securities or
property or combination thereof to which the Holder shall be
entitled upon such exercise, determined in accordance with Section
2 hereof.
e. Record Date of Issuance of Shares. Irrespective
of the date of issuance and delivery of certificates for any
stock or securities issuable upon the exercise of this Option,
or any portion hereof, each person (including a corporation
or partnership) in whose name any such certificate is to be issued
shall for all purposes be deemed to have become the holder of
record of the stock or other securities represented thereby
immediately prior to the close of business on the date on which a
duly executed Subscription Form containing notice of exercise of
this Option, or any portion hereof, and payment of the Purchase
Price is received by the Company.
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2. Adjustments.
a. Adjustment for Subdivisions, Combination or
Dividends. In case the Company shall, at any time or from
time to time, subdivide or combine the outstanding shares of Common
Stock or declare a dividend payable in Common Stock, the exercise
price of this Option in effect immediately prior to the
subdivision, combination or record date for such dividend payable
in Common Stock shall forthwith be proportionately increased, in
the case of combination, or decreased, in the case of subdivision
or dividend payable in Common Stock, and each share of Common Stock
purchasable upon exercise of the Option shall be changed to the
number determined by dividing the then current exercise price by
the exercise price as adjusted after the subdivision, combination
or dividend payable in Common Stock.
b. Adjustment for Certain Dividends and Distributions.
In the event the Company, at any time or from time to time, makes or
fixes a record date for the determination of holders of Common
Stock, entitled to receive a dividend or other distribution
payable in securities of the Company, other than shares of Common
Stock, then and in each such event provisions shall be made so
that the Holder shall receive upon exercise of the Option, or any
portion hereof, in addition to the number of shares of Common
Stock receivable thereupon, the amount of securities of the
Company which the Holder would have received had its Option, or
any portion hereof, been exercised into Common Stock on the date
of such event and had it thereafter, during the period from the
date of such event to and including the date of exercise,
retained such securities receivable by it as aforesaid during
such period, subject to all other adjustments called for during
such period under this Section 2 with respect to the rights of
the Holder of the Option.
c. Adjustment for Reclassification, Exchange and
Substitution. If the Common Stock issuable upon the exercise of
the Option, or any portion hereof, is changed into the same or
different number of shares of any class or classes of stock,
whether by recapitalization, reclassification or otherwise (other
than a subdivision or combination of shares or stock dividend
or a reorganization, merger, consolidation or sale of assets,
provided for elsewhere in this Section 2), then and in any such event
the, Holder shall have the right thereafter, upon exercise of the
Option, or any portion hereof, to receive the kind and amount of
stock and other securities and property receivable upon such
recapitalization, reclassification or other change, in an amount
equal to the amount that the Holder would have been entitled to
had the Holder exercised the Option, or any portion hereof,
immediately prior to such recapitalization, reclassification or
other change, but only to the extent the Option, or any portion
hereof, is actually exercised, all subject to further adjustment
as provided herein.
d. Reorganizations, Mergers, Consolidations or
Sales of Assets. If at any time or from time to time there
is a capital reorganization of the Common Stock (other than a
subdivision, combination, recapitalization, reclassification or
exchange of the Common Stock provided for elsewhere in this Section
2) or merger or consolidation of the Company with or into another
corporation, or a sale of all or substantially all of the
Company's properties and assets to any person then, as a part of
such reorganization, merger, consolidation or sale, provision
shall be made so that the Holder shall thereafter be entitled to
receive, upon exercise of the Option, or any portion hereof, (and
only to the extent the Option is exercised), the number of shares
of stock or other securities or property of the Company, or of
the successor corporation resulting from such merger or
consolidation or sale, to which a holder of Common Stock, or
other securities, deliverable upon the exercise of this Option,
or any portion hereof, would otherwise have been entitled on such
capital reorganization, merger, consolidation, or sale.
3. Restriction on Transfer.
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a. The Holder, by its acceptance hereof, represents,
warrants, covenants and agrees that (i) the Holder's knowledge
of the business and affairs of the Company, and (ii) this Option and
the Shares issuable upon the exercise of this Option, or any portion
hereof, are being acquired for investment and not with a view to
the distribution hereof, and that absent an effective
registration statement under the Securities Act of 1933 ("Act"),
covering the disposition of this Option, or any portion hereof,
or the Shares issued or issuable upon exercise of this Option, or
any portion hereof, they will not be sold, transferred, assigned,
hypothecated or otherwise disposed of without first providing the
Company with an opinion of counsel (which may be counsel for the
Company) or other evidence, reasonably acceptable to the Company,
to the effect that such sale, transfer, assignment, hypothecation
or other disposal will be exempt from the registration and
prospectus delivery requirements of the Act. The Holder consents
to the making of a notation in the Company's records or giving to
any transfer agent of the Option or the Shares an order to
implement such restriction on transferability.
This Option and the Shares issuable upon the exercise
of this Option, or any portion hereof, shall bear the following
legend or a legend of similar import, provided, however, that
such legend shall be removed, or not placed upon the Option or
the certificate or other instrument representing the Shares, as
the case may be, if such legend is no longer necessary to assure
compliance with the Act:
THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE
UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE BECAUSE THEY ARE BELIEVED TO
BE EXEMPT FROM REGISTRATION UNDER SECTION 4(2) OF THE ACT. THE
SECURITIES ARE "RESTRICTED" AND MAY NOT BE RESOLD OR TRANSFERRED
EXCEPT AS PERMITTED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.
b. The Company agrees to register the Shares under
the Act on Form S-8 or other applicable registration form, at the
Company's cost and expense (excluding the costs of legal counsel
to the Holder).
4. Payment of Taxes. All shares issued upon the exercise of
this Option, or any portion hereof, shall be validly issued,
fully paid and non-assessable and the Company shall pay all taxes
and other governmental charges (other than income tax) that may
be imposed in respect of the issue or delivery thereof. The
Company shall not be required, however, to pay any tax or other
charge imposed in connection with any transfer involved in the
issue of any certificate for Shares in any name other than that
of the Holder surrendered in connection with the purchase of such
Shares, and in such case, the Company shall not be required to
issue or deliver any stock certificate until such tax or other
charge has been paid or it has been established to the Company's
satisfaction that no tax or other charge is due.
5. Reservation of Common Stock. The Company shall at
all times reserve and keep available out of its authorized but
unissued shares of Common Stock, solely for the purpose of issuance
upon the exercise of this Option, or any portion hereof, such number
of shares of Common Stock as shall be issuable upon the exercise
hereof. The Company covenants and agrees that, upon exercise of
this Option, or any portion hereof, and payment of the Purchase
Price thereof, all shares of Common Stock issuable upon such
exercise shall be duly and validly issued, fully paid and non-
assessable.
6. Notices to Holder. Nothing contained in this Option
shall be construed as conferring upon the Holder hereof the right
to vote or to consent or to receive notice as a shareholder in
respect of any meetings of shareholders for the election of
directors or any other matter or as having any rights whatsoever
as a shareholder of the Company. All notices, requests, consents
and other communications hereunder shall be in writing and shall
be deemed to have been duly made when delivered or mailed by
registered or certified mail, postage prepaid, return receipt
requested:
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a. If to the Holder, to the address of such Holder
as shown on the books of the Company; or
b. If to the Company, to Fountain Powerboat
Industries, Inc., Whichard's Beach Road, P.O. Box 457, Washington,
NC 27889.
7. Replacement of Option. Upon receipt of evidence
reasonably satisfactory to the Company of the ownership of and
the loss, theft, destruction or mutilation of this Option and
(in case of loss, theft or destruction) upon delivery of
an indemnity agreement in an amount reasonably satisfactory to
the Company, or (in the case of mutilation) upon surrender and
cancellation of the mutilated Option, the Company will execute
and deliver, in lieu thereof, a new Option of like tenor.
8. Successors. All the covenants, agreements,
representations and warranties contained in this Option shall
bind the parties hereto and their respective heirs, executors,
administrators, distributees, successors and assigns.
9. Change; Waiver. Neither this Option nor any term
hereof may be changed, waived, discharged or terminated orally
but only by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge or
termination is sought.
10. Headings. The section headings in this Option are
inserted for purposes of convenience only and shall have no substantive
effect.
11. Law Governing. This Option shall for all purposes be
construed and enforced in accordance with, and governed by, the
internal laws of the State of Nevada, without giving effect to
principles of conflict of laws.
IN WITNESS WHEREOF, the Company has caused this Option
to be signed by its duly authorized officer and this Option to be
dated as of the date first above written.
FOUNTAIN POWERBOAT INDUSTRIES, INC.
/s/ R. M. Fountain, Jr.
R. M. Fountain, Jr.
Chairman, President, Chief
Executive Officer, and
Chief Operating Officer
Attest:
/s/ Carol J. Price
Carol J. Price
Assistant Secretary
CORPORATE SEAL
OPTIONEE
/s/ Mark L. Spencer
Mark L. Spencer
EXHIBIT A
SUBSCRIPTION FORM
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(To be Executed by the Holder
in order to Exercise this Option)
The undersigned hereby irrevocably elects to exercise the
right to purchase of the
Shares covered by this Option, according to the conditions hereof
and herewith makes payment of the Purchase Price of such Shares
in full.
___________________________________
Signature
___________________________________
Name
Address:
___________________________________
___________________________________
Dated: ,
