SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant (X)
Filed by a Party other than the Registrant ( )
Check the appropriate box:
( ) Preliminary Proxy Statement ( ) Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
(X) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
FOUNTAIN POWERBOAT INDUSTRIES, INC.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
(X) No fee required
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
( ) Fee paid previously with preliminary materials.
( ) Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule, or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
FOUNTAIN POWERBOAT INDUSTRIES, INC.
POST OFFICE DRAWER 457
1653 WHICHARD'S BEACH ROAD
WASHINGTON, NORTH CAROLINA 27889
----------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
----------------------------------------
NOTICE is hereby given that the Annual Meeting of Shareholders of
Fountain Powerboat Industries, Inc. (the "Company") will be held at the Hilton
Inn located at 207 S.W. Greenville Boulevard in Greenville, North Carolina, at
10:00 a.m. on Tuesday, April 4, 2000. The purposes of the meeting are as
follows:
1. ELECTION OF DIRECTORS. To elect eight directors of the Company for
terms of one year or until their respective successors are duly elected
and qualified;
2. PROPOSAL TO RATIFY APPOINTMENT OF INDEPENDENT ACCOUNTANTS. To consider
and vote on a proposal to ratify the appointment of Pritchett, Siler &
Hardy, P.A. as the Company's independent public accountants for fiscal
2000; and,
3. OTHER BUSINESS. To transact any other business properly presented for
action by shareholders at the Annual Meeting.
YOU ARE INVITED TO ATTEND THE ANNUAL MEETING IN PERSON. HOWEVER, TO
ENSURE THE PRESENCE OF A QUORUM, ALL SHAREHOLDERS, EVEN IF THEY PLAN TO ATTEND,
ARE REQUESTED TO COMPLETE, SIGN AND DATE THE ENCLOSED APPOINTMENT OF PROXY AND
RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. RETURNING A SIGNED APPOINTMENT OF
PROXY WILL NOT AFFECT YOUR RIGHT TO REVOKE IT OR TO ATTEND THE ANNUAL MEETING
AND VOTE IN PERSON.
BY ORDER OF THE BOARD OF DIRECTORS
BLANCHE C. WILLIAMS
SECRETARY
MARCH 13, 2000
<PAGE>
FOUNTAIN POWERBOAT INDUSTRIES, INC.
1653 WHICHARD'S BEACH ROAD
WASHINGTON, NORTH CAROLINA 27889
----------------------------------------
PROXY STATEMENT
----------------------------------------
ANNUAL MEETING OF SHAREHOLDERS
GENERAL
This Proxy Statement is being furnished in connection with the
solicitation by the Board of Directors of Fountain Powerboat Industries, Inc.
(the "Company") of appointments of proxy in the enclosed form for use at the
annual meeting of the Company's shareholders (the "Annual Meeting") to be held
on Tuesday, April 4, 2000, at 10:00 a.m. local time, and at any adjournments
thereof. The Annual Meeting will be held at the Hilton Inn located at 207 S.W.
Greenville Boulevard in Greenville, North Carolina. This Proxy Statement is
being mailed to the Company's shareholders on or about March 13, 2000.
ACTION TO BE TAKEN AT ANNUAL MEETING
At the Annual Meeting, the Company's shareholders will elect eight
directors for terms of one year (see "Proposal 1: Election of Directors") and
vote on a proposal to ratify the appointment of the Company's independent public
accountants for fiscal 2000 (see "Proposal 2: Ratification of Appointment of
Independent Accountants"). Shareholders also may consider such other business as
may properly be presented for action at the Annual Meeting.
APPOINTMENT AND VOTING OF PROXIES
Persons named in the enclosed appointment of proxy to represent
shareholders as proxies at the Annual Meeting (the "Proxies") are Joseph F.
Schemenauer, Carol J. Price and Blanche C. Williams. Shares represented by each
appointment of proxy which is properly executed and returned, and not revoked,
will be voted by the Proxies in accordance with the directions contained
therein. If no directions are given, those shares will be voted by the Proxies
"FOR" the election of each of the nominees for director named in Proposal 1, and
"FOR" Proposal 2. On any other matters that may properly be presented for action
at the Annual Meeting, the Proxies will be authorized to vote in accordance with
their best judgment. If, at or before the time of the Annual Meeting, any
nominee named in Proposal 1 has become unable or unwilling to serve as a
director for any reason, the Proxies will be authorized to vote for a substitute
named by the Board of Directors.
REVOCATION OF APPOINTMENT OF PROXY
A shareholder who signs an appointment of proxy may revoke it at any
time before it is exercised by filing with the Secretary of the Company either
an instrument revoking it or a duly executed appointment of proxy bearing a
later date, or by attending the Annual Meeting and announcing his or her
intention to vote in person.
<PAGE>
EXPENSES AND METHOD OF SOLICITATION
The Company will pay all costs of the solicitation of appointments of
proxy for the Annual Meeting, including costs of preparing, assembling and
mailing this Proxy Statement. In addition to solicitation by mail, appointments
of proxy may be solicited personally or by telephone by directors, officers and
employees of the Company and Fountain.
RECORD DATE
The close of business on March 7, 2000, has been fixed as the record
date (the "Record Date") for the determination of shareholders entitled to
notice of and to vote at the Annual Meeting. Only shareholders of record on the
Record Date will be eligible to vote on the matters presented for action at the
Annual Meeting.
VOTING SECURITIES
The Company's voting securities are the shares of its common stock,
$.01 par value per share, of which 4,732,608 shares were outstanding on the
Record Date. Fountain holds 15,000 shares of the Company's common stock which
are treated as treasury shares and are not entitled to be voted at the Annual
Meeting. Otherwise, each shareholder will be entitled to one vote for each share
held of record on the Record Date on each director to be elected and on each
other matter submitted for voting.
VOTING PROCEDURES; VOTES REQUIRED FOR APPROVAL
In the election of directors, the eight nominees receiving the highest
numbers of votes will be elected. To approve Proposal 2, the votes cast in favor
of the proposal must exceed the votes cast in opposition. So long as a quorum is
present at the Annual Meeting, abstentions and broker non-votes will have no
effect in the election of directors or in the voting on Proposal 2. Shareholders
may not vote cumulatively in the election of directors.
BENEFICIAL OWNERSHIP OF SECURITIES
PRINCIPAL SHAREHOLDERS. As of the Record Date, the shareholders
identified in the following table beneficially owned more than 5% of the
Company's common stock.
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE OF PERCENT
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS (1)
- --------------------------------------------- ------------------------ ------------
<S> <C> <C>
Reginald M. Fountain, Jr.
P.O. Drawer 457
Washington, North Carolina 27889......................... 2,588,872 (2) 49.81%
Triglova Finanz, A.G.
Edificio Torre Swiss Bank
Piso 16, Apartado Postal 1824
Panama 1, Republica de Panama............................ 266,500 5.65%
</TABLE>
- ----------
(1) Percentages are calculated based on 4,732,608 total outstanding shares,
minus 15,000 shares held by Fountain, plus, in the case of Mr.
Fountain, 480,000 additional shares he could purchase upon the exercise
of stock options he currently holds.
(2) Includes 480,000 shares which could be purchased by Mr. Fountain from
the Company upon the exercise of stock options and as to which shares
he may be deemed to have sole investment power only.
2
<PAGE>
MANAGEMENT OWNERSHIP. As of the Record Date, the beneficial ownership
of the Company's common stock by current directors, nominees for election as
directors and certain executive officers, individually, and by all current
directors and executive officers of the Company as a group, was as follows:
<TABLE>
<CAPTION>
NAME OF AMOUNT AND NATURE OF PERCENT
BENEFICIAL OWNER BENEFICIAL OWNERSHIP (1) OF CLASS (2)
- -------------------------------------------- ------------------------ ------------
<S> <C> <C>
Reginald M. Fountain, Jr.............................. 2,588,872 (3) 49.81%
Darryl M. Diamond, M.D................................ -0- --
George L. Deichmann III............................... 5,000 *
Craig F. Goess........................................ -0- --
Guy C. Hecker, Jr..................................... -0- --
Federico Pignatelli................................... 30,000 *
Anthony J. Romersa................................... 20,000 (4) *
Mark L. Spencer....................................... 33,525 (5) *
All current directors and executive
officers as a group (9 persons).................. 2,678,197 (6) 51.09%
</TABLE>
- ----------
(1) Except as otherwise noted below, the named individuals and persons
included in the group exercise sole voting and investment power with
respect to all shares shown as beneficially owned.
(2) Percentages are calculated based on 4,732,608 total outstanding shares,
minus 15,000 shares held by Fountain, plus, in the case of each
individual and the group, the number of additional shares that could be
purchased by that individual (if any) or by persons included in the
group upon the exercise of stock options. An asterisk indicates less
than 1.0%.
(3) Includes 480,000 shares which could be purchased by Mr. Fountain from
the Company upon the exercise of stock options and with respect to
which shares he may be deemed to have sole investment power only.
(4) Includes 15,000 shares which could be purchased by Mr. Romersa from the
Company upon the exercise of stock options and with respect to which
shares he may be deemed to have sole investment power only. Mr. Romersa
holds options to purchase 15,000 additional shares which have not yet
become exercisable.
(5) Includes 30,000 shares which could be purchased by Mr. Spencer from the
Company upon the exercise of stock options and with respect to which
shares he may be deemed to have sole investment power only.
(6) Includes an aggregate of 525,000 shares which could be purchased by
persons included in the group from the Company upon the exercise of
stock options and as to which shares such persons may be deemed to have
sole investment power only.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Company's directors and executive officers are required by Federal
law to file reports with the Securities and Exchange Commission regarding the
amount of and changes in their beneficial ownership of the Company's common
stock. Based on its review of copies of those reports, the Company's proxy
statement each year is required to disclose failures to report shares
beneficially owned or changes in such beneficial ownership or to timely file
required reports. Based solely on its review of reports filed by its directors
and executive officers, the Company is not aware of any failures to file
required reports during fiscal 1999.
3
<PAGE>
PROPOSAL 1: ELECTION OF DIRECTORS
The Company's Bylaws provide for a Board of Directors composed of not
less than three nor more than 25 members and authorize the Board of Directors to
set and change the number of directors from time to time within those limits.
Directors are elected each year at the Annual Meeting for terms of one year or
until their respective successors have been elected and have qualified.
The Board of Directors currently consists of seven members whose terms
will expire at the Annual Meeting. The Board has set the number of the Company's
directors at eight for the year following the Annual Meeting and has nominated
the eight persons named below for election at the Annual Meeting as directors of
the Company for one-year terms. Seven of the nominees currently serve as
directors and have been nominated for reelection.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
POSITION(S) WITH THE FIRST PRINCIPAL OCCUPATION AND
NAME AND AGE COMPANY AND FOUNTAIN ELECTED (1) BUSINESS EXPERIENCE
- ------------------------------ -------------------- ----------- --------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Reginald M. Fountain, Jr. Chairman, President and 1986 Officer of the Company and Fountain
(59) Chief Executive Officer
- ------------------------------------------------------------------------------------------------------------------------------------
Darryl M. Diamond, M.D. Director 1998 Retired physician, Los Angeles, CA.
(63)
- ------------------------------------------------------------------------------------------------------------------------------------
George L. Deichmann III Director 1998 Owner and President of Trent Olds-Cadillac-
(55) Buick-Pontiac-GMC Trucks, Inc. (auto dealership), New
Bern, NC
- ------------------------------------------------------------------------------------------------------------------------------------
Craig F. Goess Director 1998 President and General Manager of Greenville Toyota,
(45) Inc. and Auto Truck Center of Greenville, Inc. (auto
dealerships), Greenville, NC
- ------------------------------------------------------------------------------------------------------------------------------------
Guy C. Hecker, Jr. (2) New nominee --- President, Stafford, Burke & Hecker, Inc.,
(67) Alexandria, VA (high technology consultants)
- ------------------------------------------------------------------------------------------------------------------------------------
Federico Pignatelli (3) Director 1992 President of Eurocapital Partners, Ltd. (investment
(47) banking firm)
- ------------------------------------------------------------------------------------------------------------------------------------
Anthony J. Romersa Executive Vice President and 1999 Officer of the Company and Fountain since
(54) Chief Operating Officer August 1998; previously served as Director of
Planning - Marine Operations for Brunswick
Corp., Lake Forest, IL (1986-1998)
- ------------------------------------------------------------------------------------------------------------------------------------
Mark L. Spencer Director 1992 Owner of Spencer Communications (advertising and
(44) public relations firm), Montrose, CA; from 1976-1987,
employed by Powerboat Magazine, serving as Executive
Editor from 1981-1987; commentator for ESPN covering
the boating industry since 1985
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The term "First elected" refers to the year in which each individual
first became a director of the Company. Dr. Diamond previously served
as a director of the Company from 1989 through 1990.
(2) Mr. Hecker also serves as a director of 8X8, Inc., a public company
headquartered in Santa Clara, CA, which develops, manufactures and
markets telecommunications equipment.
(3) Mr. Pignatelli also serves as Chairman of BioLase Technologies, Inc., a
public company headquartered in San Clemente, CA, which designs,
develops, manufactures and markets laser-based systems for medical and
dental applications. He was first elected as a director of the Company
during 1992 pursuant to an agreement (made in connection with a private
placement of shares of the Company's common stock) to allow Eurocapital
Partners, Ltd. to designate one member of the Board of Directors.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" EACH OF
THE NOMINEES NAMED ABOVE. IN THE ELECTION OF DIRECTORS, THE EIGHT NOMINEES
RECEIVING THE HIGHEST NUMBERS OF VOTES WILL BE ELECTED.
4
<PAGE>
DIRECTOR COMPENSATION
The Company's directors currently do not receive any fees or other
compensation for their services as directors, but they are reimbursed for travel
and other out-of-pocket expenses incurred in connection with their attendance at
meetings of the Board of Directors.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Company's Board of Directors met two times during fiscal 1999. Each
director attended 75% or more of the aggregate number of meetings of the Board
of Directors and any committees on which he served.
The Company's Board of Directors has appointed an Audit Committee, the
current members of which are Messrs. Goess, Deichman, Diamond and Pignatelli.
However, the committee did not meet separate from the full Board of Directors
during fiscal 1999. The Company does not have a standing nominating committee.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company's executive officers are compensated by Fountain for their
services as its officers, and, with the exception of stock options, they receive
no separate or additional compensation from the Company. Fountain's full Board
of Directors considers and takes action on matters pertaining to the
compensation of executive officers, and neither Fountain nor the Company has a
standing compensation committee. During fiscal 1999, Reginald M. Fountain, Jr.,
who serves as Chairman, President and Chief Executive Officer of Fountain and
the Company, and Anthony J. Romersa, who serves as Executive Vice President and
Chief Operating Officer of Fountain and the Company, participated in
deliberations of Fountain's Board of Directors pertaining to executive
compensation, but each officer abstained from participation in deliberations
regarding his own compensation.
Mark L. Spencer, a director of the Company, is President and sole
shareholder of Spencer Communications which has been retained by Fountain to
provide it with advertising and public relations services. Pursuant to their
arrangement, Fountain pays $12,000 per month for the services of Mr. Spencer's
company, together with additional amounts for printing and production costs and
other associated expenses. During fiscal 1999, the aggregate amount paid by
Fountain to Mr. Spencer's company was $478,576.
BOARD REPORT ON EXECUTIVE COMPENSATION
Fountain's goal is to provide an executive compensation program that
will enable it to attract and retain qualified and motivated individuals as
executive officers. Currently, Fountain's and the Company's executive
compensation program includes: (i) base salary, (ii) cash bonuses to selected
executive officers, (iii) stock options to selected executive officers, and (iv)
contributions to the individual accounts of all participating employees
(including executive officers) under Fountain's Section 401(k) plan. In
addition, Fountain provides other employee benefit and welfare plans customary
for companies of its size.
Base salary paid by Fountain to its and the Company's President and
Chief Executive Officer, Reginald M. Fountain, Jr., is set by Fountain's Board
of Directors from time to time based on its evaluation of Mr. Fountain's
individual level of responsibility and performance and, in particular, his
historical importance and current leadership and direction in the development
and growth of both Fountain and the Company. For fiscal 1999, Mr. Fountain's
$350,000 base salary was unchanged from the amounts paid in fiscal 1998 and
1997. Mr. Romersa was first employed by Fountain during fiscal 1999, and his
starting annual salary of $160,000, as well as the grant to him of an option to
purchase 30,000 shares of the Company's common stock, was negotiated as part of
his employment agreement prior to the time of his employment. Pursuant to their
employment agreements, Mr. Fountain and Mr. Romersa also may receive cash
bonuses each year based on Fountain's and the Company's financial performance.
Mr. Fountain's agreement provides that his bonus shall equal to 5% of the
Company's consolidated net income (calculated after deductions of profit sharing
contributions but before deductions for income taxes), but not more than
5
<PAGE>
$250,000. Mr. Romersa's agreement provides that his bonus shall equal 1% of
Fountain's net profits before taxes and before the deduction of bonuses paid to
other officers. Neither Mr. Fountain nor Mr. Romersa received a cash bonus for
fiscal 1999.
The salaries and cash bonuses of Fountain's and the Company's other
executive officers are determined by Messrs. Fountain and Romersa based on their
judgment of the levels of responsibility, qualifications, experience and
performance of the individual officers, as well as the Company's size,
complexity, growth and financial performance. The amounts of contributions to
the separate accounts of executive officers under Fountain's 401(k) plan are
determined solely by the terms of that plan.
Except as described above with respect to Mr. Fountain's and Mr.
Romersa's cash bonuses, the performance review process and, thus, the setting of
salaries and the awarding of cash bonuses, largely are subjective and there are
no specific formulae, objective criteria, or other such mechanism by which the
salary of, or the amount of the cash bonus paid to, any executive officer,
including Mr. Fountain, are tied empirically to his individual performance or to
the Company's financial performance.
Section 162(m) of the Internal Revenue Code of 1986, as amended, limits
the deductibility of annual compensation in excess of $1,000,000 paid to certain
executive officers of public corporations. As none of Fountain's and the
Company's executive officers receive annual compensation approaching that
amount, Fountain's Board of Directors has not yet adopted a policy with respect
to Section 162(m).
THE BOARD OF DIRECTORS:
REGINALD M. FOUNTAIN, JR. GEORGE L. DEICHMANN III ANTHONY J. ROMERSA
DARRYL M. DIAMOND, M.D. CRAIG F. GOESS MARK L. SPENCER
FEDERICO PIGNATELLI
EXECUTIVE OFFICERS
REGINALD M. FOUNTAIN, JR., age 59, currently serves as Chairman,
President and Chief Executive Officer of the Company and Fountain. He founded
Fountain during 1979 and became Chief Executive Officer of the Company upon its
acquisition of Fountain during 1986.
ANTHONY J. ROMERSA, age 54, was appointed as Executive Vice President
and Chief Operating Officer of the Company and Fountain during August 1998. He
has over 20 years of experience in the boating industry and, prior to joining
the Company, had served as Director of Planning -- Marine Operations with
Brunswick Corp. since 1986.
JOSEPH F. SCHEMENAUER, age 54, was appointed Vice President -- Finance
and Chief Financial Officer of the Company and Fountain during September 1997.
Previously, he had been employed as Chief Financial Officer of Luhrs Corporation
since 1995. From 1991 through 1995, he was a principal shareholder and served as
Chief Financial Officer of G&S Technology, Inc., a resin formulation company. He
has over 20 years of experience in a financial capacity in the boating industry,
having also been employed by Great American Yachts, the Wellcraft Marine and
Triumph Yachts Divisions of Genmar Industries, Inc., Donzi Marine Corporation,
and Chris Craft Corporation (and its successors, Murray Chris Craft Sportboats,
Inc. and Murray Chris Craft Cruisers, Inc.).
BLANCHE C. WILLIAMS, age 66, has served as Secretary and Treasurer of
the Company since August 1986 and has held the same positions with Fountain
since it was formed during 1979. She also serves as Executive Assistant to the
President.
6
<PAGE>
EXECUTIVE COMPENSATION
The following table contains information regarding cash and certain
other compensation paid to or deferred by certain of the Company's and
Fountain's executive officers for the fiscal years listed. The Company's
executive officers also serve and are compensated as officers and employees of
Fountain, and no additional compensation is paid to any officer for his or her
service as an officer of the Company.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
- --------------------------------------------------------------------------------------------------------------------------------
ANNUAL COMPENSATION LONG TERM COMPENSATION
-------------------------------------- ---------------------------
RESTRICTED SECURITIES
OTHER ANNUAL STOCK UNDERLYING ALL OTHER
NAME AND FISCAL SALARY BONUS COMPENSATION AWARDS OPTIONS COMPENSATION
PRINCIPAL POSITION YEAR ($) (1) ($) ($)(2) ($) (#) ($)
- --------------------------- ------ ---------- ---------- -------------- ---------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Reginald M. Fountain (3) 1999 350,000 -0- -0- -0- -0- -0-
President and Chief
Executive Officer 1998 350,000 192,023 -0- -0- -0- -0-
1997 350,000 78,519 -0- -0- -0- -0-
Anthony J. Romersa (4) 1999 131,731 -0- -0- -0- 30,000 $1,477 (5)
Executive Vice President
and Chief Operating 1998 - - -- -- -- --
Officer
1997 - - -- -- -- --
</TABLE>
(1) Includes amounts deferred at Mr. Romersa's election pursuant to
Fountain's Section 401(k) plan. Mr. Fountain does not participate in
that plan.
(2) In addition to compensation paid in cash, Fountain's executive officers
receive certain personal benefits. The value of such benefits received
by each executive officer each year did not exceed 10% of his cash
compensation for that year.
(3) Mr. Fountain is employed as an officer of Fountain pursuant to an
employment agreement entered into during 1989 which provides for a base
term of one year and for automatic renewal at the end of each year for
an additional one-year period until terminated as provided therein.
Pursuant to the agreement, Mr. Fountain receives base salary in an
amount approved by the Board of Directors (but not less than $104,000),
an annual cash bonus in an amount equal to 5% of the Company's
consolidated net income (calculated after deductions of profit sharing
contributions but before deductions for income taxes, but not more than
$250,000), and certain other benefits.
(4) Mr. Romersa is employed as an officer of Fountain pursuant to an
employment agreement entered into during 1998 which provides for a term
ending August 23, 2001. Pursuant to the agreement, Mr. Romersa receives
base salary in an amount approved by the Board of Directors (but not
less than $160,000), an annual cash bonus equal to 1% of Fountain's net
profits before taxes and before the deduction of bonuses paid to other
officers, and certain other benefits. In the event (i) Mr. Romersa's
employment is terminated within 24 months following a "change in
control" (as defined in the agreement) of the Company or Fountain
(other than a termination for "Cause," retirement, death or
disability), or (ii) following any Change in Control, and without his
consent, Mr. Romersa's job location is transferred an unreasonable
distance from Washington, NC, he is not paid salary or bonus at the
rates described in the agreement, other employee benefits are reduced
or eliminated in a manner that does not apply proportionately to all
salaried employees, or he is assigned duties inconsistent with his
position, duties or status at the time of the Change in Control, then
he will be entitled to receive (or, in the case of (ii), he may
terminate his own employment and be entitled to receive) from Fountain
all compensation he would have been entitled to receive under the
agreement and which then remains unpaid (not to exceed the amount of
his then current base salary for two years). The agreement may be
terminated by Fountain for "Cause" (as defined in the agreement).
(5) Consists of Fountain's contributions to the Section 401(k) plan for Mr.
Romersa's account.
7
<PAGE>
STOCK OPTIONS
The following table contains information regarding options to purchase
shares of the Company's common stock which were granted during fiscal 1999 to
the Company's executive officers named in the Summary Compensation Table above.
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
- --------------------------------------------------------------------------------------------------------------------------
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
PRICE APPRECIATION
INDIVIDUAL FOR OPTION
GRANTS TERM
- ------------------------------------------------------------------------------------------- ------------------------------
NO. OF SECURITIES % OF TOTAL
UNDERLYING OPTIONS GRANTED EXERCISE OR
OPTIONS GRANTED TO EMPLOYEES BASE PRICE EXPIRATION
NAME (#) (1) IN FISCAL YEAR ($/SHARE) (1) DATE 5% ($) (2) 10% ($) (2)
- ---------------------- ----------------- --------------- ------------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Anthony J. Romersa 30,000 100% $5.00 01/11/04 $41,442 $91,590
- ----------------------- ------------------ ------------------ --------------- ------------- -------------- --------------
</TABLE>
(1) The option becomes exercisable as to 5,000 of the covered shares each
calendar quarter-end, beginning June 30, 1999. On June 30, 1999, the
option had become exercisable as to 5,000 shares and, at January 31,
2000, had become exercisable as to 15,000 shares.
(2) Calculated based on the indicated rate of stock price appreciation for
the full term of the option and with no partial exercise prior to the
expiration date.
The following table contains information regarding all options to
purchase shares of the Company's common stock held at June 30, 1999, by the
Company's executive officers named in the Summary Compensation Table above.
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUES
- ----------------------------------------------------------------------------------------------------------------------------
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT FY-END AT FY-END
------------------------------- ------------------------------------
SHARES
ACQUIRED VALUE
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Reginald M. Fountain, Jr. (1) -- 480,000 (2) -0- $20,550 (4) --
Anthony J. Romersa (1) -- 5,000 (3) 25,000 (3) -0- (5) $ -0- (5)
</TABLE>
- ----------
(1) No options were exercised during fiscal 1999.
(2) Includes options to purchase 30,000 shares at a price of $3.94 per share
which expire on March 17, 2000, and options to purchase 450,000 shares at
a price of $4.67 per share which expire on August 4, 2005. Numbers of
shares and exercise prices have been restated to give effect to the
three-for-two stock split effected during August 1997.
(3) Includes options to purchase an aggregate of 30,000 shares at a price of
$5.00 per share which become exercisable as to 5,000 shares each calendar
quarter-end, beginning June 30, 1999, and, which expire on January 11,
2004. At January 31, 2000, the options had become exercisable as to an
aggregate of 15,000 shares.
(4) Reflects the difference between the aggregate exercise price of the
options and the higher aggregate market value of the underlying shares on
June 30, 1999 (based on the $4.625 closing sale price of the Company's
common stock on the Nasdaq National Market on June 30, 1999). The options
had no value on January 31, 2000, since, on that date, the aggregate
exercise price of the options exceeded the aggregate market value of the
underlying shares (based on the $3.375 closing sale price of the
Company's common stock on that date).
(5) At June 30, 1999, and at January 31, 2000, the options had no value
since, on each of those dates, the aggregate exercise price of the
options exceeded the aggregate market value of the underlying shares
(based on the closing sale prices of the underlying shares on those
dates).
8
<PAGE>
PERFORMANCE GRAPH
The following line graphs compare the cumulative total shareholder
return (the "CTSR") on the Company's common stock during the previous five
fiscal years with the CTSR over the same measurement period of the S&P 500 index
and the S&P Leisure Time (Products) index. Each line graph assumes $100 invested
on June 30, 1994, and that dividends were reinvested in additional shares.
However, since the Company has not paid dividends on its common stock during the
previous five years, no reinvestment is included in calculation of the CTSR on
the Company's common stock. Accumulated returns are indicated through June 30,
1999.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG THE COMPANY'S COMMON STOCK, THE S&P 500 INDEX,
AND THE S&P LEISURE TIME (PRODUCTS) INDEX
(The performance graph appears here. The following table shows the plot points.)
*S&P LEISURE TIME
FISCAL YEAR |X| THE COMPANY o S&P 500 INDEX (PRODUCTS) INDEX
------------ ----------- ------------- ----------------
1994 $100 $100 $100
1995 242 126 121
1996 484 159 159
1997 621 214 199
1998 703 279 240
1999 292 342 194
9
<PAGE>
PROPOSAL 2: RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Company's current independent public accounting firm, Pritchett,
Siler & Hardy, P.A., has been appointed by the Board of Directors to serve as
the Company's independent accountants again for fiscal 2000, and a proposal to
ratify that appointment will be submitted for voting by shareholders at the
Annual Meeting. Representatives of Pritchett, Siler & Hardy, P.A. are not
expected to attend the Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" PROPOSAL
2. TO BE APPROVED, VOTES CAST IN FAVOR OF PROPOSAL 2 AT THE ANNUAL MEETING MUST
EXCEED THE VOTES CAST IN OPPOSITION.
OTHER MATTERS
The Board of Directors knows of no other matters that will be presented
for action by shareholders at the Annual Meeting. Should other matters properly
come before at the Annual Meeting, the Proxies, or their substitutes, will be
authorized to vote shares represented by appointments of proxy according to
their best judgment.
PROPOSALS OF SHAREHOLDERS
Any proposal of a shareholder which is intended to be presented for
action at the 2001 Annual Meeting must be received by the Company in writing at
its main office in Washington, North Carolina, no later than November 13, 2000,
to be considered timely received for inclusion in the proxy statement and form
of appointment of proxy distributed by the Company in connection with that
meeting. In order to be included in the Company's proxy materials related to a
particular meeting, the person submitting the proposal must own, beneficially or
of record, at least 1% or $2,000 in market value of shares of the Company's
stock entitled to be voted on that proposal at the meeting and must have held
those shares for a period of at least one year and continue to hold them through
the date of the meeting. Also, the proposal and the shareholder submitting it
must comply with certain other eligibility and procedural requirements contained
in rules of the Securities and Exchange Commission.
Written notice of other shareholder proposals intended to be presented
at the 2001 Annual Meeting (proposals which are not intended to be included in
the Company's proxy statement and form of appointment of proxy) must be received
by the Company at its main office in Washington, North Carolina, no later than
January 29, 2000, in order for such proposals to be considered timely received
for purposes of the Proxies' discretionary authority to vote on other matters
presented for action by shareholders at that meeting.
ANNUAL REPORT ON FORM 10-K
The Company is subject to the reporting requirements of the Securities
Exchange Act of 1934 and, in accordance therewith, files reports and other
information with the Securities and Exchange Commission, including without
limitation proxy statements, annual reports and quarterly reports.
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR
ENDED JUNE 30, 1999, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION WILL
BE PROVIDED WITHOUT CHARGE UPON THE WRITTEN REQUEST OF ANY SHAREHOLDER ENTITLED
TO VOTE AT THE ANNUAL MEETING. REQUESTS FOR COPIES SHOULD BE DIRECTED TO CAROL
J. PRICE, DIRECTOR OF INVESTOR RELATIONS, FOUNTAIN POWERBOAT INDUSTRIES, INC.,
POST OFFICE DRAWER 457, WASHINGTON, NORTH CAROLINA 27889, TELEPHONE
252-975-2000.
MARCH 13, 2000
10
<PAGE>
FOUNTAIN POWERBOAT INDUSTRIES, INC.
POST OFFICE DRAWER 457
1653 WHICHARD'S BEACH ROAD
WASHINGTON, NORTH CAROLINA 27889
APPOINTMENT OF PROXY SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints Joseph F. Schemenauer, Carol J. Price and
Blanche C. Williams, or any of them, as proxies (the "Proxies"), with full power
of substitution, to vote the shares of the common stock of Fountain Powerboat
Industries, Inc. (the "Company") held of record by the undersigned on March 7,
2000, at the Annual Meeting of the Company's Shareholders (the "Annual Meeting")
to be held at the Hilton Inn, located at 207 S.W. Greenville Blvd. in
Greenville, North Carolina, at 10:00 A.M. on Tuesday, April 4, 2000, and at any
adjournments thereof. The undersigned hereby directs that the shares represented
by this appointment of proxy be voted as follows on the proposals listed below.
THE SHARES REPRESENTED BY THIS APPOINTMENT OF PROXY WILL BE VOTED AS
DIRECTED BELOW. IN THE ABSENCE OF ANY DIRECTION, THE PROXIES WILL VOTE THE
SHARES REPRESENTED BY THIS APPOINTMENT OF PROXY "FOR" THE ELECTION OF EACH
NOMINEE NAMED IN PROPOSAL 1 AND "FOR" PROPOSAL 2. IF, AT OR BEFORE THE TIME OF
THE MEETING, ANY NOMINEE NAMED IN PROPOSAL 1 HAS BECOME UNABLE OR UNWILLING TO
SERVE AS A DIRECTOR FOR ANY REASON, THE PROXIES ARE AUTHORIZED TO VOTE FOR A
SUBSTITUTE NOMINEE NAMED BY THE BOARD OF DIRECTORS.
THIS APPOINTMENT OF PROXY MAY BE REVOKED BY THE RECORD HOLDER OF THE SHARES
TO WHICH IT RELATES AT ANY TIME BEFORE IT IS EXERCISED BY FILING WITH THE
SECRETARY OF THE COMPANY A WRITTEN INSTRUMENT REVOKING IT OR A DULY EXECUTED
APPOINTMENT OF PROXY BEARING A LATER DATE, OR BY ATTENDING THE ANNUAL MEETING
AND ANNOUNCING HIS OR HER INTENTION TO VOTE IN PERSON.
TO INSURE THAT A QUORUM IS PRESENT AT THE ANNUAL MEETING, PLEASE SIGN AND
RETURN YOUR APPOINTMENT OF PROXY WHETHER OR NOT YOU PLAN TO ATTEND.
PLEASE COMPLETE, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY
DETACH BELOW AND RETURN USING THE ENVELOPE PROVIDED
<PAGE>
FOUNTAIN POWERBOAT INDUSTRIES, INC. 2000 ANNUAL MEETING
1. ELECTION OF DIRECTORS: PROPOSAL TO ELECT THE EIGHT NOMINEES NAMED BELOW AS
DIRECTORS OF THE COMPANY FOR ONE-YEAR TERMS OR UNTIL THEIR SUCCESSORS ARE
DULY ELECTED AND HAVE QUALIFIED.
<TABLE>
<S> <C> <C> <C>
1 - REGINALD M. FOUNTAIN, JR. 5 - GUY L. HECKER, JR. FOR all nominees WITHHOLD AUTHORITY
2 - DARRYL M. DIAMOND, M.D. 6 - FEDERICO PIGNATELLI listed to the left to vote for all
3 - GEORGE L. DEICHMANN, III 7 - ANTHONY J. ROMERSA (except as specified nominees listed to
4 - CRAIG F. GOESS 8 - MARK L. SPENCER below). the left.
(Instructions: To withhold authority to vote for any
indicated nominee, write the number(s) of the nominee(s)
in the box provided to the right).
2. PROPOSAL TO RATIFY APPOINTMENT OF INDEPENDENT
ACCOUNTANTS. Proposal to ratify the appointment of
Pritchett, Siler & Hardy, P.A., as the Company's
independent accountants for fiscal 2000. FOR AGAINST ABSTAIN
3. OTHER BUSINESS. On such other matters as may properly be presented for action at the Annual
Meeting, the Proxies are authorized to vote the shares represented by this appointment of proxy in
accordance with their best judgment.
Check appropriate box Date:____________________ NO. OF SHARES
Indicate changes below:
Address Change? Name Change?
SIGNATURE(S) IN BOX
Instruction: Please sign above EXACTLY as
your name appears on this appointment of
proxy. Joint owners of shares should BOTH
sign. Fiduciaries or other persons signing
in a representative capacity should
indicate the capacity in which they are
signing.
</TABLE>
