FOUNTAIN POWERBOAT INDUSTRIES, INC.

                       1999 EMPLOYEE STOCK OPTION PLAN

     FOUNTAIN  POWERBOAT INDUSTRIES, INC. (the "Company") hereby  adopts  this
1999 EMPLOYEE STOCK OPTION PLAN (the "Plan") as further described herein.

                                   ARTICLE I
                          PURPOSE AND SCOPE OF PLAN

1.1  Purpose.

The purpose of the Plan is to encourage the continued service of  officers and
employees  of the Company or any company which is a subsidiary of the  Company
(a "Subsidiary"), and to provide an additional incentive for such officers and
employees to expand and improve the profits and prosperity of the Company  and
its Subsidiaries, by granting them options to purchase shares of the Company's
common  stock.  The Plan also will assist the Company and its subsidiaries  in
recruiting  and  retaining persons to serve as officers and employees  of  the
Company and its Subsidiaries.

1.2  Stock Subject to Plan.

Pursuant  to and in accordance with the terms of the Plan, options ("Options")
may  be  granted from time to time to purchase shares of the Company's  common
stock, $.01 par value per share ("Common Stock").

The  aggregate  number of shares of Common Stock which may be  sold  upon  the
exercise  of  Options granted under the Plan is 120,000 shares, which  maximum
number  is subject to adjustment as provided in Paragraph 6.1 hereof.   Shares
of  Common  Stock  sold by the Company upon the exercise  of  Options  granted
hereunder,  at  the  sole discretion of the Company, may be  issued  from  the
Company's authorized but unissued shares, or be issued and outstanding  shares
purchased  by  the Company on the open market or in private transactions.   In
the  event an Option granted under the Plan shall expire or terminate for  any
reason  without  having been exercised in full, then, to the extent  the  Plan
shall remain in effect, the shares covered by the unexercised portion of  such
Option shall again be available for the grant of Options under the Plan.

1.3  Effective Date.

The  Plan shall become effective as of January 12, 1999 (the "Effective Date,"
which  is  the  date  of  adoption  of the Plan  by  the  Company's  Board  of
Directors); provided, however, that notwithstanding anything contained  herein
to  the  contrary,  the  Plan shall be subject to approval  of  the  Company=s
shareholders by a vote of the holders of at least a majority of the shares  of
the  Company's  Common Stock present and voted at a meeting of  the  Company's
shareholders  held  in  accordance with Nevada law.  Options  may  be  granted
pursuant to the Plan prior to receipt of such approvals, but any such  Options
granted shall be subject to, and may not become exercisable until, receipt  of
such approvals.

1.4  Termination Date.   Unless sooner terminated as provided herein, the Plan
shall  terminate  at  5:00 P.M. on January 11, 2009 (the "Termination  Date").
Following  the Termination Date, no further Options may be granted  under  the
Plan,  but such termination shall not effect any Option granted prior  to  the
Termination Date.

                                  ARTICLE II
                                  DEFINITIONS

2.1  Company.  ACompany@ refers to Fountain Powerboat Industries, Inc. and  to
any successor to the Company which shall have assumed or become liable for the
Company=s  obligations  pursuant to any Option  granted  or  Option  Agreement
entered into pursuant to the Plan.

2.2  Board.  "Board" refers to the Company's Board of Directors.

2.3   Committee.   "Committee" refers to the committee  of  and  appointed  or
designated  by  the Board to administer the Plan as described in  Article  III
below.

2.4   Common Stock.  "Common Stock" refers to the common stock of the Company,
par value $.01 per share.

2.5   Date of Grant.  The "Date of Grant" of an Option refers to the effective
date of action by the Committee granting such Option.

2.6  Employee.  "Employee" refers to any person who is a full-time employee of
the Company or of any of the Company=s Subsidiaries.

2.7   Exercise Price.  "Exercise Price" refers to the price per  share  to  be
paid  by an Optionee for the purchase of Option Stock upon the exercise of  an
Option.

2.8   Expiration  Date.   "Expiration Date" refers to  the  date  set  by  the
Committee  at  which  time any unexercised portion of an Option  automatically
will terminate and be of no further force or effect.

2.9   Modification, Extension or Renewal.  "Modification" refers to any change
in  an  Option  which  alters or modifies the original  terms,  conditions  or
benefits  of  the Option granted to the Optionee.  "Extension" refers  to  the
granting  to  the  Optionee of an additional period of time  within  which  to
exercise  the Option beyond the Expiration Date originally prescribed  in  the
Option  Agreement.   "Renewal" refers to the granting  of  an  Option  to  the
Optionee  with  the  same rights and privileges and  on  the  same  terms  and
conditions  as contained in an original Option after expiration or termination
of the original Option.

2.10 Non-Employee Director.  ANon-Employee Director@ refers to a member of the
Board  who satisfies the definition of that term contained in Rule 16b-3(b)(3)
under  the  Securities Exchange Act of 1934, as such rule may be amended  from
time to time.

2.11 Option.  "Option" refers to a right granted to an Employee by the Company
pursuant to the Plan to purchase shares of Common Stock at the Exercise  Price
set by the Committee for such Option and on the terms and conditions set forth
herein and in the Option Agreement relating to such Option.

2.12  Option  Agreement.   "Option  Agreement"  refers  to  a  formal  written
agreement executed between the Company and an Optionee setting forth the terms
and conditions of an Option.

2.13  Option  Stock.   "Option Stock" refers to the  shares  of  Common  Stock
covered  by  an  Option and which may be purchased by the  Optionee  upon  the
exercise, in whole or in part, of such Option.

2.14  Optionee.  "Optionee" refers to an Employee to whom an Option is granted
pursuant to the Plan.
                               ARTICLE III
                           PLAN ADMINISTRATION

3.1  General.

The Plan shall be administered by the Committee which shall be composed solely
of  two or more Non-Employee Directors.  Members of the Committee shall  serve
at  the  pleasure of the Board, and the Board, from time to time  and  at  its
discretion, may remove members from (with or without cause) or add members  to
the  Committee  or  fill  any  vacancies on the  Committee,  however  created.
Alternatively,  the  Board  may,  by  resolution,  elect  that  the  Plan   be
administered by the full Board rather than a Committee.  During any such  time
as  the  Board  shall  administer  the Plan,  all  references  herein  to  the
"Committee" shall be deemed to refer to the Board and all actions taken by the
Board  in  the  administration of the Plan shall  be  taken  in  the  form  of
resolutions approved by the Board.

3.2  Duties.

In  its  administration of the Plan, the Committee shall have the   authority,
power and duty:

(a)  to  make any and all determinations regarding persons who are eligible to
     receive Options under the Plan;

(b)  to  construe and interpret the terms and provisions of the Plan  and  any
     and all Option Agreements entered into pursuant to the Plan;

(c)  to  make, adopt, amend, rescind, and interpret such rules and regulations
     not  inconsistent  with the Plan or law as it from  time  to  time  deems
     reasonable and necessary for the interpretation and administration of the
     Plan;

(d)  to  prescribe  the  form  or  forms of the Option  Agreements  and  other
     instruments evidencing or relating to any Options granted under the  Plan
     and  of any other instruments required under the Plan and to change  such
     forms from time to time;

(e)  to determine:

          (i)   the Employees to whom Options shall be granted pursuant to the
          Plan and the timing of such grant or grants, and to cause Options to
          be granted to Employees it selects;

          (ii)  the  number  of shares of Option Stock to be covered  by  each
          Option granted;

          (iii)      the  Exercise  Price to be paid  for  Option  Stock  upon
          exercise of the Option as set forth in the Option Agreement  and  as
          determined in accordance with Paragraph 4.3 hereof;

          (iv)     the Expiration Date of each Option granted, and the period
          within which any such Option may be exercised;

          (v)   any other term and/or condition of each Option (which need not
          be identical from Option to Option) so long as not inconsistent with
          the Plan; and,

(f)  to  make all other determinations and take all other actions provided for
     herein  or  deemed by it, in its discretion, to be necessary or advisable
     to administer the Plan in a proper and effective manner.

3.3  Meetings and Voting.
     
The  Committee  shall  select one of its members as Chairman  and  shall  hold
meetings at such times and places as it shall deem necessary or desirable.   A
majority  of  the members of the Committee shall constitute a quorum  for  all
matters with respect to administration of the Plan, and acts of a majority  of
the members of the Committee present at meetings at which a quorum is present,
or  acts  reduced  to  and approved in writing by all of the  members  of  the
Committee without a meeting, shall be valid acts of the Committee.

3.4  Choice of Form of Option.

The  Committee shall have the discretion to cause any Option granted  pursuant
to  the Plan to be granted with the intent that it qualify for treatment as an
"Incentive Stock Option" (an "ISO") as defined in '422 of the Internal Revenue
Code  of  1986, as amended (the "Code"), or with the intent that it be treated
as a "Nonqualified Stock Option" (an "NSO").  ISOs and NSOs shall collectively
be  referred to herein as "Options" unless reference is specifically made only
to  one or the other, and, in the case of any such reference only to one, such
reference shall be deemed to be made to the exclusion of the other.

3.5  Effect of Committee Action.

All  actions, decisions and determinations of the Committee in connection with
the grant of Options or the administration, interpretation or construction of,
or  questions  or  other matters concerning, the Plan or any  Option  granted,
shall (i) be made consistent and in accordance with the terms of the Plan and,
with respect to an ISO, shall be designed to cause the Plan and each such  ISO
to  continue to comply with applicable provisions of the Code, and (ii)  shall
be  final,  conclusive and binding on all persons, including the Company,  its
shareholders,  Optionees and any other person claiming  any  interest  in  any
Option;  provided,  however,  that  any action,  decision,  interpretation  or
determination, other than those respecting the actual grant of Options,  shall
be  subject  to review by the Board of Directors either on its own initiative,
at  the request of the Committee or on application of any aggrieved party.  In
such  a case, the determination of the Board of Directors on such review shall
be final and binding on all affected parties.

3.6  Indemnification.

To  the  extent  permitted by applicable law, and in addition  to  such  other
rights  of indemnification that members of the Committee may have as Directors
of  the  Company,  the members of the Committee shall be  indemnified  by  the
Company  against the reasonable expenses, including attorneys' fees,  actually
and necessarily incurred in connection with the defense of any action, suit or
proceeding, or in connection with any appeal thereof, to which they or any  of
them  may  be  made a party by reason of any action taken or omitted  in  good
faith  under  or in connection with administration of the Plan or  any  Option
granted  hereunder and against all amounts paid by them in settlement  thereof
(provided such settlement is approved by independent legal counsel selected by
the Company) or paid by them in satisfaction of a judgment in any such action,
suit  or  proceeding, except in relation to matters as to which  it  shall  be
adjudged in such action, suit or proceeding that any such Committee member  is
liable  for  gross negligence or misconduct in the performance of his  duties;
provided, however, that within thirty (30) days after institution of any  such
action,  suit  or proceeding, such Committee member(s) shall in writing  offer
the Company the opportunity, at its own expense, to handle and defend same.
 
                                ARTICLE IV
                       GRANT AND TERMS OF OPTIONS

4.1  Authorization to Grant Options.

Pursuant  to  the  Plan, from time to time prior to the Termination  Date  the
Company  may  grant Options to Employees to purchase shares of  Common  Stock.
Options  may  only be granted by action of the Committee, and no person  shall
have  any  rights under the Plan or with respect to any Option except pursuant
to such action of the Committee.

4.2  Number of Shares.

The  number of shares of Option Stock covered by each Option shall be  set  by
the Committee at the time such Option is granted and shall be specified in the
Option Agreement evidencing such Option; provided, however, that the number of
shares of Option Stock covered by Options granted from time to time to any one
Employee  under the Plan may not exceed 40% of the aggregate number of  shares
of  Common Stock originally available for the grant of Options under the  Plan
from  time  to  time.  The number of shares of Option Stock  covered  by  each
Option shall be subject to adjustment in the manner described in Paragraph 6.1
below.

4.3  Exercise Price.

At  the time an Option is granted, the Committee shall set the Exercise  Price
applicable  to  such Option.  The Exercise Price shall be  determined  by  the
Committee  in the manner described below and shall be specified in the  Option
Agreement evidencing the Option.  The Exercise Price applicable to each Option
shall be subject to adjustment in the manner described in Paragraph 6.1 below.

The  Exercise Price for each share of Option Stock covered by an Option  shall
not  be  less than one hundred percent (100%) of the fair market value of  one
share  of  the  Common Stock on the Date of Grant of such  Option  (the  "Fair
Market Value").  The Fair Market Value on any particular date shall be, (i) if
the  Common  Stock  is not then listed on the Nasdaq Stock  Market,  the  fair
market value of a share of the Common Stock as determined by the Committee  in
its  sole  discretion  in such manner as it shall deem to  be  reasonable  and
appropriate,  or,  (ii)  if the Common Stock is listed  on  the  Nasdaq  Stock
Market, the closing sale price of the Common Stock as quoted by Nasdaq on such
date.

4.4  Option Agreements.

Each  Option granted under the Plan shall be evidenced by an Option  Agreement
which  shall be executed and delivered by the Optionee and by or on behalf  of
the Company and which shall (i) specify whether such Option is intended to  be
an  ISO  or  an  NSO, (ii) contain such other information as  is  provided  or
permitted  herein  to  be  contained in the Option Agreement,  and  (iii)  not
contain any provisions inconsistent with the Plan.  Following the execution of
an Option Agreement evidencing an Option, such Option shall be effective as of
the Date of Grant of such Option.

4.5  Limits on Grant of ISOs.

Notwithstanding anything contained herein to the contrary:

(a)  in the case of an ISO granted to an Employee who owns, immediately before
     the  ISO  is  granted, more than ten percent (10%) of the total  combined
     voting  power of all classes of Common Stock of the Company, the Exercise
     Price  per share with respect to such ISO, as determined by the Committee
     and  stated  in the Option Agreement, shall not be less than one  hundred
     ten  percent (110%) of the Fair Market Value as of the Date of  Grant  of
     the ISO; and,

(b)  the  aggregate Fair Market Value (determined as of the Date of  Grant  of
     the Option) of the Option Stock for which an Optionee may be granted ISOs
     exercisable  for  the  first time in any calendar  year  (including  ISOs
     granted under all option plans of the Company or any of its Subsidiaries)
     shall  not exceed $100,000.  This $100,000 limitation shall not apply  to
     the grant of NSOs.

                                ARTICLE V
                           EXERCISE OF OPTIONS

5.1  Waiting Period.

In  connection with the grant of an Option, the Committee may, at its  option,
specify a "Waiting Period" in connection with the exercise of such Option.  In
such  event,  the  Option may not be exercised unless and until  the  Optionee
shall  have  completed  a  period of continuous,  full  time  service  in  the
employment  of the Company or any of its Subsidiaries following  the  Date  of
Grant  of  the  Option equal to the Waiting Period set by  the  Committee  and
specified  in  the  Option Agreement evidencing that Option,  but  thereafter,
subject  to  earlier  termination as described herein,  may  be  exercised  as
provided herein and in the Option Agreement evidencing such Option.   No  such
Waiting  Period shall not operate to extend the Expiration Date or other  date
of  termination of an Option set forth or provided for herein or in the Option
Agreement evidencing such Option.

5.2  Term; Conditions on Exercise; Expiration or Termination.

The  Expiration Date of each Option shall be set by the Committee at the  time
the  Option  is  granted  and  shall  be specified  in  the  Option  Agreement
evidencing the Option, but in no event shall be more than ten years  following
the Date of Grant of the Option.  However, notwithstanding any thing contained
herein to the contrary, in the case of an ISO granted to an Employee who owns,
immediately  before  the ISO is granted, more than ten percent  (10%)  of  the
total combined voting power of all classes of Common Stock of the Company, the
Expiration Date shall not be more than 5 years following the Date of Grant  of
the ISO.

Subject  to the other terms and conditions contained in the Plan, each  Option
may  be exercised by the Optionee at such times or intervals and on such other
terms and conditions (if any) as are determined by the Committee and specified
in the Option Agreement evidencing the Option.

Notwithstanding  anything contained herein or in any Option Agreement  to  the
contrary,  to  the  extent  that  an Option shall  not  previously  have  been
exercised in the manner required by the Plan, it shall expire and terminate at
5:00  P.M.  on its Expiration Date.  In addition to the termination provisions
set  forth above, Options granted pursuant to the Plan shall terminate or  may
be  terminated  as  provided  in Paragraphs 5.7   and  6.1  below.   Upon  the
expiration or termination of all or any portion of an Option, such  Option  or
portion thereof shall, without any further act by the Company, expire  and  no
longer be exercisable or confer any rights to any person to purchase shares of
Common Stock under the Plan.


5.3  Notice of Exercise.

To  exercise an Option in whole or in part, the Optionee or other person  then
entitled to exercise the Option or portion thereof shall notify the Company by
delivering  written notice of such exercise (a "Notice of  Exercise")  to  the
President  or  the  Secretary of the Company.  Such written  notice  shall  be
substantially in the form attached hereto as Exhibit A and shall  specify  the
number of shares of Option Stock to be purchased.  A Notice of Exercise  shall
not  be effective (and the Company shall have no obligation to sell any Option
Stock  to the Optionee pursuant to such Notice) unless it satisfies the  terms
and  conditions  set forth herein and actually is received by the  Company  as
provided above prior to the Expiration Date or other termination of the Option
to be exercised.

In the event an Option or portion thereof is being exercised by a person other
than  the  Optionee  (as provided in Paragraph 5.7(c) below),  the  Notice  of
Exercise  shall  be  accompanied by appropriate proof of  the  right  of  such
person(s) to exercise the Option.

5.4  Payment Upon Exercise.

The  Exercise  Price of Option Stock being purchased upon the exercise  of  an
Option (in part or in whole) shall be paid by the Optionee in full at the time
of such exercise.  Such payment may be made (i) in cash, (ii) by official bank
check,  bank money order or other certified funds, or (iii) in the  discretion
of  the  Committee, by a combination thereof.  No Option Stock shall be issued
or delivered until full payment of the Exercise Price therefor has been made.

5.5  Restrictions.

At  the time an Option is granted, the Committee shall have the authority,  in
its  sole discretion, to impose restrictions of any nature on the exercise  of
such  Option  (including restrictions in the form of a schedule  by  which  an
Option  becomes exercisable in increments over a period of time)  and  on  the
Option  Stock  acquired by the Optionee upon such exercise.  Without  limiting
the   generality  of  the  foregoing,  the  Committee  may  impose  conditions
restricting  absolutely the transferability of Option Stock  acquired  through
exercise  of any Option for such periods as the Committee may determine.   Any
such  restrictions imposed by the Committee shall be specified in  the  Option
Agreement.

5.6  Nontransferability.

Options  granted hereunder shall not be assignable or transferable  except  by
will  or by the laws of descent and distribution, and, during the lifetime  of
the  Optionee, may be exercised only by him.  More particularly,  but  without
limiting the generality of the foregoing, an Option may not be sold, assigned,
transferred (except as noted herein), pledged or hypothecated in any  way  and
shall not be subject to execution, attachment or similar process.

5.7  Termination of Employment.

(a)  Voluntary  and  Involuntary Terminations.  In  the  event  an  Optionee's
     employment  with  the  Company or any Subsidiary shall  terminate  or  be
     terminated  prior  to the Expiration Date of his or her  Option  for  any
     reason  other  than his or her death or "Disability" (as defined  below),
     then  the  status  of the Optionee's Option shall be as specified  below.
     Authorized  leaves of absence and transfers of employment by an  Optionee
     between  the  Company  and  a  Subsidiary, or between  two  Subsidiaries,
     without  a  break  in  service,  shall  not  constitute  terminations  of
     employment  for  purposes  of the Plan.  The  Committee  shall  determine
     whether  any other absence for military or government service or for  any
     other  reasons shall constitute a termination of employment for  purposes
     of the Plan, and the Committee's determination shall be final.

               (i)  If, prior to the Expiration Date of his or her Option,  an
               Optionee voluntarily terminates his or her employment with  the
               Company  or any of its Subsidiaries other than as a  result  of
               "Retirement" (as defined below), then, to the extent  it  shall
               not  previously have been exercised in the manner  required  by
               the  Plan, the Option immediately shall terminate and be of  no
               further  force  or  effect  on  the  effective  date  of   such
               termination of employment.

               (ii) If, prior to the Expiration Date of his or her Option,  an
               Optionee voluntarily terminates his or her employment with  the
               Company  or any of its Subsidiaries as a result of "Retirement"
               (as  defined below), the Option shall remain in effect and,  to
               the  extent  it  shall not previously have been exercised,  the
               Optionee  shall have the right to exercise the  Option  at  any
               time  before  but  not later than 5:00 P.M.  on  the  90th  day
               following the effective date of such Retirement (but not  later
               than the Expiration Date of the Option) in accordance with  the
               terms of the Plan and, to the extent not so exercised, at  that
               time  the Option shall terminate and be of no further force  or
               effect.

                          The termination of an Optionee's employment with the
               Company  or  any  of its Subsidiaries which  is  treated  as  a
               "retirement"  under the terms of any qualified retirement  plan
               maintained by the Company from time to time, or the termination
               of  an Optionee's employment at such earlier time or under such
               other circumstances as the Committee shall agree in writing  to
               treat as "Retirement" for purposes of the Plan, shall be deemed
               to be a "Retirement" for purposes of the Plan.

               (iii)      If,  prior  to the Expiration Date  of  his  or  her
               Option,  an Optionee's employment is terminated by the  Company
               or  any  of its Subsidiaries other than for "Cause" (as defined
               below), the Option shall remain in effect and, to the extent it
               shall  not  previously have been exercised, the Optionee  shall
               have  the  right to exercise the Option at any time before  but
               not later than 5:00 P.M. on the 90th day following the date  of
               such termination (but not later than the Expiration Date of the
               Option)  in accordance with the terms of the Plan and,  to  the
               extent  not  so  exercised,  at  that  time  the  Option  shall
               terminate and be of no further force or effect.

               (iv) If, prior to the Expiration Date of his or her Option,  an
               Optionee's employment is terminated by the Company  or  any  of
               its  Subsidiaries for Cause, then, to the extent it  shall  not
               previously  have been exercised in the manner required  by  the
               Plan,  the  Option immediately shall terminate  and  be  of  no
               further  force  or  effect  on the earlier  of  the  date  such
               termination of employment is effective or the date on which the
               determination  is  made to terminate the Optionee's  employment
               for Cause.

               For  purposes  of  this Paragraph 5.7(a), the  Company  or  its
               Subsidiary  shall  have  "Cause"  to  terminate  an  Optionee's
               employment  upon  a  determination  by  the  Company   or   its
               Subsidiary, in good faith, that the Optionee (1) has failed  in
               any  material  respect to perform or discharge  his  duties  or
               responsibilities  of  employment  in  a  reasonably   competent
               manner,  (2)  is engaging or has engaged in willful misconduct,
               insubordination, or other conduct, which is detrimental to  the
               business of the Company or its Subsidiary or which has  had  or
               likely will have a material adverse effect on the Company's  or
               its Subsidiary's business or reputation; or (3) has violated or
               failed  to comply with any of the Company=s or its Subsidiary=s
               policies  or  procedures  (including  any  employee  codes   of
               conduct) that are applicable to him or her.

               For  purposes  of this Plan, the determination of  whether  any
               termination  of an Optionee's employee was for Cause  shall  be
               within the sole discretion of the Committee.

(b)  Disability of Optionee:  If, prior to the Expiration Date of his  or  her
     Option,  an  Optionee becomes "Disabled" (as defined  below)  and,  as  a
     result, his or her employment with the Company or any of its Subsidiaries
     is  terminated, the Option shall remain in effect and, to the  extent  it
     shall  not  previously have been exercised, the Optionee=s  Option  shall
     remain  in  effect and the Optionee shall have the right to exercise  the
     Option  at any time before but not later than the 90th day following  the
     effective  date  of such termination (but not later than  the  Expiration
     Date of the Option) in accordance with the terms of the Plan and, to  the
     extent  not so exercised, at that time the Option shall terminate and  be
     of no further force or effect.  For purposes of this Paragraph 5.7(b), an
     Optionee  shall be considered "Disabled" at such time as  he  or  she  is
     determined to be permanently disabled such as would qualify the  Optionee
     for  benefits  under  the Company's long term disability  insurance  plan
     which is applicable to the Optionee.

(c)  Death  of  Optionee:   If, prior to the Expiration Date  of  his  or  her
     Option,  an  Optionee  shall  die while employed  by  the  Company  or  a
     Subsidiary, then, following the date of the Optionee=s death, the  Option
     shall  remain  in effect and, to the extent it shall not previously  have
     been  exercised, the Optionee=s designated beneficiary (determined either
     by will or other writing delivered to the Committee in advance), or if no
     designated beneficiary, the personal representative of his estate,  shall
     have  the  right to exercise the Option at any time before but not  later
     than  5:00  P.M. on the Expiration Date of the Option in accordance  with
     the  terms of the Plan and, to the extent not so exercised, at that  time
     the  Option  shall terminate and be of no further force or  effect.   Any
     references  herein to an Optionee shall be deemed to include  any  person
     entitled to exercise an Option after the death of such Optionee under the
     terms of this Plan.

5.8  Modification, Extension and Renewal of Options.

Subject  to the provisions of Paragraph 6.1 below, any Option may be Modified,
Extended  or Renewed (as those terms are defined in Article II) only upon  the
agreement of the Committee and the Optionee.  Any such agreement shall  be  in
the  form of a written amendment to the Option Agreement evidencing the Option
being Modified, Extended or Renewed and which shall set forth the terms of any
such Modification, Extension or Renewal.

5.9  Other Provisions.

In  addition to the items required to be in the Option Agreement evidencing an
Option,  such  Option Agreement may contain such other terms,  conditions  and
provisions  applicable to such Option or the exercise thereof  (including  any
and  all limitations or restrictions as shall be necessary to comply with  any
applicable federal and state securities laws and regulations) as the Committee
shall, at its sole discretion, deem

necessary  or desirable; provided, however, that the Committee may not  impose
any  such  terms,  conditions or provisions that  are  inconsistent  with  any
provisions of the Plan.

5.10 Issuance of Option Stock.

A  stock  certificate  representing  the number  of  shares  of  Option  Stock
purchased  by  the  Optionee upon the proper exercise of an  Option  shall  be
issued and delivered by the Company as soon as practicable after receipt of  a
valid  and effective Notice of Exercise and full payment of the Exercise Price
relating  to those shares.  Such certificate shall be delivered to or  on  the
written order of the person exercising the Option.

                                ARTICLE VI
                           GENERAL PROVISIONS

6.1  Adjustment of Options.

(a)  Changes  in Capitalization; Stock Splits and Dividends.  In the event  of
     (i)  any  dividend payable by the Company in shares of Common  Stock,  or
     (ii)  any recapitalization, reclassification, split-up, consolidation  or
     combination  of, or other change in or offering of rights to the  holders
     of,  Common  Stock,  or  (iii) an exchange of the outstanding  shares  of
     Common Stock for a different number or class of shares of stock or  other
     securities  of the Company in connection with a merger, consolidation  or
     other  reorganization of or involving the Company (provided  the  Company
     shall  be  the surviving or resulting corporation in any such  merger  or
     consolidation), then the Committee shall, in such a manner  as  it  shall
     determine  in  its sole discretion, appropriately adjust the  number  and
     class  or  kind of shares which may be issued under the Plan and  of  the
     securities  which  shall  be subject to outstanding  Options  and/or  the
     Exercise  Price applicable to any outstanding Option, all computed  on  a
     basis  prior to the event described in such event.  However, in no  event
     shall  any such adjustment change the aggregate Exercise Price for Option
     Stock to be purchased upon the exercise of any Option.

     Subject  to  review  by the Board of Directors of the Company,  any  such
     adjustments made by the Committee shall be consistent with changes in the
     Company's  outstanding Common Stock resulting from the above events  and,
     when  made,  shall  be  final, conclusive and  binding  on  all  persons,
     including,  without  limitation, the Company, its shareholders  and  each
     Optionee  or other person having any interest in any Option so  adjusted.
     Any  fractional  shares  resulting from  any  such  adjustment  shall  be
     eliminated.   However, notwithstanding anything contained herein  to  the
     contrary, no Option which is intended to be an ISO shall be adjusted in a
     manner that causes the Option to fail to continue to qualify as an ISO.

(b)  Dissolution; Merger or Consolidation; Sale of Assets.  In the event of  a
     dissolution or liquidation of the Company, the sale of substantially  all
     the Company's assets, or a merger or consolidation of the Company with or
     into any other corporation or entity (or any other such reorganization or
     similar  transaction)  in  which the Company  is  not  the  surviving  or
     resulting corporation, and if a provision is not made in such transaction
     for  the  continuance of this Plan or the assumption of  Options  by  any
     successor  to  the  Company or for the substitution for  Options  of  new
     options  covering  shares of any successor corporation  or  a  parent  or
     subsidiary  thereof, then, in such event, and to the extent such  Options
     have  not previously been exercised, all rights of Optionees pursuant  to
     all  outstanding  Options shall terminate and be  of  no  further  effect
     immediately prior to the effective time of such dissolution, liquidation,
     sale,  merger,  consolidation or other reorganization (or at  such  other
     time  and  pursuant to such rules and regulations as the Committee  shall
     determine and promulgate to the Optionees).  However, to the extent  such
     Options shall not previously have been exercised, and notwithstanding any
     provisions of the Plan or any Option Agreement to the contrary, each such
     Option   shall  become  exercisable,  and  may  be  exercised,  in   full
     immediately prior to the effective time of any such event.  The Committee
     shall  give each Optionee at least ninety (90) days prior written  notice
     of  the  effective  time of an event which gives  rise  to  an  immediate
     purchase right under this Paragraph 6.1.

(c)  Miscellaneous.  The grant of an Option shall not affect in  any  way  the
     right or power of the Company to (i) enter into or effect any adjustment,
     recapitalization, reclassification, reorganization or any other change in
     the  Company's  capital or business structure or its  business,  (ii)  to
     merge or consolidate, or to dissolve, liquidate, sell or transfer all  or
     any  part of its business or assets, or (iii) to issue bonds, debentures,
     preferred or other preference stock ahead of or affecting Common Stock or
     the rights thereof.

6.2  Rights as a Shareholder.

Neither  an  Optionee  nor  any  other person  shall  have  any  rights  as  a
stockholder  with respect to any shares of Option Stock covered by  an  Option
until  such  Option shall have been validly exercised in the manner  described
herein  and  in the Option Agreement relating to such Option, full payment  of
the  Exercise  Price  has been made for such shares, and a  stock  certificate
representing  the Option Stock purchased upon such exercise  shall  have  been
registered on the Company's stock records in the name of and delivered to such
person.   Except to the extent of adjustments made pursuant to  Paragraph  6.1
above,  no  adjustment on behalf of the Optionee shall be made  for  dividends
(ordinary  or  extraordinary, whether in cash, securities or other  property),
distributions  or other rights for which the record date for  determining  the
shareholders entitled to receive the same is prior to the date of registration
and delivery of the stock certificate(s) representing the Option Stock.

6.3  No Right to Employment.

Neither  the  Plan  nor  the  grant of an Option,  nor  any  Option  Agreement
evidencing  any such Option, is intended or shall be deemed or interpreted  to
constitute an employment agreement or to confer upon an Optionee any right  of
employment  with  the  Company or any of its Subsidiaries,  including  without
limitation  any right to continue in the employ of the Company or any  of  its
Subsidiaries, or to interfere with, restrict or otherwise limit in any way the
right  of  the  Company  or  any  Subsidiary to  discharge  or  terminate  the
employment  of  any  Optionee at any time for any reason whatsoever,  with  or
without Cause.

6.4  Legal Restrictions.

If in the opinion of legal counsel for the Company the issuance or sale of any
shares  of  Option Stock by the Company pursuant to the exercise of an  Option
would not be lawful without registration under the Securities Act of 1933 (the
"1933 Act") or without some other action being taken, or for any other reason,
or  would  require  the  Company  to obtain  approval  from  any  governmental
authority or regulatory body having jurisdiction deemed by such counsel to  be
necessary to such issuance or sale, then the Company shall not be obligated to
issue  or sell any Option Stock pursuant to the exercise of any Option to  any
Optionee  or  to  any other authorized person unless a registration  statement
that complies with the provisions of the 1933 Act in respect of such shares is
in effect at the time thereof and all other required or appropriate action has
been  taken under and pursuant to the terms and provisions of the 1933 Act  or
other  applicable law, or the Company receives evidence satisfactory  to  such
counsel  that  the  issuance and sale of such shares, in  the  absence  of  an
effective  registration  statement or other action,  would  not  constitute  a
violation of the 1933 Act or other applicable law, or unless any such required
approval  shall have been obtained.  The Company is in no event  obligated  to
register  any  such  shares,  to comply with any exemption  from  registration
requirements  or to take any other action which may be required  in  order  to
permit,  or to remedy or remove any prohibition or limitation on, the issuance
or sale of Option Stock to any Optionee or other authorized person.

The  Committee, as a condition of the grant of an Option and/or  the  exercise
thereof,  may  require that the Optionee execute one or more  undertakings  in
such form as the Committee shall prescribe to the effect that such shares  are
being  acquired  for  investment purposes only and not  with  a  view  to  the
distribution or resale thereof.

6.5  No Obligation to Purchase Shares.

The  granting of an Option pursuant to the Plan shall impose no obligation  on
the Optionee to purchase any shares covered by such Option.

6.6  Payment of Taxes.

Each  Optionee  shall be responsible for all federal, state,  local  or  other
taxes  of  any  nature as shall be imposed pursuant to any law or governmental
regulation  or ruling on any Option or the exercise thereof or on  any  income
which an Optionee is deemed to recognize in connection with an Option.  If the
Committee  shall determine to its reasonable satisfaction that the Company  or
any  of its Subsidiaries is required to pay or withhold the whole or any  part
of  any  estate,  inheritance, income, or other tax  with  respect  to  or  in
connection with any Option or the exercise thereof, then the Company  or  such
Subsidiary  shall have the full power and authority to withhold and  pay  such
tax  out of any shares of Common Stock being purchased by the Optionee or from
the  Optionee's salary or any other funds otherwise payable to  the  Optionee,
or,  prior  to and as a condition of exercising such Option, the  Company  may
require  that the Optionee pay to it in cash the amount of any such tax  which
the Company, in good faith, deems itself required to withhold.

6.7  Choice of Law.

The  validity,  interpretation and administration  of  the  Plan,  any  Option
Agreement,  and  of any rules, regulations, determinations or  decisions  made
thereunder, and the rights of any and all persons having or claiming  to  have
any  interest  therein  or  thereunder, shall  be  determined  exclusively  in
accordance  with  the  laws  of  the State of Nevada.   Without  limiting  the
generality  of the foregoing, the period within which any action in connection
with the Plan must be commenced shall be governed by the laws of the State  of
Nevada,  without regard to the place where the act or omission  complained  of
took place, the residence of any party to such action, or the place where  the
action may be brought or maintained.

6.8  Modification of Plan.

The  Board,  upon  recommendation of the Committee, may, from  time  to  time,
amend,  modify, suspend, terminate or discontinue the Plan at any time without
notice,  provided, however, that no such action by the Board  shall  adversely
affect  any Optionee's rights under any then outstanding Options without  such
Optionee's prior written consent; and, provided further that, except as  shall
be required to comport with changes in the Code, any modification or amendment
of  the Plan that (i) increases the aggregate number of shares of Common Stock
which  may  be issued upon the exercise of Options (other than as provided  in
Paragraph 6.1 above), (ii) changes the formula by which the Exercise Price  is
determined,  (iii)  changes the provisions of the Plan  with  respect  to  the
determination  of Employees to whom Options may be granted or, (iv)  otherwise
materially increases the benefits accruing to Optionees under the Plan,  shall
be  subject to the approval of the Company's shareholders.  In the  event  the
Board  shall terminate or discontinue the Plan, such action shall not  operate
to deprive any Optionee of any rights theretofore acquired by him or her under
the  Plan,  and any Options outstanding as of the date of any such termination
shall  remain in full force and effect according to their terms as though  the
Plan had not been terminated.

6.9  Application of Funds.

The proceeds received by the Company from the sale of Common Stock pursuant to
Options granted under the Plan will be used for general corporate purposes.

6.10 Notices.

Except  as  otherwise  provided herein, any notice which  the  Company  or  an
Optionee  may  be required or permitted to give to the other under  this  Plan
shall  be  in writing and shall be deemed duly given when delivered personally
or  deposited  in  the  United States mail, first class postage  prepaid,  and
properly addressed.  Notice, if to the Company, shall be sent to its President
at  the  address of the Company=s then current corporate office.   Any  notice
sent  by  mail by the Company to an Optionee shall be sent to the most current
address  of  the  Optionee as reflected on the records of the Company  or  its
Subsidiaries  as  of  the time said notice is required.   In  the  case  of  a
deceased  Optionee,  any  notice shall be given  to  the  Optionee's  personal
representative  if such representative has delivered to the  Company  evidence
satisfactory  to the Company of such representative's status as such  and  has
informed  the Company of the address of such representative by notice pursuant
to this Paragraph 6.10.

6.11 Conformity With Applicable Laws and Regulations.

With  respect  to persons who are subject to Section 16 of the 1934  Act,  the
Plan  and  each Option granted and transaction under it are intended  to,  and
shall  be  interpreted  so  as to, be consistent with  the  requirements,  and
satisfy  applicable conditions, of Rule 16b-3 of the Securities  and  Exchange
Commission (as such Rule may be modified, amended or superseded from  time  to
time).   To  the extent any provision of the Plan or any Option Agreement,  or
any  action by the Committee or the Board, shall fail to so comply,  then,  to
the  extent  permitted  by law and deemed advisable  by  the  Committee,  such
provision or action shall be deemed null and void.

6.12 Successors and Assigns.

Subject  to Paragraph 5.6 above, this Plan shall bind and inure to the benefit
of  the  Company,  any  Optionee,  and their respective  successors,  assigns,
personal or legal representatives and heirs.

6.13 Severability.

It  is  intended that each provision of this Plan shall be viewed as  separate
and divisible, and in the event that any provision hereof shall be held to  be
invalid  or unenforceable, the remaining provisions shall continue  to  be  in
full force and effect.

6.14 Titles.

Titles of Articles and Paragraphs are provided herein for convenience only, do
not  modify or affect the meaning of any provision herein, and shall not serve
as a basis for interpretation or construction of this Plan.

6.15 Gender and Number.

As  used  herein, the masculine gender shall include the feminine and  neuter,
the  singular  number the plural, and vice versa, whenever such  meanings  are
appropriate.

     IN  WITNESS  WHEREOF, the Company has caused this Plan to be executed  in
its  corporate  name  by  its President, attested by  its  Secretary  and  its
corporate seal to be hereto affixed, all by authority duly given by the Board.

     As of this the   12th   day of January, 1999.

                                            FOUNTAIN POWERBOAT INDUSTRIES, INC.


                                            By:
                                                    President

ATTEST:

        Secretary

































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