EXHIBIT 10.5
April __, 1998
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Dear ▇▇. ▇▇▇▇▇:
Omega Protein Corporation (the "Company") has determined that it is in the
best interests of the Company and its shareholders to assure that the Company
will have your continued dedication, and to provide you (the "Executive") with
compensation and benefits arrangements which are competitive with those of other
corporations and which ensure that your compensation and benefits expectations
will be satisfied. Therefore, in order to accomplish these objectives, the
Company does hereby enter into this agreement (this "Agreement"), which shall
supersede any other employment agreements between you and the Company.
In order to induce you to remain in the employ of the Company, it is agreed
as follows:
1. Employment. The Company hereby employs the Executive, and the Executive
hereby accepts such employment, all upon the terms and conditions set forth
herein.
2. Term. Subject to the terms and conditions set forth herein, the
Executive shall be employed for a continually renewing term of three (3) years
commencing on the date hereof and renewing each day thereafter for an additional
day without any further action by either the Company or the Executive, it being
the intention of the parties that there shall be continuously a remaining term
of three (3) years' duration of the Executive's Employment until an event has
occurred as described in, or one of the parties shall have made an appropriate
election pursuant to, the provisions of Section 5.
3. Duties and Responsibilities.
A. Capacity. The Executive shall serve in the capacity of Senior
Vice President, General Counsel and Corporate Secretary of the
Company and its successors or in a substantially similar capacity
with a subsidiary, affiliate, or joint venture of the Company.
The Executive's duties under this Agreement shall consist of such
general management activities as are consistent with the
responsibilities of
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said office and such other activities as may hereafter be
assigned to him by the Chief Executive Officer of the Company or
his designee (the "Supervisor"). All such duties shall be
performed in accordance with any written or oral direction from
time to time furnished to the Executive by the Supervisor, and
the Executive shall report to Supervisor or to such officer of
the Supervisor or the Company as is designated by the Supervisor.
B. Full-Time Duties. The Executive shall devote his full business
time, attention and energies to the business of the Company and
shall not be engaged in any other business activity, whether or
not pursued for gain, profit or other pecuniary advantage, which
would impair his ability to fulfill his duties to the Company
under this Agreement, without the prior written consent of the
Company. The Executive shall be allowed, to the extent such
activities do not substantially interfere with the performance by
the Executive of his duties and responsibilities hereunder, to
(a) manage the Executive's personal affairs, and (b) (i) serve on
boards or committees of civic or charitable organizations or
trade associations, and (ii) serve on the board of directors of
any corporation; provided, however, that the Executive shall
advise the Company in writing of any such corporate directorship
under clause (b)(ii) and, if requested by the Company, the
Executive shall first demonstrate, to the reasonable satisfaction
of the Company, that any such directorship does not detract from
the Executive's performance of his duties and responsibilities
under this Agreement. Nothing contained in this paragraph B shall
prevent the Executive from passively investing his assets in such
a form or manner as will not conflict with the terms of this
Agreement and will not require services on the part of the
Executive in the operation of the business of the companies or
other enterprises in which such investments are made.
C. Standard of Performance. The Executive will perform his duties
under this Agreement with fidelity and loyalty, to the best of
his ability, experience and talent and in a manner consistent
with his fiduciary responsibilities.
D. Location. The Executive's primary place of employment shall be
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Executive shall not be required to relocate more than 35 miles
from ▇▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
without his consent.
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4. Compensation.
A. Base Salary. The Company shall pay the Executive a salary (the
"Base Salary") of $120,000 per annum, prorated for partial years
of employment. The Base Salary shall be payable in accordance
with the general payroll practices of the Company in effect from
time to time. The Company shall review the Base Salary then being
paid to the Executive at such times as the Company regularly
reviews the compensation paid to employees generally (but no less
frequently than once each fiscal year). Upon completion of such
review, the Company in its sole discretion may increase, decrease
or maintain the Executive's then current Base Salary, provided,
however, that the Company may decrease the Executive's then
current Base Salary only with the prior written consent of the
Executive.
B. Benefits.
(1) Generally. The Executive shall be entitled to participate,
in accordance with the Company's regular practices with
respect to its similarly situated executives, in the
Company's pension, profit-sharing, bonus, disability,
accident, medical, life insurance, hospitalization plans and
any other employee benefit program maintained by the Company
for its similarly situated executives. The Company will have
the right to amend or terminate any such benefit plans it
may choose to establish.
(2) Reimbursements. The Executive shall be entitled to
reimbursement from the Company for reasonable out-of-pocket
expenses incurred by him in the course of the performance of
his duties hereunder, upon the submission of appropriate
documentation.
(3) Vacations and Other Absences. The Executive shall be
entitled to such vacation, holidays and, subject to the
provisions of Section 5, other paid or unpaid leaves of
absence as are consistent with the Company's normal policies
or as are otherwise approved by the Company.
C. Payments. All payments to the Executive provided for under this
Agreement shall be paid in cash from the general funds of the
Company, and no special or separate funds shall be established
and no other segregation of assets shall be made to assure
payment. The
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Executive shall have no right, title or interest whatsoever in or
to any investments which the Company may make to aid it in
meeting its obligations hereunder. Nothing contained in this
Agreement, and no action taken pursuant to the provisions hereof,
shall create, or be construed to create, a trust of any kind or
any fiduciary responsibility of the Company to the Executive or
any other person. To the extent that any person acquires a right
to receive payments from the Company hereunder, such right shall
be no greater than the right of an unsecured creditor of the
Company.
5. Termination.
A. Termination by the Company. At the Company's election, this
Agreement may be terminated by the Company in any of the
following circumstances:
(1) If the Company shall have "Cause" (as hereinafter defined);
(2) If the Executive shall die; or
(3) If the Executive shall be unable, with reasonable
accommodation, to perform his duties hereunder owing to
illness or incapacity for a total of 120 days during any
360-day period;
The termination of the Executive's employment pursuant to this
Section 5.A. shall be effective (i) in the case of a termination
pursuant to paragraph (1) above, as of the date specified in
Section 5.B., (ii) in the case of a termination pursuant to
paragraph (2) above, at death, or (iii) in the case of a
termination pursuant to paragraph (3) above, upon the expiration
of 30 days' written notice from the Company to the Executive.
Upon any termination of the Executive's employment pursuant to
paragraph (1), (2) or (3) above, the Company shall have no
further liability or obligation under or in connection with this
Agreement, except to pay the portion of the Executive's Base
Salary and other benefits earned or accrued at the date of
termination. If the Executive is otherwise eligible for benefits
under any long-term disability plan sponsored by the Company,
then a termination solely pursuant to paragraph (3) above shall
not affect the Executive's entitlement to such benefits. In the
event that the Executive's employment with the Company is
terminated by the Company for any reason other than for Cause,
death or disability (as defined in
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paragraph (3) above), the Company shall have no further liability
or obligation under or in connection with this Agreement except
to pay the Executive the "Severance Payment" (as defined below)
in eighteen (18) equal monthly installments, the first such
installment payable within 10 days after the date of termination
and the remaining installments payable monthly thereafter. For
purposes of this Agreement, "Severance Payment" shall mean an
amount equal to 2.99 times the Executive's "base amount" within
the meaning of Sections 280G(b)(3) and 280G(d) of the Internal
Revenue Code of 1986, as amended (the "Code"), and any applicable
temporary or final regulations promulgated thereunder, or its
equivalent as provided in any successor statute or regulation. If
Code Section 280G (and any successor provisions thereto) shall be
repealed or otherwise be inapplicable, then the Severance Payment
shall be equal to 2.99 times the Executive's then current Base
Salary. Should any of the payments, singly, in any combination or
in the aggregate, that are provided for hereunder to be paid to
or for the benefit of the Executive be determined or alleged to
be subject to an excise or similar purpose tax pursuant to
Section 4999 of the Code, or any successor or other comparable
federal, state or local tax law by reason of being a "parachute
payment" (within the meaning of Section 280G of the Code), the
Company shall pay to the Executive such additional compensation
as is necessary (after taking into account all federal, state and
local taxes payable by the Executive as a result of the receipt
of such additional compensation) to place the Executive in the
same after-tax position (including federal, state and local
taxes) he would have been in had no such excise or similar
purpose tax (or interest or penalties thereon) been paid or
incurred. Without limiting the obligation of the Company
hereunder, the Executive agrees to negotiate with the Company in
good faith with respect to procedures reasonably requested by the
Company which would afford the Company the ability to contest the
imposition of such excise or similar purpose tax. The termination
of the Executive's employment by the Company other than for Cause
shall be effective as of the date specified in this Section 5.A.
B. Cause. "Cause" means (i) the Executive's final conviction of a
felony crime that enriched the Executive at the expense of the
Company; or (ii) the Executive's deliberate and intentional
continuing failure to substantially perform his duties and
responsibilities hereunder (except by reason of the Executive's
incapacity due to physical or mental illness or injury) for a
period of forty-five (45) days after the "Required Board
Majority" (as defined
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below) has delivered to the Executive a written demand for
substantial performance hereunder which specifically identifies
the bases for the Required Board Majority's determination that
the Executive has not substantially performed his duties and
responsibilities hereunder (such period being the "Grace
Period"); provided, that for purposes of this clause (ii), the
Company shall not have Cause to terminate the Executive's
Employment unless (a) at a meeting of the Board called and held
following the Grace Period in the city in which the Company's
principal executive offices are located of which the Executive
was given not less than ten (10) days' prior written notice and
at which the Executive was afforded the opportunity to be
represented by counsel, appear and be heard, the Required Board
Majority shall adopt a written resolution which (1) sets forth
the Required Board Majority's determination that the failure of
the Employee to substantially perform his duties and
responsibilities hereunder has (except by reason of his
incapacity due to physical or mental illness or injury) continued
past the Grace Period and (2) specifically identifies the bases
for that determination and (b) the Company, at the written
direction of the Required Board Majority, shall deliver to the
Executive a notice of termination for Cause to which a copy of
that resolution, certified as being true and correct by the
secretary or any assistant secretary of the Company, is attached.
No act or failure to act on the part of the Executive shall be
considered "deliberate and intentional" unless it is taken or
omitted to be taken by the Executive in bad faith or without a
reasonable belief that the Executive's act or omission was in the
best interests of the Company. "Required Board Majority" means at
any time a majority of the members of the Board of Directors of
the Company at that time which includes at least a majority of
the outside directors at that time. Termination of the
Executive's employment by the Company for Cause shall be
effective on the date of the notice of termination for Cause is
delivered to the Executive.
C. Termination by the Executive. In the event that the Executive
terminates employment hereunder for "Good Reason" (as defined in
Section 5.D), the Company shall have no further liability or
obligation under or in connection with this Agreement, except to
pay the Executive the Severance Payment in eighteen (18) equal
monthly installments, the first such installment payable within
ten (10) days after the date of termination and the remaining
installments payable monthly thereafter. The termination of the
Executive's employment for "Good Reason" shall be effective as of
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the date specified in Section 5.D. In the event that the
Executive voluntarily terminates employment hereunder for other
than "Good Reason" (as defined in Section 5.D), the Company shall
have no further liability or obligation under or in connection
with this Agreement. Upon any termination or expiration of the
Executive's employment hereunder, the Executive shall have no
further liability or obligation under or in connection with this
Agreement; provided, however, that the Executive shall continue
to be subject to the provisions of Sections 6 and 7 hereof (it
being understood and agreed that such provisions shall survive
any termination or expiration of the Executive's employment
hereunder). Upon any voluntary termination by the Executive, for
any reason other than Good Reason, or expiration of Executive's
employment hereunder, the Company shall have no further liability
under or in connection with this Agreement, except to pay the
portion of the Executive's Base Salary earned or accrued at the
date of termination.
D. Good Reason. The Executive's employment hereunder shall be deemed
to have been terminated for "Good Reason" if such termination of
employment occurs within one year following either (i) a
diminution in the compensation (without the consent of the
Executive), or a material diminution of the responsibilities of
the Executive, (ii) ▇▇▇▇▇▇ Corporation (the "Parent") or any
subsidiary of the Parent merging with or into or consolidating
with another corporation and as a result thereof less than 50% of
the outstanding voting securities of the Parent (or if the
outstanding voting securities of the Parent are converted into or
exchanged for voting securities of some other corporation, less
than 50% of the outstanding voting securities of such other
corporation ) are then owned in the aggregate by the stockholders
of the Parent immediately prior to such merger or consolidation;
(iii) the Executive being required to relocate more than 35 miles
from ▇▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇,
without his consent, (iv) any "person," within the meaning of
Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), other than any employee or
Subsidiary of the Parent, any employee benefit plan (or related
trust) applicable to the Parent or any of its Subsidiaries or
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ or any corporation, person, partnership, trust
or other entity controlled, directly or indirectly, by him
becoming the beneficial owner (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of securities of the Company
representing 20% or more of the combined voting power of the
Company's then outstanding voting securities; or (v) the Company
failing to comply
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with any material provision of this Agreement. Termination of
employment for Good Reason shall be deemed to be effective upon
10 days' written notice of termination from the Executive or the
Company, as the case may be; provided, however, that no
termination by the Executive based on a diminution in duties and
responsibilities shall occur until the Executive has first
notified the Company in writing as to the specific nature of the
diminution in duties or responsibilities and afforded the Company
15 days in which to modify such duties or responsibilities.
6. Confidential Information.
A. Nondisclosure. The Executive hereby acknowledges that it will be
necessary in connection with the performance of services
hereunder to provide or make available to the Executive certain
confidential and proprietary information, including, but not
limited to, business and financial information, technological
information, customer lists and financial information on
customers, intellectual property, trade secrets and other
information relating to the businesses, products, technology,
services, customers, methods or tactics of the Company or its
affiliates (any such confidential or proprietary information
being hereinafter referred to as "Confidential Information"). The
Executive further acknowledges that the Confidential Information
includes certain protected trade secrets and agrees that any such
trade secrets shall remain the property of the Company or its
affiliates at all times during the term of this Agreement and
following the expiration or termination hereof. The Executive
shall not publish, disseminate, distribute, disclose, sell,
assign, transfer, copy, remove from the Company's premises,
commercially exploit, or otherwise make use of any Confidential
Information to or for the use or benefit of the Executive or any
other person, firm, corporation or entity, except as specifically
authorized in writing by the Company or as required for the due
and proper performance of his duties and obligations under this
Agreement. In addition, the Executive shall employ all necessary
safeguards and precautions in order to ensure that unauthorized
access to the Confidential Information is not afforded to any
person, firm, corporation or entity. Upon any expiration or
termination of this Agreement, or if the Company so requests at
any time, the Executive shall promptly return to the Company all
Confidential Information in the Executive's possession, whether
in writing, on computer disks or other media, without retaining
any copies, extracts or other reproductions thereof.
Notwithstanding the foregoing, nothing contained in this
paragraph
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A shall prevent the publishing, dissemination, distribution,
disclosure, sale, assignment, transfer, copying, removal,
commercial exploitation or other use by the Executive of any
information which (i) is generally available to the public (other
than through a breach on the part of the Executive of any of the
terms or provisions hereof), (ii) is lawfully obtained by the
Executive from a source other than the Company or its affiliates,
directors, officers, employees, agents or other representatives
(provided, however, that such source is not bound by a
confidentiality agreement with the Company or any of its
affiliates and is not otherwise under an obligation of secrecy or
confidentiality to either of them), or (iii) is required to be
disclosed by judicial or administrative process or, in the
opinion of counsel, by the requirements of applicable law
(provided, however, that the Executive complies fully with the
provisions of paragraph B below).
B. Requests for Disclosure. If the Executive is requested (whether
by oral questions, interrogatory, request for documents,
subpoena, civil investigative demand or other legal process) to
disclose any part of the Confidential Information, the Executive
shall (i) give prompt written notice to his supervisor of the
existence of, and the circumstances attendant to, such request,
(ii) consult with his supervisor as to the advisability of taking
legally available steps to resist or narrow any such request or
otherwise to eliminate the need for such disclosure, and (iii) if
disclosure is required, cooperate with his supervisor in
obtaining a protective order or other reliable assurance in form
and substance satisfactory to his supervisor that confidential
treatment will be accorded to such portion of the Confidential
Information as is required to be disclosed.
7. Noncompetition. The Executive hereby expressly covenants and agrees,
which covenants and agreements are of the essence of this contract, that he will
not, directly or indirectly, for himself or on behalf of, or in conjunction
with, any other person, persons, company, partnership or corporation, during the
term of this agreement and for a period of two (2) years immediately following
his voluntary termination of employment hereunder for other than Good Reason or
his termination by the Company for Cause:
i. call upon any customer or customers of the Company solicited or
contacted by the Executive or whose account was serviced by the
Executive, pursuant to his employment hereunder, for the purpose
of soliciting or selling marine protein products within the
territory stated in Paragraph 7.iv;
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ii. divulge to any person, persons, company, partnership or
corporation the methods and systems used by the Company in
producing, selling or marketing marine protein products;
iii. induce or attempt to induce, directly or indirectly, any employee
to quit the Company's employ or otherwise in any manner interfere
with or disrupt the Company's relationship with other employees;
or
iv. engage in the marine protein business as an officer, director,
employee, partner, or consultant anywhere within the states of
Texas, Louisiana, Mississippi, Alabama, Florida, Georgia, South
Carolina, North Carolina, Virginia, or Maryland.
8. Arbitration. Any dispute or controversy arising under or in connection
with this Agreement shall be settled exclusively by final and binding
arbitration in Houston, Texas, in accordance with the Commercial Arbitration
Rules of the American Arbitration Association ("AAA"). The arbitrator shall be
selected by mutual agreement of the parties, if possible. If the parties fail to
reach agreement upon appointment of an arbitrator within 30 days following
receipt by one party of the other party's notice of desire to arbitrate, the
arbitrator shall be selected from a panel or panels of persons submitted by the
AAA. The selection process shall be that which is set forth in the AAA
Commercial Arbitration Rules then prevailing, except that, if the parties fail
to select an arbitrator from one or more panels, AAA shall not have the power to
make an appointment but shall continue to submit additional panels until an
arbitrator has been selected. This agreement to arbitrate shall not preclude the
parties from engaging in voluntary, non-binding settlement efforts including
mediation.
9. Notices. All notices and other communications hereunder shall be in
writing and shall be given (and shall be deemed to have been duly given upon
receipt) by Federal Express overnight delivery, to the respective parties at the
following addresses (or at such other address as either party shall have
previously furnished to the other in accordance with the terms of this
Section 9):
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If to the Company:
President and Chief Executive Officer
Omega Protein Corporation
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If to the Executive:
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10. Amendment; Waiver. The terms and provisions of this Agreement may be
modified or amended only by a written instrument executed by each of the parties
hereto, and compliance with the terms and provisions hereof may be waived only
by a written instrument executed by each party entitled to the benefits thereof.
No failure or delay on the part of any party in exercising any right, power or
privilege granted hereunder shall constitute a waiver thereof, nor shall any
single or partial exercise of any such right, power or privilege preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege granted hereunder.
11. Entire Agreement. This constitutes the entire agreement between the
parties with respect to the subject matter hereof and supersedes all prior
written or oral agreements or understandings between the parties relating
thereto.
12. Severability. In the event that any term or provision herein is found
to be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining terms and provisions hereof shall not be in any
way affected or impaired thereby, and shall be construed as if such invalid,
illegal or unenforceable provision had never been contained therein.
13. Binding Effect; Assignment. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and assigns
(it being understood and agreed that, except as expressly provided herein,
nothing contained herein is intended to confer upon any other person or entity
any rights, benefits or remedies of any kind or character whatsoever). Neither
party may assign this Agreement without the prior written consent of the other
party; provided, however, that the Company may assign this Agreement to any of
its affiliates or to any successor.
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14. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas (except that no effect shall be
given to any conflicts of law principles thereof that would require the
application of the laws of another jurisdiction).
15. Headings. The headings of the sections contained herein are for
convenience only and shall not be deemed to control or affect the meaning or
construction of any provision hereof.
16. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
If this letter sets forth our agreement on the subject matter hereof,
kindly sign and return to the Company the enclosed copy of this letter which
will then constitute our agreement on the subject.
OMEGA PROTEIN CORPORATION
By:
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President and Chief Executive Officer
ACKNOWLEDGED AND AGREED TO:
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