Exhibit 10.1

 

OMEGA PROTEIN CORPORATION
2017 CASH INCENTIVE PERFORMANCE UNIT PLAN

 

THIS OMEGA PROTEIN CORPORATION 2017 CASH INCENTIVE PERFORMANCE UNIT PLAN (this
“Plan”), is hereby adopted by the Board under and subject to the Omega Protein
Corporation 2015 Long Term Incentive Plan (“the 2015 Incentive Plan”), effective
as of January 1, 2017 (the “Effective Date”).

 

1.

Purpose and Performance Unit Awards. The purpose of this Plan is to enable Omega
Protein Corporation (the “Company”) and its Affiliates to obtain and retain the
services of Employees by encouraging their commitment, motivating their superior
performance by means of long-term performance related incentives, encouraging
and providing them with a program that links and aligns their personal interests
to those of the Company’s stockholders, attracting and retaining them by
providing competitive incentive compensation opportunities, and enabling them to
share in the long-term growth and success of the Company. The Plan is adopted
and the Performance Units granted are under the Company’s 2015 Incentive Plan
which was approved by the Company’s stockholders on June 25, 2015. This Plan and
Awards, as defined below, hereunder are intended to meet the performance-based
exception for compensation under Code Section 162(m). This Plan consists of a
grant of Performance Units (“Awards”) to be awarded to eligible Employees as
determined by the Compensation Committee of the Board (“Committee”) at its sole
discretion. Awards will only become payable upon the Committee’s written
certification of the attainment of performance goals established under this Plan
and the Participant’s continued employment during the Performance Period as
provided herein. Each Performance Unit will have the value assigned under
Section 3 hereof which is based upon the extent to which the performance goals
are achieved. The Committee shall cause to be notified or will notify each
eligible Employee (a “Participant”) in writing of the number of Performance
Units granted to the Employee as a Participant in this Plan. Upon the written
certification by the Committee of the level of achievement of the performance
goals for a Performance Period, the Company will pay out the Performance Units
the Participant has earned for such Performance Period in cash in accordance
with Section 4 hereof.

 

 

 
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2.

Committee. The Committee shall have the power and authority to select and grant
to Awards to Participants pursuant to the terms of this Plan and all power and
authority as provided under the 2015 Incentive Plan with respect to Awards and
this Plan, including and in accordance with Code Section 162(m), the Committee
shall have the authority: (a) to construe, interpret and administer this Plan,
reconcile any inconsistency in, correct any defect in and/or supply any omission
in this Plan and any instrument or agreement relating to, or Award granted under
this Plan; (b) to promulgate, amend, and rescind rules and regulations relating
to the administration of this Plan; (c) to authorize any person to execute, on
behalf of the Company, any instrument required to carry out the purposes of this
Plan; (d) to the extent permissible under applicable law, including the
corporate law of the state in which the Company is incorporated, to delegate its
authority to one or more Officers provided that no such authority will be
delegated if it would violate Code Section 162(m); (e) to determine when Awards
are to be granted under this Plan and the applicable date of the Grant (the
“Date of Grant”) as specified in the Award; (f) to determine the number of
Performance Units to each Award; (g) to prescribe the terms and conditions of
each Award, including provisions relating to vesting and earning Performance
Units consistent with Code Section 162(m); (h) to amend any outstanding Awards
as permitted under the 2015 Incentive Plan provided that no such amendment will
be made if it would not be permitted under Code Section 162(m) with respect to
performance-based compensation; (i) to make decisions with respect to
outstanding Awards that may become necessary upon a Change in Control or an
event that triggers anti-dilution adjustments to the extent permitted under the
2015 Incentive Plan including Sections 4.1, 4.2 and 25 and as specified in
8.2(c)(iii) due to asset write downs, litigation or claims judgments or
settlements, the effect of changes in tax laws, accounting principles or other
regulatory rules affecting reported results; any reorganization or structuring
programs; extraordinary, unusual or infrequently occurring items as described in
Accounting Principles Board Opinion No. 30 (or successor or pronouncement
thereto) and/or management’s discussion and analysis of financial condition and
results of operations appearing in the Company’s annual report to stockholders
for the applicable year; acquisitions or divestitures; any other specific
unusual or nonrecurring events or objectively determinable category thereof; and
a change in the Company’s fiscal year and only to the extent such amendment or
adjustment is consistent with Code Section 162(m); (j) to exercise discretion to
make any and all other determinations which it determines to be necessary or
advisable for administration of this Plan but only to the extent consistent with
Code Section 162(m). The Committee’s decisions shall be binding and conclusive
upon all persons, including the Participant and his or her legal representative
in respect of any questions arising under the Plan or any Awards granted
thereunder.

 

For administration, construction and interpretation, all terms not otherwise
defined herein shall have the meanings of such terms in the 2015 Incentive Plan.

 

3.

Earning of Performance Units.

 

(a)     Performance Goals. The number of Performance Units granted to a
Participant in the Performance Period will be earned in an amount equal to 1/3
of the total Performance Units awarded to the Participant for each calendar year
of the Performance Period, and the value of each Performance Unit for such
calendar year will be determined at the end of the applicable calendar year of
the Performance Period based on the relative placement of the Company’s Total
Shareholder Return (“TSR”) compared to the Total Shareholder Return of the Peer
Group. This comparison will generate a percentage that will relate to one of
four quartiles: (i) less than 25%, (ii) 25% up to 50%, (iii) 50% up to 75%, and
(iv) greater than 75%.

 

 
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That quartile will determine the value of a Performance Unit as set forth below:

 

   

Company Comparison

to Peer Group

Value of a Performance

Unit

Maximum

 

 

75th % Quartile

$2.00

Target

 

 

50th % Quartile

$1.00

Threshold

 

 

25th % Quartile

$0.50

Below Threshold

 

 

< 25th % Quartile

$0

 

Values of Performance Units between quartiles will be interpolated, unless the
Company’s TSR is below the 25th quartile, in which case no payment would be
made, or unless the Company’s TRS is above the 75th quartile in which case the
value of the Performance Unit is capped at $2.00. In the event that the
Company’s TSR is negative during the applicable performance measurement period,
the maximum value of the Performance Unit for that period would be capped at
$1.00.

 

TSR for the Company is calculated with respect to each calendar year in the
Performance Period by dividing (a) the average closing price of the Company’s
common stock for the last 25 trading days of the applicable calendar year, less
the average closing price of the Company’s common stock for the 25 trading days
immediately preceding the calendar year, by (b) the average closing price of the
Company’s common stock for the 25 trading days immediately preceding the
calendar year. TSR is calculated with respect to each year in the Performance
Period for the companies in the Peer Group on the same basis as total
shareholder return is calculated for the Company.

 

If any Performance Units are earned during the Performance Period as certified
by the Committee, the Participant will accrue such units until the end of the
Performance Period. At the end of the Performance Period, the Participant will
be paid within sixty (60) days following the end of the Performance Period, a
cash amount as provided in Section 4 subject to the Participant’s continuing
employment with the Company or an Affiliate from the Date of Grant through the
payment date (except as provided in Section 4 with respect to a separation from
service due to death or Disability).

 

(b)     Employment Condition. Except as provided in Section 4 hereof, a
Participant must be employed by the Company on the payment date as provided in
Section 4 in respect of a Performance Unit to be eligible for any payment with
respect to an Award for the Performance Period.

 

(c)      Certification. Following completion of each calendar year in the
Performance Period, the Committee shall review and certify in writing whether,
and to what extent, the Performance Goal for the calendar year has been achieved
and, if so, calculate and certify in writing the number of Performance Units
that the Participant earned and the value of such units for such calendar year
based upon the Company’s TSR relative to the Peer Group TSR.

 

 
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4.

Payment. Payment in respect of the Performance Unit Award that is earned for
each calendar year of the Performance Period will be made solely in a cash
amount equal to that employee’s number of Performance Units earned for each
calendar year multiplied by the value of the Performance Units for that
corresponding calendar year, as set forth in the above chart, based upon the
certifications required by Section 3(c) above, and will be paid within sixty
(60) days following the end of the Performance Period, subject to the
Participant’s continuous Employment with the Company or an Affiliates through
the payment date; provided that payment with respect to Performance Units for a
Plan Year earned by a Participant during the Performance Period but who
separates from service prior to the expiration of the Performance Period on
account of his or her death or Disability will still be paid for that completed
Plan Year within 30 days following the separation date from service due to such
death or Disability.

 

Upon a Change in Control prior to the expiration of the Performance Period or
prior to the payment date, the Performance Units that have been earned for
completed calendar years of the Performance Period will be paid no later than 30
days after the date of the Change in Control, and for incomplete calendar years,
the earnings of the remaining Performance Units granted to a Participant will be
accelerated as of the date of the Change in Control and valued at the target
value as provided in the chart in Section 3 and such amounts will be paid no
later than 30 days after the date of the Change in Control.

 

5.

Tax Withholding and Tax Advice. All payments with respect to Performance Unit
Awards are subject to all applicable federal, state, foreign and local taxes,
and tax withholding requirements, and the Company shall have the right to
withhold from any payment due under the Plan and any Performance Unit Award an
amount equal to the minimum required withholding obligation in respect of any
federal, state, foreign and local taxes. Each Participant is solely responsible
for the tax consequences to the Participant or any beneficiary with respect to
any Performance Unit Award under this Plan and is advised to consult his or her
own tax advisor with respect to any Performance Unit Award and the payment
thereof under this Plan.

 

6.

No Rights as Stockholder. The Participant shall have no rights as a stockholder
with respect to the shares of Common Stock underlying the Performance Units.

 

7.

Compliance with Laws and Regulations. The issuance and transfer of the
Performance Units shall be subject to compliance by the Company and the
Participant with all applicable requirements of securities laws and with all
applicable requirements of any stock exchange on which the Common Stock may be
listed at the time of such issuance or transfer.

 

8.

No Right to Employment or other Service. Nothing in this Plan shall be deemed by
implication or otherwise to impose any limitation on any right of the Company or
any of its Affiliates to terminate the Participant’s Employment or other service
at any time.

 

 
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9.

Notices. All notices, demands and other communications provided for or permitted
hereunder shall be made in writing and shall be by registered or certified first
class mail, return receipt requested, facsimile, courier service or personal
delivery:

 

if to the Company:

 

2105 City West Blvd.

Suite 500

Houston, TX 77042

Attention: General Counsel

 

if to the Participant, at the Participant’s last known address on file with the
Company.

 

All such notices, demands and other communications shall be deemed to have been
duly given when delivered by hand, if personally delivered; when delivered by
courier, if delivered by commercial courier service; five (5) business days
after being deposited in the mail, postage prepaid, if mailed; and when receipt
is mechanically acknowledged, if telecopied.

 

10.

Electronic Delivery. The Committee may, in its sole discretion, deliver any
documents related to an Award by electronic means. To participate in the Plan, a
Participant consents to receive all applicable documentation by electronic
delivery and through an on-line (and/or voice activated) system established and
maintained by the Committee or a third party vendor designated by the Committee.

 

11.

Bound by Plan and Committee Determinations. The Participant will be bound by all
of the terms and provisions of the Plan, the 2015 Incentive Plan and
determinations by the Committee.

 

12.

Beneficiary. No Award shall be transferable other than by the laws of descent
and distribution. The Participant may file with the Committee a written
designation of a beneficiary in the event of Participant’s death on such form as
may be prescribed by the Committee and may, from time to time, amend or revoke
such designation. If no designated beneficiary survives the Participant, the
legal representative of the Participant’s estate shall be deemed to be the
Participant’s beneficiary.

 

13.

Successors. The terms of this Plan shall be binding upon and inure to the
benefit of the Company, its successors and assigns, and on the Participant and
the beneficiaries, executors, heirs and successors of the Participant.

 

14.

Amendment of Performance Unit Award and Plan. Subject to Sections 2 and 15 of
this Plan and the 2015 Incentive Plan including, without limitation, Section
3.3(f) and only in accordance with Code Section 162(m), the Committee at any
time and from time to time may amend the terms of this Plan or a Performance
Unit Award.

 

15.

Adjustment Upon Changes in Capitalization. The shares of Common Stock underlying
the Performance Units may be adjusted as provided in the 2015 Incentive Plan in
accordance with Code Section 162(m).

 

16.

Governing Law. This Plan shall be construed and interpreted in accordance with
the laws of the State of Nevada without regard to principles of conflicts of law
thereof, or principles of conflicts of laws of any other jurisdiction that could
cause the application of the laws of any jurisdiction other than the State of
Nevada.

 

 
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17.

Severability. Every provision of this Plan is intended to be severable and any
illegal or invalid term shall not affect the validity or legality of the
remaining terms.

 

18.

Headings. The headings of the Sections hereof are provided for convenience only
and are not to serve as a basis for interpretation of construction, and shall
not constitute a part of this Plan.

 

19.

Code Section 162(m) Requirements.

 

(a)     This Plan and Performance Unit Awards hereunder are intended to be
contingent on the attainment of one or more “pre-established,” objective
performance based on criteria that have been approved by the Company’s
stockholders in the 2015 Incentive Plan in accordance with Code Section 162(m).

 

(b)     The performance goals are hereby set by the Committee on the Effective
Date which is before 25% of the Performance Period has elapsed and within 90
days of the commencement of the Performance Period and the performance measures
have been approved by the stockholders under the 2015 Incentive Plan.

 

(c)     Before payment, the Committee must confirm in writing that the
performance goals and any other material terms were in fact satisfied.

 

(d)     To the extent permitted under and in accordance with the 2015 Incentive
Plan and only to the extent permitted under Code Section 162(m), the Committee
may use its discretion to eliminate or reduce a Performance Unit Award but it
may not increase any amount payable to a Participant who is a “covered employee”
within the meaning of Code Section 162(m).

 

20.

Definitions.

 

(a)     “Disability” shall mean the Participant’s inability to perform his
duties to the Company or a Company Affiliate on account of mental or physical
disability lasting continuously for a period of 90 days or more as determined by
the Committee in its sole discretion, and Participant agrees by accepting an
Award to provide the Committee with the necessary information to make such a
determination.

 

(b)     “Performance Goals” means those measures as described in Section 3(a)
hereof.

 

(c)     “Performance Period” is the 36-month period commencing on January 1,
2017 and ending on December 31, 2019. Within the Performance Period are three
periods that for convenience are referred to as “calendar years”:

 

 

(i)

January 1, 2017 (date of Plan adoption) to December 31, 2017

 

 
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(ii)

January 1, 2018 to December 31, 2018

 

 

(iii)

January 1, 2019 to December 31, 2019

 

(d)     “Peer Group” means the Russell 2000 Index as in effect on applicable
measurement periods during the Performance Period.

 

(e)     “Performance Unit” represents the right of a Participant under this Plan
to receive a cash amount for each Performance Unit awarded when such Performance
Unit becomes vested and payable valued in accordance with Section 3 hereof.

 

[Signature Page Follows]

 

 
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IN WITNESS WHEREOF, the Company executed this Plan as of the day first written
above.

 

 

 

OMEGA PROTEIN CORPORATION

 

       

 

 

 

 

 

 

/s/ Bret D. Scholtes 

 

 

 

Bret D. Scholtes

 

 

 

President and Chief Executive Officer

 

 

 

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