Exhibit 10.1

SEPARATION AGREEMENT AND RELEASE

This Separation Agreement and Release (the “Agreement”) is dated as of
December 8, 2010 but is effective as of the Date of Retirement (as defined
herein). This Agreement is made as a mutually agreed compromise between the
Parties (as defined below) for the complete and final settlement of all claims,
differences, and alleged causes of action existing between them as of the
Effective Date.

PARTIES

The Parties to this Agreement are Omega Protein Corporation (the “Company”) and
Robert W. Stockton (the “Executive”). The Company and the Executive are referred
to collectively as the “Parties.”

PREAMBLE

WHEREAS, the Executive is employed as the Executive Vice President and Chief
Financial Officer of the Company, pursuant to that certain Amended and Restated
Executive Employment Agreement dated December 31, 2007 (as amended to date, the
“Employment Agreement”);

WHEREAS, the Executive and the Company also entered into that certain
Indemnification Agreement dated June 11, 2004 (the “Indemnification Agreement”);

WHEREAS, the Executive intends to retire from all positions he held with the
Company and/or its Affiliates on the Date of Retirement;

WHEREAS, the Parties intend to terminate the Employment Agreement as of the
Effective Date (except with respect to the Executive’s and the Company’s
continuing obligations under Sections 8, 9, 10 and 12 of the Employment
Agreement) and enter into this Agreement;

WHEREAS, the Parties intend to enter into a Consulting Agreement effective
immediately after the Date of Retirement (the “Consulting Agreement”);

WHEREAS, the Parties intend that this Agreement shall operate as a complete and
final settlement of all claims, differences and alleged causes of action
existing between them as of the Effective Date of this Agreement;

WHEREAS, the Executive has had at least 21 days to consider this Agreement;

WHEREAS, the Company has advised the Executive in writing to consult with
independent legal counsel and tax advisors respecting this Agreement;

WHEREAS, the Executive has had an opportunity to consult with independent legal
counsel and tax advisors with respect to the terms, meaning and effect of this
Agreement; and

--------------------------------------------------------------------------------

WHEREAS, the Executive understands that the Company regards the above
representations as material and that the Company is relying on these
representations in entering into this Agreement.

NOW, THEREFORE, in consideration of the mutual promises and obligations
contained and exchanged in this Agreement and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
Parties agree as follows:

1. Definitions.

1.1 “Code” shall mean the Internal Revenue Code of 1986, as amended, and the
notices, rules and regulations thereunder.

1.2 “Company and/or its Affiliates” means and includes the Company, its
Affiliates, and all of their predecessors, successors and assigns and parents,
subsidiaries, divisions or other affiliated companies, partners, partnerships,
assigns, present and former officers, directors, employees, stockholders,
agents, insurers, employee benefit plans or programs and their fiduciaries,
whether in their individual or official capacities and all of the successors and
assigns of the foregoing. “Affiliates” also includes a person or entity who,
directly or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, the Company.

1.3 “Date of Retirement” means December 31, 2010.

1.4 “D&O Insurance Policy” means the Company’s directors’ and officers’
liability insurance policies in effect on the Date of Retirement.

Capitalized terms used but not otherwise defined herein shall have the meanings
ascribed to such terms in the Employment Agreement.

2. Termination of the Employment Agreement. The Parties agree that the
Employment Agreement is hereby terminated and of no further force and effect as
of Date of Retirement, except with respect to the Executive’s obligations under
Section 8, Executive’s Confidentiality Obligations; Section 9, Disclosure of
Information, Ideas, Concepts, Improvements, Discoveries and Inventions;
Section 10, Ownership of Information, Ideas, Concepts, Improvements, Discoveries
and Inventions, and all Original Works of Authorship; and Section 12,
Executive’s Non-Competition Obligations, all of which survive the termination of
the Employment Agreement. Except as set forth in Section 5, this Agreement shall
have no effect on the Indemnification Agreement, the D&O Insurance Policy and
any agreement or plan governing the Executive’s equity incentive awards (e.g.,
stock options and/or restricted stock).

3. Pay Through Date of Retirement. The Executive acknowledges that he has
received all salary, wages, bonuses, accrued and unpaid vacation time, sick time
or other paid time off earned, and other compensation earned on or before the
Date of Retirement.

4. Resignation by the Executive. Effective as of the Date of Retirement, the
Executive hereby resigns from all positions he holds as a director or officer
with the Company and/or its Affiliates.

 

2

--------------------------------------------------------------------------------

5. Vesting of Stock Options. The Parties hereby agree that, subject to the
Executive’s execution of this Agreement containing a release from liability and
waiver of right to sue the Company and/or its Affiliates, the Company agrees to
vest any of the Executive’s outstanding stock options to purchase securities of
Company that were not vested by their own terms on the Date of Retirement.

6. Release by the Executive. In consideration of the Company’s agreement to vest
any of the Executive’s outstanding options to purchase securities of Company in
Section 5, the Company’s release in Section 7 and the Company’s execution and
delivery of the Consulting Agreement, the Executive unconditionally, fully and
forever waives, releases, discharges, agrees to hold harmless, and promises not
to sue the Company and/or its Affiliates, from and for any claim, action or
right of any sort, known or unknown, arising on or before the Date of
Retirement.

6.1 This release includes, but is not limited to, any claim arising out of or
related to the following: any claim for any wages, salary, bonus, compensation,
sick time, vacation time, paid leave or other remuneration of any kind; any
claim for additional or different compensation or benefits of any sort,
including any participation in any severance pay plan; any claim of
discrimination or retaliation on the basis of age, race, sex, religion, marital
status, sexual preference, national origin, handicap or disability, veteran
status, or special disabled veteran status; any claim arising under Title VII of
the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Age
Discrimination in Employment Act of 1967, the Employee Retirement Income
Security Act of 1974, the Americans with Disabilities Act, the Family and
Medical Leave Act, the Fair Labor Standards Act of 1938, the Texas Commission on
Human Rights Act, Chapter 451 of the Texas Labor Code, or the Texas Payday Law,
as such statutes may be amended from time to time; any other claim based on any
statutory prohibition; any claim arising out of or related to an express or
implied employment contract, any other contract affecting terms and conditions
of employment, or a covenant of good faith and fair dealing; any tort claim or
other claim for personal injury, death or property damage or loss; any claim for
fraud or misrepresentation; and any personal gain with respect to any claim
arising under any whistleblower, qui tam or other provisions of any state or
federal law.

6.2 The Executive represents that the Executive has read and understands this
release provision and that rights and claims under the Age Discrimination in
Employment Act of 1967 are among the rights and claims against the Company that
the Executive is releasing. The parties further acknowledge and agree that the
Executive is not releasing any of the following: (i) any rights or claims
arising after the Retirement Date, (ii) any rights or claims arising from or
related to any obligations that are stated or affirmed in this Agreement,
(iii) any rights or claims for indemnification pursuant to any applicable
contract, policy, the Company’s articles of incorporation or bylaws, or law
(including but not limited to the Indemnification Agreement or the D&O Insurance
Policy), (iv) any rights or claims under any agreement or plan governing the
Executive’s equity incentive awards (e.g., stock options or restricted stock),
(v) vested benefits under any pension plan maintained by the Company,
(vi) health benefits under any law or policy or plan currently maintained by the
Company that provides for health insurance continuation or conversion rights and
(vii) any rights or claims that may not be released as a matter of law (for
example, claims for unemployment insurance).

 

3

--------------------------------------------------------------------------------

7. Release by the Company. In consideration of the Executive’s release in
Section 6, the Company irrevocably, unconditionally, fully and forever waives,
releases, discharges, and agrees to hold Executive harmless from any claim,
action or right of any sort, known or unknown, arising on or before the Date of
Retirement, except with respect to the Executive’s obligations under these
sections of the Executive’s Employment Agreement: Section 8, Executive’s
Confidentiality Obligations; Section 9, Disclosure of Information, Ideas,
Concepts, Improvements, Discoveries and Inventions; Section 10, Ownership of
Information, Ideas, Concepts, Improvements, Discoveries and Inventions, and all
Original Works of Authorship; and Section 12, Executive’s Non-Competition
Obligations, all of which survive the termination of the Employment Agreement.

8. Future Employment. The Executive acknowledges that the Company and/or its
Affiliates are not obligated to offer employment to the Executive, now or in the
future.

9. No Other Claims. The Executive represents that the Executive has not filed or
authorized the filing of any complaints, charges or lawsuits against the Company
and/or its Affiliates with any federal, state or local court, governmental
agency, or administrative agency, and that if, unbeknownst to the Executive, any
such complaint has been filed on the Executive’s behalf, the Executive will use
the Executive’s best efforts to cause it to be withdrawn immediately and
dismissed with prejudice.

10. Confidentiality and Defense of Claims.

10.1 Both Parties shall keep strictly confidential all the terms and conditions,
including amounts payable, in the Agreement and shall not disclose them to any
person other than legal and/or financial advisors, government officials who seek
such information in the course of their official duties, individuals at the
Company responsible for implementing the Agreement, and the Executive’s spouse,
unless compelled to do so by law or regulation, or business necessity. The
parties acknowledge and agree that the Company shall be permitted to file a Form
8-K with the Securities and Exchange Commission regarding this Agreement and
shall be permitted to disclose or publicly file this Agreement (or the contents
thereof) as otherwise required by state and federal law (including tax reporting
obligations). Nothing in this Section is intended to prevent the Executive from
disclosing the fact that he was employed by the Company or from describing his
employment duties.

10.2 The Executive agrees that from the Effective Date until two (2) years after
the Date of Retirement, upon request from the Company, he will reasonably
cooperate with the Company and/or its Affiliates in the defense of any claims or
actions that may be made by or against the Company and/or its Affiliates that
affect his prior areas of responsibility, except if the Executive’s reasonable
interests are adverse to the Company and/or its Affiliates in such claim or
action. To the extent travel is required to comply with the requirements of this
Section 10.2, the Company shall, to the extent possible, provide the Executive
with notice at least 10 days prior to the date on which such travel would be
required. The Company agrees to promptly pay or reimburse the Executive upon
demand for all of his reasonable travel and other direct expenses incurred, or
to be reasonably incurred, to comply with his obligations under this
Section 10.2.

 

4

--------------------------------------------------------------------------------

11. Consultation With Counsel. The Company advises the Executive to consult with
independent legal counsel and tax advisors prior to executing this Agreement,
and the Executive acknowledges being given that advice.

12. No Defamatory Statements. The Executive agrees that he will refrain from
making any representation, statement, comment or any other form of communication
(hereinafter collectively referred to as “representation”), whether written or
oral, to any person or entity, including but not limited to the principals,
officers, directors, employees, advisors, agents, customers, suppliers and
competitors of the Company and/or its Affiliates, or any government officials,
which representation has the effect or tendency to disparage, denigrate, or
otherwise reflect negatively on the Company and/or its Affiliates and/or their
business, officers, directors, shareholders, employees, agents, advisors or
investors.

13. Return of Company Materials. The Executive agrees to deliver to the Company
promptly after the Date of Retirement all originals and copies of Company
materials and all other property of the Company and/or its Affiliates in the
Executive’s possession, custody or control.

14. Revocation of Agreement; Effective Date. The Executive, at the Executive’s
sole discretion, may revoke Sections 5, 6 and 7 of this Agreement on or before
the expiration of seven calendar days after signing the Agreement. Revocation
shall be in writing and effective upon dispatch to the following: John D. Held,
General Counsel, Omega Protein Corporation, 2105 City West Boulevard, Suite 500,
Houston, Texas 77042-2838. If the Executive elects to so revoke sections 5, 6
and 7 of the Agreement, then Sections 5, 6 and 7 of the Agreement shall be void
and unenforceable but all remaining portions of the Agreement shall remain
enforcable and in full force and effect. If the Executive does not so elect,
then Sections 5, 6 and 7 shall become effective at the expiration of the
revocation period (i.e., on the eighth calendar day after the Executive signs
the Agreement) (the “Effective Date”).

The Company, at the Company’s sole discretion, may terminate this Agreement in
its entirety on or prior to December 31, 2010. Such termination shall be in
writing and effective upon delivery to the Executive. In the case of such
termination, this Agreement will be null and void and will not go into effect.

15. Miscellaneous.

15.1 The Parties acknowledge that this Agreement is the result of a compromise
and shall never be construed as, or said by either of them to be, an admission
by the other of any liability, wrongdoing, or responsibility. The Parties
expressly disclaim any such liability, wrongdoing, fault, or responsibility.

15.2 This Agreement constitutes the entire agreement between the Parties, except
to the extent that it expressly incorporates provisions of the Employment
Agreement. Except as set forth in Section 5, this Agreement shall have no effect
on the Indemnification Agreement, the D&O Insurance Policy and any agreement or
plan governing the Executive’s equity incentive awards (e.g., stock options or
restricted stock), and all such agreements, plans or policies shall remain in
effect in accordance with their respective terms. This Agreement may be executed
in identical counterparts, each of which shall constitute an original and both
of which shall constitute one and the same agreement. Except as expressly
provided herein, this Agreement

 

5

--------------------------------------------------------------------------------

supersedes the Employment Agreement and any severance benefit plan or program
and any bonus program at the Company and/or its Affiliates.

15.3 The Parties understand and agree that any breach of the terms of this
Agreement may give rise to liability for money damages and other legal or
equitable relief.

15.4 The Parties warrant that no representations have been made other than those
contained in the written provisions of this Agreement, and that they do not rely
on any representations not stated in this Agreement.

15.5 The Parties further warrant that they or their undersigned representatives
are legally competent and fully authorized to execute and deliver this
Agreement.

15.6 The Parties confirm they have had the opportunity to have this Agreement
explained to them by independent legal counsel and tax advisors of their choice,
and that they execute this Agreement freely, knowingly and voluntarily. The
Company is relying on its own judgment and on the advice of its independent
legal counsel and tax advisors and not upon any recommendation of the Executive
or his agents, independent counsel or other representatives. Likewise, the
Executive is relying on his own judgment and on the advice of his independent
legal counsel and tax advisors, and not upon any recommendation of the Company
or its directors, officers, employees, agents, independent counsel or other
representatives. By voluntarily executing this Agreement, both Parties confirm
their competence to understand and do hereby accept the terms of this Agreement
as resolving fully all differences, disputes and claims that may exist within
the scope of this Agreement.

15.7 This Agreement may not be modified or amended except by a writing signed by
both Parties. No waiver of this Agreement or of any of the promises,
obligations, terms, or conditions contained in it shall be valid unless it is in
writing signed by the Party against whom the waiver is to be enforced. The
waiver by either Party hereto of a breach of any provision of this Agreement
shall neither operate nor be construed as a waiver of any subsequent breach by
any Party. Except as expressly provided for herein, the failure of either Party
hereto to take any action by reason of any breach will not deprive such Party of
the right to take action at any time while such breach occurs.

15.8 If any part or any provision of this Agreement shall be finally determined
to be invalid or unenforceable under applicable law by a court of competent
jurisdiction, that part shall be ineffective to the extent of such invalidity or
unenforceability only, without in any way affecting the remaining parts of said
provision or the remaining provisions of the Agreement.

15.9 The Parties have cooperated in the preparation of this Agreement. Hence,
the Agreement shall not be interpreted or construed against or in favor of
either Party by virtue of the identity, interest, or affiliation of its
preparer.

15.10 This Agreement is made and shall be enforced pursuant to the laws of the
State of Texas, without regard to its law governing conflicts of law.

 

6

--------------------------------------------------------------------------------

15.11 The amount of benefits payable under this Agreement shall be paid from the
general assets of the Company and there shall be no separate trust established
to pay any benefits under this Agreement.

15.12 All payments and benefits payable under this Agreement shall be subject to
all applicable federal, state and local taxes and tax requirements and any
elections by the Executive for payouts or deferrals under any Company benefit
plan or program.

15.13 This Agreement shall be binding on and inure to the benefit of the
successors and assigns of the Parties. No rights or obligations, benefits of or
payments to the Executive under this Agreement may be subject to claims of the
Executive’s creditors, or in any manner may be assigned or transferred by the
Executive other than his rights to compensation and benefits that are
transferred by will or to his estate by operation of law.

15.14 All notices and other communications required or permitted hereunder or
necessary or convenient in connection herewith shall be in writing and shall be
deemed to have been given when (i) delivered by hand or sent by facsimile, or
(ii) on the third business day following deposit in the United States mail by
registered or certified mail, return receipt requested, to the addresses as
follows (provided that notice of change of address shall be deemed given only
when received):

If to the Company to:

Omega Protein Corporation

2105 City West Boulevard, Suite 500

Houston, Texas 77042-2838

Attention: General Counsel

Facsimile No.: (713) 940-6122

If to the Executive to:

Robert W. Stockton

16 Champions Bend Circle

Houston, Texas 77069

or to such other addresses as the Company or the Executive, as the case may be,
shall designate by notice to the other party hereto in the manner specified in
this Section 15.14.

15.15 Titles and headings to Sections are for the purpose of reference only and
shall in no way limit, define or otherwise affect the provisions hereof. Any and
all Exhibits referred to in this Agreement are, by such reference, incorporated
herein and made a part hereof for all purposes. The words “herein”, “hereof”,
“hereunder” and other compounds of the word “here” shall refer to the entire
Agreement and not to any particular provision hereof.

15.16 Wherever appropriate to the intention of the Parties, the respective
rights and obligations of said parties, including, but not limited to, the
rights and obligations set forth in Sections 10 through 13 hereof and this
Section 15, shall survive any termination or expiration of this Agreement.

 

7

--------------------------------------------------------------------------------

15.17 Notwithstanding anything herein to the contrary, if any provision of this
Agreement would result in the imposition of an applicable tax under Section 409A
of the Code, the Company and the Executive may mutually agree to reform such
provisions so as to attempt to avoid the imposition of any tax and to maintain
as near as practicable the terms of this Agreement. All terms and definitions
including, “specified employee” and “separation from service” shall have the
meaning provided in Section 409A of the Code to the extent required for the
payments under this Agreement to comply with or continue to be excluded from
Section 409A of the Code. The Executive acknowledges and agrees that none of the
Company, its Affiliates or their officers, directors or employees guarantee or
are responsible for the tax consequences of this Agreement or any payments
hereunder to the Executive and the Executive is solely liable for any tax
consequences to the Executive under federal, state, local or foreign law or
regulation, including, but not limited to, tax consequences to the Executive
under Section 409A of the Code.

[SIGNATURE PAGE FOLLOWS]

 

8

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have
executed this Agreement as of the date indicated below

 

ROBERT W. STOCKTON (“Executive”)     OMEGA PROTEIN CORPORATION (the “Company”)

 

    By:  

/s/ John D. Held

    Name:   John D. Held     Title:   Executive Vice President and General
Counsel

 

THE STATE OF TEXAS

   §       §   

COUNTY OF HARRIS

   §   

BEFORE ME, the undersigned authority, on this day personally appeared Robert W.
Stockton who, being by me first duly sworn, upon his oath deposed and stated
that he has read the foregoing Agreement; that he has been advised to discuss
the provisions of this Agreement with an attorney of his choice before signing
it; that he fully understands the terms and conditions of this Agreement; that
he is legally competent to execute this Agreement; and that he has voluntarily
executed this Agreement for the purposes and consideration therein expressed.

Given under my hand and seal of office on this 8th day of December, 2010.

 

 

NOTARY PUBLIC IN AND FOR THE STATE OF TEXAS

 

9

--------------------------------------------------------------------------------

 

THE STATE OF TEXAS

   §       §   

COUNTY OF HARRIS

   §   

BEFORE ME, the undersigned authority, on this day personally appeared John D.
Held, who being by me first duly sworn, upon his oath deposed and stated that he
is the Executive Vice President and General Counsel of Omega Protein Corporation
(the “Company”).

Given under my hand and seal of office on this 8th day of December, 2010.

 

 

NOTARY PUBLIC IN AND FOR THE STATE OF TEXAS

 

10