Exhibit 10.31
May 20, 2004

     
Ms. Jean M. Nelson
  Fax: (419) 730-8737
3368 Blackburn Street
   
Dallas, TX 75204
   

Dear Jean:
I am pleased to offer you the position of Chief Financial Officer of Virbac
Corporation (“Virbac”), commencing on June 14, 2004. The following terms have
been discussed and agreed:

  1)   Your base salary will be $240,000 per year. In addition, you will
participate in health insurance and other benefit plans, as are generally
applicable to executives at your level as those plans currently exist and may be
amended in the future.     2)   A bonus of 20% of the base salary ($48,000) will
be paid to you during the first quarter of 2005, provided you are actively
employed by Virbac as of 12/31/04.     3)   We also discussed that a Performance
Bonus Plan will be developed, commencing with the 2005 fiscal year, and upon
development of such a plan you will be eligible to participate on the same terms
as others of like rank and status.     4)   A Long-Term Incentive Plan tied to
market performance was also discussed. However, such a program could only be
adopted by the Board of Directors. Thus, I am unable to make any specific
representations regarding the content of a potential Plan or its eligibility
criteria. However, it is Virbac’s intent to develop and adopt, in the near
future, a Long-Term Incentive Plan in which you will participate.     5)   As
Chief Financial Officer, you will be listed as a co-insured under a Directors
and Officers (“D&O”) insurance policy and your activities will be subject to
coverage under the Company’s general or comprehensive insurance program to the
same extent and under the same terms and conditions as are applicable to other
executives of the Company of similar status and level.     6)   Virbac will
indemnify and defend you from any claims for damages made or criminal
proceedings brought against you as a result of your actions on behalf of Virbac
to the extent permitted by and under the conditions stated in our By-laws.

 

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 2

  7)   Your employment under this agreement may be terminated immediately for
any of the following reasons:

  a.   your conviction of a felony offense;     b.   dishonesty, fraud, willful
misconduct, unlawful discrimination or theft on your part (whether within the
workplace or elsewhere);

      However, in the event your employment is terminated under this agreement
“without cause” during the first three (3) years following your start date,
Virbac will make a lump sum payment to you equal to twelve (12) months of your
then base salary. Under this section, “without cause” is defined to include:

  a.   any reason other than the immediate termination provisions listed above
as “a” and “b”;     b.   a breach by Virbac of any of the material terms or
conditions of this agreement;     c.   a material diminution or reduction in
your duties or scope of responsibilities;     d.   the occurrence of a change in
control which is defined as a change in the current majority ownership structure
of Virbac.

If these terms are acceptable to you, please countersign this letter in the
space provided below and return one signed original to me.

     
Sincerely,
   
 
   
/s/ David G. Eller
 
David G. Eller
   
President & Chief Executive Officer
   
 
   
Accepted & Agreed:
   
 
   
/s/ Jean M. Nelson
 
Jean M. Nelson
   
 
   
Date: May 21, 2004
   

 

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  September 20, 2004

Ms. Jean M. Nelson
3368 Blackburn Street
Dallas, TX 75204
Re: May 20, 2004 Employment Letter Agreement Addendum

Dear Jean:
The following additional terms to your May 20, 2004 employment letter agreement
(“The Agreement”) have been discussed and agreed:

1)   An additional bonus of $200,000 will be paid to you within 10 days after
December 31, 2004. Such bonus will be paid assuming you make all reasonable
efforts to prepare the restated financial statements for Virbac Corporation
(“Virbac”) for fiscal years 2001, 2002 and 2003 by December 31, 2004 and make
all reasonable efforts to support PricewaterhouseCoopers in their audit of the
financial statements for these periods to enable them to complete their audit of
these periods by December 31, 2004.   2)   If you are required to consult with
or on behalf of Virbac, Virbac S.A. or any of its subsidiaries in any capacity
post your employment period, Virbac agrees to pay you $2,000 per day that your
services are required; in addition, you will be reimbursed for any reasonable
expenses you may have incurred in connection with supplying your services.   3)
  Virbac agrees to a fixed term of employment through December 31, 2005 during
which period Virbac agrees to not terminate your employment without cause, as
defined in The Agreement Subsequent to December 31, 2005, the provisions of
paragraph number 7 of The Agreement are applicable.   4)   Virbac agrees to pay
you a bonus of $75,000 on June 30, 2005 or upon the re-listing Virbac’s
securities on NASDAQ. Virbac agrees to pay you a bonus of $73,000 on
December 31, 2005 due to additional responsibilities you have assumed in
connection with the SEC investigation and the shareholder lawsuits. In addition,
you agree to implement Oracle during fiscal year 2005.   5)   Paragraph 6 of The
Agreement is deleted. Virbac agrees to indemnify you as per the terms of the
Indemnification Agreement attached as Exhibit A.   6)   Virbac agrees to retain
D&O insurance for Virbac Corporation’s officers, which include you as a named
insured, at a minimum level of $10,000,000 throughout the term of you
employment.   7)   Your official title is Executive Vice-President and Chief
Financial Officer.

3200 Meacham Blvd., Fort Worth, TX 76137 • Telephone: (817) 831-5030 • (800)
338-3659 • Fax (817) 831-8327

 

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If these terms are acceptable to you, please countersign this letter in the
space provided below and return one signed original to me.

     
Sincerely,
   
 
   
/s/ David G. Eller
 
David G. Eller
   
President & Chief Executive Officer
   
Virbac Corporation
   
 
   
Accepted & Agreed:
   
 
   
/s/ Jean M. Nelson
 
Jean M. Nelson
   
Date: 9/24/04
   

3200 Meacham Blvd., Fort Worth, TX 76137 • Telephone: (817) 831-5030 • (800)
338-3659 • Fax (817) 831-8327

 

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EXHIBIT A
INDEMNIFICATION AGREEMENT
          THIS INDEMNIFICATION AGREEMENT (the “Agreement”), dated as of July 31,
2004, is made by and between Virbac Corporation, a Delaware corporation (the
“Corporation”) and Jean M. Nelson, the Chief Financial Officer of the
Corporation (“Nelson”).
          In consideration of the mutual promises, covenants, agreements and
conditions contained herein, and Nelson’s continued service as the Chief
Financial Officer of the Corporation, and other good and valuable consideration
the receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
          1. Subject to the provisions of paragraphs (3) and (4) below, the
Corporation shall indemnify Nelson in the event that she is made a party, or is
threatened to be made a party, to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Corporation) by reason of the
fact that she is or was the Chief Financial Officer of the Corporation, or is or
was serving at the request of the Corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys’ fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by Nelson in
connection with such action, suit or proceeding if Nelson acted in good faith
and in a manner she reasonably believed to be in or not opposed to the best
interests of the Corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe her conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that Nelson did not act in good faith and in a
manner which she reasonably believed to be in or not opposed to the best
interest of the

 

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Corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that her conduct was unlawful.
          2. Subject to the provisions of Sections (3) and (4) below, the
Corporation shall indemnify Nelson in the event that she is made a party, or is
threatened to be made a party, to any threatened, pending or completed action or
suit by or in the right of the Corporation to procure a judgment in its favor by
reason of the fact that she is or was the Chief Financial Officer of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorneys’ fees)
actually and reasonably incurred by her in connection with the defense or
settlement of such action or suit if she acted in good faith and in a manner she
reasonably believed to be in or not opposed to the best interests of the
Corporation and except that no indemnification shall be made in respect of any
claim, issue or matter as to which Nelson shall have been adjudged to be liable
to the Corporation unless, and only to the extent that, the court in which such
action or suit was brought shall determine, upon application, that, despite the
adjudication of liability but in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such expenses which
such court shall deem proper.
          3. To the extent that Nelson has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred to in paragraphs
(1) and (2), or in defense of any claim, issue or matter therein, she shall be
indemnified against expenses (including attorneys’ fees) actually and reasonably
incurred by her in connection therewith.
          4. To the extent that Nelson has been unsuccessful on the merits or
otherwise in defense of any action, suit or proceeding referred to in paragraphs
(1) and (2), or in defense of any claim, issue or matter therein, she shall be
indemnified against expenses (including attorney’s fees) actually and reasonably
incurred by her in connection

 

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therewith by the Corporation only (unless ordered by a court) as authorized in
the specific case upon a determination that indemnification of Nelson is proper
in the circumstances because she has met the applicable standard of conduct set
forth in paragraphs (1) and (2). Such determination shall be made (a) a majority
vote of the members of the Board of Directors of the Corporation (the “Board”)
who are not parties to such action, suit or proceeding, even though less than a
quorum, (b) by a committee of such directors designated by majority vote of such
directors, even though less than a quorum, (c) if there are no such directors,
or if such directors so direct, by independent legal counsel in a written
opinion, or (d) by the stockholders.
          5. Expenses (including attorneys’ fees) incurred by Nelson in
defending any civil, criminal, administrative, or investigative action, suit or
proceeding shall be paid by the Corporation in advance of the final disposition
of such action, suit or proceeding upon receipt of an undertaking by or on
behalf of Nelson to repay such amount if it shall ultimately be determined that
she is not entitled to be indemnified by the Corporation. Such expenses
(including attorneys’ fees) incurred by Nelson may be so paid upon such terms
and conditions, if any, as the Corporation deems appropriate. Nelson shall be
entitled to counsel of her choice with respect to any action, suit or proceeding
referred to in paragraphs (1) and (2), or in defense of any claim, issue or
matter therein.
          6. The indemnification and advancement of expenses provided by, or
granted pursuant to, the other sections of this Agreement shall not be deemed
exclusive of any other rights to which Nelson may be entitled under any by-law,
vote of stockholders or disinterested directors or otherwise, both as to action
in her official capacity as Chief Financial Officer and as to action in another
capacity while holding such office.
          7. The Corporation shall purchase and maintain insurance on behalf of
the Director against any liability asserted against her and incurred by her in
her

 

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capacity as the Chief Financial Officer and in her capacity as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise when acting at the request of the Corporation, or
arising out of her status as such, whether or not the Corporation would have the
obligation to indemnify her against such liability under the provisions of this
Agreement.
          8. For purposes of this Agreement, references to “the Corporation”
shall include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued, would
have had the power and authority (but not necessarily the obligation) to
indemnify its directors, officers, employees or agent, so that any person who is
or was a director, officer, employee or agent of such constituent corporation,
or is or was serving at the request of such constituent corporation as a
director, officer employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, shall stand in the same position under the
provisions of this Agreement with respect to the resulting or surviving
corporation as such person would have with respect to such constituent
corporation if its separate existence had continued.
          9. For purposes of this Agreement, references to “other enterprises”
shall include employee benefit plans; references to “fines” shall include any
excise taxes assessed on a person with respect to an employee benefit plan; and
references to “serving at the request of the Corporation” shall include any
service as a director, officer, employee or agent of the Corporation which
imposes duties on, or involves services by, such director, officer, employee or
agent with respect to an employee benefit plan, its participants, or
beneficiaries; and a person who acted in good faith and in a manner she
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner “not
opposed to the best interests of the Corporation” as referred to in this
Agreement.

 

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          10. The indemnification and advancement of expenses provided by, or
granted pursuant to, this Agreement shall continue as to Nelson when she has
ceased to serve as the Chief Financial Officer of the Corporation.
          IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first written above.
Approved and Accepted:

             
By:
  /s/ David Eller       24 Sept. 04
 
 
           
 
  David Eller       Date
 
  President and Chief Executive Officer        
 
  Virbac Corporation        
 
           
By:
  /s/ Jean M. Nelson       9/24/04
 
 
           
 
  Jean Nelson       Date