<PAGE>
===============================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
OMEGA PROTEIN CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
<PAGE>
[OMEGA PROTEIN LOGO]
May 3, 2000
To Our Stockholders:
You are cordially invited to attend the 2000 Annual Meeting of Stockholders
of Omega Protein Corporation, to be held on Tuesday, June 27, 2000, at 10:00
a.m., Central Standard Time, at The Sheraton Gateway, 6501 North Mannheim Rd.,
Rosemont, Illinois. A notice of the meeting, proxy statement and form of proxy
are enclosed with this letter.
At the meeting, we will report on the progress of the Company, comment on
matters of interest and respond to your questions. A copy of the Company's
Annual Report to Stockholders for the fiscal year ended December 31, 1999
accompanies this mailing.
Stockholders can vote their shares by proxy by marking their votes on the
proxy/voting instructions card, or by attending the meeting in person.
It is important that your shares be represented at the meeting. Even if you
plan to attend the meeting, we hope that you will read the enclosed Proxy
Statement and the voting instructions on the enclosed proxy card and then vote
by completing, signing, dating and mailing the proxy card in the enclosed,
postage pre-paid envelope. You may vote your shares in person if you attend
the Annual Meeting, thereby canceling any proxy previously given. If your
shares are not registered in your own name and you would like to attend the
meeting, please ask the broker, trust, bank or other nominee that holds the
shares to provide you with evidence of your share ownership.
We appreciate your continued interest in the Company.
Sincerely,
/s/ Joseph L. von Rosenberg III
Joseph L. von Rosenberg III
President and Chief Executive
Officer
<PAGE>
[OMEGA PROTEIN LOGO]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 27, 2000
TO THE STOCKHOLDERS OF OMEGA PROTEIN CORPORATION:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Omega
Protein Corporation (the "Company") will be held at The Sheraton Gateway, 6501
North Mannheim Rd., Rosemont, Illinois on Tuesday, June 27, 2000 at 10:00
a.m., Central Standard Time, for the following purposes:
1. To elect two Class II directors for terms of three years each and until
their successors are duly elected and qualified;
2. To approve the adoption of the Company's 2000 Long-Term Incentive Plan;
3. To ratify the appointment of PricewaterhouseCoopers, LLP as independent
certified public accountants for the Company's fiscal year ending December 31,
2000; and
4. To transact such other business as may properly come before the meeting
or any postponements or adjournments thereof.
The Board of Directors has fixed the close of business on May 1, 2000 as the
record date for determining the stockholders entitled to notice of, and to
vote at, the meeting and at any postponement or adjournment thereof. A list of
such stockholders will be available during normal business hours at the
offices of the Company for inspection at least ten days prior to the Annual
Meeting.
You are cordially invited to attend this meeting.
By order of the Board of Directors
/s/ Robert W. Stockton
ROBERT W. STOCKTON
Executive Vice President, Chief
Financial Officer and Secretary
Houston, Texas
May 3, 2000
<PAGE>
OMEGA PROTEIN CORPORATION
1717 ST. JAMES PLACE
SUITE 550
HOUSTON, TEXAS 77056
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
JUNE 27, 2000
General Information
This statement (the "Proxy Statement") is being furnished in connection with
the solicitation of proxies by the Board of Directors of Omega Protein
Corporation ("Omega" or the "Company") for use at the Annual Meeting of
Stockholders of the Company to be held at The Sheraton Gateway, 6501 North
Mannheim Rd., Rosemont, Illinois on June 27, 2000 at 10:00 a.m., Central
Standard Time, and at any postponement or adjournment thereof (the "Annual
Meeting"). The Annual Meeting is being held for the purposes set forth in this
Proxy Statement. This Proxy Statement and the enclosed form of proxy (the
"Proxy Card") are first being mailed on or about May 3, 2000.
Proxy Card
The shares represented by any Proxy Card which is properly executed and
received by the Company prior to or at the Annual Meeting (each, a "Conforming
Proxy") will be voted in accordance with the specifications made thereon.
Conforming Proxies that are properly signed and returned but on which no
specifications have been made by the stockholder will be voted in favor of the
proposals described in the Proxy Statement. The Board of Directors is not
aware of any matters that are expected to come before the Annual Meeting other
than those described in the Proxy Statement. However, if any other matters are
properly brought before the Annual Meeting, the persons named in the Proxy
Card will vote the shares represented by each Conforming Proxy on those
matters as instructed by the Board of Directors, or in the absence of express
instructions from the Board of Directors, in accordance with their own best
judgment. A stockholder who has executed and delivered a Conforming Proxy may
revoke that Conforming Proxy at any time before it is voted by (i) executing a
new proxy with a later date and delivering the new proxy to the Secretary of
the Company, (ii) voting in present at the Annual Meeting, or (iii) giving
record of written notice of the revocation to the Secretary of the Company.
Quorum and Other Matters
The presence at the Annual Meeting, in person or by proxy, of the holders of
a majority of the outstanding shares of Common Stock is necessary and
sufficient to constitute a quorum. Shares of Common Stock represented by
Conforming Proxies will be counted as present at the Annual Meeting for
purposes of determining a quorum, without regard to whether the proxy is
marked as casting a vote or abstaining. Shares of Common Stock held by
nominees that are voted on at least one matter coming before the Annual
Meeting will also be counted as present for purposes of determining a quorum,
even if the beneficial owner's discretion has been withheld (a "broker non-
vote") for voting on some or all other matters.
<PAGE>
Directors will be elected by a favorable vote of a plurality of the shares
of Common Stock present, in person or by proxy, at the Annual Meeting and
entitled to vote. Accordingly, abstentions and broker non-votes will not
affect the outcome of the election of directors.
All other matters to come before the Annual Meeting require the approval of
a majority of the shares of Common Stock present, in person or by proxy, at
the Annual Meeting and entitled to vote. Therefore, abstentions will have the
same effect as votes against the proposals on such matters. Broker non-votes,
however, will be deemed shares not present to vote on such matters, and
therefore will not count as votes for or against the proposals, and will not
be included in calculating the number of votes necessary for approval of such
matters.
Solicitation of Proxies
This solicitation of proxies is being made by the Board of Directors of the
Company and all expenses of this solicitation will be borne by the Company.
The Company expects to reimburse brokerage houses, banks and other fiduciaries
for reasonable expenses of forwarding proxy materials to beneficial owners.
VOTING SECURITIES AND SECURITY OWNERSHIP
OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The outstanding voting securities of the Company consist entirely of shares
of common stock, par value $.01 per share (the "Common Stock"). Each share of
Common Stock entitles its owner to one vote upon each matter to come before
the Annual Meeting. Only stockholders of record at the close of business on
May 1, 2000 (the "Record Date") will be entitled to vote at the Annual Meeting
and at any postponement or adjournment thereof. At the close of business on
such date, the Company had outstanding 23,898,699 shares of Common Stock.
Security Ownership of Certain Beneficial Owners
To the Company's knowledge, the following persons are the only persons who
are beneficial owners of more than five percent of the Company's common stock
based on the number of shares outstanding on December 31, 1999:
<TABLE>
<CAPTION>
Number of Percent of
Name and Address Shares Class(1)
---------------- ---------- ----------
<S> <C> <C>
Zapata Corporation (2)............................. 14,501,000 60.7%
100 Meridian Centre, Suite 350
Rochester, New York 14618
Malcolm I. Glazer (2).............................. 14,510,466(3) 60.7%
1482 Ocean Boulevard
Palm Beach, Florida 33480
State of Wisconsin Investment Board................ 2,176,300(4) 9.1%
P.0. Box 7842
Madison, Wisconsin 53707
Dimensional Fund Advisors Inc...................... 1,557,700(5) 6.5%
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401
</TABLE>
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(1) For purposes of computing the percentage of outstanding shares held by
each person or group of persons named above, any security which such
person or persons has the right to acquire within 60 days after December
31, 1999 is deemed to be outstanding, but is not deemed to be outstanding
in computing the percentage ownership of any other person.
2
<PAGE>
(2) Based on a Form 10-K for the fiscal year ended December 31, 1999 filed by
Zapata Corporation. The Glazer Family Limited Partnership, a Nevada
limited partnership (the "Glazer Partnership"), in which Malcolm I. Glazer
controls the sole general and limited partners, reportedly owns
beneficially and of record 43.4% of Zapata Corporation's outstanding
common stock. By virtue of such ownership, the Glazer Partnership may be
deemed to control Zapata Corporation and, therefore, may be deemed to
beneficially own Common Stock of the Company owned by Zapata Corporation.
Mr. Malcolm I. Glazer disclaims beneficial ownership of such shares.
(3) Includes 9,466 shares subject to options exercisable on December 31, 1999
or within 60 days thereafter.
(4) Based on a Schedule 13G dated February 10, 2000 filed with the SEC by the
State of Wisconsin Investment Board.
(5) Based on a Schedule 13G dated February 4, 2000 filed with the SEC by
Dimensional Fund Advisors Inc.
Security Ownership of Directors and Executive Officers
The following table sets forth the number of shares of Common Stock of the
Company and common stock of Zapata Corporation ("Zapata") beneficially owned
as of December 31, 1999 by each of the directors, each of the Named Executive
Officers set forth in the Summary Compensation Table, and by all directors and
executive officers as a group. Unless otherwise noted, each of the named
persons and members of the group has sole voting and investment power with
respect to the shares shown.
<TABLE>
<CAPTION>
Shares of the Percent of the Shares of % of
Company's Company's Zapata Zapata
Common Common Common Common
Name of Beneficial Owner Stock(1) Stock(2) Stock Stock
------------------------ ------------- -------------- ---------- ------
<S> <C> <C> <C> <C>
Malcolm I. Glazer (3)....... 14,510,466 60.7% 10,523,717(4) 43.4%
Joseph L. von Rosenberg
III........................ 448,300 1.8% 100 *
Robert W. Stockton.......... 279,332 1.2 -- --
Kelsey D. Short............. 450,000 1.8 -- --
Eric T. Furey............... 241,160 1.0 10,000 *
Michael E. Wilson........... 47,850 * -- --
Avram A. Glazer (5)......... 378,800 1.6% 228,333(4) *
Gary L. Allee............... 23,975 * -- --
William Lands............... 11,617 * -- --
All directors and executive
officers as a group,
including those named above
(10 total)................. 16,394,149(4) 63.7% 10,752,150(5) 43.4%
</TABLE>
- --------
* Represents ownership of less than 1.0%.
(1) Includes 9,466, 428,800, 273,332, 450,000, 241,160, 47,850, 378,800,
4,733, 4,733, and 1,841,023 shares of Omega Common Stock subject to
options exercisable on December 31, 1999 or within 60 days thereafter
held by Messrs. M. Glazer, von Rosenberg, Stockton, Short, Furey, Wilson,
A. Glazer, Allee, Lands, and all directors and executive officers as a
group including those persons named in the above table, respectively.
Because Mr. Short and Mr. Furey are no longer employed by the Company,
under the terms of their option agreements, their options will expire in
December 2000, unless exercised prior to that date.
(2) For purposes of computing the percentage of outstanding shares held by
each person or group of persons named above, any security which such
person or persons has the right to acquire within 60 days after December
31, 1999 is deemed to be outstanding, but is not deemed to be outstanding
in computing the percentage ownership of any other person.
(3) The Glazer Partnership reportedly owns beneficially and of record 43.4%
of Zapata Corporation's outstanding common stock. By virtue of such
ownership, the Glazer Partnership may be deemed to control Zapata
Corporation and, therefore, may be deemed to beneficially own Common
Stock of the Company owned by Zapata Corporation. Mr. Malcolm I. Glazer
disclaims beneficial ownership of such shares.
(4) Includes 128,333 and 228,333 shares of Zapata common stock subject to
options exercisable on December 31, 1999 or within 60 days thereafter
held by Messrs. M. Glazer and A. Glazer, respectively, based on public
information available to Omega.
(5) Does not include the shares that are held by the Glazer Partnership, with
respect to which Mr. Avram A. Glazer disclaims any beneficial ownership.
3
<PAGE>
Because Zapata holds more than a majority of the Company's outstanding
Common Stock, Zapata has the power to approve matters submitted for
consideration at the Annual Meeting without regard to the votes of the other
stockholders. The Company understands that Zapata intends to vote for the
election of Management's Nominees for the Board of Directors, for the approval
of the Plan, and for the ratification of the appointment of
PricewaterhouseCoopers, LLP as the Company's independent auditors. There are
no agreements between the Company and Zapata with respect to the election of
directors or the officers of the Company or with respect to other matters that
may come before the Annual Meeting.
PROPOSAL 1
ELECTION OF DIRECTORS
The Company has five directors. The Company's Articles of Incorporation
divide the Board of Directors into three classes designated as Class I, Class
II and Class III. Each class of directors is elected to serve a three-year
term. The Board presently consists of five directors, two in Class I, two in
Class II and one in Class III, whose terms expire at the 2002, 2000 and 2001
Annual Meetings, respectively, and until their successors are duly elected and
qualified.
The Class II directors consist of Malcolm I. Glazer and Avram I. Glazer, and
such directors' terms expire at the 2000 Annual Meeting, or as soon thereafter
as their successors are elected and qualified. Mr. M. Glazer and Mr. A. Glazer
have each been nominated to serve an additional three-year term as Class II
Directors to be elected by the holders of the Common Stock. Mr. M. Glazer and
Mr. A. Glazer have each consented to be named in this Proxy Statement and to
serve as director if elected.
The Company's Articles of Incorporation provide that the Board of Directors
shall consist of no more non-U.S. citizens than a minority of the number
necessary to constitute a quorum of the Board of Directors.
Proxies representing shares of Common Stock held on the Record Date that are
returned duly executed will be voted, unless otherwise specified, in favor of
the two nominees for Class II directors named below. Both nominees have
consented to serve if elected, but should any nominee be unavailable to serve
(which event is not anticipated) the persons named in the proxy intend to vote
for such substitute nominee as the Board of Directors may recommend. The
nominees shall be elected by a plurality of the votes cast in the election by
the holders of the Common Stock represented and entitled to vote at the Annual
Meeting, assuming the existence of a quorum.
Class II Nominees--To Serve Three-Year Terms Expiring at the 2003 Annual
Stockholders Meeting
MALCOLM I. GLAZER, age 69, has been a director of the Company since January
1998. He is also a director and Chairman of the Board of Directors of Zapata,
positions he has held since July 1993 and July 1994, respectively. From August
1994 to March 1995, Mr. Glazer served as President and Chief Executive Officer
of Zapata. For more than the past five years, Mr. Glazer has been a self-
employed private investor, whose diversified portfolio consists of ownership
of the Tampa Bay Buccaneers National Football League franchise and investments
in television broadcasting, restaurants, restaurant equipment, food services
equipment, health care, banking, real estate and stocks. He is also a director
of Specialty Equipment Companies, Inc., a food service equipment manufacturer,
and Viskase Corporation, a food services corporation. Malcolm I. Glazer is the
father of Avram A. Glazer.
4
<PAGE>
AVRAM A. GLAZER, age 38, has been Chairman of the Board of the Company since
January 1998. He is also a director and President and Chief Executive Officer
of Zapata, positions which he has held since March 1995. For more than the
past five years, he has been employed by, and has worked on behalf of, Malcolm
I. Glazer and a number of entities owned and controlled by Malcolm I. Glazer,
including First Allied Corporation. Mr. Glazer served as Vice President of
First Allied Corporation from 1985 through 1995. He also serves as a director
of Specialty Equipment Companies, Inc., a restaurant equipment manufacturer,
and Viskase Corporation, a food packaging company. Avram A. Glazer is the son
of Malcolm I. Glazer.
THE BOARD RECOMMENDS A VOTE FOR THE ELECTION OF EACH CLASS II NOMINEE AS A
DIRECTOR.
CONTINUING DIRECTORS
Biographical and other information with respect to all members of the Board
of Directors whose current terms will continue after the Annual Meeting is set
forth below:
Class I Directors--Current Term Expires at the 2002 Annual Stockholders
Meeting
GARY L. ALLEE, age 55, has been a director of the Company since May 1998.
Dr. Allee is professor of Swine Nutrition at the University of Missouri. Dr.
Allee has served as President and as a member of the Board of Directors of the
Midwest Section of the American Society of Animal Science. He has B.S. and
M.S. degrees in Animal Husbandry and Swine Nutrition from the University of
Missouri and a Ph.D. from the University of Illinois in Nutritional Sciences.
WILLIAM LANDS, age 69, has been a director of the Company since May 1998.
Dr. Lands serves as Senior Scientific Advisor to the Director of the National
Institute on Alcohol Abuse and Alcoholism, a position he assumed after serving
as head of the Department of Biological Chemistry at the University of
Illinois Medical Center. Dr. Lands has a B.S. degree in Chemistry from the
University of Michigan and a Ph.D. in Biological Chemistry from the University
of Illinois.
Class III Director--Current Term Expires at the 2001 Annual Stockholders
Meeting
JOSEPH L. VON ROSENBERG III, age 41, is President and Chief Executive
Officer and a director of the Company. He has served in these positions since
July 1997. Prior to serving in these positions, Mr. von Rosenberg served as
the Executive Vice President of Zapata from November 1995 until April 1998, as
General Counsel and Vice President from August 1994 until April 1998 and as
Corporate Secretary from June 1993 until July 1997.
Board of Directors and Board Committees
The Company's Board of Directors has five directors and has established the
Audit and Compensation Committees as its standing committees. In addition, The
Board has established a Scientific Committee. The Board of Directors does not
have a nominating committee or any committee performing a similar function.
During 1999, the Board of Directors held four meetings. During 1999, the
Audit Committee met one time, the Compensation Committee met one time and took
action by written consent on one occasion and the Scientific Committee met one
time. Each director attended at least 75% of the total number of Board of
Directors and Committee meetings held in 1999.
5
<PAGE>
The Audit Committee consists of Dr. Allee and Dr. Lands. The Audit Committee
reviews the adequacy of the Company's internal control systems and financial
reporting procedures, reviews the general scope of the annual audit and
reviews and monitors the performance of non-audit services by the Company's
independent public accountants. The Audit Committee also meets with the
independent auditors and with appropriate financial personnel of the Company
regarding these matters. The Audit Committee recommends to the Company's Board
the appointment of the independent auditors. The independent auditors
periodically meet alone with the Audit Committee and have unrestricted access
to the Audit Committee.
The Compensation Committee consists of Dr. Allee and Dr. Lands. The
Compensation Committee administers management incentive compensation plans and
makes recommendations to the Company's Board with respect to the compensation
of directors and officers of the Company.
The Scientific Committee consists of Dr. Allee and Dr. Lands. The Scientific
Committee keeps the Board and Company officers apprised of scientific matters
and developments which are relevant to the Company's industry.
EXECUTIVE OFFICERS
The following sets forth certain information with respect to the executive
officers of the Company as of the date of this Proxy Statement. All officers
of the Company serve at the pleasure of the Company's Board of Directors until
their successors are elected and qualified.
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<C> <C> <S>
Joseph L. von Rosenberg III........... 41 Chief Executive Officer, President
and Director
Robert W. Stockton.................... 49 Executive Vice President, Chief
Financial Officer and Corporate
Secretary
Bernard H. White...................... 52 Corporate Vice President
Jonathan Specht....................... 43 Vice President--Operations
</TABLE>
Certain biographical information regarding Mr. von Rosenberg is set forth
above under the caption "Class III Director--Current Term Expires at the 2001
Annual Stockholders Meeting."
ROBERT W. STOCKTON has served as Executive Vice President and Chief
Financial Officer since July 1997. He has also served as Secretary since
January 2000. For the five years prior to joining the Company, Mr. Stockton
was Corporate Controller of Proler International Corp., which was engaged in
the business of buying, processing for recycling, and selling ferrous and non-
ferrous metals both domestically and internationally.
BERNARD H. WHITE was named Corporate Vice President in March 1998. From 1994
to March 1998, Mr. White worked as a Public Affairs and Investor Relations
Consultant. Prior to such time, Mr. White served as Vice President--Corporate
Affairs of Zapata Corporation.
JONATHAN SPECHT was named Vice President--Operations in June 1999. From June
1997 through June 1999, Mr. Specht was the General Manager of the Company's
Cameron, Louisiana facility. Prior thereto, he was General Manager of a
facility operated by Golden Valley Meat.
6
<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth, for the year ended December 31, 1999 the
compensation paid to the Company's current Chief Executive Officer and its
other four most highly compensated employees with annual compensation in
excess of $100,000 for 1999 (the "Named Executive Officers"). The Company was
not, prior to April 1998, a reporting company pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934.
<TABLE>
<CAPTION>
Annual Compensation
-----------------------------------------------
Fiscal All Other
Name and Principal Position Year Salary(1) Bonus(1) Compensation(1)(2)
--------------------------- ------ --------- -------- ------------------
<S> <C> <C> <C> <C>
Joseph L. von Rosenberg III
(3).......................... 1998 $172,500 $766,495(4) $ 383
President and Chief Executive
Officer 1999 $287,500 0 $ 448
Robert W. Stockton............ 1998 $175,000 $290,500 $ 698
Executive Vice President and
Chief Financial Officer 1999 $193,333 0 $ 625
Kelsey D. Short (5)........... 1998 $155,722 $247,750 $ 359
Senior Vice President--
Marketing & Development 1999 $168,016 0 $547,969(5)
Eric T. Furey (3) (6)......... 1998 $ 90,000 $225,750 $ 105
Vice President, General
Counsel and Secretary 1999 $138,557 0 $450,475(6)
Michael E. Wilson............. 1998 $115,250 $ 50,000 $ 0
Vice President--Marine 1999 $117,708 $ 8,000 $ 0
Operations and President of
Omega Shipyard, Inc.
</TABLE>
- --------
(1) Amounts include salary and bonuses earned, as well as all deferred
portions of salary and bonuses paid on services rendered to the Company.
Because the Company changed its fiscal year end from September 30 to
December 31, effective as of December 1 1998, the fiscal year 1998 in this
table includes amounts earned in the five-quarter period from October 1,
1997 through December 31, 1998. The fiscal year 1999 in this table
includes amounts for the four quarter period for the 1999 fiscal year from
January 1, 1999 through December 31, 1999.
(2) Amounts exclude perquisites and other personal benefits because such
compensation did not exceed the lesser of $50,000 or 10% of the total
annual salary reported for each Named Executive Officer. The reported
amounts represent insurance premiums paid by the Company on the named
executive's behalf and, with respect to Messrs. Short and Furey, payments
to be made pursuant to such officer's employment agreement with the
Company.
(3) Amounts reflect compensation for services rendered to the Company from
April 1998, subsequent to the Company's initial public offering.
(4) Includes a one-time bonus of $336,495 payable under Mr. von Rosenberg's
employment agreement which was based on the increase in Company earnings
from fiscal year 1997 to fiscal year 1998.
(5) Effective December 1999, Mr. Short is no longer an employee of the
Company. Pursuant to his employment agreement with the Company, the
Company will pay Mr. Short an amount equal to 2.99 times his annual base
salary of $182,500, payable in equal monthly installments during the
eighteen month period following termination of employment.
(6) Effective December 1999, Mr. Furey is no longer an employee of the
Company. Pursuant to his employment agreement with the Company, the
Company will pay Mr. Furey an amount equal to 2.99 times his annual base
salary of $150,000, payable in equal monthly installments during the
eighteen month period following termination of employment.
7
<PAGE>
Option Grants In Last Fiscal Year
The following table provides information regarding options to acquire Common
Stock of Omega granted to the Named Executive Officers during 1999.
<TABLE>
<CAPTION>
Potentially
Realizable Percent of
Value at Assumed
Number of Annual Rate of Stock
Securities Total Options Price Appreciation of
Underlying Granted to Exercise Option Term(3)
Options Employees in Price Expiration ---------------------
Name Granted(1)(2) Fiscal Year ($/Share) Date 5% 10%
---- ------------- ------------- --------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Joseph L. von Rosenberg
III.................... 150,000 14.3% $8.25 1/31/09 $ 778,257 $1,972,256
Robert W. Stockton...... 200,000 19.1% $8.25 1/31/09 $1,037,676 $2,629,675
Kelsey L. Short......... 200,000(4) 19.1% $8.25 12/6/00 $ 82,500 $ 165,000
Eric T. Furey........... 125,000(5) 12.0% $8.25 12/6/00 $ 51,563 $ 103,125
Michael E. Wilson....... 0 0% N/A N/A N/A N/A
</TABLE>
- --------
(1) These are options to acquire shares of Common Stock granted under the
Company's 1998 Long-Term Incentive Plan.
(2) All options vest and are exercisable in one-third increments on each of
the first, second and third years, respectively, after the date of grant.
The exercise price of all options is the fair market value of the
Company's Common Stock at the time of grant.
(3) These amounts represent assumed rates of appreciation for the market value
of the Company's stock from the date of grant until the end of the option
period at rates arbitrarily set by the Securities and Exchange Commission.
They are not intended to forecast possible future appreciation in the
Company's stock and any actual gains on exercise of options are dependent
on the future performance of the Company's stock.
(4) All of such options vested upon Mr. Short's departure from the Company in
December 1999 and remain exercisable until December 6, 2000, the first
anniversary of his departure date, at which time they will expire unless
previously exercised.
(5) All of such options vested upon Mr. Furey's departure from the Company in
December 1999 and remain exercisable until December 6, 2000, the first
anniversary of his departure date, at which time they will expire unless
previously exercised.
8
<PAGE>
Aggregated Option Exercises and Fiscal Year-End Option Values
The following table shows the stock option exercises by the Named Executive
Officers during 1999. In addition, this table includes the number of
exercisable and unexercisable stock options held by each of the Named
Executive Officers as of December 31, 1999. Omega has not granted any stock
appreciation rights or restricted stock.
<TABLE>
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money(1)(2)
Shares Options at Options at Fiscal
Acquired Fiscal Year End Year End
On Value Exercisable/ Exercisable/
Name Title of Class Exercise Realized(1) Unexercisable Unexercisable
---- -------------- -------- ----------- --------------- ------------------
<S> <C> <C> <C> <C> <C>
Joseph L. von Rosenberg
III.................... Omega Common Stock -- -- 189,400/528,800 $0/0
Zapata Common Stock -- -- 0/0 --
Robert W. Stockton...... Omega Common Stock -- -- 103,333/406,667 $0/0
Zapata Common Stock -- -- 0/0 --
Kelsey D. Short......... Omega Common Stock -- -- 83,333/366,667 $0/0
Zapata Common Stock -- -- 0/0 --
Eric T. Furey........... Omega Common Stock -- -- 38,720/202,440 $0/0
Zapata Common Stock 10,000(3) $41,875 0/0 --
Michael E. Wilson....... Omega Common Stock -- -- 47,850/62,150 $0/0
Zapata Common Stock -- -- 0/0 --
</TABLE>
- --------
(1) "In-the-Money" options are options which had an exercise price less than
market price of Common Stock at December 31, 1999.
(2) All Omega options held by the named executives have an exercise price of
greater than $3.125, the closing price of a share of Omega Common Stock
on December 31, 1999 as reported by the New York Stock Exchange--
Composite Transactions, and therefore such options were not in-the-money
on such date.
(3) These were shares subject to options granted to Mr. Furey during his
employment by Zapata but which were exercised after his resignation from
Zapata.
Employment Agreements
Messrs. von Rosenberg and Stockton have Employment Agreements with the
Company pursuant to which the Company has agreed to provide for base salaries
that are subject to review at least annually, provided that they may not be
decreased without the executive's consent. The employment agreements provide
for a severance payment equal to 2.99 times the executive's annual base salary
in effect immediately preceding the event of employment termination (i) by the
executive for Good Reason (as defined in the respective employment agreement)
(ii) by the Company without Cause (as defined in the respective employment
agreement) or (iii) following any Change in Control of the Company (as defined
in the respective employment agreement). The agreements provide for rolling
three year terms. In 1999, Mr. Short and Mr. Furey had similar employment
agreements but as a result of the departure of these executives from the
Company in December 1999, their agreements have been terminated and the
Company is obligated to make the applicable severance payments to them
thereunder.
Messrs. White and Specht have Change of Control Agreements with the Company
pursuant to which the executive is entitled to a severance payment in the
event of both a change of control of the
9
<PAGE>
Company (as defined in the respective agreement) and a termination other than
for Cause (as defined in the respective agreement) within a two year period
after a Change of Control. The severance payment is equal to one times the
executive's annual base salary in effect prior to the termination of
employment.
Retirement Plans
The Company maintains a defined benefit plan for its employees (the "Pension
Plan"). The table below shows the estimated annual benefits payable on
retirement under the Pension Plan to persons in the specified compensation and
years of service classifications. The retirement benefits shown are based upon
retirement at age 65 and the payments of a single-life annuity to the employee
(although a participant can select other methods of calculating benefits) to
be received under the Company's Pension Plan using current average Social
Security wage base amounts and are not subject to any deduction for Social
Security or other offset amounts. These amounts include Salary and Bonus as
set forth in the Summary Compensation Table. A participant's benefit is based
on the average monthly earnings for the consecutive five year period during
which the participant had his or her highest level of earnings. With certain
exceptions, the Internal Revenue Code of 1986, as amended (the "Code"),
restricts to an aggregate amount of $120,000 (subject to cost of living
adjustments) the annual pension that may be paid by an employer from a plan
which is qualified under the Code. The Code also limits the covered
compensation which may be used to determine benefits to $160,000.
Retirement Benefits
<TABLE>
<CAPTION>
Years of Service
Covered ---------------------------------------
Compensation(1) 15 20 25 30 35
--------------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
$120,000 $17,073 $22,763 $28,454 $34,145 $39,836
130,000 $18,723 $24,963 $31,204 $37,445 $43,686
140,000 $20,373 $27,163 $33,954 $40,745 $47,536
150,000 $22,023 $29,363 $36,704 $44,045 $51,386
160,000 and higher $23,673 $31,563 $39,454 $47,345 $55,236
</TABLE>
- --------
(1) Represents the highest average annual earnings during five consecutive
calendar years of service.
As of December 31, 1999, the approximate years of credited service (rounded
to the nearest whole year) under the Pension Plan for the Named Executive
Officers were as follows: Mr. von Rosenberg--6; Mr. Stockton--2; Mr. Short--
14; Mr. Furey--2; and Mr. Wilson--14.
10
<PAGE>
COMPENSATION OF DIRECTORS
Directors who are employees of the Company are not paid any fees or
additional compensation for services rendered as members of the Board of
Directors or any committee thereof. Directors who are not employees of the
Company or Zapata receive a fee of $20,000 annually which is paid in four
equal quarterly installments. Members of the Audit and Compensation committees
receive $2,000 annually for each committee which is paid in four equal
quarterly installments. Members of the Scientific Committee are paid on a $500
per diem basis.
Pursuant to the Company's 1998 Directors Option Plan, upon joining the
Board, each director, other than the initial Chairman of the Board, is granted
options to purchase 14,200 shares of Common Stock at fair market value on the
date of grant. Pursuant to such plan, the initial Chairman of the Board, upon
being elected, received options to purchase 568,200 shares of Common Stock at
fair market value on the date of the grant ($12.75 per share). All options
granted under the Directors Option Plan generally vest ratably over a three
year period commencing on the date of grant.
COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors (the "Committee") is
composed of Dr. Gary L. Allee and Dr. William Lands, each of whom is a non-
employee director of the Company.
The Committee reviews and approves executive compensation, establishes
target profit goals, makes grants of long-term incentives, and determines the
compensation to be paid to the Chief Executive Officer and each of the other
officers of the Company. The goal of the executive compensation program is to
reward executives for their performance and enhancement of stockholder value.
The Company's executive compensation program is designed to attract and
retain executives who are key to the long-term success of the Company and
align compensation with the attainment of the Company's business goals and the
increase of share value. The Company uses the same philosophy as the Committee
in establishing compensation for employees other than officers.
Executive compensation consists of (i) salary, (ii) annual performance
incentives, and (iii) long-term incentives. The Committee reviews executive
compensation annually and makes appropriate adjustments based on (i) Company
performance, (ii) achievement of predetermined goals, and (iii) changes in an
executive's duties and responsibilities.
Salary. The Committee desires that overall compensation reflect the
performance of each individual executive over time. Base salaries are set at
levels subjectively determined by the Committee to adequately reward and
retain capable executives, including the President and Chief Executive
Officer. The Committee considers the importance of and skills required in a
particular executive position in establishing salary.
The Committee reviews and establishes the annual salary of each officer,
including the Chief Executive Officer on an annual basis. The Committee makes
an independent, subjective determination of the appropriate level of each
officer's salary to determine such amount or if a salary has been fixed by
contract which limits decreases, to determine the amount of the increase, if
any. The Committee does not use any mechanical formulations or weighting of
any of the factors considered.
11
<PAGE>
Annual Performance Incentives. The Company has established an annual bonus
plan for employees that is based on the attainment by the Company of targeted
financial performance, including increases in earnings (before depreciation,
interest, and amortization) and return on invested capital. These are set at
the beginning of each fiscal year. Under the bonus plan, a maximum bonus is
established for each executive officer, which may equal up to a maximum of
150% of an executive's salary depending on the position of the executive and
the achievement of certain profit goals.
Long Term Incentives. In an effort to properly align the long-term interests
of the Company's management and stockholders, the Committee may make awards
under the Company's 1998 Long-Term Incentive Plan, or if adopted, as set forth
in Proposal 2, the Company's 2000 Long Term Incentive Plan. Under the Plans,
the Committee may award non-qualified or incentive stock options, stock
appreciation rights, restricted stock or cash awards. The Committee believes
that the Plans enable the Company to attract and retain the highest quality
managers. Under the Plans, the Committee is responsible for establishing who
receives awards, the terms of the awards, requisite conditions and the size of
the awards. Awards to any recipient are made by a subjective determination by
the Committee, which considers the person's past performance and current
responsibilities, as well as the amount of awards previously made to that
person.
CEO Compensation. Mr. von Rosenberg was elected President and Chief
Executive Officer in July of 1997. In January 1999 his salary was increased
from $230,000 to $290,000. In February 1999, the Committee awarded Mr. von
Rosenberg options to purchase up to 150,000 shares of Common Stock at $8.25
per share which was equal to the fair market value of the stock on the date of
grant. The options vest in one-third increments commencing on the first
anniversary of the grant date and annually thereafter. The option grants were
made to Mr. von Rosenberg to provide a strong incentive for him to increase
the value of the Company's Common Stock.
Mr. von Rosenberg received no bonus for 1999.
In fiscal year 1998, the Company entered into employment agreements with Mr.
von Rosenberg and certain other executive officers of the Company which are
described in the section entitled "Employment Agreements with Officers."
Section 162(m) of the Internal Revenue Code of 1986 places a limit of
$1,000,000 on the amount of compensation that may be deducted by the Company
in any one fiscal year with respect to the Chief Executive Officer and the
other four most highly compensated individuals who are executive officers as
of the end of the fiscal year. This deduction limitation, however, does not
apply to certain "performance based" compensation. The Committee intends to
generally design and implement compensation plans that qualify for full
deductibility in accordance with Section 162(m). The Company, however, may
from time to time pay other compensation to its executive officers that may
not be deductible.
Respectfully submitted,
Gary L. Allee
William Lands
12
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
During 1999, the Compensation Committee consisted of Dr. Allee and Dr.
Lands. Neither Dr. Allee nor Dr. Lands had any relationships or transactions
with the Company or its subsidiaries required to be disclosed pursuant to Item
402(j) of Regulation S-K under the Exchange Act of 1934.
STOCK PERFORMANCE GRAPH
The following performance graph compares the Company's cumulative total
stockholder return on its Common Stock with the cumulative total return on (i)
the Russell 2000 Index and (ii) a peer group stock index (the "Peer Group
Index") which consists of four publicly traded companies in the same industry
or line-of-business as the Company. The cumulative total return computations
set forth in the Performance Graph assume the investment of $100 in the
Company's Common Stock, the Russell 2000 Index and the Peer Group Index on
April 2, 1998, the date of the Company's initial public offering of its Common
Stock
The companies that comprise the Peer Group Index are: Agribrands
International, Inc., Archer-Daniels-Midland Inc., Tyson Foods, Inc. and
ConAgra, Inc.
COMPARISON OF TWELVE MONTH CUMULATIVE TOTAL RETURN*
AMONG OMEGA PROTEIN CORPORATION, THE RUSSELL 2000 INDEX
AND A PEER GROUP
[GRAPH]
<TABLE>
<CAPTION>
4/2/98 12/31/98 12/31/99
------ -------- --------
<S> <C> <C> <C>
OMEGA PROTEIN CORPORATION.............................. 100.00 56.06 17.30
PEER GROUP............................................. 100.00 67.22 22.93
RUSSELL 2000........................................... 100.00 88.31 105.62
</TABLE>
- --------
* $100 INVESTED ON April 2, 1998--INCLUDING REINVESTMENT OF DIVIDENDS
The Performance Graph and related description shall not be deemed
incorporated by reference by any general statement incorporating by reference
the Proxy Statement into any filing under the Securities Act of 1933 or under
the Securities Exchange Act of 1934, except to the extent that the Company
specifically incorporates this information by reference and shall not
otherwise be deemed filed with the Securities and Exchange Commission.
13
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Prior to the Company's initial public offering in April 1998 (the "Initial
Public Offering"), Zapata advanced funds to the Company from time to time.
During fiscal year 1997, Zapata forgave the repayment of $41.9 million of
intercompany indebtedness owed to Zapata by the Company and the Company
recorded this amount as contributed capital. After forgiving such
indebtedness, Zapata advanced $28.1 million to the Company to meet the cash
requirements of certain acquisitions and $5.2 million, primarily for payment
of the Company's income taxes. As of December 31, 1997, Zapata had no
outstanding guarantees of Company indebtedness and the Company owed Zapata
approximately $33.3 million of intercompany debt. The intercompany balance
attributable to the acquisition financing discussed above accrued interest at
a rate equal to Zapata's cost of funds, which was approximately 8.5%; the
balance of the Company's indebtedness to Zapata did not bear any interest.
Pursuant to the Separation Agreement described below, the Company utilized a
portion of the net proceeds from the Initial Public Offering to repay all of
the $33.3 million it owed Zapata.
Prior to the Initial Public Offering, Zapata provided the Company with
certain administrative services, including treasury and tax services, which
were billed at their approximate costs to Zapata. The costs of these services
were directly charged and/or allocated based on the estimated percentage of
time that employees spent working on the other party's matters as a percentage
of total time worked.
In connection with the Initial Public Offering, the Company and Zapata
entered into a number of agreements for the purpose of defining their
continuing relationship. These agreements were negotiated in the context of a
parent-subsidiary relationship and, therefore, were not the result of arms-
length negotiations.
Separation Agreement. The Separation Agreement served as the master
agreement for the Company's separation from Zapata. Pursuant to the Separation
Agreement, the Company and Zapata entered into a Sublease Agreement,
Registration Rights Agreement, Tax Indemnity Agreement and Administrative
Services Agreement. The Separation Agreement also required the Company to
repay the $33.3 million of intercompany indebtedness owed by the Company to
Zapata contemporaneously with the consummation of the Initial Public Offering.
The Separation Agreement also prohibits Zapata from engaging in the
harvesting of menhaden or the production or marketing of fish meal, fish oil
or fish solubles anywhere in the United States for a period of five years from
the date of the Separation Agreement. Under the Separation Agreement, Zapata
and the Company and its subsidiaries agreed to indemnify each other with
respect to any future losses that might arise from the Initial Public Offering
as a result of any untrue statement or alleged untrue statement in any Initial
Public Offering document or the omission or alleged omission to state a
material fact in any Initial Public Offering document (i) in the Company's
case except to the extent such statement was based on information provided by
Zapata and (ii) in Zapata's case, only to the extent such statement is based
on information supplied by Zapata.
Sublease Agreement. Pursuant to the Sublease, the Company subleases from
Zapata its principal corporate offices in Houston, Texas. The annual rent paid
by the Company in 1999 under this Sublease was $58,711.
Registration Rights Agreement. Under the Registration Rights Agreement, the
Company granted to Zapata certain rights (the "Registration Rights") with
respect to the registration under the Securities Act of 1933, as amended (the
"Securities Act"), of shares of Common Stock owned by Zapata at the closing of
the Initial Public Offering (the "Registrable Securities"). Pursuant to the
Registration Rights
14
<PAGE>
Agreement, Zapata may require the Company, not more than once in any 365-day
period commencing on the first anniversary of the closing of the Initial
Public Offering and on not more than three occasions after Zapata no longer
owns a majority of the voting power of the outstanding capital stock of the
Company, to file a registration statement under the Securities Act covering
the registration of the Registrable Securities, including in connection with
an offering by Zapata of its securities that are exchangeable for the
Registrable Securities (the "Demand Registration Rights"). Zapata's Demand
Registration Rights are subject to certain limitations, including that any
such registration cover a number of Registrable Securities having a fair
market value of at least $50.0 million at the time of the request for
registration and that the Company may be able to temporarily defer a demand
registration to the extent it conflicts with another public offering of
securities by the Company or would require the Company to disclose certain
material non-public information. Zapata will also be able to require the
Company to include Registrable Securities owned by Zapata in a registration by
the Company of its securities (the "Piggyback Registration Rights"), subject
to certain conditions, including the ability of the underwriters for the
offering to limit or exclude Registrable Securities therefrom.
The Company and Zapata will share equally the out-of-pocket fees and
expenses of the Company associated with a demand registration and Zapata will
pay its pro rata share of underwriting discounts, commissions and related
expenses (the "Selling Expenses"). The Company will pay all expenses
associated with a piggyback registration, except that Zapata will pay its pro
rata share of the Selling Expenses. The Registration Rights Agreement contains
certain indemnification and contribution provisions (i) by Zapata for the
benefit of the Company and related persons, as well as any potential
underwriter and (ii) by the Company for the benefit of Zapata and related
persons, as well as any potential underwriter. Zapata's Demand Registration
Rights will terminate on the date that Zapata owns, on a fully converted or
exercised basis with respect to such securities held by Zapata, Registrable
Securities representing less than 10% of the then issued and outstanding
voting stock of the Company. Zapata's Piggyback Registration Rights will
terminate at such time as it is able to sell all of its Registrable Securities
pursuant to Rule 144 under the Securities Act within a three month period.
Zapata also may transfer its Registration Rights to any transferee from it of
Registrable Securities that represent, on a fully converted or exercised basis
with respect to the Registrable Securities transferred, at least 20% of the
then issued and outstanding voting stock of the Company at the time of
transfer; provided, however, that any such transferee will be limited to (i)
two demand registrations if the transfer conveys less than a majority but more
than 30% and (ii) one demand registration if the transfer conveys 30% or less
of the then issued and outstanding voting stock of the Company.
Tax Indemnity Agreement. Prior to the Initial Public Offering, the Company
was a member of Zapata's affiliated group and filed its tax returns on a
consolidated basis with such group. As a result of the Initial Public
Offering, the Company is no longer a member of the Zapata affiliated group.
The Tax Indemnity Agreement defines the respective rights and obligations of
the Company and Zapata relating to federal, state and other taxes for periods
before and after the Initial Public Offering. Pursuant to the Tax Indemnity
Agreement, Zapata is responsible for paying all federal income taxes relating
to taxable periods ending before and including the date on which the Company
is no longer a member of Zapata's affiliated group. Under the Tax Indemnity
Agreement, the Company is responsible for all taxes of the Company with
respect to taxable periods beginning after the date on which the Company was
no longer a member of Zapata's affiliated group. The Company is entitled to
any refunds (or reductions in tax liability) attributable to any carry back of
the Company's post-Initial Public Offering tax attributes (i.e., net operating
losses) realized by the Company after it was no longer a member of Zapata's
affiliated group. Any other refunds arising from the reduction in tax
liability
15
<PAGE>
involving the Zapata affiliated group while the Company was a member of such
group, including but not limited to, taxable periods ending before or
including such date (with the exception of any refunds arising from a
reduction in tax liability attributable to the Company), belong to Zapata.
Administrative Services Agreements. Under the Administrative Services
Agreement, the Company is required to provide Zapata with administrative
services upon reasonable request of Zapata. Zapata pays the Company for these
services at the Company's estimated cost of providing these services. This
Agreement continues until Zapata terminates it on five (5) days advance
written notice or the Company terminates it after Zapata fails to cure a
breach of the Agreement for thirty (30) days after the Company has given
Zapata written notice of the breach. The amount paid by Zapata to the Company
under this agreement in 1999 was $96,797.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors, and persons who beneficially own more than
ten percent of the Company's Common Stock, to file reports of their beneficial
ownership (Forms 3, 4, and 5, and any amendment thereto) with the Securities
and Exchange Commission and the New York Stock Exchange. Executive officers,
directors, and greater-than-ten percent holders are required to furnish the
Company with copies of the forms that they file.
To the Company's knowledge, based solely on the Company's review of the
copies of Forms 3, 4, and 5 or written representations that no reports were
required, all filings applicable to its officers, directors, greater-than-ten
percent beneficial owners and other persons subject to Section 16 of the
Exchange Act were timely filed.
PROPOSAL 2
APPROVAL OF THE OMEGA PROTEIN CORPORATION
2000 LONG-TERM INCENTIVE PLAN
The Board of Directors has unanimously approved the Omega Protein
Corporation 2000 Long-term Incentive Plan and unanimously recommends that the
Company stockholders vote FOR approval of the proposed Plan. The affirmative
vote of holders of a majority of the shares of Common Stock present in person
or represented by proxy and entitled to vote at the 2000 Annual Meeting is
required to approve the proposed Plan.
The Omega Protein Corporation 2000 Long-Term Incentive Plan (the "Plan")
initially was established as the 1998 Long-Term Incentive Plan, effective as
of January 26, 1998 (the "1998 Incentive Plan"), and the 1998 Non-Management
Directors Stock Option Plan, effective as of January 26, 1998 (the "1998
Directors Plan" and together with the 1998 Incentive Plan, the "Initial
Plans"). The Initial Plans have been amended and restated in their entirety
and renamed the 2000 Long-Term Incentive Plan, effective as of their adoption.
The terms of the Plan will supersede the Initial Plans in their entirety. The
following summary of the Plan is qualified by the terms of the Plan, a copy of
which is attached hereto as Appendix A.
Types of Awards Available
The Plan permits the granting of the following types of awards: stock
options ("Options") to purchase shares of Common Stock which may be either
incentive stock options ("Incentive Stock
16
<PAGE>
Options") within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended (the "Code"), or options that do not constitute Incentive
Stock Options ("Non-qualified Options"); stock-based awards ("Restricted
Stock," "Bonus Shares" or "Other Stock-Based Awards") and cash awards ("Cash
Awards"). Options, Restricted Stock, Bonus Shares, Other Stock-Based Awards
and Cash Awards are collectively referred to herein as "Awards."
Eligibility for Participation
Any employee or officer of, or any consultant to, the Company or an
affiliate of the Company is eligible to receive Awards under the Plan (a
"Participant"). In addition, a director of the Company who is not also an
employee of the Company or a director or control person of an entity that is
the beneficial owner of 25% or more of the outstanding Common Stock of the
Company (a "Non-employee Director") will receive automatic grants of Non-
qualified Options ("Director Options") under the Plan; Non-employee Directors
will not be eligible to receive any other Award. As of the date of this Proxy
Statement, approximately 100 employees (including officers) and two Non-
employee Directors are eligible to participate in the Plan.
Shares Subject to the Plan
The 1998 Incentive Plan currently provides that a maximum of 3,600,000
shares of Common Stock are available for Awards made thereunder, and the 1998
Directors Plan currently provides that a maximum of 620,000 shares of Common
Stock are available for issuance thereunder. As of December 31, 1999, all of
such 4,220,000 shares have been reserved for issuance pursuant to Awards made
under the Initial Plans. The market price per share of the Common Stock
underlying such options was $3.125 as of December 31, 1999, based on the
closing price of the Common Stock as reported in The Wall Street Journal on
December 31, 1999.
The Plan provides for the issuance of up to an aggregate of 4,220,000 shares
of Common Stock pursuant to Awards granted under the Plan, all of such shares
being subject to adjustment in the event of stock splits and certain other
corporate events; see "--Adjustments to Shares" below. The aggregate number of
shares of Common Stock available for issuance under the Plan will
automatically be increased on the last day of each calendar quarter (the
"Calculation Date") commencing on June 30, 2000 to a number of shares equal to
25% of the number of shares of Common Stock outstanding on that Calculation
Date. However, that the Board may from time to time provide for a lesser
increase in the aggregate number of shares of Common Stock available for
Awards under the Plan. The increase in the maximum aggregate number of shares
available for Awards under the Plan will not exceed 15,000,000.
The shares of Common Stock available for Awards may consist of authorized
but unissued shares, treasury shares, shares bought on the open market or
otherwise. Each share of Common Stock issued pursuant to the Plans will be
fully paid and nonassessable.
17
<PAGE>
Initial Plan Benefits
The following table sets forth information concerning the options previously
granted pursuant to the Initial Plans since their adoption (1) to the Named
Executive Officers; (2) to all current executive officers of the Company as a
group; and (3) to all other employees, including all current officers who are
not executive officers, as a group. Option grants under the Plan will be made
at the discretion of the Compensation Committee and, accordingly, future
grants under the Plan are not yet determinable.
<TABLE>
<CAPTION>
Weighted
Options Average
Granted Exercise
Name (#) Price ($/Sh)
- ---- --------- ------------
<S> <C> <C>
Named Executive Officers:
Joseph L. von Rosenberg III.......................... 718,200 11.81
Robert W. Stockton................................... 720,000 8.73
Kelsey D. Short(1)................................... 450,000 10.75
Eric T. Furey(1)..................................... 241,160 10.42
Michael E. Wilson.................................... 135,000 10.83
Current nominees for director:
Malcom I. Glazer..................................... 14,200 12.75
Avram A. Glazer...................................... 568,200 12.75
All current executive officers as a group.............. 2,351,400 10.41
All current directors who are not executive officers as
a group............................................... 42,600 14.96
All employees, including all current officers who are
not executive officers, as a group.................... 4,022,810 9.45
</TABLE>
- --------
(1) Because Mr. Short and Mr. Furey are no longer employed by the Company,
under the terms of their respective option agreements, these options will
expire on December 6, 2000, unless exercised prior to that date.
Administration
The Plan is administered by the Compensation Committee (the "Committee") of
the Board of Directors, consisting of two or more directors of the Company
appointed by the Board of Directors. Subject to the terms and conditions of
the Plan, the Committee has authority to, among other things, determine the
Participants who are to receive Awards, the types of Awards and the number of
shares to be issued pursuant to such Awards and, within the limits of the
Plan, the exercise price of Options (other than Director Options), to
interpret the Plan and all Awards, and to administer the Plan. The Committee,
in its sole discretion, may delegate any or all of its powers and duties under
the Plan to the Chief Executive Officer of the Company, subject to any
limitations on such delegated powers and duties as the Committee may impose,
except that the Chief Executive Officer may not grant Awards to, or take any
action with respect to any Award previously granted to, a person who is an
officer or a director of the Company.
Options
The Committee has the authority to grant to Participants, prior to the
termination of and subject to the terms and conditions of the Plan, Options
that will be in such form as the Committee may from time to time approve. (For
a description of Director Options automatically granted to Non-employee
Directors of the Company, see "--Director Awards" below.) The Committee also
has the authority to determine whether Options granted to Participants will be
Incentive Stock Options or Non-qualified Options; provided, however, that only
employees of the Company, its Parent Corporation or a Subsidiary Corporation
(as such terms are defined in Section 424 of the Code) may be granted
Incentive Stock Options. During any calendar year no Participant may receive
more than 75% of the total number of Options granted under the Plan during
such calendar year.
18
<PAGE>
To exercise an Option granted under the Plan, the person entitled to
exercise the Option must deliver to the Company payment in full for the shares
being purchased, together with any required withholding tax in the case of the
exercise of a Non-qualified Option. The payment may be made by such methods in
such forms as the Committee determines, including, without limitation, cash,
shares of Common Stock, other securities, other Awards or other property,
withholding of shares, cashless exercise with simultaneous sale, or any
combination thereof, provided that the combined value of all cash, shares or
other property delivered to the Company, as of the date of such delivery, is
at least equal to the full amount required to be paid under the Plan or the
applicable Award agreement. The value of each share of Common Stock delivered
will be deemed to be equal to the high and low sales price of a share of
Common Stock as reported in The Wall Street Journal (the "Fair Market Value")
on the trading day prior to the date the Option is exercised.
The price at which shares of Common Stock may be purchased upon the exercise
of a Non-qualified Option granted to an Participant will be determined by the
Committee at the time the Option is granted, but will not be less than the
Fair Market Value per share of Common Stock on the date of grant. In the case
of Options granted to Non-employee Directors, the exercise price of each
Option will be equal to the Fair Market Value per share of Common Stock on the
date of grant.
The exercise price for Options will be subject to appropriate adjustments in
the event of stock splits and certain other corporate events; see "--
Adjustments to Shares" below.
The Committee may, in its discretion, provide in an Option agreement (other
than an Incentive Stock Option agreement) that the Option granted to the
individual may be transferred as provided in such Option agreement.
Director Awards
Each Non-employee Director who is first elected or appointed to the Board of
Directors of the Company after the effective date of the Plan will be
automatically be granted, as of the date of his or her initial election, a
Non-qualified Option to purchase 14,200 shares of Common Stock. On the date of
the regular Annual Meeting of Stockholders of the Company in each year the
Plan is in effect (commencing with the 2000 Annual Meeting) each Non-employee
Director on such date will receive a grant of a Non-qualified Option to
purchase 10,000 shares of Common Stock. Each Director Option will become
exercisable (vested) six months and one day after its date of grant, and will
expire the earlier of 10 years from the date of grant or one year from the
date a Non-employee Director ceases to serve as a director of the Company (the
"Resignation Date"); provided, that if a Director Option is not exercisable as
of the Resignation Date, the Director Option will expire on such Resignation
Date.
The Plan also allows Non-Employee Directors to elect to take all or a
portion of their annual retainer fees, if any, and meeting and per diem fees
in Common Stock in lieu of cash. On the last day of each calendar quarter
beginning June 30, 2000 (each, an "Election Date"), a Non-Employee Director
may elect to receive a percentage (the "Elected Percentage") of his or her
director's fees for service as a director during the quarterly period
immediately following such Election Date (the "Service Period") in shares of
Common Stock. The number of shares to be received will be determined on the
first day of the month immediately following the completion of the Service
Period by multiplying the amount of the director's fees for such Service
Period by his or her Elected Percentage and dividing that result by the Fair
Market Value per share on such date.
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Restricted Stock and Bonus Shares
The Committee has the authority to determine the Participants to whom
Restricted Stock will be granted, the number of shares of Restricted Stock to
be granted to each such Participant, the duration of the restricted period,
and the conditions, including performance objectives, if any, under which if
not achieved, the Restricted Stock may be forfeited to the Company. Unless
subject to the achievement of performance objectives or otherwise determined
by the Committee, the restricted period will not be less than three years.
The Committee may in its discretion grant Bonus Shares to Participants. Each
Bonus share will be a share of Common Stock without restrictions, and will be
granted as additional compensation for the Participant's services to the
Company. The number of shares of Restricted Stock that may be granted to any
individual during a calendar year will not exceed 75% of the total shares of
Restricted Stock granted in such calendar year.
Cash Awards and Other Stock-Based Awards
The Committee has the authority to determine the Participants to whom Cash
Awards will be granted, the amount, and the terms or conditions, if any, as
additional compensation for the Participant's services to the Company or its
affiliates. A cash Award may be granted (simultaneously or subsequently)
separately or in tandem with another Award and may entitle a recipient to
receive a specified amount of cash upon such other Award become taxable to the
recipient.
The Committee may grant to Participants Other Stock-Based Awards, which will
consist of a right which is an Award denominated or payable in, valued in
whole or in part by reference to, or otherwise based on or related to, shares
of Common Stock. The Committee will determine the terms and conditions of such
Awards, including performance objectives, if any, applicable to such Awards.
The maximum number of Shares or the value for which Other Stock-Based Awards
may be granted to any Participant during any calendar year will not exceed 75%
of the total Shares granted in such calendar year, if the Award is in Shares,
or $2.0 million, if the Award is denominated in dollars.
Change in Control
The Plan provides that in the event of a Change in Control (as defined in
the Plan), and except to the extent an Award Agreement expressly provides to
the contrary: (i) all outstanding Awards granted on or after the date of
adoption of the Plan by the stockholders of the Company automatically shall
become fully vested immediately prior to such Change in Control (or such
earlier time as set by the Committee), all restrictions, if any, with respect
to such Awards shall lapse, all performance criteria, if any, with respect to
such Awards shall be deemed to have been met at the target level, and (ii) all
outstanding Awards granted prior to the date of adoption of the Plan by the
stockholders of the Company shall continue in effect in accordance with their
respective terms. In addition, unless the Company is the survivor of such
Change in Control as an independent publicly traded Company, each Option
outstanding at the time of the event or transaction automatically shall
convert on the date of such event or transaction into a new equivalent option
covering the stock of such successor (or a parent or subsidiary thereof), in
which case the outstanding Options will continue in the manner and under the
terms so provided.
In general, the Plan defines a "change in control" as an acquisition by
certain persons, entities or groups (other than Zapata or a Company employee
benefit plan) of 25% or more of the combined voting power of the Company's
then outstanding securities, a change in the majority of the Board during two
consecutive years, or certain reorganizations, mergers, consolidations or
liquidations.
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Amendment and Termination
The Board of Directors or the Committee in its discretion may amend, alter,
suspend, discontinue or terminate the Plan; provided that no such amendment
may be made without Company Stockholder approval if the amendment would (i)
materially increase the aggregate number of shares of Common Stock authorized
under the Plan (excluding any adjustments made for changes in capitalization
and certain unusual or nonrecurring events described in the Plan), or (ii)
materially increase the persons eligible to receive Awards under the Plan.
The Committee may waive any conditions or rights under, amend any terms of,
or alter any Award previously granted under the Plan, provided that no change
(other than adjustments made in recognition of certain unusual or nonrecurring
events or changes in capitalization) may reduce the benefit to an Award
recipient without the consent of such recipient. No amendment of an Incentive
Stock Option that increases the number of shares of Common Stock subject to
the Incentive Stock Option or reduces the exercise price per share of Common
Stock (other than as prescribed for changes in capitalization as described
herein) will be subject to the approval of the stockholders of the Company in
order for the Incentive Stock Option to remain qualified under the Code.
Adjustments to Shares
In the event that the Committee determines that a corporate transaction or
event such as a consolidation, recapitalization, stock split, stock dividend,
reorganization, merger, consolidation, combination, repurchase or the like
affects the Common Stock such that an adjustment is determined by the
Committee to be appropriate in order to prevent dilution or enlargement of the
benefits intended under the Plan, then the Committee may adjust any and all of
(i) the number and type of shares of Common Stock (or other securities or
property) subject to outstanding Awards, (ii) the number and type of shares of
Common Stock (or other securities or property) with respect to which Awards
may be granted, and (iii) the grant or exercise price with respect to any
Award or, if appropriate, make provision for a cash payment to the holder of
an Outstanding Award.
Federal Income Tax Consequences of Options
A grant of a Non-qualified Option, including a Director Option, pursuant to
the Plan results in no taxable income to the Option recipient or deduction to
the Company at the time it is granted. Upon exercising such an Option, the
optionee will realize taxable ordinary income in the amount of the difference
between the Option exercise price and the then fair market value of the shares
of Common Stock acquired. If the optionee retains the stock received as a
result of the exercise of an Option for at least two years from the date of
the grant and one year from the date of exercise, then any gain on the sale of
such stock will be treated as capital gain. Subject to the applicable
provisions of the Code, a business expense deduction for federal income tax
purposes will be allowable to the Company in the year of exercise in an amount
equal to the taxable ordinary income realized by the Option recipient.
A grant of an Incentive Stock Option pursuant to the Plan also does not
result in taxable income to the Option recipient at the time it is granted.
The optionee would not recognize taxable income upon exercise of an Incentive
Stock Option if the optionee retains the Common Stock acquired upon exercise
of an Incentive Stock Option for at least two years from the date of grant and
one year from the date of exercise (the "holding period"). Any gain on the
sale of such Common Stock after the holding period will be treated as a
capital gain. The Company would not be entitled to any business expense
deduction upon the grant or exercise of an Incentive Stock Option or the
disposition of the shares of Common Stock so acquired.
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If, however, the optionee disposes of the shares of Common Stock acquired
upon exercise of an Incentive Stock Option before the end of the holding
period, the optionee will realize taxable ordinary income equal to the lesser
of (i) the gain realized by the optionee upon such disposition or (2) the
difference between the exercise price and the fair market value of the shares
of Common Stock on the date of exercise. The Company in such event would be
entitled to claim a deduction for compensation paid at the same time and in
the same amount as that received by the optionee.
PROPOSAL 3
RATIFICATION OF INDEPENDENT AUDITORS
The Board of Directors, acting on the recommendation of its Audit Committee,
has selected the firm of PricewaterhouseCoopers, LLP, which has served (or its
predecessors) as independent auditors for the past five fiscal years, to
conduct an audit, in accordance with generally accepted auditing standards, of
the Company's financial statements for fiscal year ending December 31, 2000.
Omega Protein expects representatives of that firm to be present at the Annual
Meeting to respond to appropriate questions and to make a statement, if they
so desire. This selection is being submitted for ratification at the meeting.
The affirmative vote of the holders of a majority of the shares of Common
Stock present in person or represented by proxy at the meeting and entitled to
vote is required for such ratification. If not ratified, the Board will
reconsider the selection upon recommendation of the Audit Committee, although
the Board of Directors will not be required to select different independent
auditors for the Company.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR RATIFICATION OF
PRICEWATERHOUSECOOPERS, LLP AS INDEPENDENT AUDITORS FOR THE COMPANY.
OTHER MATTERS
The Board of Directors is not presently aware of any matters to be presented
at the Annual Meeting other than the election of directors, the approval of
the Plan and the ratification of PricewaterhouseCoopers, LLP as the Company's
independent auditors. If, however, other matters are properly brought before
the Annual Meeting, the enclosed proxy gives discretionary authority to the
persons named therein to act in accordance with their best judgment on such
matters.
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STOCKHOLDER PROPOSALS FOR 2001 ANNUAL MEETING
Pursuant to the Company's Bylaws, stockholder proposals to be presented at
the fiscal year 2001 Annual Meeting of Stockholders of the Company must be
received by the Company by no later than 90 days before the date of the 2001
Annual Meeting of Stockholders. If such timely notice of a stockholder
proposal is not given, the proposal may not be brought before the 2001 Annual
Meeting of Stockholders. If such timely notice is given but is not accompanied
by a written statement to the extent required by applicable securities laws,
the Company may exercise discretionary voting authority over proxies with
respect to such proposal if presented at the Company's 2001 Annual Meeting.
Under applicable securities laws, stockholder proposals must be received by
the Company no later than 120 days prior to May 3, 2001 to be considered for
inclusion in the Company's proxy statement relating to the 2001 Annual Meeting
or, if the Company changes the date of the 2001 Annual Meeting by more than 30
days from the date of the 2000 Annual Meeting, then stockholder proposals must
be received by the Company a reasonable time before the Company begins to
print and mail its proxy statement for the 2001 Annual Meeting.
Stockholder proposals must be mailed to Omega Protein Corporation, to the
attention of the Secretary, 1717 St. James Place, Suite 550, Houston, Texas
77056.
ANNUAL REPORT
The Company's Annual Report to Stockholders containing audited financial
statements for 1999, is being mailed with this Proxy Statement to all
stockholders of record.
By the order of the Board of
Directors
/s/ Robert W. Stockton
ROBERT W. STOCKTON
Executive Vice President, Chief
Financial Officer and Secretary
Houston, Texas
May 3, 2000
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APPENDIX A
OMEGA PROTEIN CORPORATION
2000 LONG-TERM INCENTIVE PLAN
SECTION 1. Purpose of the Plan.
(a) Amendment and Restatement of Initial Plans. The Omega Protein
Corporation 2000 Long-Term Incentive Plan (the "Plan") initially was
established as the 1998 Long-Term Incentive Plan, effective as of January 26,
1998, and the 1998 Non-Management Directors Stock Option Plan, effective as of
January 26, 1998 (the "Initial Plans"). The Initial Plans, as amended hereby,
are amended and restated in its entirety and renamed the 2000 Long-Term
Incentive Plan, effective as of its adoption. The terms of this Plan shall
supersede the Initial Plans in their entirety; provided, however, that nothing
herein shall operate or be construed as modifying the terms of an incentive
stock option granted under the Initial Plan in a manner that would treat the
option as being a new grant for purpose of Section 424(h) of the Code (as
hereafter defined).
(b) General Purpose. The Plan is intended to promote the interests of Omega
Protein Corporation, a Nevada corporation (the "Company"), by encouraging
officers, employees, directors and consultants of the Company and its
Affiliates to acquire or increase their equity interest in the Company and to
provide a means whereby they may develop a sense of proprietorship and
personal involvement in the development and financial success of the Company,
and to encourage them to remain with and devote their best efforts to the
business of the Company thereby advancing the interests of the Company and its
stockholders. The Plan is also contemplated to enhance the ability of the
Company and its Affiliates to attract and retain the services of individuals
who are essential for the growth and profitability of the Company.
SECTION 2. Definitions.
As used in the Plan, the following terms shall have the meanings set forth
below:
"Affiliate" shall mean (i) any "parent corporation" of the Company (as
defined in Section 424(e) of the Code) and any "subsidiary corporation" of
any such corporation (as defined in Section 424(f) of the Code), (ii) any
entity that, directly or through one or more intermediaries, is controlled
by the Company, and (iii) any entity in which the Company has a significant
equity interest, as determined by the Committee.
"Award" shall mean any Option, Restricted Stock, Bonus Shares, Other
Stock-Based Award or Cash Award.
"Award Agreement" shall mean any agreement, contract, or other instrument
or document (written or electronic) evidencing any Award, which may, but
need not, be executed or acknowledged by a Participant.
"Board" shall mean the Board of Directors of the Company.
"Bonus Shares" shall mean an award of Shares granted pursuant to Section
6(c) of the Plan.
"Cash Award" shall mean an award payable in cash granted pursuant to
Section 6(d) of the Plan.
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"Change in Control" shall mean the occurrence of any one of the following
events:
(a) any "person" (as such term is used in Section 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act")),
other than Zapata Corporation or a trustee or other fiduciary holding
securities under an employee benefit plan of the Company or any
affiliate, or any corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as
their ownership of stock of the Company, is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly of securities of the Company representing 25% or more of the
combined voting power of the Company's then outstanding securities;
(b) during any period of two consecutive years (not including any
period prior to the effective date of the Plan), individuals who at the
beginning of such period constitute the Board, and any new director
(other than a director designated by a person who has entered into an
agreement with the Company to effect a transaction described in clause
(a), (c) or (d) of this Change in Control definition and excluding any
individual whose initial assumption of office occurs as a result of
either (i) an actual or threatened election contest (as such terms are
used in Rule 14a-11 of Regulation 14A promulgated under the Exchange
Act), or an actual or threatened solicitation of proxies or consents by
or on behalf of a Person other than the Board) whose election by the
Board or nomination for election by the Company's stockholders was
approved by a vote of at least two-thirds of the directors then still
in office who either were directors at the beginning of the period or
whose election or nomination for election was previously so approved
(hereinafter referred to as "Continuing Directors"), cease for any
reason to constitute at least a majority thereof;
(c) the stockholders of the Company approve a merger or consolidation
of the Company with any other corporation, other than a merger or
consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting
securities of the surviving entity) more than 60% of the combined
voting power of the voting securities of the Company (or such surviving
entity) outstanding immediately after such merger or consolidation; or
(d) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition
by the Company of all or substantially all of the Company's assets. For
purposes of this clause (d), the term "the sale or disposition by the
Company of all or substantially all of the Company's assets" shall mean
a sale or other disposition transaction or series of related
transactions involving assets of the Company or of any direct or
indirect subsidiary of the Company (including the stock of any direct
or indirect subsidiary of the Company) in which the value of the assets
or stock being sold or otherwise disposed of (as measured by the
purchase price being paid therefor or by such other method as the Board
determines is appropriate in a case where there is no readily
ascertainable purchase price) constitutes more than two-thirds of the
"fair market value of the Company" (as hereinafter defined). For
purposes of the preceding sentence, the "fair market value of the
Company" shall be the aggregate market value of the Company's
outstanding common stock (on a fully diluted basis) plus the aggregate
market value of the Company's other outstanding equity securities. The
aggregate market value of the Company's common stock shall be
determined by multiplying the number of shares of the Company's common
stock (on a fully diluted basis) outstanding on the date of the
execution and delivery of a definitive agreement with respect to the
transaction or series of related transactions (the "Transaction Date")
by
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the average closing price for the Company's common stock for the ten
trading days immediately preceding the Transaction Date. The aggregate
market value of any other equity securities of the Company shall be
determined in a manner similar to that prescribed in the immediately
preceding sentence for determining the aggregate market value of the
Company's common stock or by such other method as the Board shall
determine is appropriate. However, notwithstanding anything in this
clause (d) to the contrary, a spinoff or distribution of the stock of a
subsidiary of the Company to those persons who were stockholders of the
Company immediately prior to such spinoff or distribution in
substantially the same proportion as their ownership of Company stock
immediately prior to such spinoff or distribution shall not constitute
a "sale or disposition by the Company of all or substantially all of
the Company's assets".
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time, and the rules and regulations thereunder.
"Committee" shall mean the Compensation Committee of the Board.
"Consultant" shall mean any individual, other than a Director or an
Employee, who renders consulting services to the Company or an Affiliate
for a fee.
"Director" shall mean a "non-employee director" of the Company, as
defined in Rule 16b-3, provided, however, that a person who is a control
person or director of an entity that is the beneficial owner of 25% or more
of the outstanding shares of the Company shall not be deemed a "non-
employee director" for purposes of this Plan.
"Employee" shall mean any employee of the Company or an Affiliate.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Fair Market Value" shall mean, with respect to Shares, the average of
the high and low sales price of a Share on the applicable date (or if there
is no trading in the Shares on such date, on the next preceding date on
which there was trading) as reported in The Wall Street Journal (or other
reporting service approved by the Committee). In the event the Shares are
not publicly traded at the time a determination of its fair market value is
required to be made hereunder, the determination of fair market value shall
be made in good faith by the Committee.
"Option" shall mean an option granted under Section 6(a) of the Plan.
Options granted under the Plan may constitute "incentive stock options" for
purposes of Section 422 of the Code or nonqualified stock options.
"Other Stock-Based Award" shall mean an award granted pursuant to Section
6(e) of the Plan that is not otherwise specifically provided for, the value
of which is based in whole or in part upon the value of a Share.
"Participant" shall mean any Director, Employee or Consultant granted an
Award under the Plan.
"Performance Objectives" means the objectives, if any, established by the
Committee that are to be achieved with respect to an Award granted under
this Plan, which may be described in terms of Company-wide objectives, in
terms of objectives that are related to performance of a
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division, subsidiary, department or function within the Company or an
Affiliate in which the Participant receiving the Award is employed or in
individual or other terms, and which will relate to the period of time
determined by the Committee. The Performance Objectives intended to qualify
under Section 162(m) of the Code shall be with respect to one or more of
the following: earnings per share; earnings before interest, taxes,
depreciation and amortization expenses ("EBITDA"); earnings before interest
and taxes ("EBIT"); EBITDA, EBIT or earnings before taxes and unusual or
nonrecurring items as measured either against the annual budget or as a
ratio to revenue; market share; sales; costs; return on equity; operating
cash flow; production volumes compared to plan or prior years; reserves
added; discretionary cash flow; return on net capital employed; and stock
price performance. Which objectives to use with respect to an Award, the
weighting of the objectives if more than one is used, and whether the
objective is to be measured against a Company-established budget or target,
an index or a peer group of companies, shall be determined by the Committee
in its discretion at the time of grant of the Award. A Performance
Objective need not be based on an increase or a positive result and may
include, for example, maintaining the status quo or limiting economic
losses.
"Person" shall mean individual, corporation, partnership, association,
joint-stock company, trust, unincorporated organization, government or
political subdivision thereof or other entity.
"Restricted Period" shall mean the period established by the Committee
with respect to an Award during which the Award either remains subject to
forfeiture or is not exercisable by the Participant.
"Restricted Stock" shall mean any Share, prior to the lapse of
restrictions thereon, granted under Sections 6(b) of the Plan.
"Rule 16b-3" shall mean Rule 16b-3 promulgated by the SEC under the
Exchange Act, or any successor rule or regulation thereto as in effect from
time to time.
"SEC" shall mean the Securities and Exchange Commission, or any successor
thereto.
"Shares" or "Common Shares" or "Common Stock" shall mean the common stock
of the Company, $0.01 par value, and such other securities or property as
may become the subject of Awards under the Plan.
SECTION 3. Administration.
The Plan shall be administered by the Committee. A majority of the Committee
shall constitute a quorum, and the acts of the members of the Committee who
are present at any meeting thereof at which a quorum is present, or acts
unanimously approved by the members of the Committee in writing, shall be the
acts of the Committee. Subject to the following, the Committee, in its sole
discretion, may delegate any or all of its powers and duties under the Plan,
including the power to grant Awards under the Plan, to the Chief Executive
Officer of the Company, subject to such limitations on such delegated powers
and duties as the Committee may impose. Upon any such delegation all
references in the Plan to the "Committee", other than in Section 8, shall be
deemed to include the Chief Executive Officer; provided, however, that such
delegation shall not limit the Chief Executive Officer's right to receive
Awards under the Plan. Notwithstanding the foregoing, the Chief Executive
Officer may not grant Awards to, or take any action with respect to any Award
previously granted to, a person who is an officer or a member of the Board.
Subject to the terms of the Plan and applicable law, and in addition
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to other express powers and authorizations conferred on the Committee by the
Plan, the Committee shall have full power and authority to: (i) designate
Participants; (ii) determine the type or types of Awards to be granted to a
Participant; (iii) determine the number of Shares to be covered by, or with
respect to which payments, rights, or other matters are to be calculated in
connection with, Awards; (iv) determine the terms and conditions of any Award;
(v) determine whether, to what extent, and under what circumstances Awards may
be settled or exercised in cash, Shares, other securities, other Awards or
other property, or canceled, forfeited, or suspended and the method or methods
by which Awards may be settled, exercised, canceled, forfeited, or suspended;
(vi) determine whether, to what extent, and under what circumstances cash,
Shares, other securities, other Awards, other property, and other amounts
payable with respect to an Award shall be deferred either automatically or at
the election of the holder thereof or of the Committee; (vii) interpret and
administer the Plan and any instrument or agreement relating to an Award made
under the Plan; (viii) establish, amend, suspend, or waive such rules and
regulations and appoint such agents as it shall deem appropriate for the
proper administration of the Plan; and (ix) make any other determination and
take any other action that the Committee deems necessary or desirable for the
administration of the Plan. Unless otherwise expressly provided in the Plan,
all designations, determinations, interpretations, and other decisions under
or with respect to the Plan or any Award shall be within the sole discretion
of the Committee, may be made at any time and shall be final, conclusive, and
binding upon all Persons, including the Company, any Affiliate, any
Participant, any holder or beneficiary of any Award, any stockholder and any
Employee.
SECTION 4. Shares Available for Awards.
(a) Share Reserve. Subject to adjustment as provided in Section 4(d), the
number of Shares with respect to which Awards may be granted under the Plan
shall initially be 4,220,000. If any Award is exercised, paid, forfeited,
terminated or canceled without the delivery of Shares, then the Shares covered
by such Award, to the extent of such payment, exercise, forfeiture,
termination or cancellation, shall revert to the Share Reserve and again be
Shares available for issuance under the Plan.
(b) Evergreen Share Reserve Increase.
(i) Notwithstanding Section 4(a) hereof, on the last day of each calendar
quarter (the "Calculation Date"), commencing on June 30, 2000, the
aggregate number of shares of Common Stock that is available for issuance
under the Plan shall automatically be increased by that number of shares
equal to twenty-five percent (25%) of the outstanding shares of Common
Stock of the Company on such Calculation Date; provided, however, that the
Board, from time to time, may provide for a lesser increase in the
aggregate number of shares of Common Stock that is available for issuance
under the Plan.
(ii) Subject to the provisions of Section 4(d) hereof relating to
adjustments upon changes in securities, the increase in the maximum
aggregate number of shares of Common Stock that is available for issuance
pursuant to Awards granted under the Plan shall not exceed 15,000,000.
(c) Sources of Shares Deliverable Under Awards. Any Shares delivered
pursuant to an Award may consist, in whole or in part, of authorized and
unissued Shares, treasury Shares, Shares bought on the market or otherwise.
(d) Adjustments. In the event that the Committee determines that any
dividend or other distribution (whether in the form of cash, Shares, other
securities, or other property), recapitalization, stock split, reverse stock
split, reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, or exchange of Shares or other securities of the Company, issuance
of warrants or other rights to purchase Shares or other securities of the
Company, or other similar corporate transaction or
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event affects the Shares such that an adjustment is determined by the
Committee to be appropriate in order to prevent dilution or enlargement of the
benefits or potential benefits intended to be made available under the Plan,
then the Committee shall, in such manner as it may deem equitable, adjust any
or all of (i) the number and type of Shares (or other securities or property)
with respect to which Awards may be granted, (ii) the number and type of
Shares (or other securities or property) subject to outstanding Awards, and
(iii) the grant or exercise price with respect to any Award or, if deemed
appropriate, make provision for a cash payment to the holder of an outstanding
Award.
SECTION 5. Eligibility.
Any Employee, Director or Consultant shall be eligible to be designated a
Participant and receive an Award under the Plan. In addition, each Director
shall receive Awards automatically as provided in Section 7.
SECTION 6. Awards.
(a) Options. Subject to the provisions of the Plan, the Committee shall have
the authority to determine the Participants to whom Options shall be granted,
the number of Shares to be covered by each Option, the purchase price therefor
and the conditions and limitations applicable to the exercise of the Option,
including the following terms and conditions and such additional terms and
conditions, as the Committee shall determine, that are not inconsistent with
the provisions of the Plan.
(i) Exercise Price. The purchase price per Share purchasable under an
Option shall be determined by the Committee at the time the Option is
granted, but shall not be less than the Fair Market Value per Share on such
grant date.
(ii) Time and Method of Exercise. The Committee shall determine the time
or times at which an Option may be exercised in whole or in part (which may
include the achievement of one or more Performance Objectives), and the
method or methods by which, and the form or forms (which may include,
without limitation, cash, check acceptable to the Company, Shares already-
owned for more than six months, outstanding Awards, Shares that would
otherwise be acquired upon exercise of the Option, a "cashless-broker"
exercise through procedures approved by the Company, other securities or
other property, loans, notes approved by the Committee, or any combination
thereof, having a Fair Market Value on the exercise date equal to the
relevant exercise price) in which payment of the exercise price with
respect thereto may be made or deemed to have been made.
(iii) Incentive Stock Options. The terms of any Option granted under the
Plan intended to be an incentive stock option shall comply in all respects
with the provisions of Section 422 of the Code, or any successor provision,
and any regulations promulgated thereunder. Incentive stock options may be
granted only to employees of the Company and its parent corporation and
subsidiary corporations, within the meaning of Section 424 of the Code. To
the extent the aggregate Fair Market Value of the Shares (determined as of
the date of grant) of an Option to the extent exercisable for the first
time during any calendar year (under all plans of the Company and its
parent and subsidiary corporations) exceeds $100,000, such Option Shares in
excess of $100,000 shall be nonqualified stock options.
(iv) Limits. The maximum number of Options granted to any Participant
during any calendar year shall not exceed 75% of the total Options granted
to Participants under the Plan during such calendar year.
A-6
<PAGE>
(b) Restricted Stock. Subject to the provisions of the Plan, the Committee
shall have the authority to determine the Participants to whom Restricted
Stock shall be granted, the number of Shares of Restricted Stock to be granted
to each such Participant, the duration of the Restricted Period during which,
and the conditions, including Performance Objectives, if any, under which if
not achieved, the Restricted Stock may be forfeited to the Company, and the
other terms and conditions of such Awards. Unless subject to the achievement
of Performance Objectives or a special determination is made by the Committee
as to a shorter Restricted Period, the Restricted Period shall not be less
than three years.
(i) Dividends. Dividends paid on Restricted Stock may be paid directly to
the Participant, may be subject to risk of forfeiture and/or transfer
restrictions during any period established by the Committee or sequestered
and held in a bookkeeping cash account (with or without interest) or
reinvested on an immediate or deferred basis in additional shares of Common
Stock, which credit or shares may be subject to the same restrictions as
the underlying Award or such other restrictions, all as determined by the
Committee in its discretion.
(ii) Registration. Any Restricted Stock may be evidenced in such manner
as the Committee shall deem appropriate, including, without limitation,
book-entry registration or issuance of a stock certificate or certificates.
In the event any stock certificate is issued in respect of Restricted Stock
granted under the Plan, such certificate shall be registered in the name of
the Participant and may bear an appropriate legend referring to the terms,
conditions, and restrictions applicable to such Restricted Stock or such
legend may be noted in the records of the transfer agent.
(iii) Forfeiture and Restrictions Lapse. Except as otherwise determined
by the Committee or the terms of the Award that granted the Restricted
Stock, upon termination of a Participant's employment (as determined under
criteria established by the Committee) for any reason during the applicable
Restricted Period, all Restricted Stock shall be forfeited by the
Participant and reacquired by the Company. Unrestricted Shares, evidenced
in such manner as the Committee shall deem appropriate, shall be issued to
the holder of Restricted Stock promptly after the applicable restrictions
have lapsed or otherwise been satisfied.
(iv) Transfer Restrictions. During the Restricted Period, Restricted
Stock will be subject to the limitations on transfer as provided in Section
6(i)(iii).
(v) Limits. The maximum number of Shares of Restricted Stock that may be
granted to any Participant during any calendar year shall not exceed 75% of
the total number of Shares of Restricted Stock granted during such
calendar.
(c) Bonus Shares. The Committee shall have the authority, in its discretion,
to grant Bonus Shares to Participants. Each Bonus Share shall constitute a
transfer of an unrestricted Share to the Participant, without other payment
therefor, as additional compensation for the Participant's services to the
Company. Bonus Shares shall be in lieu of a cash bonus that otherwise would be
granted to the Participant.
(d) Cash Awards. The Committee shall have the authority to determine the
Participants to whom Cash Awards shall be granted, the amount, and the terms
or conditions, if any, as additional compensation for the Participant's
services to the Company or its Affiliates. A Cash Award may be granted
(simultaneously or subsequently) separately or in tandem with another Award
and may entitle a Participant to receive a specified amount of cash from the
Company upon such other Award becoming taxable to the Participant, which cash
amount may be based on a formula relating to the anticipated taxable income
associated with such other Award and the payment of the Cash Award.
A-7
<PAGE>
(e) Other Stock-Based Awards. The Committee may grant to Participants Other
Stock-Based Awards, which shall consist of a right which is an Award
denominated or payable in, valued in whole or in part by reference to, or
otherwise based on or related to, Shares as is deemed by the Committee to be
consistent with the purposes of the Plan. Subject to the terms of the Plan,
including the Performance Objectives, if any, applicable to such Award, the
Committee shall determine the terms and conditions of any such Other Stock-
Based Award. The maximum number of Shares or the value for which Other Stock-
Based Awards may be granted to any Participant during any calendar year shall
not exceed 75% of the total Shares granted in such calendar year, if the Award
is in Shares, or $2.0 million, if the Award is denominated in dollars.
(f) Replacement Awards. The Committee shall have the authority to grant an
Award to any Participant conditioned upon such Participant canceling his or
her rights with respect to a similar award granted to the Participant under
another plan of the Company.
(g) General.
(i) Awards May Be Granted Separately or Together. Awards may, in the
discretion of the Committee, be granted either alone or in addition to, in
tandem with, or in substitution for any other Award granted under the Plan
or any award granted under any other plan of the Company or any Affiliate.
Awards granted in addition to or in tandem with other Awards or awards
granted under any other plan of the Company or any Affiliate may be granted
either at the same time as or at a different time from the grant of such
other Awards or awards.
(ii) Forms of Payment by Company Under Awards. Subject to the terms of
the Plan and of any applicable Award Agreement, payments or transfers to be
made by the Company or an Affiliate upon the grant, exercise or payment of
an Award may be made in such form or forms as the Committee shall
determine, including, without limitation, cash, Shares, other securities,
other Awards or other property, or any combination thereof, and may be made
in a single payment or transfer, in installments, or on a deferred basis,
in each case in accordance with rules and procedures established by the
Committee. Such rules and procedures may include, without limitation,
provisions for the payment or crediting of reasonable interest on
installment or deferred payments.
(iii) Limits on Transfer of Awards.
(A) Except as provided in (C) below, each Award, and each right under
any Award, shall be exercisable only by the Participant during the
Participant's lifetime, or by the person to whom the Participant's
rights shall pass by will or the laws of descent and distribution.
(B) Except as provided in (C) below, no Award and no right under any
such Award may be assigned, alienated, pledged, attached, sold or
otherwise transferred or encumbered by a Participant otherwise than by
will or by the laws of descent and distribution (or, in the case of
Restricted Stock, to the Company) and any such purported assignment,
alienation, pledge, attachment, sale, transfer or encumbrance shall be
void and unenforceable against the Company or any Affiliate.
(C) Notwithstanding anything in the Plan to the contrary, to the
extent specifically provided by the Committee with respect to a grant,
a nonqualified stock option may be transferred to immediate family
members or related family trusts, or similar entities on such terms and
conditions as the Committee may establish.
(iv) Term of Awards. The term of each Award shall be for such period as
may be determined by the Committee; provided, that in no event shall the
term of any Award exceed a period of 10 years from the date of its grant.
A-8
<PAGE>
(v) Share Certificates. All certificates for Shares or other securities
of the Company or any Affiliate delivered under the Plan pursuant to any
Award or the exercise thereof shall be subject to such stop transfer orders
and other restrictions as the Committee may deem advisable under the Plan
or the rules, regulations, and other requirements of the SEC, any stock
exchange upon which such Shares or other securities are then listed, and
any applicable federal or state laws, and the Committee may cause a legend
or legends to be put on any such certificates to make appropriate reference
to such restrictions.
(vi) Consideration for Grants. Awards may be granted for no cash
consideration or for such consideration as the Committee determines
including, without limitation, such minimal cash consideration as may be
required by applicable law.
(vii) Delivery of Shares or other Securities and Payment by Participant
of Consideration. No Shares or other securities shall be delivered pursuant
to any Award until payment in full of any amount required to be paid
pursuant to the Plan or the applicable Award Agreement (including, without
limitation, any exercise price, tax payment or tax withholding) is received
by the Company. Such payment may be made by such method or methods and in
such form or forms as the Committee shall determine, including, without
limitation, cash, Shares, other securities, other Awards or other property,
withholding of Shares, cashless exercise with simultaneous sale, or any
combination thereof; provided that the combined value, as determined by the
Committee, of all cash and cash equivalents and the Fair Market Value of
any such Shares on the trading day prior to exercise or other property so
tendered to the Company, as of the date of such tender, is at least equal
to the full amount required to be paid pursuant to the Plan or the
applicable Award Agreement to the Company.
SECTION 7. Director Awards.
(a) Automatic Grant of Director Options. Each Director who is elected or
appointed to the Board for the first time after the effective date of this
Plan shall automatically receive, on the date of his or her election or
appointment, a nonqualified Option for 14,200 shares of Common Stock.
On the date of the regular Annual Meeting of Stockholders of the Company in
each year that this Plan is in effect (commencing with the Annual Meeting of
Stockholders in 2000), each Director who is serving on that day, including a
Director who was elected for the first time at such annual meeting, shall
automatically receive a nonqualified Option grant for 10,000 shares of Common
Stock. Each such Option will be subject to all of the limitations contained in
the following provisions:
(i) Each such Director Option shall become exercisable (vested) six
months and one day after its grant date.
(ii) The purchase price of each Director Option shall be the Fair Market
Value of the Common Stock on its grant date.
(iii) Each such Director Option may be exercised in full at one time or
in part from time to time by giving written notice to the Company, stating
the number of shares of Common Stock with respect to which the Director
Option is being exercised, accompanied by payment in full of the option
purchase price for such shares, which payment may be (i) in cash by check
acceptable to the Company, (ii) by the transfer to the Company of shares of
Common Stock already owned by the optionee having an aggregate Fair Market
Value at the date of exercise equal to the aggregate option purchase price,
(iii) from the proceeds of a sale through a broker of some or all of the
shares to which such exercise relates, or (iv) by a combination of such
methods of payment.
A-9
<PAGE>
(iv) Each Director Option shall expire 10 years from the grant date
thereof, but shall be subject to earlier termination as follows: (1) to the
extent exercisable as of the date a Director ceases to serve as a director
of the Company (the "Resignation Date"), the Director Option may be
exercised only within one year of such Resignation Date by the Director or
the Director's legal representative or the person to whom the Director's
rights shall pass by will or the laws of descent and distribution, as the
case may be, and to the extent not so exercised shall terminate on the
first anniversary of the Resignation Date and (2) to the extent not
exercisable as of the Resignation Date, the Director Option shall terminate
on such Resignation Date.
In the event that the number of shares of Common Stock available for
automatic Director Options under this Plan is insufficient to make all such
automatic Awards provided for in this Section on the applicable date, then all
Directors who are entitled to a grant on such date shall share ratably in the
number of shares then available for grant under this Plan, and shall have no
right to receive a grant with respect to the deficiencies in the number of
available shares and all future grants under this Section.
(b) Director's Fee Stock. On the last day of each calendar quarter,
beginning on June 30, 2000 (each such date, an "Election Date"), a Director
may elect to receive a percentage (the percentage so elected being the
"Elected Percentage") of the Director's fees (including both annual retainer
fees, if any, and meeting and per diem fees) the Company otherwise would pay
in cash to the Director for his or her service as a Director during the
quarterly period immediately following such Election Date (the "Service
Period") in Shares of Common Stock. The number of Shares, as the case may be,
paid or credited to a Director during the Service Period shall be determined
on the first day of the month immediately following the Service Period by
multiplying the amount of the Director's fees for such Service Period by his
or her Elected Percentage and dividing that result by the Fair Market Value
per Share on such date, with the result rounded down to the nearest whole
number. Each quarterly election made by a Director pursuant to this paragraph
must take the form of a written document signed by the Director and filed with
the Secretary of the Company and designate the Elected Percentage of the cash
fees the Director elects to forego in the next Service Period in exchange for
Shares of Common Stock.
SECTION 8. Amendment and Termination.
Except to the extent prohibited by applicable law and unless otherwise
expressly provided in an Award Agreement or in the Plan:
(a) Amendments to the Plan. Except as required by applicable law or the
rules of the principal securities market on which the Shares are traded and
subject to paragraph (b) below, the Board or the Committee may amend,
alter, suspend, discontinue, or terminate the Plan without the consent of
any stockholder, Participant, other holder or beneficiary of an Award, or
other Person; provided, however, no such amendment may be made without
stockholder approval, if such amendment would (i) materially increase the
number of Shares authorized under the Plan, but excluding any adjustment
made pursuant to Section 4(c), or (ii) materially increase the Persons
eligible to receive Awards under the Plan.
(b) Amendments to Awards. Subject to paragraph (d) below, the Committee
may waive any conditions or rights under, amend any terms of, or alter any
Award theretofore granted, provided no change, other than pursuant to
paragraph (c), in any Award shall reduce the benefit to a Participant
without the consent of such Participant.
(c) Adjustment of Awards Upon the Occurrence of Certain Unusual or
Nonrecurring Events. Subject to paragraph (d) below, the Committee is
hereby authorized to make adjustments in the
A-10
<PAGE>
terms and conditions of, and the criteria included in, Awards in
recognition of unusual or nonrecurring events (including, without
limitation, the events described in Section 4(c) of the Plan) affecting the
Company, any Affiliate, or the financial statements of the Company or any
Affiliate, or of changes in applicable laws, regulations, or accounting
principles, whenever the Committee determines that such adjustments are
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan.
(d) Section 162(m). The Committee, in its sole discretion and without the
consent of the Participant, may amend (i) any stock-based Award to reflect
(1) a change in corporate capitalization, such as a stock split or
dividend, (2) a corporate transaction, such as a corporate merger, a
corporate consolidation, any corporate separation (including a spinoff or
other distribution of stock or property by a corporation), any corporate
reorganization (whether or not such reorganization comes within the
definition of such term in Section 368 of the Code), (3) any partial or
complete corporate liquidation, or (4) a change in accounting rules
required by the Financial Accounting Standards Board and (ii) any Award
that is not intended to meet the requirements of Section 162(m) of the
Code, to reflect significant event that the Committee, in its sole
discretion, believes to be appropriate to reflect the original intent in
the grant of the Award. With respect to an Award that is subject to Section
162(m) of the Code, the Committee (i) shall not take any action that would
disqualify such Award and (ii) must first certify that the Performance
Objectives, if applicable, have been achieved before the Award may be paid.
SECTION 9. Change in Control.
(a) Subject to paragraph (b) below, and except to the extent an Award
Agreement expressly provides to the contrary, in the event of a Change in
Control of the Company (i) all outstanding Awards granted on or after the date
of adoption of this Plan by the stockholders of the Company automatically
shall become fully vested immediately prior to such Change in Control (or such
earlier time as set by the Committee), all restrictions, if any, with respect
to such Awards shall lapse, all performance criteria, if any, with respect to
such Awards shall be deemed to have been met at the target level, and (ii) all
outstanding Awards granted prior to the date of adoption of this Plan by the
stockholders of the Company shall continue in effect in accordance with their
respective terms. In addition, unless the Company survives as an independent
publicly traded company, each Option outstanding at the time of the event or
transaction automatically shall convert on the date of such event or
transaction into a new equivalent option covering the stock of a successor
entity, or the parent or subsidiary thereof, with appropriate adjustments as
to the number and kinds of shares and exercise prices, in which event the
Options theretofore granted shall continue in the manner and under the terms
so provided.
(b) If a Participant is a "disqualified individual" (as defined in Section
280G of the Code) and the accelerated vesting of an Award and/or the
termination of the Restricted Period occurs with respect to a Change in
Control, together with any other payments which the Participant has the right
to receive from the Company and its Affiliates, whether or not under this
Plan, would constitute a "parachute payment" (as defined in Section 280G of
the Code), then, except to the extent such Participant has entered into an
Award Agreement or a written severance or employment agreement with the
Company that expressly provides for a "Parachute tax gross-up", such
accelerated vesting and/or termination of the Restricted Period provided under
the paragraph above shall be reduced to the extent necessary (beginning with
Options) so that the present value thereof (as determined for parachute
purposes) to the Participant will be $1.00 less than three times the
Participant's "base amount" (as defined in Section 280G of the Code), but only
if such reduction produces a better net after-tax position to the Participant.
Such determinations shall be made by the Company in good faith.
A-11
<PAGE>
SECTION 10. General Provisions.
(a) No Rights to Awards. No Director, Employee, Consultant or other Person
shall have any claim to be granted any Award, and there is no obligation for
uniformity of treatment of Employees, Consultants, or holders or beneficiaries
of Awards. The terms and conditions of Awards need not be the same with
respect to each recipient.
(b) Withholding. The Company or any Affiliate is authorized to withhold from
any Award, from any payment due or transfer made under any Award or under the
Plan or from any compensation or other amount owing to a Participant the
amount (in cash, Shares, other securities, Shares that would otherwise be
issued pursuant to such Award, other Awards or other property) of any
applicable taxes payable in respect of an Award, its exercise, the lapse of
restrictions thereon, or any payment or transfer under an Award or under the
Plan and to take such other action as may be necessary in the opinion of the
Company to satisfy all obligations for the payment of such taxes.
Notwithstanding the above, a Participant who is subject to Rule 16b-3 may
direct the Company to satisfy such Participant's tax withholding obligation
through the "constructive" tender of already-owned Shares or the withholding
of Shares otherwise to be acquired upon the exercise or payment of such Award.
(c) No Right to Employment. The grant of an Award shall not be construed as
giving a Participant the right to be retained in the employ of the Company or
any Affiliate. Further, the Company or an Affiliate may at any time dismiss a
Participant from employment, free from any liability or any claim under the
Plan, unless otherwise expressly provided in the Plan or in any Award
Agreement.
(d) Governing Law. The validity, construction, and effect of the Plan and
any rules and regulations relating to the Plan shall be determined in
accordance with the laws of the State of the Company's state of incorporation
and applicable federal law.
(e) Severability. If any provision of the Plan or any Award is or becomes or
is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as
to any Person or Award, or would disqualify the Plan or any Award under any
law deemed applicable by the Committee, such provision shall be construed or
deemed amended to conform to the applicable laws, or if it cannot be construed
or deemed amended without, in the determination of the Committee, materially
altering the intent of the Plan or the Award, such provision shall be stricken
as to such jurisdiction, Person or Award and the remainder of the Plan and any
such Award shall remain in full force and effect.
(f) Other Laws. The Committee may refuse to issue or transfer any Shares or
other consideration under an Award if, acting in its sole discretion, it
determines that the issuance of transfer or such Shares or such other
consideration might violate any applicable law or regulation or entitle the
Company to recover the same under Section 16(b) of the Exchange Act, and any
payment tendered to the Company by a Participant, other holder or beneficiary
in connection with the exercise of such Award shall be promptly refunded to
the relevant Participant, holder or beneficiary.
(g) No Trust or Fund Created. Neither the Plan nor the Award shall create or
be construed to create a trust or separate fund of any kind or a fiduciary
relationship between the Company or any Affiliate and a Participant or any
other Person. To the extent that any Person acquires a right to receive
payments from the Company or any Affiliate pursuant to an Award, such right
shall be no greater than the right of any general unsecured creditor of the
Company or any Affiliate.
(h) No Fractional Shares. No fractional Shares shall be issued or delivered
pursuant to the Plan or any Award, and the Committee shall determine whether
cash, other securities, or other property shall
A-12
<PAGE>
be paid or transferred in lieu of any fractional Shares or whether such
fractional Shares or any rights thereto shall be canceled, terminated, or
otherwise eliminated.
(i) Headings. Headings are given to the Sections and subsections of the Plan
solely as a convenience to facilitate reference. Such headings shall not be
deemed in any way material or relevant to the construction or interpretation
of the Plan or any provision thereof.
SECTION 11. Designation of Beneficiary.
Each Participant to whom an Award has been made under this Plan may
designate a beneficiary or beneficiaries (which beneficiary may be an entity
other than a natural person) to exercise any rights or receive any payment
that under the terms of such Award may become exercisable or payable on or
after the Participant's death. At any time, and from time to time, any such
designation may be changed or canceled by the Participant without the consent
of any such beneficiary. Any such designation, change or cancellation must be
on a form provided for that purpose by the Company and shall not be effective
until received by the Company. If no beneficiary has been named by a deceased
Participant, or the designated beneficiaries have predeceased the Participant,
the beneficiary shall be the Participant's estate. If a Participant designates
more than one beneficiary, any such exercise or payment under this Plan shall
be made in equal shares unless the Participant has designated otherwise, in
which case the exercise or payment shall be made in the shares designated by
the Participant.
SECTION 12. Effective Date of the Plan.
The Plan shall become effective upon its adoption by the Board; however, no
Award may become exercisable or payable unless and until the Plan is approved
by the stockholders of the Company at (1) the first annual meeting of the
stockholders following the date the Plan is adopted by the Board or (2) if
earlier, a special meeting of the stockholders at which the Plan is presented
for approval by the stockholders. In the event such stockholder approval is
not obtained, all Awards outstanding on such date, whichever is applicable,
shall be automatically canceled without payment.
SECTION 13. Term of the Plan.
No Award shall be granted under the Plan after the 10th anniversary of the
date the Plan is adopted by the Board. However, unless otherwise expressly
provided in the Plan or in an applicable Award Agreement, any Award granted
prior to such termination, and the authority of the Board or the Committee to
amend, alter, adjust, suspend, discontinue, or terminate any such Award or to
waive any conditions or rights under such Award, shall extend beyond such
termination date.
A-13
<PAGE>
OMEGA PROTEIN CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
SOLICITED BY THE BOARD OF DIRECTORS OF OMEGA PROTEIN CORPORATION
The undersigned hereby appoints Joseph L. van Rosenberg III and Robert W.
Stockton, and each of them individually, as proxies with full power of
substitution, to vote all shares of Common Stock of Omega Protein Corporation
that the undersigned is entitled to vote at the Annual Meeting of Stockholders
thereof to be held on June 27, 2000, or at any adjournment or postponement
thereof, as follows:
Any executed proxy which does not designate a vote shall be deemed to grant
authority for any item not designated.
(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE)
- -------------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE>
0444
[X] PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
WITHHOLD
FOR AUTHORITY
all nominees for all nominees
listed at right listed at right NOMINEES:
PROPOSAL 1. Malcolm I. Glazer
ELECTION OF [ ] [ ] Avram A. Glazer
DIRECTORS
INSTRUCTIONS: To withhold authority to vote for any to hold office until the 2003 Annual Meeting and until their
individual nominee or nominees, write the appropriate successors are elected and qualified.
name or names in the space provided here.
FOR AGAINST ABSTAIN
PROPOSAL 2.
APPROVAL OF 2000 LONG-TERM [ ] [ ] [ ]
INCENTIVE PLAN
PROPOSAL 3.
APPOINTMENT OF PRICEWATERHOUSECOOPERS, LLP [ ] [ ] [ ]
AS AUDITORS FOR THE COMPANY
Please check the following box if you plan to attend [ ]
the Annual Meeting of Stockholders in person
ALL SHARES WILL BE VOTED AS DIRECTED HEREIN AND, UNLESS
OTHERWISE DIRECTED, WILL BE VOTED "FOR" PROPOSAL 1 (ALL
NOMINEES), "FOR" PROPOSAL 2 AND "FOR" PROPOSAL 3 AND IN
ACCORDANCE WITH THE DISCRETION OF THE PERSON VOTING THE
PROXY WITH RESPECT TO ANY OTHER BUSINESS PROPERLY BROUGHT
BEFORE THE MEETING.
YOU MAY REVOKE THIS PROXY AT ANY TIME PRIOR TO A VOTE
THEREON.
Please complete, sign and promptly mail this proxy in the
enclosed envelope.
SIGNATURE ____________________________________ ____________________________________ DATE:_____________, 2000
SIGNATURE IF HELD JOINTLY
NOTE: Please sign exactly as name appears on this card. Joint owners should each sign. Executors, administrators, trustees, etc.,
should give their full titles.
</TABLE>
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
PLEASE DATE, SIGN AND MAIL YOUR
PROXY CARD BACK AS SOON AS POSSIBLE!
ANNUAL MEETING OF STOCKHOLDERS
OMEGA PROTEIN CORPORATION
JUNE 27, 2000
