Corporate Governance Guidelines
4. Term of Directors
The Board believes that stockholders will benefit from the continuity, experience and stability that comes with longevity of service on the Board. As such, the Board does not believe it is appropriate to limit the terms of its directors or require retirement at a specific age.
6. Definition of Director Independence
The Board has adopted a definition of independent director which includes the NYSE definition of independent director. The Company’s definition of independent director is set forth in full below:
- No director qualifies as “independent” unless the Board affirmatively determines that the director has no material relationship with the Company (either directly or as a partner, shareholder or officer of an organization that has a relationship with the Company). In addition, in affirmatively determining the independence of any director who will serve on the Compensation Committee, the Board must consider all factors specifically relevant to determining whether a director has a relationship to the Company which is material to that director’s ability to be independent from management in connection with the duties of a Compensation Committee member, including, but not limited to, (i) the source of compensation of such director, including any consulting, advisory or other compensatory fee paid by the Company to such director, and (ii) whether such director is affiliated with the Company, a subsidiary of the Company or an affiliate of a subsidiary of the Company. References to the Company or another company include any parent or subsidiary in consolidated group with Omega Protein. The Company will disclose these determinations annually in its proxy statement.
- In addition, a director is not independent if:
- The director is, or has been within the last three years, an employee of Omega Protein, or an immediate family member (as defined in the NYSE Listed Company Manual) who is, or has been within the last three years, an executive officer, of Omega Protein. Employment as an interim Chairman or CEO or other executive officer shall not disqualify a director from being considered independent following that employment.
The director has received, or has an immediate family member who has received, during any twelve-month period within the last three years, more than $120,000 in direct compensation from Omega Protein, other than director and committee fees and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service). Compensation received by a director for former service as an interim Chairman or CEO or other executive officer need not be considered in determining independence under this test. Compensation received by an immediate family member for service as an employee of Omega Protein (other than an executive officer) need not be considered in determining independence under this test.
- (A) The director is a current partner or employee of a firm that is Omega Protein’s internal or external auditor; (B) the director has an immediate family member who is a current partner of such a firm; (C) the director has an immediate family member who is a current employee of such a firm and personally works on Omega Protein’s audit; or (D) the director or an immediate family member was within the last three years a partner or employee of such a firm and personally worked on Omega Protein’s audit within that time.
- The director or an immediate family member is, or has been with the last three years, employed as an executive officer of another company where any of Omega Protein’s present executive officers at the same time serves or served on that company’s compensation committee.
- The director is a current employee, or an immediate family member is a current executive officer, of a company that has made payments to, or received payments from, Omega Protein for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of $1 million, or 2% of such other company’s consolidated gross revenues. Both the payments and the consolidated gross revenues to be measured shall be those reported in the last completed fiscal year of such other company. The look-back provision for this test applies solely to the financial relationship between Omega Protein and the director or immediate family member’s current employer; Omega Protein need not consider former employment of the director or immediate family member. Contributions to tax exempt organizations shall not be considered payments for purposes of this test, provided however Omega Protein shall disclose in its annual proxy statement, or if Omega Protein does not file an annual proxy statement, in Omega Protein’s annual report on Form 10-K filed with the SEC, any such contributions made by Omega Protein to any tax exempt organization in which any independent director serves as an executive officer if, within the preceding three years, contributions in any single fiscal year from Omega Protein to the organization exceeded the greater of $1 million, or 2% of such tax exempt organization's consolidated gross revenues. The Board is obligated to consider the materiality of any such relationship in accordance with Section 5(a) above.
A director who is a control person or director, or the immediate family member of a control person or director, of an entity that is the beneficial owner of 25% of the outstanding shares of common stock of the Company is not independent until three years after the end of such control or director relationship.
7. Selection of Chairman of the Board and Chief Executive Officer
The Board shall be free to choose its Chairman in any way that seems best for the Company at any given point in time. Therefore, the Board does not have a policy whether the role of the Chief Executive Officer (“CEO”) and Chairman of the Board should be separate and, if they are to be separate, whether the Chairman of the Board should be selected from the non-employee directors or be an employee.
8. Directors Who Change Their Present Job Responsibility
Upon termination of his or her primary occupation or other significant change in business/professional circumstances, a Board member shall inform the Board. The Board shall discuss whether or not such change is of a nature such that the Board asks the affected director for his or her resignation from the Board.
12. Board Interaction with Institutional Investor, Press and Customers
The Board of Directors maintains a process for stockholders or other interested parties to communicate with the Board or any Board member. Stockholders or interested parties who desire to communicate with the Board should send any communication to the Company’s Corporate Secretary, c/o Omega Protein Corporation, 2105 City West Blvd., Suite 500, Houston, Texas 77042. The Corporate Secretary will forward such communication to the full Board of Directors or to any individual director or directors to whom the communication is directed unless the communication is threatening or illegal, uses inappropriate expletive language or is similarly inappropriate, in which case the Corporate Secretary has the authority to discard the communication or take appropriate legal action regarding the communication.
13. Board Contact with Independent Auditors
Board members shall have complete access to the independent auditors.
14. Director Orientation and Continuous Education
The Company has and will continue to maintain orientation and education programs that contain written materials and oral presentations for directors.
Each director is encouraged to participate in continuing education programs pertinent to service on the Board. To facilitate this participation, the Company will pay the expenses of any director attending accredited director education programs.
In order to facilitate open discussion, the proceedings and deliberations of the Board and its committees shall be confidential. Each director shall maintain the confidentiality of information received in connection with his or her service as a director.
16. Board Compensation
Only independent directors will receive compensation for service as directors. Non-independent directors will not receive compensation for service as directors. Compensation to independent directors, as established and reviewed as is necessary or appropriate by the Compensation Committee or the Board, shall be the only compensation for Board and/or committee service. Compensation shall be in the form established by the Compensation Committee or the Board and should be competitive and consistent with the compensation paid by other similarly situated public companies.
17. Separate Sessions of Independent Directors
The independent directors shall meet at regularly scheduled executive sessions without Company management.
18. Evaluation of the Board
There shall generally be four regularly scheduled meetings of the Board each year. Additional meetings may be held from time to time as the need arises. Directors are encouraged to attend all Board meetings called unless extenuating circumstances dictate otherwise. The Board does not have a policy requiring that all directors attend Company annual meetings of stockholders, but it encourages all directors to do so. Board materials related to agenda items should be provided to directors sufficiently in advance of a meeting to allow directors to review and study the materials in preparation for their discussion and consideration at the meeting. Directors are expected to review and study meeting materials in advance of each meeting.
20. Selection of Agenda Items for Board Meetings
Each Board member shall be free to suggest inclusion of items on the agenda as well as free to raise at any Board meeting subjects that are not specifically on the agenda for that meeting.
21. Review, Approval or Ratification of Related Party Transactions
The following policy and procedure must be followed prior to any transaction or series of similar transactions, including any indebtedness or guarantee of indebtedness, where the aggregate amount involved is expected to exceed $120,000 in any calendar year, and in which a Related Party (defined below) had or will have a direct or indirect material interest (“Related Party Transactions”):
- The Board of Directors must review the material facts of any Related Party Transaction and approve such transaction. If advanced approval is not feasible, then the Board must ratify the Related Party Transaction at its next regularly scheduled meeting or the transaction must be rescinded. In making its determination to approve or ratify, the Board should consider such factors as (i) the extent of the Related Party’s interest in the Related Party Transaction, (ii) if applicable, the availability of other sources of comparable products or services, (iii) whether the terms of the Related Party Transaction are no less favorable than terms generally available in unaffiliated transactions under like circumstances, (iv) the benefit to the Company, and (v) the aggregate value of the Related Party Transaction.
- For purposes of this Policy and Procedure, "Related Party" means:
- Any person who is or was an executive officer, director or nominee for election as a director (since the beginning of the last fiscal year); or
- Any person or group who is a greater than 5% beneficial owner of the Company's then outstanding voting securities; or
- Any immediate family member of any of the foregoing, which means any child, step-child, parent, step-parent, spouse, sibling, mother-inlaw, father-in-law, son-in-law, daughter-in-law, brother-in-law, sisterin-law, and anyone residing in such person's home (other than a tenant or employee).
- Any firm, corporation or other entity in which any of the foregoing persons has a 10% beneficial ownership interest.
22. Number and Names of Board Committees
The Company shall have three standing committees: Audit, Compensation, and Corporate Governance and Nominating. The duties for each of these committees shall be outlined in committee charters which shall be approved by the Board. The Board may form a new committee or disband a current committee.
23. Independence of Audit, Compensation, and Corporate Governance and Nominating Committees
The Audit Committee, Compensation Committee, and Corporate Governance and Nominating Committee shall be composed entirely of independent directors.
24. Assignment of Committee Members
After considering the recommendations of the Corporate Governance and Nominating Committee, the Board shall be responsible for appointing the Chairs and members to the committees.
25. Management Succession Planning
The Board shall discuss with the CEO from time to time his current recommendations for succession planning in the event that all or a portion of the senior officers (including the CEO) should unexpectedly become unable to perform their duties. The Board shall review succession planning at least annually.
26. Disclosure of Corporate Governance Guidelines
These Corporate Governance Guidelines will be made available on the Company’s website.
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