Exhibit 10.5
AMENDMENT TO
EMPLOYMENT AGREEMENT
(Restated as of December 31, 2001)
WHEREAS, Core Laboratories N.V. and Xxxxxxx X. Xxxxxxxx have heretofore
entered into that certain Employment Agreement (Restated as of December 31,
2001) (the "Agreement"); and
WHEREAS, the parties desire to amend the Agreement as provided herein;
NOW, THEREFORE, the Agreement is amended hereby effective as of
February 28, 2003 (the "Effective Date"), as follows:
1. Section 4.5 is amended by deleting the second sentence thereof
and adding the following new sentences to the end of such Section:
"All determinations required to be made under this Section
4.5, including, without limitation, whether and when a
Gross-up Payment is required and the amount of such Gross-up
Payment and the assumptions to be utilized in arriving at such
determination, shall be made by the independent public
accounting firm used by Company immediately prior to the
Change in Control for purposes of preparing Company's audited
financial statements. However, in the event such accounting
firm is also serving as an accountant or auditor for the
individual, entity or group effecting the Change in Control,
Executive may appoint another nationally recognized accounting
firm to make the determinations required hereunder."
2. Section 6.1 is amended by deleting the last sentence thereof
and adding the following new sentences to the end of such Section:
"The restrictions placed on Executive by this Section 6.1
shall apply during the period that Executive is employed by
Company and for the two-year period thereafter if Executive's
employment with Company is terminated for any reason other
than (i) by Executive for a Good Reason or (ii) by Company
without Cause. Notwithstanding the foregoing, from and after
the date upon which a Change in Control occurs, such
restrictions shall cease to apply to Executive except for any
period during which he is employed by Company."
3. Section 8.1(4) is amended in its entirety to read as follows:
`"Change in Control' shall mean (i) a merger of Company with
another entity, a consolidation involving Company, or the sale
of all or substantially all of the assets of Company to
another entity if, in any such case, (A) the holders of equity
securities of Company immediately prior to such transaction or
event do not beneficially own immediately after such
transaction or event, in substantially the same proportions
that they owned the equity securities of Company immediately
prior to such transaction or event, 50% or more of the common
equity of the resulting entity, (B) the holders of equity
securities of Company immediately prior to such transaction or
event do not beneficially own immediately after such
transaction or event, in substantially the same proportions
that they owned the equity securities of Company immediately
prior to such transaction or event, equity securities of the
resulting entity entitled to 50% or more of the votes then
eligible to be cast in the election of directors generally (or
comparable governing body) of the resulting entity, or (C) the
persons who were members of the Board of Directors immediately
prior to such transaction or event shall not constitute at
least a majority of the board of directors of the resulting
entity immediately after such transaction or event, (ii)
shareholder approval of a plan of dissolution or liquidation
of Company, (iii) when any person or entity, including a
"group" as contemplated by Section 13(d)(3) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), (other
than a trustee or other fiduciary holding securities under an
employee benefit plan of Company or any affiliate of Company),
acquires or gains ownership or control (including, without
limitation, power to vote) of more than 30% of the combined
voting power of the outstanding securities of, (A) if Company
has not engaged in a merger or consolidation, Company, or (B)
if Company has engaged in a merger or consolidation, the
resulting entity, or (iv) a change in the composition of the
Board of Directors, as a result of which fewer than a majority
of the supervisory directors are Incumbent Directors. For
purposes of the preceding sentence, (1) "resulting entity" in
the context of a transaction or event that is a merger,
consolidation or sale of all or substantially all assets shall
mean the surviving entity (or acquiring entity in the case of
an asset sale) unless the surviving entity (or acquiring
entity in the case of an asset sale) is a subsidiary of
another entity and the holders of common equity of Company
receive capital stock of such other entity in such transaction
or event, in which event the resulting entity shall be such
other entity, (2) subsequent to the consummation of a merger
or consolidation that does not constitute a Change in Control,
the term "Company" shall refer to the resulting entity and the
term "Board of Directors" shall refer to the board of
directors (or comparable governing body) of the resulting
entity, and (3) "Incumbent Directors" shall mean directors who
either (A) are directors of Company as of February 28, 2003,
or (B) are elected, or nominated for election, to the Board of
Directors with the affirmative votes of at least two-thirds of
2
the Incumbent Directors at the time of such election or
nomination, but Incumbent Director shall not include an
individual whose election or nomination occurs as a result of
either (A) an actual or threatened election contest (as such
terms are used in Rule 14a-11 of Regulation 14A promulgated
under the Exchange Act) or (B) an actual or threatened
solicitation of proxies or consents by or on behalf of a
person other than the Board of Directors. For purposes of this
Section 8.1(4), all references to "Company" shall refer solely
to Core Laboratories N.V. except as expressly provided in
clause (2) of the preceding sentence."
4. Section 8.1(5)(iii) is amended in its entirety to read as
follows:
"All of the outstanding stock options granted by Company to
Executive shall become fully vested and immediately
exercisable in full upon Executive's termination of employment
and shall remain exercisable for a period of 12 months
thereafter (three months thereafter in the case of
Grandfathered Options) or for such greater period as may be
provided in the plan or plans pursuant to which any such stock
options were granted (but in no event shall any such stock
option be exercisable after the expiration of the original
term of such stock option). For purposes of the preceding
sentence, the term "Grandfathered Options" means (1) each
stock option granted by Company to Executive on or before
February 28, 2003, with respect to which the purchase price
per share under such stock option is less than the Fair Market
Value (as such term is defined in the Core Laboratories N.V.
1995 Long-Term Incentive Plan, as amended) per share as of the
date of execution of the amendment to this Agreement
implementing this provision and (2) each other stock option
granted by Company to Executive on or before February 28,
2003, that qualifies as an incentive stock option (within the
meaning of Section 422 of the Code) and which would cease to
qualify as such an incentive stock option if the period during
which such stock option could be exercised after termination
of employment was extended from three months to 12 months as
provided in the preceding sentence."
5. Section 8.1(5)(v) is amended by adding thereto a new sentence
to read as follows:
"If the receipt of any benefit or payment under this clause
(v) ("Benefit") is taxable to Executive, then Company shall
pay to Executive an additional amount in cash ("Additional
Payment") equal to all taxes (including any interest or
penalties imposed with respect to such taxes) Executive incurs
with respect to such Benefit and the Additional Payment."
3
6. Section 8.1(6) is amended in its entirety to read as follows:
"`Change in Control Payment' shall mean a lump sum payment in
an amount equal to three times the sum of (i) Executive's
annual base salary as in effect pursuant to Section 2.1
immediately prior to Executive's termination of employment
with Company and (ii) the greater of (x) the highest annual
bonus earned by Executive during any of the last three fiscal
years of Company ending prior to the Change in Control, and
(y) 45% of the maximum annual incentive bonus amount pursuant
to Section 2.2 that Executive could have earned for the year
during which Executive's employment with Company terminates."
7. Section VII is amended by adding thereto a new Section 7.12 to
read as follows:
"7.12 Legal Fees and Expenses: It is the intent of
Company that Executive not be required to bear any legal fees
or related expenses associated with the interpretation,
enforcement or defense of Executive's rights under this
Agreement (by litigation or otherwise) with respect to any
termination of his employment on or after a Change in Control.
Accordingly, if it should appear to Executive that Company has
failed to comply with any of its obligations under this
Agreement or in the event that Company or any other person
takes or threatens to take any action to declare this
Agreement void or unenforceable, or institutes any litigation
or other action or proceeding designed to deny, or to recover
from, Executive any benefit provided or intended to be
provided to Executive hereunder, in each case with respect to
his rights or obligations upon or following a termination of
his employment on or after a Change in Control, then Company
irrevocably authorizes the Executive from time to time to
retain counsel of Executive's choice, at the expense of
Company, to advise and represent Executive in connection with
any such interpretation, enforcement or defense, including,
without limitation, the initiation or defense of any
litigation or other legal action, whether by or against
Company or any director, officer, stockholder or other person
affiliated with Company, in any jurisdiction. Notwithstanding
any existing or prior attorney-client relationship between
Company and such counsel, Company irrevocably consents to
Executive entering into an attorney-client relationship with
such counsel, and in that connection Company and Executive
agree that a confidential relationship will exist between
Executive and such counsel. Without regard to whether
Executive prevails, in whole or in part, in connection with
any of the foregoing, Company will pay and be solely
financially responsible for any and all attorneys' fees and
related expenses incurred by Executive in connection with any
of the foregoing, except to the extent that a final judgment
4
no longer subject to appeal finds that a claim or defense
asserted by Executive was frivolous. In such a case, the
portion of such fees and expenses incurred by Executive
attributable to such frivolous claim or defense shall become
Executive's sole responsibility and any funds advanced by
Company with respect to the same shall be promptly returned to
Company by Executive without interest."
8. As amended hereby, the Agreement is specifically ratified and
reaffirmed.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the 28th day of February, 2003, effective for all purposes as of the
Effective Date.
CORE LABORATORIES N.V.
By Core Laboratories International B.V.,
its sole managing director
By:
------------------------------------------
Xxxxxxx Xxxxxxxx
Managing Director of Core Laboratories
International B.V.
------------------------------------------
Xxxxxxx X. Xxxxxxxx
5
