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EXHIBIT 10.2
CORE LABORATORIES
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
FOR
XXXXX X. XXXXX
EFFECTIVE DATE: JANUARY 1, 1999
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CORE LABORATORIES
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
THIS SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN and deferred compensation
agreement is made and entered into by and between Core Laboratories N.V. (the
"Company") and Xxxxx X. Xxxxx ("Executive").
WITNESSETH:
WHEREAS, Executive is currently employed as Chief Operating Officer and
Senior Vice President by one or more members of the Company Group (as such term
is hereinafter defined); and
WHEREAS, the services of Executive as an employee of the Company Group
have been substantial and meritorious; and
WHEREAS, the Company desires to recognize the value to the Company of
past and present services of Executive and to reward Executive for his
contributions to the success and growth of the Company and to encourage
Executive to remain in the employment of the Company Group through the use of
additional but deferred compensation;
NOW, THEREFORE, the Company hereby adopts this CORE LABORATORIES
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN (the "Plan"), effective as of January 1,
1999, and the Company and Executive agree as follows:
I.
DEFINITIONS
1.1 DEFINITIONS. Where the following words and phrases appear in the
Plan, they shall have the meanings set forth below, unless their context clearly
indicates to the contrary.
(1) ANNIVERSARY DATE: Each anniversary of Executive's Retirement Date.
(2) BOARD: The Board of Supervisory Directors of the Company.
(3) CAUSE: A determination by the Committee that "cause" (as such term is
defined in Executive's employment agreement, if any, with a member of
the Company Group) exists for the termination of the employment
relationship; provided, however, that if Executive does not have such
an employment agreement, or Executive's employment agreement does not
define the term "cause," then "Cause" shall mean a determination by the
Committee that Executive (i) has engaged in gross negligence or willful
misconduct in the performance of his duties with respect to the Company
Group, (ii) has been convicted of a felony or a misdemeanor involving
moral turpitude (which, through lapse of time or otherwise, is not
subject to appeal), (iii) has willfully refused without proper legal
reason to perform his duties and responsibilities to the Company Group
faithfully and to the best of his abilities, (iv) has materially
breached any material provision of a written employment agreement or
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policy or code of conduct established by any member of the Company
Group, or (v) has willfully engaged in conduct that he knows or
should know is materially injurious to the Company Group; and provided,
further, that, for purposes of clause (iv) of the preceding proviso, a
material breach of a material provision of a written employment
agreement or corporate policy or code of conduct shall include, but not
be limited to, any breach that results in termination of Executive's
employment.
(4) CHANGE IN CONTROL: The purchase or other acquisition by any person,
entity, or group of persons, within the meaning of section 13(d) or
14(d) of the Securities Exchange Act of 1934, as amended (the "Act"),
or any comparable successor provisions, of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Act) of more than
twenty percent (20%) of either the outstanding shares of common stock
or the combined voting power of the Company's then outstanding voting
securities entitled to vote generally, or the approval by the
stockholders of the Company of a reorganization, merger, or
consolidation, in each case, with respect to which persons who were
stockholders of the Company immediately prior to such reorganization,
merger or consolidation do not, immediately thereafter, own more than
eighty percent (80%) of the combined voting power entitled to vote
generally in the election of directors of the reorganized, merged, or
consolidated Company's then outstanding securities, or a liquidation or
dissolution of the Company, or of the sale of all or substantially all
of the Company's assets.
(5) CODE: The Internal Revenue Code of 1986, as amended.
(6) COMPANY: Core Laboratories N.V.
(7) COMPANY GROUP: The Company and any subsidiary or affiliate of the
Company designated from time to time by the Committee in its
discretion. As of the Effective Date, the Company Group shall consist
solely of the Company and Core Laboratories, Inc.
(8) COMMITTEE: The Compensation Committee of the Board.
(9) COMPENSATION: For each Plan Year, the total of all amounts paid by the
Company Group to or for the benefit of Executive for services rendered
or labor performed for the Company Group while Executive is an employee
of the Company Group, to the extent such amounts are required to be
reported on Executive's federal income tax withholding statement (Form
W-2 or its subsequent equivalent), but adjusted to include (i) elective
deferrals under Code sections 125 and 402(e)(3) and (ii) deferrals by
the Executive under a non-qualified deferred compensation plan
maintained by the Company Group.
(10) DATE OF HIRE: April 1, 1998.
(11) DEATH BENEFIT: A benefit calculated under Section 3.2 and paid in
accordance with Article III.
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(12) DESIGNATED BENEFICIARY: Executive's beneficiary or beneficiaries
determined in accordance with Section 8.1.
(13) EFFECTIVE DATE: January 1, 1999.
(14) EXECUTIVE: Xxxxx X. Xxxxx.
(15) FINAL AVERAGE PAY: The average of Executive's annual Compensation for
the five consecutive Plan Years (or, if shorter, all consecutive Plan
Years) immediately preceding the Plan Year in which occurs the earlier
of (i) the termination of Executive's employment with the Company Group
or (ii) the death of Executive; provided, however, that in the event of
a Change in Control prior to the termination of Executive's employment
with the Company Group, "Final Average Pay" shall be the greater of (i)
the average of Executive's annual Compensation for the five consecutive
Plan Years (or, if shorter, all consecutive Plan Years) immediately
preceding the Plan Year in which occurs the Change in Control or (ii)
the average of Executive's annual Compensation for the five consecutive
Plan Years (or, if shorter, all consecutive Plan Years) immediately
preceding the Plan Year in which occurs the earlier of (1) the
termination of Executive's employment with the Company Group or (2) the
death of Executive.
(16) INSOLVENT: The Company either (i) is unable to pay its debts as they
become due or (ii) is subject to a pending proceeding as a debtor under
the United States Bankruptcy Code (or any successor federal statute).
(17) PLAN: This Core Laboratories Supplemental Executive Retirement Plan.
(18) PLAN YEAR: The twelve-consecutive month period commencing January 1 of
each year.
(19) RETIREMENT BENEFIT: A benefit calculated under Section 2.2 and paid in
accordance with Article II.
(20) RETIREMENT DATE: The later of (i) the first date after the Effective
Date on which Executive is no longer employed by the Company Group or
any affiliate of the Company Group or (ii) the date Executive attains
the age of sixty-five.
(21) TRUST: The trust, if any, established under the Trust Agreement.
(22) TRUST AGREEMENT: The agreement, if any, entered into between the
Company and the Trustee pursuant to Section 6.2.
(23) TRUSTEE: An independent third party that may be granted corporate
trustee powers under state law and which has been appointed by the
Board to be the trustee qualified and acting under the Trust Agreement
at any time.
(24) VESTED INTEREST: The percentage of Executive's Plan benefit, which is
vested and nonforfeitable, as determined under Article IV.
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(25) YEARS OF ACCRUAL SERVICE: The total of all completed months of
Executive's employment with (i) the Company Group commencing on his
Date of Hire and (ii) Dresser Industries, Inc. and Western Atlas, Inc.
for periods prior to his Date of Hire (which totals 193 months prior to
his Date of Hire), and ending (1) for purposes of calculating
Executive's Retirement Benefit, on the first date after the Effective
Date on which Executive is not employed by the Company Group and (2)
for purposes of calculating Executive's Death Benefit, on the date of
Executive's death, in either case divided by twelve.
(26) YEARS OF VESTING SERVICE: The total of all completed months of
Executive's employment with the Company Group commencing on the
Effective Date, and ending on the earlier of (i) the first date after
the Effective Date on which Executive is not employed by the Company
Group or (ii) the date of Executive's death, in either case divided by
twelve.
1.2 NUMBER AND GENDER. Whenever appropriate herein, words used in the
singular shall be considered to include the plural, and words used in the plural
shall be considered to include the singular. The masculine gender, where
appearing herein, shall be deemed to include the feminine gender.
1.3 HEADINGS. The headings of Articles and Sections herein are included
solely for convenience, and, if there is any conflict between such headings and
the text of this Plan, the text shall control.
II.
RETIREMENT BENEFIT
2.1 ENTITLEMENT TO RETIREMENT BENEFIT. Executive shall be entitled to
receive a Retirement Benefit, calculated in accordance with Section 2.2, upon
his Retirement Date.
2.2 RETIREMENT BENEFIT. Executive's "Retirement Benefit" shall be an
annual payment equal to his Vested Interest in 2% of Executive's Final Average
Pay, multiplied by Executive's Years of Accrual Service (not to exceed 25
years); provided, however, that if an event occurs that results in Executive
obtaining a 100% Vested Interest pursuant to Section 4.3, then Executive's
Retirement Benefit shall be no less than an annual payment equal to his Vested
Interest in $150,000.
2.3 COMMENCEMENT AND DURATION OF RETIREMENT BENEFIT PAYMENTS.
Executive's Retirement Benefit shall be paid to Executive once each calendar
year during his lifetime. The first such annual payment shall be paid to
Executive as soon as administratively practicable after Executive's Retirement
Date, and each subsequent annual payment shall be paid as soon as
administratively practicable after each Anniversary Date thereafter until the
date of Executive's death. Except as provided in Section 2.4, all payments of
Executive's Retirement Benefit shall cease upon the death of Executive.
2.4 DEATH ON OR AFTER RETIREMENT DATE. If Executive dies on or after
his Retirement Date and prior to receiving fifteen annual installment payments
of his Retirement Benefit, then no
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Death Benefit shall be payable, but Executive's Retirement Benefit shall be
paid, or continue to be paid, to Executive's Designated Beneficiary in annual
installments at the same time and in the same amount as such Retirement Benefit
would have been paid to Executive had Executive's death not occurred, and such
Retirement Benefit installments shall continue through the Anniversary Date upon
which Executive would have received the fifteenth Retirement Benefit
installment. In the event of the death of a Designated Beneficiary prior to the
payment of the fifteenth Retirement Benefit installment, such Designated
Beneficiary's share of any remaining installments of Executive's Retirement
Benefit shall be paid to such Designated Beneficiary's estate at the same time,
in the same amount, and for the same period of time such Retirement Benefit
would have been paid to such Designated Beneficiary had his or her death not
occurred. All payments of deceased Executive's Retirement Benefit pursuant to
this Section shall cease upon the date of payment of what would have been the
deceased Executive's fifteenth Retirement Benefit installment.
2.5 CODE SECTION 162(M) LIMITATION. The preceding Sections of this
Article notwithstanding, no Retirement Benefit shall be paid to the extent such
payment, when added to all other remuneration provided to Executive by the
Company or any affiliate, would result in any such amount being nondeductible
under section 162(m) of the Code, and the payment of any such Retirement Benefit
shall be deferred to the first subsequent year in which such payment may be both
paid and fully deductible by the Company. In the event payment of a Retirement
Benefit is deferred pursuant to this Section, such deferral shall not affect the
time of payment or amount of any other installment of Executive's Retirement
Benefit, unless such other payment is itself deferred pursuant to this Section.
III.
DEATH BENEFIT
3.1 ENTITLEMENT TO DEATH BENEFIT. If Executive dies prior to his
Retirement Date, a Death Benefit, calculated in accordance with Section 3.2,
shall be paid under this Article III. If Executive dies on or after his
Retirement Date, no Death Benefit shall be paid under the Plan, but Executive's
Retirement Benefit shall cease or be paid in accordance with Section 2.4.
3.2 DEATH BENEFIT. Executive's Death Benefit shall be an annual payment
equal to Executive's Vested Interest in the greater of (1) or (2) below:
(1) 2% of Executive's Final Average Pay, multiplied by
Executive's Years of Accrual Service (not to exceed 25 years);
or
(2) $150,000.
3.3 COMMENCEMENT AND DURATION OF DEATH BENEFIT. If Executive dies prior
to his Retirement Date, then Executive's Death Benefit shall be paid to his
Designated Beneficiary once each year for fifteen years. The first such annual
payment shall be paid to Executive's Designated Beneficiary as soon as
administratively practicable after Executive's death, and each subsequent annual
payment shall be paid to Executive's Designated Beneficiary on each anniversary
of Executive's death until the payment of fifteen annual Death Benefit payments.
In the event of the
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death of a Designated Beneficiary prior to the payment of fifteen Death Benefit
installments, such Designated Beneficiary's share of any remaining installments
of Executive's Death Benefit shall be paid to such Designated Beneficiary's
estate at the same time, in the same amount, and for the same period of time
such Death Benefit would have been paid to such Designated Beneficiary had his
or her death not occurred. All payments of Executive's Death Benefit pursuant to
this Section shall cease upon the payment of the fifteenth installment of such
Death Benefit.
IV.
VESTING AND FORFEITURE
4.1 VESTED INTEREST. Except as provided in Sections 4.2, 4.3, and 4.4,
Executive shall acquire a Vested Interest in his Plan benefit according to the
following schedule:
Years of Vesting Service Vested Interest
------------------------ ---------------
Less than 5 0%
5 or more 100%
4.2 ACCELERATED VESTING UPON DEATH. Section 4.1 notwithstanding, in the
event of Executive's death while he is employed by the Company Group, Executive
shall acquire a 100% Vested Interest in his Plan benefit.
4.3 ACCELERATED VESTING IN CONNECTION WITH A CHANGE IN CONTROL. Section
4.1 notwithstanding, Executive shall acquire a 100% Vested Interest in his Plan
benefit upon (1) the occurrence of a Change in Control while Executive is
employed by the Company Group, (2) the involuntary termination of Executive's
employment with the Company Group by a member of the Company Group for a reason
other than Cause within the six-month period ending on the date a Change in
Control occurs, or (3) the termination or amendment of the Plan in a manner that
is to the detriment of Executive (or anyone who would be entitled to benefits
hereunder upon the death of Executive) without Executive's consent if the
adoption date or effective date of such termination or amendment occurs within
the six-month period ending on the date a Change in Control occurs.
4.4 FORFEITURE UPON TERMINATION FOR CAUSE. In the event Executive's
employment with the Company Group or any affiliate is terminated for Cause, all
benefits payable under the Plan to Executive or his Designated Beneficiary shall
be forfeited, and neither Executive nor his Designated Beneficiary shall be
entitled to receive, or continue to receive, any benefit under the Plan.
V.
ADMINISTRATION OF PLAN
5.1 COMMITTEE ADMINISTRATION. The plan shall be administered by the
Committee. The Committee shall supervise the administration of the Plan
according to the terms and provisions hereof and shall have the sole
discretionary authority and all of the powers necessary to accomplish these
purposes, including, without limitation, the sole discretionary authority to
interpret and construe all Plan terms and to make all factual determinations
associated with the Plan. All such
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interpretations, constructions, and determinations shall be final and binding
upon Executive and all other persons. No member of the Committee shall be liable
to Executive or any other person for any action taken or omitted in connection
with the administration of the Plan unless attributable to his own willful
misconduct or lack of good faith.
5.2 COMMITTEE APPOINTMENT, REMOVAL. Each member of the Committee shall
be appointed and removed by and in the sole discretion of the Board and shall
serve in accordance with applicable rules and procedures of the Board and the
Committee.
VI.
UNFUNDED NATURE OF PLAN
6.1 "TOP HAT" PLAN. The Plan is intended to constitute an unfunded,
unsecured plan of deferred compensation for a select group of management or
highly compensated employees of the Company Group. Further, it is the intention
of the Company that the Plan be unfunded for purposes of the Code and Title I of
the Employee Retirement Income Security Act of 1974, as amended. The Plan
constitutes a mere promise by the Company to make benefit payments in the
future. Plan benefits hereunder provided are to be paid out of the Company's
general assets, and Executive shall have the status of, and shall have no better
status than, a general unsecured creditor of the Company.
6.2 DISCRETIONARY ESTABLISHMENT OF RABBI TRUST. The Board, in its sole
discretion, may select the Trustee, establish the Trust, and enter into the
Trust Agreement with the Trustee. Any such Trust established by the Board, and
any assets held by such Trust to assist the Company in meeting its obligations
under the Plan, shall conform in all material respects to the terms of the model
rabbi trust set forth in Revenue Procedure 92-64, 1992-2 C.B. 422. The Company
may transfer money and/or other property to the Trustee, and the Trustee shall
pay Plan benefits to Executive and his beneficiaries out of the Trust assets if
such benefits are not paid by the Company. In the event the Trust is
established, the Company shall remain the owner of all assets in the Trust, and
the assets shall be subject to the claims of Company creditors in the event (and
only in the event) the Company ever becomes Insolvent. Neither Executive nor any
beneficiary of Executive shall have any preferred claim to, any security
interest in, or any beneficial ownership interest in any assets of the Trust.
6.3 INSOLVENCY OF COMPANY. The Board and the Chief Executive Officer of
the Company shall each have the duty to inform the Trustee in writing if the
Company becomes Insolvent. Such notice given under the preceding sentence by any
one party shall satisfy each party's duty to give notice. When so informed, the
Trustee shall suspend any payments to Executive or his Designated Beneficiary,
as applicable, and hold the assets for the benefit of the Company's general
creditors and shall determine within the period specified in the Trust
Agreement, or, in the absence of a specified period, within a reasonable period
of time, whether the Company is Insolvent. If the Trustee determines that the
Company is not Insolvent, the Trustee shall (1) resume payments to Executive or
his Designated Beneficiary, as applicable, and (2) make a payment to Executive
or his Designated Beneficiary, as applicable, as soon as administratively
feasible after such determination, in an aggregate amount equal to the
difference between the payments that would have been made to such individual(s)
by the Trustee but for this Section 6.3 and the aggregate payments actually made
to such individual(s) by the Company pursuant to the Plan during any such period
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discontinuance (plus interest on such amount calculated at the prime rate as
reported in The Wall Street Journal as of the date of such discontinuance from
the time that such payment or payments were due until their actual payment).
VII.
AMENDMENT AND TERMINATION
7.1 AMENDMENT. The Board may, in its discretion, amend the Plan, in
whole or in part, at any time; provided, however, that no amendment shall be
made that would reduce the vested accrued benefit of Executive as of the later
of the adoption date or effective date of such amendment.
7.2 TERMINATION. The Board may, in its discretion, terminate the Plan,
in whole or in part, at any time. In the event the Plan is terminated,
notwithstanding any other provision of the Plan, the Board, in its discretion,
may pay Executive his payable but unpaid vested accrued Retirement Benefit (or,
in the case of Executive's death, Executive's Designated Beneficiary any payable
but unpaid Death Benefit or Retirement Benefit) either in accordance with
Article II or III, as applicable, or in any other manner the Board deems
appropriate, including, without limitation, a lump sum payment of the actuarial
equivalent present value of such unpaid Retirement Benefit or Death Benefit,
actuarially reduced to take into account any earlier time of payment. In
determining actuarial equivalency for purposes of the preceding sentence,
reasonable actuarial assumptions shall be used, and the actuarial calculation
shall be made by an actuary selected by and in the discretion of the Board and
agreed to by Executive or his Designated Beneficiary, as applicable.
VIII.
MISCELLANEOUS
8.1 DESIGNATION OF BENEFICIARIES. Executive shall have the right to
designate the beneficiary or beneficiaries to receive payment of his benefit in
the event of his death. Each such designation shall be made in writing filed
with the Committee by Executive. Any such designation may be changed at any time
by Executive by execution and filing of a new designation in accordance with
this Section. If no beneficiary designation is on file with the Committee at the
time of the death of Executive or if such designation is not effective for any
reason as determined by the Committee, the designated beneficiary or
beneficiaries to receive such death benefit shall be as follows:
(1) If Executive leaves a surviving spouse, his designated
beneficiary shall be such surviving spouse; and
(2) If Executive leaves no surviving spouse, his designated
beneficiary shall be (A) Executive's executor or
administrator or (B) his heirs at law if there is no
administration of Executive's estate.
Notwithstanding the preceding provisions of this Section and to the extent not
prohibited by state or federal law, if Executive is divorced from his spouse and
at the time of his death is not remarried to the person from whom he was
divorced, any designation of such divorced spouse as his beneficiary under the
Plan filed prior to the divorce shall be null and void unless the contrary is
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expressly stated in writing filed with the Committee by Executive. The interest
of such divorced spouse failing hereunder shall vest in the persons specified in
the preceding provisions of this Section as if such divorced spouse was not
designated as a beneficiary by Executive.
8.2 NO ASSIGNMENT OR ALIENATION. The interest of Executive in the Plan
or of his Designated Beneficiary hereunder may not be anticipated, sold,
transferred, assigned, or encumbered in any manner, either voluntarily or
involuntarily, and any attempt to anticipate, alienate, sell, transfer, assign,
pledge, encumber, or charge the same shall be null and void. The benefits
provided hereunder shall not be liable for, or subject to the debts, contracts,
liabilities, engagements, or torts of, any person to whom such benefits are
payable, nor shall they be subject to garnishment, attachment, or other legal or
equitable process, nor shall they be an asset of the bankrupt's estate in
bankruptcy.
8.3 NO CONTRACT OF EMPLOYMENT. Nothing contained in the Plan or in the
adoption of the Plan shall confer on Executive the right to continued employment
with the Company Group or any affiliate or affect in any way the right of the
Company Group to terminate the employment or services of Executive at any time.
Nothing contained in the Plan shall be construed to affect the provisions of any
other plan maintained by the Company Group or shall prevent the Company Group
from adopting or continuing in effect other or additional compensation
arrangements affecting Executive.
8.4 BINDING EFFECT. The Plan shall be binding upon, and inure to the
benefit of, the Company, its successors, and assigns, and Executive and his
respective heirs, executors, administrators, and legal representatives.
8.5 SEVERABILITY. In case any provision of the Plan is determined by a
court of competent jurisdiction to be illegal, invalid, or unenforceable for any
reason, such illegal, invalid, or unenforceable provision shall not affect the
remaining provisions of the Plan, and the Plan shall be construed and enforced
as if such illegal, invalid, or unenforceable provision had not been included
therein.
8.6 JURISDICTION. Except to the extent federal law applies and preempts
state law, the Plan shall be construed, enforced, and administered according to
the laws of the state of Texas, excluding any conflict-of-law rule or principle
that might refer construction of the Plan to the laws of another state or
country. In the event of litigation relating to the Plan, such litigation shall
be brought in state or federal court residing in Houston, Xxxxxx County, Texas,
and the Company and Executive (or persons claiming rights of or through
Executive) irrevocably appoints the Secretary of State for the state of Texas as
agent for receipt of service of process in connection with such litigation.
8.7 WITHHOLDING. All benefit payments provided for hereunder shall be
subject to applicable withholding and other deductions as shall be required
under applicable local, state, or federal law.
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EXECUTED on this _____ day of ______________________, 1999.
CORE LABORATORIES N.V.
By:
Xxxxxxx Xxxxxxxx
Managing Director of
Core Laboratories International B.V. which
is the sole managing director of Core
Laboratories N.V.
XXXXX X. XXXXX
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