You are cordially invited to attend our 20182023 annual meeting of shareholders which(the “Meeting”) of Core Laboratories N.V. (“Core Lab N.V.”). Prior to the Meeting, on or about May 1, 2023, Core Lab N.V. will merge (the “Merger”) with and into Core Laboratories Luxembourg S.A., a public limited liability company incorporated under the laws of Luxembourg (“Core Lab Luxembourg”), with Core Lab Luxembourg surviving, and as soon as practicable thereafter, Core Lab Luxembourg will migrate out of Luxembourg and domesticate as Core Laboratories Inc. (“Core Lab Delaware”), a Delaware corporation (the “U.S. Redomestication” and together with the Merger, the “Transaction”). The Supervisory Board of Core Lab N.V. will continue as the board of directors of Core Lab Delaware (except as otherwise described herein and the accompanying Proxy Statement), and the officers of Core Lab N.V. will continue as the officers of Core Lab Delaware. As such, references to the “Company”, the “Board” and “Directors” herein: (i) prior to completion of the Transaction, refer to Core Lab N.V., the Supervisory Board of Core Lab N.V. and the Directors of the Supervisory Board of Core Lab N.V., respectively, and (ii) after completion of the Transaction, refer to Core Lab Delaware, the Board of Core Lab Delaware and the Directors of the Board of Core Lab Delaware, respectively. For more information regarding the Transaction, please see the final prospectus/definitive proxy statement filed by Core Lab Luxembourg and Core Lab N.V., filed with the United States Securities and Exchange Commission (the “SEC”) on February 28, 2023. After completion of the Transaction, the Meeting will be held by Core Lab Delawareat the Hotel Sofitel Legend the Grand Amsterdam, Oudezijds Voorburgwal 197, 1012 EX, Amsterdam, the Netherlands,The Westin Houston, Memorial City, 945 Gessner Road, Houston, Texas 77024, on Thursday, May 24, 2018Wednesday, June 28, 2023 at 9:00 a.m. Central European SummerDaylight Time ("CEST"(“CDT”). The proposals below relate to Core Lab Delaware. The Meeting is being held for the following purposes as proposed by the BoardBoard:
One year _______
Two years _______
Three years _______
The election of supervisory boardthe Company's Board members as described in agenda item no. 1 and the topics covered by agenda item nos. 2 through 84 have largely been presented to and approved by our shareholders at our prior annual meetings, and are presented to our shareholders each year as a result of our being organized under the laws of the Netherlands.
A list of nominees forshareholders entitled to vote at the Supervisory Board2023 Annual Meeting will be available for inspectionreview by any shareholder at our offices in the Netherlands,Houston Texas, located at Strawinskylaan 913, Tower A, Level 9, 1077 XX Amsterdam, Attention: Mr. Jacobus Schouten, by registered shareholders and other persons entitled to attend our shareholder meetings.6316 Windfern Road, Houston, Texas 77040. Such copieslist will be available for inspection fromreview beginning on the date of this notice until10th calendar day preceding the Meeting through the close of our annual meeting. The proxy materials, including the aforementioned copies, will be posted on
IF YOU PLAN TO ATTEND IN PERSON:
Attendance at the meetingMeeting is limited to shareholders as of the close of business Eastern Daylight Time on May 5, 2023 (and others with a statutory meeting right), Company management and Company advisors. Registration will begin at 8:00 a.m. CESTCDT and the meetingMeeting will begin at 9:00 a.m. CESTCDT on May 24, 2018.June 28, 2023. Each shareholder desiring to attend MUST bring proof of share ownership as of the “day of registration” (“
It is important that your shares be represented at the annual meetingMeeting regardless of whether you plan to attend. In order to be able to vote at the annual shareholder meeting,Meeting, you will have tomust be a record holder of shares (or otherwise a person with voting rights with respect to shares) at the close of business Eastern Daylight Time on April 26, 2018.May 5, 2023. Please mark, sign, date and return the accompanying proxy card accordingly, vote online or vote by phone, all as described in further detail in the proxy statement. If you are present at the annual meetingMeeting and wish to do so, you may revoke your proxy and vote in person.
By Order of the Board of Directors, |
|
Lawrence Bruno |
Chairman |
Houston, Texas
April 27, 2023
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF
PROXY MATERIALS FOR THE 2023 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 28, 2023
The Notice of 2023 Annual Meeting of Shareholders and the Proxy Statement for the 2023 Annual Meeting of Shareholders, together with the Company’s Annual Report to Shareholders, are available free of charge at www.proxydocs.com/clb.
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CORE LABORATORIES N.V.
Van Heuven Goedhartlaan 7B
1181 LE Amstelveen
The Netherlands
PROXY STATEMENT |
WHY HAVE I RECEIVED THESE MATERIALS?
This proxy statement and the accompanying proxy card are first being made available to you on the Internet on March 31, 2018April 27, 2023, and written notice has been sent to our shareholders in a manner consistent with applicable law. If you receive notice of the materials and desirewish to request a physical copy of the materials be sent to you, those materials will be mailed to you upon receipt of your request. These materials are being furnished in connection with the solicitation of proxies by and on behalf of the Board of Supervisory Directors of Core Laboratories N.V. ("Core"(“Core Lab N.V.”). Prior to the Meeting, on or about May 1, 2023, Core Lab N.V. will merge (the “Merger”) with and into Core Laboratories Luxembourg S.A., a public limited liability company incorporated under the "Company"laws of Luxembourg (“Core Lab Luxembourg”), with Core Lab Luxembourg surviving, and as soon as practicable thereafter, Core Lab Luxembourg will migrate out of Luxembourg and domesticate as Core Laboratories Inc. (“Core Lab Delaware”), a Delaware corporation (the “U.S. Redomestication” and together with the Merger, the “Transaction”). The Supervisory Board of Core Lab N.V. will continue as the board of directors of Core Lab Delaware (except as otherwise described herein), and the officers of Core Lab N.V. will continue as the officers of Core Lab Delaware. As such, references to the “Company”, the “Board” and “Directors” herein: (i) prior to completion of the Transaction, refer to Core Lab N.V., the Supervisory Board of Core Lab N.V. and the Directors of the Supervisory Board of Core Lab N.V., respectively, and (ii) after completion of the Transaction, refer to Core Lab Delaware, the Board of Core Lab Delaware and the Directors of the Board of Core Lab Delaware, respectively. For more information regarding the Transaction, please see the final prospectus/definitive proxy statement filed by Core Lab Luxembourg and Core Lab N.V., filed with the United States Securities and Exchange Commission (the “SEC”) on February 28, 2023. The proxies being solicited hereby are for use at our 20182023 annual meeting of shareholders (the “2023 Annual Meeting” or the “Meeting”), to be held after the completion of the Transaction, by Core Lab Delaware, at the Hotel Sofitel Legend the Grand Amsterdam, Oudezijds Voorburgwal 197, 1012 EX, Amsterdam, the Netherlands,The Westin Houston, Memorial City, 945 Gessner Road, Houston, Texas 77024, on Thursday, May 24, 2018Wednesday, June 28, 2023 at 9:00 a.m. CESTCDT for the purpose of voting on the proposals described in this proxy statement.
WHY DID I RECEIVE A ONE-PAGE NOTICE IN THE MAIL REGARDING THE INTERNET AVAILABILITY OF PROXY MATERIALS INSTEAD OF A FULL SET OF PROXY MATERIALS?
As permitted by rules adopted by the SEC, we are making this proxy statement and our Annual Report on Form 10-K (the "Annual Report"“Annual Report”) available on the Internet. On or before April 11, 2018, inIn order to be able to comply with applicable electronic notification deadlines,
Choosing to receive your future proxy materials by email will save us the cost of printing and mailing documents to you. If you choose to receive future proxy materials by email, you will receive an email next year with instructions containing a link to those materials and a link to the proxy voting site. Your election to receive proxy materials by email will remain in effect until you terminate it.
3
WHAT AM I VOTING ON?
You will be voting on the following matters proposed by the BoardBoard:
One year _______
Two years _______
Three years _______
to extend the term of the Director Plan through June 28, 2033;
WHO IS ENTITLED TO VOTE?
We are sending notice of the 2018 annual meeting2023 Annual Meeting to those shareholders who hold shares of common sharesstock at the close of business Eastern Daylight Time on March 16, 2018May 5, 2023 in order to be able to comply with applicable electronic notification deadlines. As of March 16, 2018,April 21, 2023, there were 44,183,22646,664,413 common shares outstanding. Ourof Core Lab N.V. outstanding, and to the knowledge of the Company, there will be 46,681,683 shares of common shares arestock of Core Lab Delaware outstanding as of May 5, 2023. The common stock of Core Lab Delaware will be the only class of our capital stock outstanding and entitled to notice of and to vote at the annual meeting.Meeting. Each outstanding share of common sharestock (issued shares excluding common sharesstock held by the Company) is entitled to one vote.
HOW DO I VOTE BEFORE THE MEETING?
If you are a registered shareholder, meaning that you hold your shares through an account with our transfer agent, Computershare, as of May 5, 2023, you can vote by mail by completing, signing and returning the accompanying proxy card or you may vote online at
www.proxyvote.com or by phone: +1-800-690-6903.If you hold your shares, as of May 5, 2023, through an account with a bank or broker, you must obtain a legal proxy from the bankmay vote by mail, online or broker in order to vote at the meeting. Please followby phone by following the directions that your bank or broker provides.
In order for your mailed or on-line vote or vote cast by phone to be counted, it must be received on or before 5:0011:59 p.m. Eastern Daylight Time on Wednesday, May 23, 2018.Tuesday, June 27, 2023. The official electronic voting results will be those reported by our vote tabulator, Broadridge Financial Solutions, in its final report upon the close of business Eastern Daylight Time on May 23, 2018.Tuesday, June 27, 2023. Any other proxies that are actually received in hand by our Secretary before the polls close at the conclusion of voting at the meeting will be voted as indicated.
4
MAY I VOTE AT THE MEETING?
If you are a registered shareholder as of May 5, 2023, you may vote your shares at the meeting if you attend in person. If you hold your shares as of May 5, 2023 through an account with a bank or broker, you must obtain a legal proxy from the bank or broker in order to vote at the meeting. Even if you plan to attend the meeting, we encourage you to vote your shares by proxy.
IF YOU PLAN TO ATTEND IN PERSON:
Attendance at the meetingMeeting is limited to shareholders as of the close of business Eastern Daylight Time on May 5, 2023 (and others with a statutory meeting right), Company management and Company advisors. Registration will begin at 8:00 a.m. CESTCDT and the meetingMeeting will begin at 9:00 a.m. CESTCDT on May 24, 2018.June 28, 2023. Each shareholder desiring to attend MUST bring proof of share ownership as of the "day of registration" (“
CAN I CHANGE MY MIND AFTER I VOTE?
You may change your vote at any time before the polls close at the conclusion of voting at the meeting. You may revoke your proxy (1) by giving written notice to Mark F. Elvig,D. Tattoli, Secretary, in care of Core Laboratories LP, 6316 Windfern Road, Houston, Texas 77040, at any time before the proxy is voted, (2) by submitting a properly signed proxy card with a later date, or (3) by voting in person at the annual meeting.
If you hold your shares through an account with a bank or broker, you may revoke your proxy by following the instructions provided to you by your bank or broker, or by obtaining a legal proxy from your bank or broker and voting in person at the Meeting.
WHAT IF I RETURN MY PROXY CARD BUT DO NOT PROVIDE VOTING INSTRUCTIONS?
Proxies that are signed and returned but do not contain instructions will be voted "FOR"“FOR” all proposals and in accordance with the best judgment of the named proxies on any other matters properly brought before the meeting.
WHAT VOTE IS REQUIRED?
The attendance in person or by proxy of Association, there is no specific quorum requirement for our annual meeting and the affirmative voteholders of a majority of the shares of common stock entitled to vote at the Meeting will constitute a quorum to hold the Meeting. Under the Core Lab Delaware Bylaws, Proposal 1 will require a plurality of votes cast is requiredin order to approve each of the proposals proposed by the Supervisory Board, except that in relation to agenda item nos. 4 and 7, a two-thirds majority of the votes cast is required to approve these proposals in the event less than 50% of the issued share capital is present or represented at the meeting. Our Articles of Association prohibit shareholders from acting by written consent, unless such written consent is unanimous and Dutch law does not allow a written consent at a lesser percentage.
The Core Lab Delaware Bylaws provide that shares of common sharesstock abstaining from voting will count as shares present at the annual meeting but will not count for the purposepurposes of determining the numberpresence or absence of votes cast. Brokera quorum. The Core Lab Delaware Bylaws also provide that broker non-votes will not count as shares present at the annual meetingMeeting or for the purpose of determining the numberpresence or absence of votes cast.a quorum. A "broker non-vote"“broker non-vote” occurs if you do not provide the record holder of your shares (usually a bank, broker, or other nominee) with voting instructions on a matter and the holder is not permitted to vote on the matter without instructions from you under applicable rules of the New York Stock Exchange ("NYSE"(“NYSE”).
5
WHO WILL BEAR THE EXPENSE OF SOLICITING PROXIES?
We will bear the cost of preparing and mailing proxy materials as well as the cost of soliciting proxies and will reimburse banks, brokerage firms, custodians, nominees and fiduciaries for their expenses in sending proxy materials to the beneficial owners of our common shares. The solicitation of proxies by the Supervisory Board will be conducted by mail and also through the Internet. In addition, certain members of the Supervisory Board, as well as our officers and regular employees may solicit proxies in person, by facsimile, by telephone or by other means of electronic communication. We have retained Okapi Partners LLC to assist in the solicitation of proxies for a fee of $8,500$9,000 plus out-of-pocket expenses, which fee and expenses will be paid by the Company. In addition to solicitation of proxies, Okapi Partners LLC may provide advisory services as requested pertaining to the solicitation of proxies.
6
OWNERSHIP OF SECURITIES
Security Ownership by Certain Beneficial Owners and Management | ||||
The table below sets forth certain information, as of March 16, 2018,April 21, 2023, with respect to the common shares of Core Lab N.V. and to the knowledge of the Company, the common stock of Core Lab Delaware as of May 5, 2023 beneficially owned, or expected to be beneficially owned by:
Name of Beneficial Owner (1) |
| Number of |
|
| Percentage of | |
Ariel Investment, LLC (3) |
|
| 9,703,122 |
|
| 20.79% |
BlackRock, Inc. (4) |
|
| 5,848,677 |
|
| 12.53% |
The Vanguard Group, Inc. (5) |
|
| 5,262,192 |
|
| 11.28% |
Alger Associates, Inc. (6) |
|
| 3,853,977 |
|
| 8.26% |
Earnest Partners LLC (7) |
|
| 3,573,101 |
|
| 7.66% |
Lawrence Bruno |
|
| 102,518 |
|
| * |
Christopher S. Hill |
|
| 50,231 |
|
| * |
Gwendolyn Y. Gresham |
|
| 15,061 |
|
| * |
Mark D. Tattoli |
|
| 6,880 |
|
| * |
Martha Z. Carnes |
|
| 30,592 |
|
| * |
Michael Straughen |
|
| 16,467 |
|
| * |
Harvey Klingensmith |
|
| 26,226 |
|
| * |
Monique van Dijken Eeuwijk (8) |
|
| 17,118 |
|
| * |
Kwaku Temeng |
|
| 9,792 |
|
| * |
Katherine Murray |
|
| 5,485 |
|
| * |
Curtis Anastasio |
|
| — |
|
| * |
All current Directors and executive officers as a group (11 persons) |
|
| 280,370 |
|
| * |
* Represents less than 1%. |
|
|
|
|
| |
| Name of Beneficial Owner (1) | Number of Common Shares Beneficially Owned | Percentage of Common Shares Outstanding (2) | |||
| Clearbridge Investments, LLC (3) | 5,074,897 | 11% | |||
| WCM Investment Management (4) | 4,793,731 | 11% | |||
| The Vanguard Group (5) | 3,672,917 | 8% | |||
| BlackRock Inc. (6) | 2,909,717 | 7% | |||
| David M. Demshur | 359,893 | * | |||
| Richard L. Bergmark | 133,766 | * | |||
| Monty L. Davis | 97,760 | * | |||
| Lawrence Bruno | 4,287 | * | |||
| Jan Willem Sodderland | 3,336 | * | |||
| Charles L. Dunlap | 2,634 | * | |||
| Margaret Ann van Kempen | 1,781 | * | |||
| Lucia van Geuns | 979 | * | |||
| Martha Z. Carnes | 200 | * | |||
| Michael Straughen | 106 | * | |||
| All Supervisory Directors and executive officers as a group | 604,742 | 1% | |||
| * Represents less than 1%. | |||||
| (1) Unless otherwise indicated, each person has sole voting power and investment power |
7
Equity Compensation Plan Information | ||||
We have two main incentive plans, our 20142020 Long-Term Incentive Plan ("LTIP"(“LTIP”), and our 2014 NonemployeeNon-Employee Director Stock Incentive Plan ("(“2014 Director Plan"Plan”), both of which have been approved by our shareholders. The following table below provides information regarding ourshows the balance of shares in each plan that remain available for future issuance and the number of shares that have been awarded, but not yet vested, under each of the equity compensation plans as of December 31, 2017.
| Number of Common Shares to be Issued Upon Exercise of Outstanding Options, Warrants and Rights | Weighted Average Exercise Price of Outstanding Options, Warrants and Rights | Number of Common Shares Remaining Available for Future Issuance Under Equity Compensation Plans | |||||||
| Equity compensation plans approved by our shareholders | |||||||||
| LTIP | 508,361 | — | 1,106,157 | ||||||
| Director Plan | 28,389 | — | 543,159 | ||||||
| Equity compensation plans not approved by our shareholders | — | — | — | ||||||
| Total | 536,750 | — | 1,649,316 | ||||||
|
| Number of Common |
|
| Weighted Average |
|
| Number of Common |
| |||
Equity compensation plans approved by our shareholders |
|
|
|
|
|
|
|
|
| |||
LTIP |
|
| 981,445 |
|
|
| — |
|
|
| 633,195 |
|
2014 Director Plan |
|
| 32,910 |
|
|
| — |
|
|
| 525,215 |
|
Equity compensation plans not approved by our shareholders |
|
| — |
|
|
| — |
|
|
| — |
|
Total |
|
| 1,014,355 |
|
|
| — |
|
|
| 1,158,410 |
|
8
Performance Graph | ||||
The following performance graph compares the performance of our common shares to the Standard & Poor'sPoor’s 500 Index and the compensation peer group selected for 2017
The graph assumes that the value of the investment in our common shares and each index was $100 at December 31, 20122017 and that all dividends were reinvested. The shareholderstockholder return set forth below is not necessarily indicative of future performance. The following graph and related information is “furnished” and shall not be deemed "soliciting material"“soliciting material” or "filed"to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, as amended (the “Exchange Act”) except to the extent that Core Laboratoriesthe Company specifically incorporates it by reference into such filing.
9
INFORMATION ABOUT OUR SUPERVISORY DIRECTORS AND DIRECTOR COMPENSATION
Board of | ||||
Following the Company initiated steps to bring new membership toTransaction, the Supervisory Board of Core Lab N.V. will continue as the Board of Supervisory Directors with a plan of replacing one existing non-executive director who will have served for longer than ten years each year overCore Lab Delaware (except as otherwise described herein and the next few years (the "Succession Plan")accompanying Proxy Statement). The Succession Plan was completed as of the 2017 annual shareholder meeting, and at this time the longest tenure of any non-executive director is seven years.
Nominees for Class III SupervisoryI Directors (Term Toto Expire 2021)2026)
Harvey Klingensmith
Mr. Klingensmith, a native of Denver, Colorado, retired from executive office at the end of January 2019 after numerous executive leadership positions in the oil and gas industry. Mr. Klingensmith co-founded and served as Chief Executive Officer and Board member of Ajax Resources LLC (“Ajax”), an exploration and production company focused on oil and gas development in the Permian Basin. He served as Chief Executive Officer from its founding in July 2015 until October 2017 and served on the Board until its sale in 2018. As Co-Founder and Chief Executive Officer of Ajax, Mr. Klingensmith was instrumental in successfully putting together the $425 million financing package necessary to start Ajax; recruited key personnel needed to build and run the business; and executed key business initiatives that resulted in production growth from 2,000 to 18,500 barrels of oil equivalent per day and Ajax’s sale to Diamondback Energy for $1.24 billion. Mr. Klingensmith was also President of Wyatt Energy LLC (“Wyatt”), a privately held, independent oil and gas exploration and production company based in Houston, Texas, focused on the identification of and investment in unique opportunities in the oil and gas space, from April 2014 through January 2018. He led this effort simultaneously with his roles at Ajax. | Mr. Klingensmith also co-founded and served as Chief Executive Officer of Spoke Resources Ltd. (“Spoke”), including its predecessor entity Stone Mountain Resources Ltd (“Stone”), from April 2006 through August 2018. Spoke was a large natural gas production company headquartered in Calgary, Alberta, and had its primary producing asset in NE British Columbia before its sale to Surmont Oil and Gas in 2018. During his tenure at Spoke and Stone, Mr. Klingensmith led efforts to raise capital, headed operations and production growth as well as gained experience with financially distressed companies during Stone’s entry into receivership and exit as Spoke before its sale to Surmont Oil and Gas in 2018. Prior to entering the private space Mr. Klingensmith had served as President of El Paso Canada (2002-2004), Senior Vice President Worldwide Exploration for Coastal Oil and Gas (1994-2001), and Vice President of Worldwide Exploration of Maxus Energy (1986-1993). Mr. Klingensmith received dual Bachelor of Science degrees in Geological Engineering and Geophysical Engineering from the Colorado School of Mines in 1975. He is an active member of the Society of Petroleum Engineers, the American Association of Petroleum Geologists and the Society of Exploration Geophysicists. Mr. Klingensmith’s over 44 years of diverse experience in the upstream oil and gas business along with his proven leadership and executive oversight experience make him a valuable addition to our board. |
10
Curtis Anastasio
Mr. Anastasio retired from executive office in 2013, having spent over 35 years in various leadership positions in the upstream, midstream and downstream sectors of the oil and gas industry. At various stages over the course of his career, Mr. Anastasio has been responsible for supply, trading, transportation, marketing, business development and legal & regulatory affairs. He began his career in the industry in 1988 with Ultramar plc, an integrated oil and gas company with assets principally in the United States, Canada, Latin America, the United Kingdom and Asia Pacific. In a series of acquisitions, Ultramar’s midstream assets were ultimately acquired by NuStar Energy L.P., a publicly traded energy master limited partnership based in San Antonio, Texas. Mr. Anastasio was appointed President and Chief Executive Officer of NuStar in April 2001, leading the company’s initial public offering. He served in that role until his retirement on December 31, 2013. Under Mr. Anastasio’s leadership, NuStar grew from a small business to a Fortune 500 company. NuStar received many awards and recognition during his tenure, including being named by Fortune magazine as one of the 100 Best Companies to Work for in America every year since 2007 and Forbes Magazine’s 100 Most Trustworthy Companies. In 2013, Mr. Anastasio was elected to the San Antonio Business Hall of Fame. Mr. Anastasio presently serves on the boards of three publicly traded energy companies, all of which are listed on the New York Stock Exchange. He is the Chairman of GasLog Partners L.P., an international owner, operator and manager of liquefied natural gas carriers, providing support to international energy companies as part of their LNG logistics chain. | As Executive Chairman, he led the company’s initial public offering in May 2014. Mr. Anastasio also serves on the Board and as Chairman of the Audit Committee of Par Pacific Holdings, Inc., an energy company with primary interests in refining, retail and logistics, including a refining, marketing and logistics business in Hawaii, refining and logistics businesses in Washington and Wyoming and a retail distribution network in the Pacific Northwest. The company also owns an equity interest in a joint venture focused on natural gas production. Finally, Mr. Anastasio serves on the Board and as Chairman of the Audit Committee of The Chemours Company, which was spun out from DuPont in 2015. A multinational specialty chemicals company providing titanium technologies, fluoroproducts and chemical solutions, Chemours ingredients are found in plastics and coatings, refrigeration and air conditioning, mining and oil refining operations and general industrial manufacturing. Mr. Anastasio also served as a director of the Federal Reserve Bank of Dallas for six years from 2014 through 2019. In addition to participating in various volunteer activities, Mr. Anastasio has served as Chairman of the Board of Trustees of the United Way of San Antonio and Bexar County, Chairman of the Alamo Area Council of the Boy Scouts of America, and Chairman of the National Association of Publicly Traded Partnerships. Mr. Anastasio received a Juris Doctorate degree from Harvard Law School in 1981 and a Bachelor of Arts degree, magna cum laude, from Cornell University in 1978. Prior to focusing his career on the oil and gas industry, Mr. Anastasio worked in private practice as a corporate attorney in New York City. |
11
Continuing Class III Directors (Term to Expire 2024)
Lawrence Bruno
Mr. Bruno became President of the Company on February 1, 2018, and on January 1, 2019, he also assumed the position of Chief Operating Officer. On May 20, 2020, Mr. Bruno succeeded Mr. David Demshur as the Chairman of the Supervisory Board and Chief Executive Officer and has led the Company’s global operations for both of its business segments, Reservoir Description and Production Enhancement. Over the last several years, Mr. Bruno has served as a technical spokesperson for many investor presentations and panels in the oil and gas industry and has been instrumental in driving the Company’s technology innovation that will continue to be a critical strength in the years to come. Mr. Bruno previously led the Company’s global reservoir-based laboratories within the Company’s Reservoir Description segment, from July 2015 through January 31, 2018. Mr. Bruno has been in the industry for more than 35 years and with the Company for more than 23 years. | Prior to being named as President of the Petroleum Services division in July 2015, Mr. Bruno was the General Manager of U.S. Rocks from 1999 to July 2015. Prior to joining the Company, he was employed at an oil and gas service company for 14 years before it was acquired by the Company in 1999. Mr. Bruno received a Master’s of Science degree in Geology in 1987 from the University of Houston. Mr. Bruno’s extensive operations and management experience at the Company makes him well-suited to lead the Company as Chief Executive Officer and Chairman of the Board. |
12
Kwaku Temeng
Mr. Temeng retired from Aramco Services Company (“ASC”) in Houston, Texas in May of 2021, where he served as Director of Upstream since 2007. During his tenure, he was responsible for managing Saudi Aramco’s upstream technology and business programs in North America. These included cultivating business relationships, evaluating commercial opportunities, performing analyses of technology trends and best practices, and overseeing technical studies undertaken by commercial laboratories, universities, and technology centers. Prior to his final assignment, Mr. Temeng worked for 14 years with Saudi Aramco in Saudi Arabia where he held a variety of professional, managerial, and advisory positions. He oversaw managing the company’s drilling budget development, coordination of petroleum engineering studies and served as a special advisor to senior management. He was instrumental in developing the framework for Saudi Aramco’s upstream research and development program. In his assignments with Saudi Aramco and ASC, Mr. Temeng combined his knowledge of engineering and economics to direct production planning, budgeting, and technical studies for the world’s largest producing company. He also administered contracts and relationships with all the major oilfield services companies, and in the process has gained great insight from the client perspective into what drives successful relationships between producing companies and service providers. | Before joining Saudi Aramco, Mr. Temeng worked in the U.S. as a petroleum engineer with Exxon Company USA and Mobil Oil Corporation. Mr. Temeng earned a Bachelor’s degree in Ocean Engineering from the Massachusetts Institute of Technology (MIT), a Master of Science, Master of Engineering and Doctorate degrees in Petroleum Engineering from Stanford University. He served as a member of the Stanford University Earth Sciences Advisory Board and the Society of Petroleum Engineers and is licensed as a professional petroleum engineer in the State of California. Mr. Temeng’s experience in the oil and gas industry and expertise in petroleum engineering allow him to provide valuable insight to the Company. |
13
Continuing Class I SupervisoryII Directors (Term to Expire 2020)
Martha Z. Carnes
Ms. Carnes retired from PricewaterhouseCoopers LLP (“PwC”) in June 2016, where she had a 34-year career with the firm. She was an Assurance Partner serving large, publicly traded companies in the energy industry. Ms. Carnes held a number of leadership positions with PwC including the Houston office Managing Partner. She also served as PwC’s Energy and Mining leader for the United States where she led the firm’s energy and mining assurance, tax and advisory practices. In these roles, she was responsible for leading the design and execution of the market and sector strategies, business development, compensation, professional development, succession planning, and client satisfaction. As an Assurance Partner, Ms. Carnes had vast experience with capital markets activities and was the lead audit partner on some of the largest merger and acquisition transactions completed in the energy sector. Ms. Carnes also served as one of PwC’s Risk Management Partners and was PwC’s United States representative on the firm’s Global Communities Board. She is a certified public accountant. | Since December 2019, she has served as a director of |
14
Michael Straughen
Age: 73
Following an extensive career in oilfield services, Mr. Straughen retired from executive office at the end of 2014 and has since held various non-executive positions. He currently serves on the board of the Glasgow-based Denholm Energy Services Group. He was previously on the board of Glacier Energy Services, an Aberdeen-based offshore services company, until June 2020, on the board of ASCO, an Aberdeen-based logistics support group, until June 2019, and also on the board of GMS PLC, an Abu Dhabi-based, but London-listed, marine services company for three years until the end of 2016. Mr. Straughen’s last executive position was as an Executive Director of John Wood Group PLC, the UK’s leading oilfield services business, from 2007 to the end of 2014, where he served as Chief Executive of the Engineering Division, which had revenues of $1.8 billion and 10,000 employees. His responsibilities included P&L performance, HSSE, resourcing, customer relationships, strategy and growth. As an Executive Director of a publicly traded company, he also had responsibilities for corporate governance. | From 1982 to 2007, he served in various roles, including as Group Managing Director, with AMEC PLC, an international project management and engineering services provider. Mr. Straughen is a Chartered Engineer, has served on various industry bodies and continues to be a mentor to small businesses. His extensive management experience in the oil and gas sector, as well as his diverse background, enable him to provide valuable insight on management, governance, and strategic issues. | |||
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Katherine Murray
Following a 33-year career serving the energy sector as a senior finance executive to large global corporations and as a public accountant, Ms. Murray retired from executive office in 2018. From that time, she has worked as an independent financial consultant and, since January 2021, has also served as Vice-Chair, Board Member and member of the Finance and Communications Committees for the Foundation for the Women’s Energy Network, a non-profit organization serving women interested in pursuing a career in energy. From January 2013 until May 2018, Ms. Murray held progressive financial leadership roles at McDermott International, Inc. (“McDermott”), a global provider of engineering, procurement, construction, and installation solutions to the energy industry. Most recently, from 2017 to 2018, she served as Vice President and Regional Chief Financial Officer, Worldwide Finance Operations for McDermott’s global assets and projects group. Her responsibilities included financial reporting, operational accounting, financial planning, tax, and strategic planning. Previously, from 2015 to 2017, she served as Vice President and Treasurer, where she was responsible for implementing strategies to optimize McDermott’s capital structure and cash flows. Through these roles, Ms. Murray gained extensive experience managing lender arrangements and relationships across the globe, including the U.S., Europe, and the Middle East. | From 2016 to 2017, she also worked in Investor Relations for McDermott, and became responsible for optimizing shareholders’ and analysts’ relations and communications, including outreach programs in the U.S. and Europe. Prior to this time, from 1991 to 2012, Ms. Murray held progressive positions at El Paso Corporation (formerly Tenneco Gas, Inc.), a provider of natural gas and related energy products. As Senior Vice President, Tax from 2001 to 2012, she was responsible for over $600 million of annual taxes, and gained significant experience in financial reporting, internal controls, worldwide compliance, tax litigation, entity structuring and financial planning and analysis. She was also a key contributor to El Paso Corporation’s strategic initiatives, including mergers and acquisitions, dispositions and the ultimate $3 billion sale of the business to Kinder Morgan in 2012. Ms. Murray began her career with Arthur Andersen, serving in their energy tax practice, and is a member of the Texas Society of Certified Public Accountants. She earned a Bachelors in Business Administration with a minor in Accounting from the University of St. Thomas. Ms. Murray’s financial expertise and extensive experience working in senior finance roles in large global energy companies, as well as her public accounting experience, allow her to contribute key insights to the Company. |
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Non-Executive |
The following table sets forth a summary of the compensation we paid to our non-executive Supervisory Directors in 2017. Supervisory2022. Directors who are our full-time employees receive no compensation for serving as Supervisory Directors:
Director Compensation
for Year Ended December 31, 2017
Name (1) |
| Fee Earned |
|
| Stock Awards (2)(3) |
|
| Total |
| |||
Gregory B. Barnett (4) |
|
| 37,500 |
|
|
| — |
|
|
| 37,500 |
|
Martha Z. Carnes |
|
| 127,500 |
|
|
| 177,661 |
|
|
| 305,161 |
|
Monique van Dijken Eeuwijk (5) |
|
| 87,500 |
|
|
| 177,661 |
|
|
| 265,161 |
|
Harvey Klingensmith |
|
| 81,250 |
|
|
| 177,661 |
|
|
| 258,911 |
|
Katherine A. Murray (6) |
|
| 38,750 |
|
|
| 135,317 |
|
|
| 174,067 |
|
Michael Straughen |
|
| 102,500 |
|
|
| 177,661 |
|
|
| 280,161 |
|
Kwaku Temeng |
|
| 80,000 |
|
|
| 177,661 |
|
|
| 257,661 |
|
| Name | Fee Earned or Paid in Cash ($) | Stock Awards ($) (1)(2) | Total ($) | |||||
| Martha Z. Carnes | 87,500 | 147,229 | 234,729 | |||||
| Charles L. Dunlap | 76,000 | 147,229 | 223,229 | |||||
| Lucia van Geuns | 67,000 | 147,229 | 214,229 | |||||
Michael C. Kearney (3) | 62,000 | 147,229 | 209,229 | |||||
| Margaret Ann van Kempen | 65,000 | 147,229 | 212,229 | |||||
| Jan Willem Sodderland | 87,000 | 147,229 | 234,229 | |||||
| Michael Straughen | 89,000 | 147,229 | 236,229 | |||||
(3) Each of our currently serving non-executive Directors had 5,485 restricted stock awards granted in 2022 and outstanding as of December 31, 2022. (4) |
(6)
Retainer/Fees
Each non-executive Supervisory Director was paid the following amounts during fiscal 2017:
Equity-Based Compensation
Effective as of April 1, 2014,2021, we made a grant of restricted shares to the non-executive Supervisory Directors serving in 20142021 in the amount of $150,000, divided by the closing price of the Company'sCompany’s stock on March 31, 2014,January 21, 2021, rounded upwards to the nearest whole share for a total of 7564,307 shares each. The restricted shares vested, without performance criteria, at the end of a one-year vesting period that began on March 31, 2017.
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Effective as of April 1, 2022, we made a grant of restricted shares to the non-executive Supervisory Directors serving in 20152022 in the amount of $150,000, divided by the closing price of the Company'sCompany’s stock on March 31, 2015, rounded upwards to the nearest
Outstanding awards granted to the current non-executive Supervisory Directors require the recipient'srecipient’s continued service as a director (other than termination of service due to death or disability) to the time of vesting for the recipient to receive the shares that would otherwise vest. In the event of an award recipient'srecipient’s death or disability prior to the last day of these vesting periods, his or her restricted shares would vest in accordance with the aforementioned vesting schedules. If an award recipient'srecipient’s service with us terminates (other than due to death or disability) prior to the last day of these vesting periods, his or her restricted shares would be immediately forfeited to the extent not then vested. In the event of a change in control (as defined in the 2014 Nonemployee Director Stock Incentive Plan (the"2014 Director Plan"))Plan) prior to the last day of the aforementioned vesting periods and while the award recipient is in our service (or in the event of a termination of the award recipient'srecipient’s service upon such change in control), all of the award recipient'srecipient’s restricted shares will vest as of the effective date of such change in control.
Minimum Stock Ownership by Non-Executive Supervisory Directors
The Compensation Committee has established a requirement that non-executive Supervisory Directors must maintain equity ownership of Company stock, determined using the average price of the stock over the immediately preceding five years, in the minimum amount of five times the annual base retainer for the previous year. Non-executive Supervisory Directors will be allowed five years to achieve that minimum equity ownership level. All current Supervisory Directors are in compliance with the Compensation Committee'sCommittee’s requirements.
Policy against Insider Trading
The Company has a written policy against insider trading that is applicable to all Supervisory Directors and other persons with access to material, non-public information about the Company. Such policy provides that entering into any derivative transaction which effectively shifts the economic risk of ownership to a third party (e.g., selling the stock short; entering into collars, floors, cap arrangements, or placing the stock on margin; etc.)margin) is not allowed at any time.
2023 Non-Executive Supervisory Director Compensation
Each non-executive Supervisory Director serving in 20182023 shall receive the same level of cash compensation in 20182023 as received by Supervisory Board members in 20172022 and described above under “Retainer/Fees
In addition, effective onas of April 1, 2018,2023, we will awardawarded each of our non-executive Supervisory Directors serving in 2018,who will continue to serve on the Board after the conclusion of the 2023 Annual Meeting an amount of restricted shares equal to $150,000 based on the closing price of the Company'sCompany’s stock on March 31, 2018,January 13, 2023, which was $23.37 rounded upwards to the nearest whole share.share, which amounts to 6,419 shares. The restricted shares will vest, without performance criteria, at the end of a one-year vesting period that will begin on April 1, 20182023 and will end on April 1, 2019.2024. This award will be subject to an agreement to be signed by each recipient.
Board Membership | ||||
Prior to the Transaction, the Company has a two-tier board structure consisting of a Management Board and a Supervisory Board, each of which must consist of at least one member under the Company'sCompany’s Articles of Association. Under Dutch law, the Supervisory Board'sBoard’s duties include supervising and advising the Management Board in performing its management tasks. The Supervisory Board currently
Prior to the Transaction, the Management Board'sBoard’s sole member is Core Laboratories International B.V. ("CLIBV"(“CLIBV”). As a Managing Director, CLIBV'sCLIBV’s duties include overseeing the management of the Company, consulting with the Supervisory Board on important matters and submitting certain important decisions to the Supervisory Board for its prior approval.
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Board Structure | ||||
Mr. DemshurBruno currently serves as the Company'sCompany’s Chief Executive Officer (the “CEO”) and as Chairman of the Supervisory Board ("Chairman ofand will continue to serve in such capacities following the Board").Transaction. Given the size of the Company, we believe our shareholdersstakeholders are well served by having Mr. DemshurBruno hold the Chief Executive Officer role along with being Chairman of the Board and that this is the most effective leadership structure for us at the present time. We also note that within our industry, the common practice is for the same person to hold both positions. We believe this structure has served us well for many years.
Ms. Carnes has served as our Lead Director since the 20172020 annual meeting. The Lead Director has leadership authority and responsibilities and sets the agenda for, and leads, all executive sessions of the independent directors, providing consolidated feedback, as appropriate, from those meetings to the Chairman of the Board. Mr. SodderlandMs. Carnes has served on the Supervisory Board since 2011, and prior to that served as a non-employee managing director of the Company's sole managing director, Core Laboratories International B.V. He2016. She is deemed to be independent from the Company (according to applicable regulatory standards, as well as by shareholder advisory services such as ISS and Glass-Lewis), due to the fact that he has never been an employee of the Company or any affiliate and his service on the management board of the Company's sole management board, is the equivalent of serving as a Supervisory Director.
In its role in the risk oversight of the Company, the Supervisory Board oversees our shareholders'stakeholders’ interest in the long-term health and overall success of the Company and its financial strength, as well as the interests of the other stakeholders of the Company. The Supervisory Board is actively involved in overseeing risk management for the Company, and each of our Supervisory Board committees considers the risks within its areas of responsibilities. The Supervisory Board and each of our Supervisory Board committees regularly discuss with management our major risk exposures, their potential financial impact on us and the steps we take to manage them.
Director Independence | ||||
In connection with determining the independence of each Supervisory Director of the Company, the Supervisory Board inquired as to any transactions and relationships between each Supervisory Director and his or her immediate family and the Company and its subsidiaries, and reviewed and discussed the results of such inquiry. The purpose of this review was to determine whether any such relationships or transactions were material and, therefore, inconsistent with a determination that a Supervisory Director is independent, under the standards set forth by the NYSE and, to the extent consistent therewith, the Dutch Corporate Governance Code, as currently amended (the "Dutch Code"). Under the Dutch Code, the Supervisory Board is to be composed of members who are able to act critically and independently of each other and of the Management Board.NYSE. With regard to Messrs. DunlapStraughen, Temeng, Klingensmith and StraughenAnastasio and Mmes. Carnes, van GeunsMurray and van Kempen,Dijken Eeuwijk, none have ever held any position with the Company or any of its affiliates apart from their service on the Supervisory Board and its committees. With regard to Mr. Sodderland, he served as a non-employee managing director of CLIBV, an affiliate of the Company, until his election to the Supervisory Board of the Company in May 2011, at which time he resigned from that position with CLIBVcommittees and his position as a non-employee director of other Dutch affiliates of the Company. He has qualifiedall qualify as independent under the NYSE Listed Company Manual section 303A.02 since 2014 and was deemed to be independent under the Dutch Code upon his re-appointment in 2017. Ms. Carnes qualifies as independent under the NYSE Listed Company Manual section 303A.02.
As a result of this review, after finding no material transactions or relationships among the following Supervisory Directors and the Company, the Supervisory Board affirmatively determined that each of Messrs. Dunlap, SodderlandStraughen, Temeng, Klingensmith and Straughen as well asAnastasio and Mmes. Carnes, van Geuns,Murray and van KempenDijken Eeuwijk, are independent under the applicable standards described above.
Board Meetings | ||||
The Supervisory Board held fourfive meetings in 2017.2022. All Supervisory Directors participated in 100% of the 2017 Supervisory2022 Board meetings. All Supervisory Directors participated in 100% of the meetings in 20172022 of all committees on which he or she serves. Under our Corporate Governance Guidelines, Supervisory Directors are expected to diligently fulfill their fiduciary duties to the Company, including preparing for, attending and participating in meetings of the Supervisory Board and the committees of which the Supervisory Director is a member. In 2017,2022, all Supervisory Directors attendedparticipated in the 2022 annual shareholdergeneral meeting and we expect each of our Supervisory Directors to attend our 2018 annual meeting as ourshareholders. All current policy and Articles of Association impose an obligation upon the Supervisory Directorsboard members are expected to attend the annual meeting.
Our non-executive Supervisory Directors meet separately in executive session without any members of management present. The Lead Director is the presiding Supervisory Director at each such session. If any of our non-executive Supervisory Directors were to fail to meet the applicable criteria for independence, then our independent Supervisory Directors would meet separately at least once a year in accordance with the rules of the NYSE.
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Committees of the | ||||
The Supervisory Board has three standing committees, the identities, memberships and functions of which are described below. Each Supervisory Director who is at the time "independent"“independent” and who has never served as a director of any affiliate of the Company may be considered for Committee assignment at any time during their term, as determined by the Supervisory Board. Any Supervisory Director who is at the time "independent", but who has previously served as a director of any affiliate of the Company, may be considered for Committee assignment, as determined by the Supervisory Board, at the earlier of: (a) five years after they last served as an affiliate director or (b) they are not classified as "non-independent" at the time of their nomination and election.
Audit Committee
The current members of the Audit Committee are Mrs.Mmes. Carnes (Chairman), and Messrs. SodderlandMurray, and Straughen.
Compensation Committee
The current members of the Compensation Committee are Mr.Messrs. Straughen (Chairman), Klingensmith and Ms. van Kempen.Temeng, each of whom will continue in their respective roles following the conclusion of the 2023 Annual Meeting of Shareholders. The Supervisory Board has determined that each of the members of the Compensation Committee is (i) independent under the NYSE’s rules governing Compensation Committee membership;membership and (ii) a “non-employee director” under Rule 16b-3 of the Exchange Act; and (iii) an “outside director” under Section 162(m) of the Internal Revenue Code of 1986, as amended (the "IRS Code"). For 2018, the Supervisory Board is not expecting any additional changes to the membership of the Compensation Committee.
The Compensation Committee'sCommittee’s principal functions, which are discussed in detail in its charter, include a general review of our compensation and benefit plans to ensure that they are properly designed to meet corporate objectives. The Compensation Committee reviews and approves the compensation of our Chief Executive Officer and our senior executive officers, granting of awards under our benefit plans and adopting and changing major compensation policies and practices. The Compensation Committee also regularly discusses a succession plan for the Chief Executive Officer and other senior executive management. In addition to establishing the compensation for the CEO Chief Executive Officer, the Compensation Committee reports its recommendations to the Supervisory Board for approval to review and approveapproval of awards made pursuant to our LTIP. Pursuant to its charter, the Compensation Committee has the authority to delegate its responsibilities to other persons. The Compensation Committee held one meetingthree meetings in 2017.
The Compensation Committee periodically retains a consultant to provide independent advice on executive compensation matters and to perform specific project-related work. The consultant reports directly to the committee, which pre-approves the
The Compensation Committee operates under a written charter. A copy of the Compensation Committee charter may be found on the Company'sCompany’s website at
Nominating, Governance, Sustainability and Corporate Responsibility Committee
The current members of the NGCRNGSCR Committee are Mr. DunlapMs. van Dijken Eeuwijk (Chairman) and Messrs. Klingensmith and Temeng. Messrs. Klingensmith and Temeng will continue in their respective roles following the conclusion of the 2023 Annual Meeting. Ms. van Geuns. For 2018,Dijken Eeuwijk is not standing for re-election to the Supervisory Board plans to re-appointat the 2023 Annual Meeting. She will be replaced by Mr. DunlapAnastasio as a member of the NGSCR Committee. Following Ms. van Dijken Eeuwijk’s departure, Mr. Temeng will serve as chairman and Ms. van Geuns to serve onof the NGCR Committee following the 2018 annual meeting.
20
The NGCR Committee'sNGSCR Committee’s principal functions, which are discussed in detail in its charter, include:
The NGCRNGSCR Committee operates under a written charter, which was updated in February 2014.charter. A copy of the NGCRNGSCR Committee Charter may be found on the Company'sCompany’s website at
Qualifications of | ||||
The NGCRNGSCR Committee has the responsibility to make recommendations to the Board of Supervisory Directors of candidates for the Supervisory Board that the NGCRNGSCR Committee believes will perform well in that role and maximize shareholder and stakeholder value. In considering suitable candidates for that position, the NGCRNGSCR Committee considers, among other factors, the person'sperson’s reputation, knowledge, experience, integrity, independence, skills, expertise, business and governmental acumen and time commitments. In addition to considering these factors on an individual basis, the NGCRNGSCR Committee considers how these factors contribute to the overall variety and mix of attributes of our Supervisory Board as a whole so that the members of our Supervisory Board collectively possess the diverse knowledge and complementary attributes necessary to oversee our business. Supervisory Directors should be excellentexemplary representatives of the Company and be able to provide a wide range of management and strategic advice and be someone that the Company can count on to devote the required time and attention needed from members of the Supervisory Board. In the case of current Supervisory Directors being considered for re-nomination, the NGCRNGSCR Committee will also take into account the Supervisory Director'sDirector’s tenure as a member of our Supervisory Board; the Supervisory Director'sDirector’s history of attendance at meetings of the Supervisory Board and committees thereof; the Supervisory Director'sDirector’s preparation for and participation in all meetings; and the Supervisory Director'sDirector’s contributions and performance as a member of the Supervisory Board.
Six of the eightseven members of the Supervisory Board who will serve following the 2018 annual meeting,2023 Annual Meeting, including Mr. Anastasio assuming his election to the re-election of Ms. van Kempen,Board, are considered independent under applicable SEC NYSE and Dutch CodeNYSE standards. For this year's annual meetingyear’s Meeting and election, the NGCRNGSCR Committee believes the candidates possess the characteristics outlined above and bring to the Supervisory Board valuable skills that enhance the Supervisory Board'sBoard’s ability to manage and guide the strategic affairs of the Company in the best interests of our shareholders and our other stakeholders.
A more complete description of the specific qualifications of each of our Supervisory Board members and of this year's nomineesyear’s nominee are contained in the biographical information section beginning on page 910 of this proxy statement.
Director Nomination Process | ||||
The NGCRNGSCR Committee, the Chairman of the Board, the Chief Executive Officer, or a Supervisory Director identifies a need to add a new Supervisory Board member that meets specific criteria or to fill a vacancy on the Supervisory Board. The NGCRNGSCR Committee also reviews the candidacy of existing members of the Supervisory Board whose terms are expiring and who may be eligible for reelection to the Supervisory Board. The NGCRNGSCR Committee also considers recommendations for nominees for directorships submitted by shareholders as provided below. The nomination process is outlined below:
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Related person transactions have the potential to create actual or perceived conflicts of interest between the Company and its Supervisory Directors andand/or named executive officers or any of their respective immediate family members. Under its charter, the Audit Committee is charged with the responsibility of reviewing with management and the independent registered public accountants (together and/or separately, as appropriate) insider and affiliated party transactions and potential conflicts of interest. The Audit Committee has delegated authority to review transactions involving employees, other than our named executive officers, to our general counsel.General Counsel. We identify such transactions by distributing questionnaires annually to each of our Supervisory Directors, officers and employees.
In deciding whether to approve a related person transaction, the following factors may be considered:
To receive approval, the related person transaction must be on terms that are fair and reasonable to the Company, and which are on terms at least as favorable to the Company as would be available from non-related entities in comparable transactions. The Audit Committee requires that there is a Company business interest supporting the transaction and the transaction meets the same Company standards that apply to comparable transactions with unaffiliated entities. The Audit Committee has adopted a written policy that governs the approval of related person transactions.
There were no transactions that occurred during fiscal year 20172022 in which, to our knowledge, the Company was or is a party, in which the amount involved exceeded $120,000, and in which any director, director nominee, named executive officer, holder of more than 5% of our common shares or any member of the immediate family of any of the foregoing persons had or will have a direct or indirect material interest.
Compensation Committee Interlocks and Insider Participation | ||||
22
During 2017,2022, no named executive officer served as:
Communications with Directors; Website Access to Our Corporate Documents | ||||
Shareholders or other interested parties can contact any Supervisory Director or committee of the Board of Supervisory Directors by directing correspondence to Mark F. Elvig,D. Tattoli, Secretary, in care of Core Laboratories LP, 6316 Windfern Road, Houston, Texas 77040. Comments or complaints relating to the Company'sCompany’s accounting, internal accounting controls or auditing matters will be referred to members of the Audit Committee.
Our Internet address is
www.corelab.com. Our Corporate Governance Guidelines, Code of Ethics and Corporate Responsibility and the charters of ourWe file Quarterly Reports on Form 10-Q, Annual Reports on Form 10-K and Current Reports on Form 8-K with the SEC. We also file Annual Accounts and Semi-Annual Accounts with the Dutch regulator, the Autoriteit Financiële Markten ("AFM").
These reports are available free of charge through our website as soon as reasonably practicable after they are filed with the respective agency. We may from time to time provide important disclosures to investors by posting them in the investor relations section of our website, as allowed by SEC and/or AFM rules. Materials we file with the SEC may also be read and copied at the SEC's Public Reference Room at 100 F Street, N.W., Washington, D.C. 20549. Information on the operation of the Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330. The SEC also maintains an Internet website at
Risk Assessment of Compensation Policies and Practices | ||||
We have assessed our compensation policies and practices and found that the compensation policies and practices are not reasonably likely to have a material adverse effect on us. Our Compensation Committee and our Supervisory Board are aware of the need to routinely assess our compensation policies and practices and will make a determination as to the necessity of this particular disclosure on an annual basis.
23
CORPORATE GOVERNANCE AND RESPONSIBILITY
Core Laboratories maintains a corporate governance page on its website that includes key information about corporate governance initiatives, including Corporate Governance Guidelines, a Code of Ethics and Corporate Responsibility, and committee charters for the Audit, Compensation, and NGCRNGSCR Committees of the Supervisory Board. The corporate governance page can be found at
The actions we are taking regarding corporate responsibility, are posted on our website, and specifically in the form of our 2017 Annual Sustainability Report,Reports, under the "Corporate Responsibility"“Corporate Responsibility” link at
24
COMPENSATION DISCUSSION AND ANALYSIS
Introduction | ||||
This Compensation Discussion and Analysis ("(“CD&A"&A”) describes our executive compensation program as it relates to our Named Executive Officers ("NEOs"(“NEOs”) listed below.. This CD&A also summarizes the Compensation Committee'sCommittee’s process for making pay decisions, as well as its rationale for specific decisions related to the 20172022 performance year.
Name of Executive | Title | |
Lawrence Bruno | Chairman, President and Chief Executive Officer | |
Christopher S. Hill | Senior Vice President and Chief Financial Officer | |
Gwendolyn Y. Gresham | Senior Vice President, Corporate Development and | |
Mark D. Tattoli | Senior Vice President, Secretary and General Counsel | |
Executive Summary | ||||
Industry Conditions and Outlook
In 2022, as the global impact from COVID-19 continued, we remained vigilant in our commitment to making health and safety a top priority in all of our facilities, ensuring a safe work environment while meeting the needs of our clients and stakeholders by maintaining many of the risk mitigation and communication efforts previously established. We continued to operate as an essential business with timely delivery of products and services to our clients throughout the COVID-19 pandemic, while also maintaining a continuity plan across our global organization to protect the health of our employees while servicing our clients.
In addition, the geopolitical conflict between Russia and Ukraine that erupted in February 2022 resulted in disruptions to traditional supply chains associated with the movement and trading patterns of crude oil, adversely impacting our business in the affected region. Additionally, continued high inflation affecting most countries globally resulted in increased cost of services and cost of product sales during 2022.
Our diverse, dedicated employees are the reason the Company successfully navigated client project disruptions. Our talented workforce across our global network acted expeditiously to minimize disruptions to our operations and ensure workplace safety. The Company is well positioned as international activity builds across all regions, resulting in our positive outlook for 2023 and beyond.
As part of our long-term growth strategy, we continue to broaden our market presence by opening or expanding facilities in strategic areas which aligns with client demand and market conditions and realizing synergies within our business lines. More recently, we increased our laboratory capabilities in Qatar, Saudi Arabia and Brazil. We believe our market presence in strategic areas provides us a unique opportunity to serve our clients who have global operations, whether they are international oil companies, national oil companies, or independent oil companies.
Additionally, we continue to pursue energy transition opportunities with the introduction of our first Joint Industry Carbon Capture and Sequestration Consortium in 2021. We also recently conducted a series of Enhanced Oil Recovery and flow assurance studies for a multi-well onshore program using CO2-rich injection gases that can simultaneously improve oil recovery and reduce CO2 emissions.
2022 Business Achievements
Over the course of our over 2227 years as a publicly traded company, we have posted an annualized compounded shareholder return of 3,715.2%8.06%, according to Bloomberg Financial, compared to 9.17% for the S&P 500, which was up 548.7% compounded annually over that same time period. See "Ownership“Ownership of Securities - Performance Graph"Graph” on page 8 of this proxy statement9 for a graph that comparescomparing our five-year cumulative total shareholder return to the S&PStandards & Poors 500 Index and the Philadelphia Oil Services Index ("OSX").
25
In addition, during 2017, we continued to produce strong2022, our relative and absolute results are as follows:
•
Compensation Actions
Our executive compensation decisions included:
2022 “Say-on-Pay” / Shareholder Engagement
Each year, we carefully consider the results of our shareholder say-on-pay vote from the preceding year. We also take into accountconsider the feedback we receive from our major shareholders, which we solicit in various ways, to include face to faceincluding face-to-face meetings during the year. At the 2017 annual meeting, 93.28%98.5% of the votes cast supportedwith respect to this voting item at our 2022 Annual Meeting approved our executive compensation program. We believe
Our committee believes that this strong level of shareholder support reinforcesfeedback, including the Committee'smost recent say-on-pay vote, supports their view that our compensation program remainsprograms remain aligned with the best interests of our shareholders.
26
Best Compensation Governance Practices & Policies
Our executive compensation program is grounded in the following policies and practices, which promote sound compensation governance, enhance our pay-for-performance philosophy and further align our executives'executives’ interests with those of our shareholders:
WHAT WE DO | WHAT WE DO NOT DO | |||
| 100% of NEO equity awards are performance-based | | No | |
| Target performance for equity incentive awards set at 75th percentile of industry peers. | | No significant prerequisites | |
| Incentive awards | | No | |
| Equity award grants subject to three-year performance periods to promote retention | | ||
Core | ||||
| Clawback policy applies to cash and equity incentive compensation | |||
| Retain independent compensation consultant | |||
Developing, Retaining and Rewarding Our Employees
Our People Program
At Core Lab we value our employees and work hard to provide resources that enhance the work experience of our people while developing them for the future. Through our People Program we establish Core Lab’s fundamental principles for ensuring our ability to attract, engage, and retain a workforce with the right skills, attitudes and behaviors, and it outlines our approach to building and maintaining a relationship with each employee at all stages of the Employee Life Cycle.
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What Guides Our Executive Compensation Program | ||||
Compensation Philosophy and Objectives
Our executive compensation program is designed to create a strong financial incentive for our NEOs to maximize ROIC as well asand other financial and operational metrics, which we believe leads to long-term sustainable growth in shareholderstakeholder value. Our compensation philosophy is driven by the following guiding principles and objectives:
Guiding Principle | Objective | |
Pay for Performance | Drive performance relative to our financial goals, which are designed to achieve growth in shareholder returns and long-term value | |
Competitiveness | Provide compensation at levels that will attract, motivate, and retain | |
Stakeholder Alignment | Reinforce a culture of ownership and long-term commitment to | |
The Core Elements of Compensation
The core elements of executive compensation are summarized in the table below:
Element | Form | What It Does | How It Links to Performance | |||
Base Salary | Cash (Fixed) | Provides a competitive rate relative to similar positions in the oilfield services industry and other service-based industries, and enables the Company to attract and retain critical executive talent | Based on job scope, level of responsibilities, experience, tenure and market levels | |||
Annual Cash Incentive Plan | Cash | Focuses executives on achieving annual financial and operational goals that drive long-term stockholder value | Payouts: • Combination of absolute and relative financial and | |||
Long-Term Incentive Plan (LTIP) | Equity | Provides incentives for executives to execute on longer-term financial/strategic growth goals that drive value creation and support | Payouts: 0% to 150% of target, based on performance • Combination of relative | |||
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Pay Mix
The charts below show the target compensation of our CEOChief Executive Officer and our two other NEOs for fiscal 2017.year 2022. These charts illustrate that a majority of NEO compensation is performance-based and variable (86%(84% for our CEOChief Executive Officer and an average of 81%72% for our other NEOs). We view each compensation element as a different means of encouraging and promoting performance. These elements are designed to work in tandem, not against each other. The weighting of these compensation components is consistent with the market and puts a material, significant portion of the executives'executives’ total direct compensation "at risk"“at risk” if Company performance declines.
|
|
CEO Realizable Compensation: Aligned with Performance
Our emphasis on at-risk, variable and performance-based pay elements, particularly equity incentives, helps to ensure that the actual compensation realized by our NEOs aligns with returns to our shareholders. As shown in the charts below, the
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relationship between CEO realizable and target pay over the past five years has aligned closely with our total shareholder return performance.
CEO REALIZABLE PAY ALIGNED WITH PERFORMANCE(1) |
|
Target compensation includes base salary, target annual incentive award, and the grant-date value of performance share units. Realizable compensation includes base salary, actual annual cash incentive paid, and the value of performance share units determined by whether the awards are still outstanding as of the end of the year or have been settled during that year. Any performance share units settled within the five-year period have been adjusted for actual payout percent. Outstanding performance share unit awards have been valued assuming a target payout with the stock price that is applicable at the end of each year.
The Role of the Compensation Committee
Our Compensation Committee'sCommittee’s principal functions include conducting periodic reviews of the Company’s compensation and benefits programs to ensure that they are properly designed to meet corporate objectives, overseeing of the administration of the cash incentive and equity-based plans and developing the compensation program for the Supervisory Directors.
The Compensation Committee generally focuses on compensation structures designed to reflect the normal marketmiddle range (betweenof the 25th to 75th percentiles), which gives the Compensation Committee the ability to set compensation that reflects Company and individual performance.market. We believe that maintaining compensation opportunities in the normal marketmiddle range of our peer group minimizes competitive disadvantagesupports recruitment and retention while at the same time fairly compensating our NEOs for meeting our corporate goals.ensuring that realized pay opportunities align appropriately with individual and Company performance. The Compensation Committee usestargets a market range of compensation targets so asrather than a specific percentile in order to respond better to changing business conditions, manage salaries and incentives more evenly over an individual'sindividual’s career, and minimize potential for automatic increases in salaries and incentives that could occur with inflexible and narrow competitive targets. The Compensation Committee links a significant portion of each executive'sexecutive’s total compensation to accomplishing specific, measurable results based on both companyCompany and individual performance intended to create value for shareholders in both the short- and long-term. Only executives with performance exceeding established targets may significantly exceed the market median in total compensation due to incentive compensation.
The Role of Management
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Our CEO provides recommendations to the Compensation Committee in its evaluation of our other NEOs, including recommendations of individual cash and equity compensation levels for each of the remaining NEOs. Mr. Demshur relies on his personal experience serving in the capacity of CEO with respect to evaluating the contribution of our other NEOs, as well as publicly- available information for comparable compensation guidance as the basis for his recommendations to the Compensation Committee. Mr. Demshur does not participate in discussions regarding his own pay.
The Role of the Independent Compensation Consultant
Our Compensation Committee periodically retains a consultant to provide independent advice on executive compensation matters and to perform specific project-related work. TheDuring 2022, the Compensation Committee engaged Pearl Meyer &Meridian Compensation Partners LLC ("Pearl Meyer"(“Meridian”) to provide information on pay levels and program design for 2017. Pearl Meyer has2022. Meridian reported to and acted at the direction of the Compensation Committee. In connection with its engagement of Pearl Meyer, based on the information presented to it, theThe Compensation Committee assessed the independence of Pearl Meyerthe firm pursuant to applicable SEC and NYSE rules and concluded that the firm’s work for the Compensation Committee did not raise any conflict of interest for 2017.
The Role of Market Compensation Analysis
The Compensation Committee reviews several sources as a reference for determining competitive total compensation packages. For 20172022 executive compensation recommendations, the Compensation Committee reviewed and considered Pearl Meyer'sMeridian’s evaluation and analysis of compensation survey data from multiple general industry and industry-specific sources.
In addition, the Compensation Committee reviewedreviews proxy statement data from athe Company’s peer group of companies (see below). These analyses wereThis analysis was used to determine the NEOs'our NEOs’ base salary, annual incentive targets and long-term equity awards (100% performance-based) for 2017.
Selecting the Peer Group
The Compensation Committee, with the assistance of Pearl Meyer,Meridian, developed a peer group of companies to be used for compensation comparison purposes.purposes (“Compensation Peer Group”). The peer groupCompensation Peer Group consists of publicly traded oilfield services companies comparable in size to our companyCompany in terms of annual revenues and the value of ongoing operations. The following companies comprise our compensation peer groupCompensation Peer Group used to evaluate the market for NEO compensation for 2017:
Baker Hughes Company | Fugro N.V. | RPC, Inc. | ||||||
Champion X Corporation | Helix Energy Solutions Group | TechnipFMC plc | ||||||
Dril-Quip Inc. | John Wood Group PLC | TGS-NOPEC Geophysical Company ASA | ||||||
Expro Group Holdings N.V. | Oceaneering International | |||||||
Forum Energy Technologies | Oil States International | |||||||
The Compensation Committee also periodically reviews the composition of our compensation peer group, the compensation paid at these companies, as well as their corporate performance, and other factors in determining the appropriate compensation levels for our NEOs.
2022 Compensation Program Details | ||||
Base Salary
Base salary is the fixed annual compensation we pay to an executive for performing specific job responsibilities. It represents the minimum income an executive may receive in any given year. We target annual base salaries to result in annual salaries in the normal marketmiddle range of our peer groupCompensation Peer Group for executives having similar responsibilities. The Compensation Committee may adjust salaries based on its annual review of the following factors:
31
As a result of these factors, a particular executive'sexecutive’s base salary may be above or below the median of our peer group at any point in time.Compensation Peer Group for a given year. The table below shows base salaries for each of our NEOs for the years ending December 31, 20172022 and 2016. It also shows their base2021. NEO salaries that were approved by the Compensation Committee for 2018.
| Name of Executive | 2018 ($) | 2017 ($) | 2016 ($) | |||
| David Demshur | 1,008,863 | 979,479 | 951,000 | |||
| Richard Bergmark | 539,600 | 523,881 | 508,600 | |||
| Monty Davis | 539,600 | 523,881 | 508,600 | |||
Name of Executive |
| January 2022 (2) ($) |
|
| August 2021 (2) ($) |
|
| January 2021 (2) ($) |
| |||
Lawrence Bruno (1) |
|
| 820,000 |
|
|
| 738,000 |
|
|
| 656,000 |
|
Christopher S. Hill (1) |
|
| 430,000 |
|
|
| 387,000 |
|
|
| 344,000 |
|
Gwendolyn Y. Gresham (3) |
|
| 370,000 |
|
|
| 333,000 |
|
| - |
| |
Mark D. Tattoli (4) |
|
| 370,000 |
|
|
| 315,000 |
|
| - |
| |
(1) NEO annual base salaries approved by the Compensation Committee in 2021, $820,000 for Mr. Bruno and $430,000 for Mr. Hill. |
(2) NEO salaries were reduced by a total of 20% from April 2020 to July 2021, Subsequently, NEO salaries were reinstated in two installments of 10% in August 2021 and January 2022. |
(3) Ms. Gresham became an executive officer in February 2021 and her annual base salary of $370,000 was approved by the Compensation Committee in 2021. |
(4) Mr. Tattoli became an executive officer in August 2021, at which time his base salary was $350,000. Mr. Tattoli’s salary was increased to $370,000 beginning January 1, 2022. |
Annual Cash Incentives
All of our NEOs participate in our annual cash incentive plan. Under this plan, each NEO is assigned a target and a maximum bonus expressed as a percentage of his or her base salary. The target bonus percentage and maximum bonus percentage for each of our NEOs for 2017 and 2018 is set forth below:
| Award Percentages | ||||||
| Name of Executive | Title | Target | Maximum | |||
| David M. Demshur | President and Chief Executive Officer | 110% | - | 220% | ||
| Richard L. Bergmark | Executive Vice President and Chief Financial Officer | 75% | - | 150% | ||
| Monty L. Davis | Senior Vice President and Chief Operating Officer | 75% | - | 150% | ||
|
|
|
| Award Percentages | ||
Name of Executive |
| Title |
| Target |
| Maximum |
Lawrence Bruno |
| Chairman, President and Chief Executive Officer |
| 100% | - | 200% |
Christopher S. Hill |
| Senior Vice President and Chief Financial Officer |
| 75% | - | 150% |
Gwendolyn Y. Gresham |
| Senior Vice President, Corporate Development and |
| 75% | - | 130% |
Mark D. Tattoli |
| Senior Vice President, Secretary and General Counsel |
| 75% | - | 130% |
The target award opportunity is established as a percentage of the NEO’s salary based upon a review of the competitive data for that cash incentive compensation will approximate the market range when individualofficer’s position, level of responsibility and corporate strategic objectives are achieved and will exceed the market median when performance plans are exceeded. Annual incentive awards are designedability to put a significant portion of total compensation at risk. NEOs are eligible for an incentive cash award to the extent that the Company achieves certain relative and absolute performance goals.
The Compensation Committee has set performance goals that are consistent with the Company'sCompany’s business strategy and focus on creating long-term shareholder value. Performance is assessed based on the achievement of specific financial measures, safety metrics, operating objectives, and environmental, social and governance goals. The Compensation Committee may also considersconsider individual contributions to performance results.
Relative Performance
Relative performance requires that NEOs achieve at least median performance among the Compensation Peer Group. The achievement of three different financial performance metrics accounts for 75% of the potential annual cash incentive award and is based on the achievement of three different financial performance metrics as compared to the Comp Group:
Metric | Description | Weight | ||
Revenue | Change in the | 25% | ||
Operating Margin | The Company’s margins relative to | 25% | ||
EPS | The Company’s annual EPS relative to | 25% | ||
Relative performance is assessed afterat the end of the year. Bloomberg data is analyzed on a trailing four-quarter period for the CompCompensation Peer Group as published by Bloomberg for the period ending with the third quarter of the current year. This data is used to determine the Company’s performance as a percentile ofranking in the CompCompensation Peer Group for each metric, which is then ranked. A ranking at the top of the list will be assigned a ranking of being in the 100
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For each metric, the NEOs can achieve a maximum score of 25 and a minimum score of 12.5 for a ranking between the 100
th and the 50thMessrs. Bruno and Hill may earn up to 2x their target award opportunity, and Ms. Gresham and Mr. Tattoli may earn up to 1.3x their target award opportunity, for each metric in return for the 50
Percentile of Compensation Peer Group | Below 50th | 50th | 100th |
Payout as a Multiple of Target Award Opportunity (Messrs. Bruno and Hill) | 0 | 1.0x | 2.0x |
Payout as a Multiple of Target Award Opportunity (Ms. Gresham and Mr. Tattoli) | 0 | 1.0x | 1.3x |
Absolute Performance
Absolute performance accounts for 25% of the annual incentive award. The Compensation Committee evaluates the Company’s progress in improving on a collective basis, year-over-year improvement in the areas of safety and ESG. The Compensation Committee will basebases its determination primarily on relevant objective third-party reports and may award a maximum score of up to 25%25, equivalent to a weighting of the maximum bonus possible25%, depending on the Company’s overall improvement in these areas. If the Compensation Committee determines that overall the Company’s performance at the end of a year, on a year-over-year basis, has declined, it may award as little as zero (0) bonus for this metric.
2022 Results
For 2017,2022, our performance results were as follows:
| Metric | Weighting | Ranking | Score | |||
| Revenue | 25% | 60th percentile | 15.00 | |||
| Operating Margin | 25% | 70th percentile | 17.50 | |||
| EPS | 25% | 80th percentile | 20.00 | |||
| Sub-Total Relative Score | 52.50 | |||||
| Absolute Performance | 25% | 25.00 | ||||
| Total Score | 77.50 | |||||
Metric |
| Weight |
| Ranking |
| Weighted Percent of Maximum Opportunity |
| |
Revenue |
| 25% |
| 43rd percentile |
|
| 0.00 | % |
Operating Margin |
| 25% |
| 93rd percentile |
|
| 23.22 | % |
EPS |
| 25% |
| 64th percentile |
|
| 16.07 | % |
Weighted payout factor (relative) |
|
|
|
|
|
| 39.29 | % |
Absolute Performance |
| 25% |
|
|
|
| 25.00 | % |
Weighted payout factor (total) |
|
|
|
|
|
| 64.29 | % |
As shown, relative and actual performance under the plan produced a weighted payout factor equal to 64.29% of the maximum award opportunity. The table below reflects the actual annual cash incentive award earned by the NEOs and approved by the Compensation Committee. However, based upon a broader assessment of the Company’s financial performance results and individual achievements,considering affordability, the Chairman of the Board, acting on authority conferred upon him by the Compensation Committee, approved the annual incentive awards for 2017 as shown in the next table. The decision whether these earned 2017 cash incentive bonuses will be paid shall be at the discretiona payout of one-half of the Chairman of the Supervisory Board.
| Award Percentages | Award Payouts ($) | |||||||
| Name of Executive | Target | Maximum | Actual (1) | Target | Maximum | Actual (1) | ||
| David M. Demshur | 110% | 220% | 170% | 1,077,427 | 2,154,854 | 1,670,011 | ||
| Richard L. Bergmark | 75% | 150% | 116% | 392,911 | 785,822 | 609,011 | ||
| Monty L. Davis | 75% | 150% | 116% | 392,911 | 785,822 | 609,011 | ||
| (1) Award percentages are calculated as a percent of salary; payouts under the Company's annual cash incentive compensation for 2017 performance were awarded at 77.5% of the maximum. See the section entitled "--2017 Results" below for additional details regarding 2017 performance. Thus, the numbers in this column reflect 77.5% of the award amount percentage between the Target and the Maximum. | ||||||||
Name of Executive |
| Target Award Opportunity |
| Max Award Opportunity |
| Actual Award Opportunity |
| Actual Award Earned ($) |
|
| Actual Award Paid ($) |
| ||
Lawrence Bruno |
| 100% |
| 200% |
| 129% |
|
| 1,054,286 |
|
|
| 527,143 |
|
Christopher S. Hill |
| 75% |
| 150% |
| 96% |
|
| 414,643 |
|
|
| 207,322 |
|
Gwendolyn Y. Gresham |
| 75% |
| 130% |
| 84% |
|
| 309,214 |
|
|
| 154,607 |
|
Mark D. Tattoli |
| 75% |
| 130% |
| 84% |
|
| 309,214 |
|
|
| 154,607 |
|
Equity Incentive Compensation
We currently administer long-term incentive compensation awards through our LTIP. Under the LTIP, our NEOs are eligible for performance-based restricted shares.
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Our Compensation Committee, based on recommendations from our CEO (other than with respect to awards for himself), determines the amount of each NEO'sNEO’s grant by periodically reviewing competitive market data and each NEO'sNEO’s long-term past performance, ability to contribute to our future success, and time in the current job. The Compensation Committee takes into accountconsiders the risk of losing the executive to other employment opportunities and the value and potential for appreciation in our shares. The number of shares previously granted or vested pursuant to prior grants is not typically a factor in determining subsequent share grants to a NEO. The Compensation Committee considers the foregoing factors together and determines the appropriate magnitudeamount of the award.
Performance Share Award Program ("PSAP"(“PSAP”)
PSAP shares vest if we achieve certain performance goals generally over a three-year period, which allow us to compensate our employees as we meet or exceed our business objectives. Starting with grants of restricted performance shares made in 2017, the restricted performance shares will vest only upon the Company's ROIC being in the top 50
PSAP Awards Generally
Under the PSAP, our NEOs are awarded rights to receive a pre-determined number of common shares if certain performance targets are met overat the end of a three-year performance period and as specified in the applicable agreements.grant agreement. Awards vest at the end of each three-year performance period.
Performance Period.
ROIC | Below 50th | 50th | 75th | 100th |
Shares Earned as a Percent of Target | 0% | 50% | 100% | 150% |
Beginning with PSAP shares awarded in 2020, the Compensation Committee included a modifier based upon absolute total PSAP awards grantedshareholder return (“TSR”), such that the number of common shares awarded for performance in 2017. The multiplesexcess of pay used to determine our annual grants have not changed since 2015 andthe 75th percentile in ROIC will not change for 2018:
2020 PSAP Awards
On February 16, 2015,11, 2020, we made grants of 79,455134,900 restricted performance shares to three of our current NEOs. The three-year performance period began on January 1, 2020 and ended on December 31, 2022.
The 2020 PSAP awards to the executives who were NEOs on the grant date were as follows:
Name of Executive |
| Target Award |
|
| 2020 Performance Period Proforma ROIC Percentile Rank (1) |
| Approved Percent of Target Award Earned |
| Actual Share Earned |
| ||
Lawrence Bruno |
|
| 91,212 |
|
| 72nd |
| 100% |
|
| 91,212 |
|
Christopher S. Hill |
|
| 31,688 |
|
| 72nd |
| 100% |
|
| 31,688 |
|
Gwendolyn Y. Gresham |
|
| 12,000 |
|
| 72nd |
| 100% |
|
| 12,000 |
|
In December 2022, the Compensation Committee made consideration for the adverse impact on the Company’s financial performance during 2022 caused by certain extraordinary items, including effects of the Russia-Ukraine conflict. After considering the financial impact caused by these extraordinary events, the Compensation Committee approved the vesting of the 2020 PSAP awards to Messrs. Bruno and Hill and Ms. Gresham at 100% of the target award on December 31, 2022, the end of the three-year performance period.
2022 PSAP Awards
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On February 17, 2022, we made grants of 205,836 restricted performance shares to our current NEOs for 2015. Assuming the recipient's continued employment (or death or disability while employed) and the satisfaction of certainserving in 2022. The three-year performance goals, these awards vested at the end of a three-year Performance Period thatperiod began on January 1, 2015.2022 and will end on December 31, 2024.
The PSAP awards to our current NEOs were as follows:
Name of Executive |
| Target Award (in Shares) |
|
| Maximum Possible Incremental Award (in Shares) |
| ||
Lawrence Bruno |
|
| 127,424 |
|
|
| 191,136 |
|
Christopher S. Hill |
|
| 43,236 |
|
|
| 64,854 |
|
Gwendolyn Y. Gresham |
|
| 17,588 |
|
|
| 26,382 |
|
Mark D. Tattoli |
|
| 17,588 |
|
|
| 26,382 |
|
Executive Compensation Policies |
Stock Ownership Requirements
Alignment with shareholder interests is reinforced through meaningful stock ownership requirements among the NEOs. In 2015,order to help ensure that our NEOs maintain a meaningful ownership stake, the total long-term incentive guideline usedCompensation Committee has adopted the ownership requirements related to make awards was common shares outlined below:
NEO | Required Ownership |
CEO | 5.0x |
Other NEOs | 3.0x |
NEOs havefive timesyears from the 2014 base salarydate they become a NEO to comply with these guidelines as of December 31, 2022. All of our NEOs were either in compliance with their required ownership level or were still within the five-year compliance window for Mr. Demshur and three and three quarters times their 2014 base salary for both Messrs. Bergmark and Davis, with 80%position.
Clawback Policy
January 1, 2022, the Board adopted a clawback policy applicable to performance-based compensation paid to the Company’s executives. The policy applies to any current or former executive of the shares vesting if the Company's ROIC was in the top decile of the Comp Group at the end of the Performance Period and the remaining 20% vesting only if the Company's ROIC was the highest among the Comp Group at the end of the Performance Period. Based upon the actual performance results, the 2015 PSAP awards fully vested on Friday, December 29, 2017.
| Name of Executive | Amount of Award Subject to Top Decile Vesting Requirement for 80% of the Award (in Shares) | Amount of Award Subject to Top Performer Vesting Requirement for 20% of the Award (in Shares) | Total Award of 100% (in Shares) | |||
| David Demshur | 33,917 | 8,479 | 42,396 | |||
| Richard Bergmark | 13,606 | 3,402 | 17,008 | |||
| Monty Davis | 13,606 | 3,402 | 17,008 | |||
| Name of Executive | Target Award (in Shares) | Amount to vest if CLB in Top 50th Percentile of ROIC at end of 2017 Performance Period (in Shares) | Additional amount to vest if CLB in Top 75th Percentile of ROIC at end of 2017 Performance Period (in Shares) | Additional amount to vest if CLB is Top Performer of ROIC at end of 2017 Performance Period (in Shares) | Maximum possible award of 150% (in shares) | |||||
| David Demshur | 39,400 | 19,700 | 19,700 | 19,700 | 59,100 | |||||
| Richard Bergmark | 15,804 | 7,902 | 7,902 | 7,902 | 23,706 | |||||
| Monty Davis | 15,804 | 7,902 | 7,902 | 7,902 | 23,706 | |||||
| Name of Executive | Target Award (in Shares) | Amount to vest if CLB in Top 50th Percentile of ROIC at end of 2017 Performance Period (in Shares) | Additional amount to vest if CLB in Top 75th Percentile of ROIC at end of 2017 Performance Period (in Shares) | Additional amount to vest if CLB is Top Performer of ROIC at end of 2017 Performance Period (in Shares) | Maximum possible award of 150% (in shares) | |||||
| David Demshur | 42,038 | 21,019 | 21,019 | 21,019 | 63,057 | |||||
| Richard Bergmark | 16,864 | 8,432 | 8,432 | 8,432 | 25,296 | |||||
| Monty Davis | 16,864 | 8,432 | 8,432 | 8,432 | 25,296 | |||||
Under the policy, if the Company is required to prepare an accounting restatement of its financial statements due to the Company’s material noncompliance with any financial reporting requirement under the securities laws and such changenoncompliance is attributable, in control.
Securities Trading Policy
We prohibit officers, directors and certain other managers from trading our securities on the basis of material, non-public information or "tipping"“tipping” others who may so trade on such information and from trading in our securities without obtaining prior approval from our General Counsel. If a manager or officer does not have inside information that is material to the business, such officer or manager may trade immediately following quarterly earnings press releases during an Allowed Trading Window.open trading window. Any exceptions must be requested in writing and signed by our Chief Executive Officer, Chief Operating Officer, Chief Financial Officer or our General Counsel. Core LabThe Company’s stock may not be margined and, further,placed on margin. Moreover, any derivative transaction which effectively shifts the economic
35
unless approved by the Compensation Committee.
Health and Welfare Benefits
We offer a standard range of health and welfare benefits to all employees, including our NEOs. These benefits include medical, prescription drug, and dental coverages, life insurance, accidental death and dismemberment, long-term disability insurance and flexible spending accounts. Our plans do not discriminate in favor of our NEOs.
401(k)
We offer a defined contribution 401(k) plan to substantially all of our employees in the United States. We provide this plan to assist our employees in saving some amount of their cash compensation for retirement in a tax efficient manner. Participants may contribute up to 60% of their base and cash incentive compensation, subject to the current limits under the IRS Code. We provide safe harbor matching contributions under this plan up to the first 4% of the participant'sparticipant’s compensation and may make additional discretionary contributions. For plan year 2017, dueAs of June 1, 2020, the safe harbor matching and discretionary contributions were suspended. On April 1, 2022, we reinstated one-half (equivalent to the oil and gas sector market conditions, we determined that we would not make a discretionary contribution to2%) of the 401(k) plan for any eligible employee, including our NEOs.
Deferred Compensation Plan
Through our subsidiary, Core Laboratories LP, we have adopted a nonqualified deferred compensation plan that permits certain employees, including our NEOs, to elect to defer all or a part of their cash compensation (base, annual incentives and/or commissions) from us until the termination of their status as an employee. Participating employees are eligible to receive a matching deferral under the nonqualified deferred compensation plan that compensates them for contributions they could not receive from us under the 401(k) plan due to the various limits imposed on 401(k) plans by the U.S. federal income tax laws.
Discretionary employer contributions may also be made on behalf of participants in the plan and are subject to discretionary vesting schedules determined at the time of such contributions. Vesting in employer contributions is accelerated upon the death or disability of the participant or a change in control. EmployerDiscretionary employer contributions under the plan are forfeited upon a participant'sparticipant’s termination of employment to the extent they are not vested at that time.
Other Perquisites and Personal Benefits
We do not offer any perquisites or other personal benefits to any executive with a value over $10,000 beyond those discussed within this proxy and specifically in the table "Summary“Summary Compensation for the Years Ended December 31, 2015, 20162020, 2021 and 2017"2022” and its footnote (3) on page 33 ofthe supplemental table titled “All Other Compensation from Summary Compensation Table” within this proxy statement.
We believe in the importance of providing attractive intangible benefits to all employees such as open and honest communications, ethical business practices, and a safe work environment.
Deductibility of Compensation Over $1 Million
Section 162(m) of the Internal Revenue Code generally limits the amount of compensation that may be deducted per covered employee to $1 million per taxable year. For 2017 and prior years, covered employeesA “covered employee” for this purpose included our Chief Executive Officer and the three next most highly compensated executive officers (other than the Chief Financial Officer) required to be reported as named executive officers, although any compensation that met the requirementspurposes of qualified performance-based compensation under Section 162(m) was not subject to this deduction limitation. Following the enactment of the Tax Cuts and Jobs Act, beginning with the 2018 calendar year, the $1 million annual deduction limitation applies to
36
Employment Agreements and Change in Control Agreements | ||||
The employment agreements with our three NEOsMessrs. Bruno and Hill, Ms. Gresham and Mr. Tattoli remain in effect for and generally provide for severance compensation to ensure they will perform their rolesbe paid if the employment of these individuals is terminated under certain conditions. Effective October 18, 2021, the employment agreements for an extended period of time.Messrs. Bruno and Hill and Ms. Gresham were amended and restated, and we entered into the employment agreement with Mr. Tattoli effective the same date. These agreements, as amended where applicable, are described in greater detail in "Information“Information About Our Named Executive Officers and Executive Compensation -– Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table -– Employment Agreements." These agreements provide for severance compensation to be paid if the employment of the NEOs is terminated under certain conditions, such as following a change in control, termination by our NEOs for any reason or termination by us for any reason other than upon their death or disability, for "cause" or upon a material breach of a material provision of his employment agreement (as defined in the employment agreements).
Change in Control
As part of our normal course of business, we engage in discussions with other companies about possible collaborations and/or other ways in which the companies may work together to further our respective long-term objectives. In addition, many larger, established companies consider companies at similar stages of development to ours as potential acquisition targets. In certain scenarios, the potential for a merger or being acquired may be in the best interests of our shareholders.stakeholders. We provide severance compensation if an executive'scertain of our executives’ employment is terminated following a change in control transaction to promote the ability of our senior executives to act in the best interests of our shareholdersstakeholders even though their employment could be terminated as a result of the transaction.
Termination Without Cause
If we terminate the employment of ana NEO without cause as defined in thetheir applicable agreement,agreements, we arewould be obligated to continue to pay him or her certain amounts as described in greater detail in "Potential“Potential Payments Upon Termination or Change in Control."” We believe these payments are appropriate because the terminated executive is bound by confidentiality, non-solicitation and non-compete provisions covering the two yeartwo-year period immediately following termination of service and because the Company and each executive have mutually agreed to a severance package that is in place prior to any termination event. This provides us with more flexibility to make a change in senior management if such a change is in our best interests and the best interests of the Company and our shareholders.
37
INFORMATION ABOUT OUR NAMED EXECUTIVE OFFICERS AND EXECUTIVE COMPENSATION
Named Executive Officers | ||||
As of December 31, 2017,2022, our NEOs consisted of Messrs. Demshur, BergmarkBruno and Davis. Biographical information regarding Messrs. DemshurHill, Ms. Gresham and Bergmark can be found in "Information About Our Supervisory Directors and Director Compensation - Board of Supervisory Directors."Mr. Tattoli. The following biography describes the business experience of Messrs. Bruno and Hill, Ms. Gresham and Mr. Davis. Our NEOs are not Managing Directors of our Company for purposes of Dutch law.
Mr. Davis,Bruno, who is 63 years of age, joined Western Atlas International in 1977, holding various management positions including Atlas Wireline Division Financial Controller for Europe, Africa and the Middle East from 1983 to 1987, Core Laboratories Division Vicebecame President of Finance from 1987 to 1991, and Atlas Wireline Division Vice President of Finance and Administration from 1991 to 1993. In 1993, Mr. Davis left Western Atlas International and joined Bovar Inc. of Calgary, Canada, an environmental waste disposal company, as Chief Financial Officer. From 1994 to 1995 he served as Chief Operating Officer and from 1995 to 1998 he served as President and Chief Executive Officer of Bovar Inc. Mr. Davis rejoined ourthe Company as Senior Vice President in 1998, and in 1999 was promoted to Chief Operating Officer, the position he currently holds.
Mr. Hill, who is 53 years of age, has been with the Company for over sixteen years, most recently as Chief Financial Officer, since May 24, 2018, after serving as Vice President, Chief Accounting Officer from May 2015 to May 2018. Since joining the identificationCompany in October 2006, Mr. Hill led the Company’s Investor Relations effort, was Corporate Group Controller based in Amsterdam, and was Controller of our NEOsFinancial Reporting. Prior to joining the Company, he worked at Halliburton from August 2000 to October 2006 as Controller – Energy & Chemicals of the KBR Division and Corporate Director of Training and Accounting Research. Mr. Hill a CPA worked at Ernst & Young from January 1993 until August 2000, where he held the position of Manager his last three years there. Mr. Hill has a B.B.A. in Accounting from Texas A&M University, and an M.B.A. degree from Rice University.
Ms. Gresham, who is made55 years of age, has been with the Company for over sixteen years. Since 2016 Ms. Gresham has served as Senior Vice President, Corporate Development and Investor Relations, leading the Company’s Sustainability, Investor Relations, Risk Management, and Human Resources functions. Since joining the Company in October 2006, Ms. Gresham led the Company’s Human Resources and Sustainability efforts, as Corporate Vice President based in Amsterdam from 2013 to 2016 and Director of December 31, 2017, thereforeU.S. Human Resources from 2006 to 2013. Prior to joining the information within the CD&Acompany, Ms. Gresham worked at Texas Children’s Hospital Integrated Delivery System and the tables below will focusUniversity of Texas MD Anderson as Assistant Director of Leadership Development and Director of Human Resources, respectively. Ms. Gresham has a B.S in Business from Lubbock Christian University and an M.B.A. from Texas Women’s University.
Mr. Tattoli, who is 51 years of age, has been with the Company for over ten years, most recently as Senior Vice President, Secretary and General Counsel, since July 1, 2021, after serving as Assistant General Counsel since November 2012. Mr. Tattoli oversees all aspects of the Company’s legal and compliance matters. Mr. Tattoli has 20 years of industry experience acting as in-house counsel and outside counsel for companies in the petroleum industry across all sectors, including upstream, midstream and downstream. Prior to joining the Company, he worked in private practice initially with the law firm of Haynes & Boone LLP in its Austin and Houston, Texas offices, and most recently as a partner at the law firm of Buchanan, Ingersoll and Rooney PC in Pittsburgh, Pennsylvania. While in private practice, Mr. Tattoli advised public and private clients on mergers and acquisitions, joint venture formation and structuring, debt and equity securities offerings, and general corporate governance and transactional matters. Mr. Tattoli has a B.S. in Chemical Engineering from the three individuals designated as our NEOs forUniversity of Notre Dame, and J.D. and M.B.A. degrees from the 2017 year.
38
Summary Compensation | ||||
The following table summarizes, with respect to our Chief Executive Officer and each of our other NEOs as of December 31, 2017,2022, information relating to the compensation earned for services rendered to the Company in all capacities during fiscal years 2015, 2016,2020, 2021, and 2017:
Summary Compensation
for the Years Ended December 31, 2015, 20162020, 2021 and 2017
Name of Executive |
| Year |
| Salary (1) |
|
| Stock |
|
| Non-Equity |
|
| Change in Post- |
|
| All Other |
|
| Total |
| ||||||
Lawrence Bruno |
| 2022 |
|
| 820,000 |
|
|
| 4,873,523 |
|
|
| 527,143 |
|
|
| — |
|
|
| 185,730 |
|
|
| 6,406,396 |
|
Chairman, President and |
| 2021 |
|
| 820,000 |
|
|
| 4,939,861 |
|
|
| 459,889 |
|
|
| — |
|
|
| 328,380 |
|
|
| 6,548,130 |
|
Chief Executive Officer |
| 2020 |
|
| 820,000 |
|
|
| 4,257,913 |
|
|
| — |
|
|
| — |
|
|
| 367,131 |
|
|
| 5,445,044 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Christopher S. Hill |
| 2022 |
|
| 430,000 |
|
|
| 1,653,626 |
|
|
| 207,322 |
|
|
| — |
|
|
| 44,700 |
|
|
| 2,335,648 |
|
Senior Vice President, and |
| 2021 |
|
| 430,000 |
|
|
| 1,780,872 |
|
|
| 180,871 |
|
|
| — |
|
|
| 91,782 |
|
|
| 2,483,525 |
|
Chief Financial Officer |
| 2020 |
|
| 430,000 |
|
|
| 1,479,243 |
|
|
| — |
|
|
| — |
|
|
| 118,029 |
|
|
| 2,027,272 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Gwendolyn Y. Gresham (6) |
| 2022 |
|
| 370,000 |
|
|
| 672,680 |
|
|
| 154,607 |
|
|
| — |
|
|
| 39,677 |
|
|
| 1,236,963 |
|
Senior Vice President, Corporate Development and Investor Relations |
| 2021 |
|
| 370,000 |
|
|
| 724,414 |
|
|
| 134,882 |
|
|
| — |
|
|
| 74,162 |
|
|
| 1,303,458 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Mark D. Tattoli (6) |
| 2022 |
|
| 370,000 |
|
|
| 672,680 |
|
|
| 154,607 |
|
|
| — |
|
|
| 37,834 |
|
|
| 1,235,121 |
|
Senior Vice President, Secretary and General Counsel |
| 2021 |
|
| 350,000 |
|
|
| 290,979 |
|
|
| 73,796 |
|
|
| — |
|
|
| 35,106 |
|
|
| 749,881 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
David M. Demshur (7) |
| 2020 |
|
| 1,040,000 |
|
|
| 6,750,425 |
|
|
| — |
|
|
| 708,000 |
|
|
| 4,033,189 |
|
|
| 12,531,614 |
|
Former Chairman, Chief Executive Officer and Director |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Name of Executive and Principal Position | Year | Salary ($) | Stock Awards ($) (1) | Non-Equity Incentive Plan Compensation Paid ($) (2) | Non-Equity Incentive Plan Compensation Not Paid ($) (2) | Change in Post-employment Benefit Value and Nonqualified Deferred Compensation Earnings ($) (3) | All Other Compensation ($) (4) | Total ($) | Total Excluding Non-Equity Incentive Plan Compensation Not Paid ($) (5) | |
| David M. Demshur | 2017 | 979,479 | 6,547,689 | — | 1,670,011 | (263,000) | 39,025 | 8,973,204 | 7,303,193 | |
| President and Chief Executive Officer | 2016 | 951,000 | 5,072,681 | — | 1,759,122 | 178,000 | 43,292 | 8,004,095 | 6,244,973 | |
| 2015 | 951,000 | 3,964,123 | 1,516,845 | — | 109,000 | 44,738 | 6,585,706 | 6,585,706 | ||
| Richard L. Bergmark | 2017 | 523,881 | 2,626,388 | — | 609,011 | (239,000) | 15,814 | 3,536,094 | 2,927,083 | |
| Executive Vice President, and Chief Financial Officer | 2016 | 508,600 | 2,035,007 | — | 641,446 | 174,000 | 28,958 | 3,388,011 | 2,746,565 | |
| 2015 | 508,600 | 1,590,208 | 553,103 | — | 112,000 | 21,155 | 2,785,066 | 2,785,066 | ||
| Monty L. Davis | 2017 | 523,881 | 2,626,388 | — | 609,011 | (158,000) | 20,987 | 3,622,267 | 3,013,256 | |
| Senior Vice President and Chief Operating Officer | 2016 | 508,600 | 2,035,007 | 641,446 | 106,000 | 47,736 | 3,338,789 | 2,697,343 | ||
| 2015 | 508,600 | 1,590,208 | 553,103 | — | 48,000 | 25,672 | 2,725,583 | 2,725,583 | ||
(5) All Other |
from Summary Compensation Table.”
39
All Other Compensation from Summary Compensation Table | ||||
The following table contains a breakdown of the compensation and benefits included under All Other Compensation in the Summary Compensation table above.
Name of Executive |
| Year |
| Core 401(k) |
|
| Non-Qualified |
|
| Company-Owned |
|
| All Other |
| ||||
Lawrence Bruno |
| 2022 |
|
| 476 |
|
|
| 184,823 |
|
|
| 431 |
|
|
| 185,730 |
|
Christopher S. Hill |
| 2022 |
|
| 1,558 |
|
|
| 43,000 |
|
|
| 142 |
|
|
| 44,700 |
|
Gwendolyn Y. Gresham |
| 2022 |
|
| 2,492 |
|
|
| 37,000 |
|
|
| 185 |
|
|
| 39,677 |
|
Mark D. Tattoli |
| 2022 |
|
| 2,720 |
|
|
| 35,000 |
|
|
| 114 |
|
|
| 37,834 |
|
| Name of Executive | Year | Core 401(k) Contributions ($) (1) | Non-Qualified Deferred Compensation: Registrant Contributions in 2017 | Core 401(k) Discretionary Contributions ($) (2) | Company-Owned Life Insurance ($) (3) | All Other Compensation Total ($) | ||||||
| David M. Demshur | 2017 | 10,800 | 28,007 | — | 218 | 39,025 | ||||||
| 2016 | 10,600 | 27,438 | 5,040 | 214 | 43,292 | |||||||
| 2015 | 10,600 | 28,901 | 5,042 | 195 | 44,738 | |||||||
| Richard L. Bergmark | 2017 | 10,395 | 5,171 | — | 248 | 15,814 | ||||||
| 2016 | 10,600 | 13,075 | 5,040 | 243 | 28,958 | |||||||
| 2015 | 10,306 | 5,587 | 5,042 | 220 | 21,155 | |||||||
| Monty L. Davis | 2017 | 8,051 | 12,704 | — | 232 | 20,987 | ||||||
| 2016 | 10,600 | 31,869 | 5,040 | 227 | 47,736 | |||||||
| 2015 | 10,600 | 9,823 | 5,042 | 207 | 25,672 | |||||||
Grants of Plan-Based Awards | ||||
A total of 92,608205,836 performance shares of plan-based awards at the target level were awarded to our Chief Executive Officer and the two other NEOs in 20172022 under the PSAP.
The following table provides information concerning each grant of an award made to our Chief Executive Officer and each of our other NEOs in 20172022 under the PSAPCompany’s Long-Term Incentive Plan and our annual cash incentive plan.
Grants of Plan-Based Awards for the Year Ended December 31, 2017
|
|
|
|
|
| Estimated Future Payouts Under |
|
| Estimated Future Payouts Under |
|
| Grant Date |
| |||||||||||||||
Name of Executive |
| Grant Date |
| Approval Date |
| Target |
|
| Maximum |
|
| Threshold |
|
| Target |
|
| Maximum |
|
| Awards (2) |
| ||||||
Lawrence Bruno |
|
|
|
|
|
| 820,000 |
|
|
| 1,640,000 |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
| 2/17/2022 |
| 2/15/2022 |
|
|
|
|
|
|
|
| 63,712 |
|
|
| 127,424 |
|
|
| 191,136 |
|
|
| 4,873,523 |
| |||
Christopher S. Hill |
|
|
|
|
|
| 322,500 |
|
|
| 645,000 |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
| 2/17/2022 |
| 2/15/2022 |
|
|
|
|
|
|
|
| 21,618 |
|
|
| 43,236 |
|
|
| 64,854 |
|
|
| 1,653,626 |
| |||
Gwendolyn Y. Gresham |
|
|
|
|
|
| 277,500 |
|
|
| 481,000 |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
| 2/17/2022 |
| 2/15/2022 |
|
|
|
|
|
|
|
| 8,794 |
|
|
| 17,588 |
|
|
| 26,382 |
|
|
| 672,680 |
| |||
Mark D. Tattoli |
|
|
|
|
|
| 277,500 |
|
|
| 481,000 |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
| 2/17/2022 |
| 2/15/2022 |
|
|
|
|
|
|
|
| 8,794 |
|
|
| 17,588 |
|
|
| 26,382 |
|
|
| 672,680 |
| ||
Estimated Future Payouts Under Non-Equity Incentive Plan Awards | Estimated Future Payouts Under Equity Incentive Plan Awards | Grant Date Fair Value of Stock and Option Awards ($) | |||||||||||||||||||||||
| Name of Executive | Grant Date | Approval Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | |||||||||||||||||
| David M. Demshur | — | 1,077,427 | 2,154,854 | ||||||||||||||||||||||
| 2/14/2017 | 1/23/2017 | — | 39,400 | 59,100 | 4,755,186 | ||||||||||||||||||||
| Richard L. Bergmark | — | 392,911 | 785,822 | ||||||||||||||||||||||
| 2/14/2017 | 1/23/2017 | — | 15,804 | 23,706 | 1,907,385 | ||||||||||||||||||||
| Monty L. Davis | — | 392,911 | 785,822 | ||||||||||||||||||||||
| 2/14/2017 | 1/23/2017 | — | 15,804 | 23,706 | 1,907,385 | ||||||||||||||||||||
40
The following is a discussion of material factors necessary to an understanding of the information disclosed in the Summary Compensation Table.
Employment Agreements
The information below describes the employment agreements that we maintained with Messrs. Bruno, Hill and Tattoli, and Ms. Gresham during the 2022 year, including any amendments that were made effective during the 2022 year, as applicable.
Lawrence Bruno
Mr. DemshurBruno serves as ourPresident and Chief Executive Officer and previously served as our Presidentof the Company effective from May 20, 2020, pursuant to an employment agreement entered into on AugustMarch 1, 1998, as2019 and subsequently amended and restated effective as of December 31, 2007.October 15, 2021. Unless either partythe Company or Mr. Bruno gives notice to terminate the agreement, the agreement will automatically renew each year on the anniversary of the effective date for a successive three-yearone-year term. Mr. Demshur'sBruno’s employment agreement as amended, entitles him to an initiala base salary of $420,000,$820,000 per year, subject to increase at the discretion of the Compensation Committee, and the opportunity to earn a yearlyan annual bonus of up to 220%200% of his then currentthen-current annual base salary dependent upon his reaching certain performance objectives established by the Compensation Committee and described above under "Compensation“Compensation Discussion and Analysis -– Elements of Compensation -– Non-Equity Incentive Compensation."” The employment agreement provides thatallows Mr. Demshur is entitledBruno to participate in all of our benefit plans and programs that are generally available to our other executive employees.
Christopher S. Hill
Mr. BergmarkHill serves as our Senior Vice President and Chief Financial Officer and Executive Vice President pursuant to an employment agreement entered into on AugustMarch 1, 1998, as2019 and subsequently amended and restated effective as of December 31, 2007.October 15, 2021. Unless either partythe Company or Mr. Hill gives notice to terminate the agreement, the agreement will automatically renew each year on the anniversary of the effective date for a successive three-yearone-year term. Mr. Bergmark'sHill’s employment agreement as amended, entitles him to an initiala base salary of $236,250,$430,000 per year, subject to increase at the discretion of the Compensation Committee, and the opportunity to earn a yearlyan annual bonus of up to 150% of his then currentthen-current annual base salary dependent upon his reaching certain performance objectives established by the Compensation Committee and described above under "Compensation“Compensation Discussion and Analysis -– Elements of Compensation -– Non-Equity Incentive Compensation."” The employment agreement provides thatallows Mr. Bergmark is entitledHill to participate in all of our benefit plans and programs that are generally available to our other executive employees. As disclosed above under "Compensation Discussion and Analysis - Introduction", Mr. Bergmark will retire from his role as our Chief Financial Officer, effective at the conclusion of the 2018 annual meeting of shareholders. Mr. Bergmark intends to remain in his role as Executive Vice President until he retires from the Company on December 31, 2018.
Gwendolyn Y. Gresham
Ms. Gresham serves as our Chief Operating OfficerSenior Vice President, Corporate Development and Investor Relations pursuant to an employment agreement entered into on AugustMarch 1, 1998, as2019 and subsequently amended and restated effective as of December 31, 2007.October 15, 2021. Unless either partythe Company or Ms. Gresham gives notice to terminate the agreement, the agreement will automatically renew each year on the anniversary of the effective date for a successive three-yearone-year term. Mr. Davis'Ms. Gresham’s employment agreement as amended, entitles himher to an initiala base salary of $231,000,$370,000 per year, subject to increase at the discretion of the Compensation Committee, and the opportunity to earn a yearlyan annual bonus of up to 150%130% of his then currenther then-current annual base salary dependent upon hisher reaching certain performance objectives established by the Compensation Committee and described above under "Compensation“Compensation Discussion and Analysis -– Elements of Compensation -– Non-Equity Incentive Compensation."” The employment agreement provides that Mr. Davis is entitledallows Ms. Gresham to participate in all of our benefit plans and programs that are generally available to our other executive employees.
Mark D. Tattoli
Mr. Tattoli serves as our Senior Vice President, Secretary and General Counsel pursuant to employees, other than the NEOs, under the PSAP. Subject to continued employment with us, these shares would vest only upon our ROIC being in the top decile of the Comp Group as published by Bloomberg at the end of the three-year Performance Period which ended on the last NYSE trading day in 2017, Friday, December 29, 2017. For the NEOs, we granted 79,455 shares under the PSAP. Subject to continued employment with us, rights conferred by an employment agreement entered into effective as of October 15, 2021. Unless either the Company or Mr. Tattoli gives notice to terminate the award agreement, or upon death or disability, 80% of these shares would vest only upon our ROIC being in the top decileagreement will automatically renew each year on the anniversary of the Comp Groupeffective date for a successive one-year term. Mr. Tattoli’s employment agreement entitles him to a base salary of $370,000 per year, subject to increase at the discretion of the Compensation Committee, and the final 20% would vest onlyopportunity to earn an annual bonus of up to 130% of his then-current annual base salary dependent upon our ROIC being athim reaching certain performance objectives established by the topCompensation Committee and described above under “Compensation Discussion and Analysis – Elements of the Comp Group as published by Bloomberg at the end of the three-year Performance Period on December 29, 2017. Vesting would occur to the extent the performance criteria were met at the end of a Performance Period. Based upon the actual performance results, the 2015 PSAP awards fully vested on December 29, 2017.
41
Outstanding Equity Awards at Fiscal Year End | ||||
The following table provides information concerning stock that has not vested and equity incentive plan awards for our Chief Executive Officer and each of our other NEOs as of the end of our last completed fiscal year. None of our NEOs held unexercised options as of the end of our last completed fiscal year.
Outstanding Equity Awards
at December 31, 2017
|
| Performance Share Award Program |
|
| Restricted Share Award Program |
| ||||||||||
Name of Executive |
| Equity and Incentive Plan Awards: Number of Shares or Units of Stock That Have Not Vested (1) (#) |
|
| Equity and Incentive Plan Awards: Market Value of Shares or Units of Stock That Have Not Vested (2) ($) |
|
| Equity and Incentive Plan Awards: Number of Shares or Units of Stock That Have Not Vested (1) (#) |
|
| Equity and Incentive Plan Awards: Market Value of Shares or Units of Stock That Have Not Vested (2) ($) |
| ||||
Lawrence Bruno |
|
| 332,394 |
|
|
| 6,737,626 |
|
|
| — |
|
|
| — |
|
Christopher S. Hill |
|
| 115,779 |
|
|
| 2,346,840 |
|
|
| — |
|
|
| — |
|
Gwendolyn Y. Gresham |
|
| 47,097 |
|
|
| 954,656 |
|
|
| — |
|
|
| — |
|
Mark D. Tattoli |
|
| 33,282 |
|
|
| 674,626 |
|
|
| 6,050 |
|
|
| 122,634 |
|
| Name of Executive | Award Year | Vesting Date | Equity and Incentive Plan Awards: Number of Shares or Units of Stock That Have Not Vested (#) | Equity and Incentive Plan Awards: Market Value of Shares or Units of Stock That Have Not Vested (1) ($) | ||||
| David M. Demshur | 2017 | December 31, 2019 | 59,100 | 6,474,405 | ||||
| 2016 | December 31, 2018 | 52,995 | 5,805,602 | |||||
| Richard L. Bergmark | 2017 | December 31, 2019 | 23,706 | 2,596,992 | ||||
| 2016 | December 31, 2018 | 21,260 | 2,329,033 | |||||
| Monty L. Davis | 2017 | December 31, 2019 | 23,706 | 2,596,992 | ||||
| 2016 | December 31, 2018 | 21,260 | 2,329,033 | |||||
Vesting Schedule for Unvested PSAPs
|
|
|
|
|
| Vesting Schedule at Target |
| |||||
Name of Executive |
| Type of Award |
| Grant Date |
| 2023 |
|
| 2024 |
| ||
Lawrence Bruno |
| PSAP |
| February 19, 2021 |
|
| 141,258 |
|
|
| — |
|
|
|
|
| February 17, 2022 |
|
| — |
|
|
| 191,136 |
|
Christopher S. Hill |
| PSAP |
| February 19, 2021 |
|
| 50,925 |
|
|
| — |
|
|
|
|
| February 17, 2022 |
|
| — |
|
|
| 64,854 |
|
Gwendolyn Y. Gresham |
| PSAP |
| February 19, 2021 |
|
| 20,715 |
|
|
| — |
|
|
|
|
| February 17, 2022 |
|
| — |
|
|
| 26,382 |
|
Mark D. Tattoli |
| PSAP |
| February 19, 2021 |
|
| 6,900 |
|
|
| — |
|
|
|
|
| February 17, 2022 |
|
| — |
|
|
| 26,382 |
|
Vesting Schedule for Unvested RSAPs
|
|
|
|
|
|
|
| |||||||||||||||||
Name of Executive |
| Type of Award |
| Grant Date |
| 2023 |
|
| 2024 |
|
| 2025 |
|
| 2026 |
|
| 2027 |
| |||||
Mark D. Tattoli |
| RSAP |
| December 1, 2017 |
|
| 160 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
|
|
| August 1, 2018 |
|
| 120 |
|
|
| 120 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
|
|
| May 1, 2019 |
|
| 200 |
|
|
| 200 |
|
|
| 200 |
|
|
| — |
|
|
| — |
|
|
|
|
| May 1, 2020 |
|
| 250 |
|
|
| 250 |
|
|
| 250 |
|
|
| 250 |
|
|
| — |
|
|
|
|
| October 1, 2020 |
|
| 700 |
|
|
| 700 |
|
|
| 700 |
|
|
| 700 |
|
|
| — |
|
|
|
|
| August 1, 2021 |
|
| 250 |
|
|
| 250 |
|
|
| 250 |
|
|
| 250 |
|
|
| 250 |
|
The following table provides information concerning each vesting of stock, including restricted stock, restricted stock units and similar instruments during the last completed fiscal year on an aggregated basis with respect to each of our NEOs.
Stock Vested
for the Year Ended December 31, 2017
| Stock Awards | ||||
| Name of Executive | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | ||
| David M. Demshur | 44,085 | 4,829,512 | ||
| Richard L. Bergmark | 17,685 | 1,937,392 | ||
| Monty L. Davis | 17,685 | 1,937,392 | ||
42
|
| Stock Awards |
| |||||
Name of Executive |
| Number of Shares |
|
| Value Realized |
| ||
Lawrence Bruno |
|
| 91,212 |
|
|
| 1,848,867 |
|
Christopher S. Hill |
|
| 31,688 |
|
|
| 642,316 |
|
Gwendolyn Y. Gresham |
|
| 12,000 |
|
|
| 243,240 |
|
Mark D. Tattoli |
|
| 1,790 |
|
|
| 34,270 |
|
| Name of Executive | Plan Name | Number of Years Credited Service (#) | Present Value of Accumulated Benefit ($) | Payments During 2017 ($) | ||||
| David M. Demshur | Group SERP | N/A | 4,228,000 | — | ||||
| Richard L. Bergmark | Group SERP | N/A | 4,327,000 | — | ||||
| Monty L. Davis | Individual SERP | 25 | 2,534,000 | — | ||||
Nonqualified Deferred Compensation Plan | ||||
The following table provides information relating to our NEOs'NEOs’ benefits in our nonqualified deferred compensation plans, including, with respect to each NEO, the aggregate contributions made by such NEO during the year ended December 31, 2017,2022, the aggregate contributions made by the companyCompany during the year ended December 31, 2017,2022 on behalf of the NEO, the aggregate interest or other earnings accrued during the year ended December 31, 2017,2022, the aggregate value of withdrawals and distributions to the NEO during the year ended December 31, 20172022, and the balance of each account as of December 31, 2017.
Nonqualified Deferred Compensation
for the Year Ended December 31, 2017
Name of Executive |
| Aggregate |
|
| Executive |
|
| Company |
|
| Aggregate |
|
| Aggregate |
|
| Aggregate |
| ||||||
Lawrence Bruno |
|
| 1,711,441 |
|
|
| 173,060 |
|
|
| 184,823 |
|
|
| (317,498 | ) |
|
| — |
|
|
| 1,751,826 |
|
Christopher S. Hill |
|
| 843,198 |
|
|
| — |
|
|
| 43,000 |
|
|
| (206,925 | ) |
|
| — |
|
|
| 679,273 |
|
Gwendolyn Y. Gresham |
|
| 276,327 |
|
|
| — |
|
|
| 37,000 |
|
|
| 4,302 |
|
|
| — |
|
|
| 317,629 |
|
Mark D. Tattoli |
|
| 369,718 |
|
|
| — |
|
|
| 35,000 |
|
|
| (105,564 | ) |
|
| — |
|
|
| 299,154 |
|
| Executive Contributions in 2017 (1) | Registrant Contributions in 2017 (2) | Aggregate Earnings (Losses) in 2017 (3) | Aggregate Withdrawals/(Distributions) | Aggregate Balance at December 31, 2017 (4) | ||||||
| Name of Executive | ($) | ($) | ($) | ($) | ($) | |||||
| David M. Demshur | 115,344 | 28,007 | 2,478,225 | — | 9,774,784 | |||||
| Richard L. Bergmark | 13,219 | 5,171 | 237,938 | — | 1,223,704 | |||||
| Monty L. Davis | 77,832 | 12,704 | 313,234 | — | 3,423,157 | |||||
| (1) Executive contributions have always been included in the Summary Compensation table in the Salary column | ||||||||||
| (2) Registration contributions are included in the Summary Compensation table in the All Other Compensation column for 2017 | ||||||||||
| (3) Aggregate earnings are not at above-market interest rates for 2017 | ||||||||||
| (4) Prior to 2014, Registrant Contributions were not included but all Executive Contributions were included in Summary Compensation | ||||||||||
Since 2006, the Company has made certain matching contributions on participant salary reduction deferrals to our nonqualified deferred compensation plan. The plan also provides for employer contributions equal in amount to certain forfeitures of, and/or reductions in, employer contributions that participants could have received under our 401(k) plan in the absence of certain limitations imposed by the IRS Code. Distributions of a participant'sparticipant’s plan benefits can only be made under certain prescribed circumstances, such as termination of employment or upon a specified date as elected by the participant. In the event of a termination of employment (other than by death or disability) of a "key“key employee,"” distributions must be delayed for six months. A participant'sparticipant’s plan benefits include the participant'sparticipant’s deferrals, the vested portion of the employer'semployer’s contributions, and deemed investment gains and losses on such amounts. In the case of a participant who dies while employed with the Company, an additional $50,000 life insurance benefit will also be paid under the nonqualified deferred compensation plan to the participant'sparticipant’s beneficiary. The plan was amended in 2008 to comply with the American Jobs Creation Act of 2004 to reflect certain statutorily mandated requirements applicable to the plan. For additional information, see "Components“Components of Executive Compensation -– Deferred Compensation Plan."
Potential Payments Upon Termination or Change in Control | ||||
We have entered into certain agreements and maintain certain plans that will require us to provide compensation and/or benefits to our NEOs in the event of a termination of employment or a change in control of the Company. The terms described below are unique
Messrs. Bruno and Hill and Ms. Gresham entered into their respective employment agreements on March 1, 2019, as amended and restated on October 18, 2021, and each could receive potential benefits pursuant to those agreements at termination or upon the three NEOs and were first put into place in 1998 and are not terms that have been granted to any other executive since then or would be granted to any future executive with the Company.occurrence of certain events. The compensation and benefits described belowin the tables beginning on page 46 assume that
43
any termination of employment for Messrs. Bruno or Hill, or Ms. Gresham, was effective as of December 31, 2017,2022, and thus includes amounts earned through that date.
Mr. Tattoli entered into his employment agreement on October 18, 2021, and could receive potential benefits pursuant to that agreement at termination or upon the occurrence of certain events. The compensation and benefits described in the tables beginning on page 46 assume that any termination of employment for Mr. Tattoli was effective as of December 31, 2022, and thus includes amounts earned through that date.
The tables belowbeginning on page 46 provide estimates of the compensation and benefits that would be provided to the executivesapplicable NEOs upon their termination of employment;employment or a change in control; however, in the event of an executive'sNEO’s separation from the Company or a change in control event, any actual amounts will be determined based on the facts and circumstances in existence at that time.
Employment Agreements | ||||
The Demshur, BergmarkBruno, Hill, Gresham and DavisTattoli Employment Agreements
Effective October 15, 2021, we amended and Davis haverestated the 2019 employment agreements firstwith Messrs. Bruno and Hill and Ms. Gresham, and entered into an employment agreement with Mr. Tattoli (collectively the “2021 Employment Agreements”). These agreements are also described in 1998 which have included provisions governing“Information About Our Named Executive Officers and Executive Compensation – Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table – Employment Agreements.”
Pursuant to the paymentterms of severance benefits if employment isthe 2021 Employment Agreements, in the event that (A) any of the executives are terminated by the executive for any reason or by the Company for any reason other than (1) due to(i) death, (ii) Disability (as defined below), (iii) Cause (as defined below), or disability, (2) for cause, or (3)(iv) the executive'sexecutive’s material breach of a material provision of his or her 2021 Employment Agreement, (B) the executive terminates his or her employment agreement. In such event, our executive severance benefits will be comprised of:
(I) if such termination occurs at any reasontime other than within threetwo years following a changeChange in control,Control (as defined below):
(1) an amount equal to the sum of (a) a multiple of the executive’s annual base salary in effect immediately prior to the termination (such multiple being two (2) times for Mr. Bruno and one and one-half (1 ½) times for Mr. Hill, Ms. Gresham and Mr. Tattoli), plus (b) a pro-rata bonus calculated by multiplying the target incentive bonus amount for the year in which the termination occurs by the number of days during the applicable year that the executive will be entitledwas employed (the “Pro-Rata Bonus”) (together, the “Severance Payment”); and
(2) continued coverage under the Company’s medical, dental, and group life insurance plans for the executive, the executive’s spouse and the executive’s dependent children after termination at no cost to the same benefits described above except that certainexecutive for twenty-four (24) months for Mr. Bruno and eighteen (18) months for Mr. Hill, Ms. Gresham, and Mr. Tattoli, and thereafter, such coverage may be extended provided the executive pays the employee portion of the insurance premium; accelerated vesting of outstanding stock options shall remain exercisableequity awards, with the vesting of performance-based awards measured against performance criteria as of the most recent quarter-end; and reimbursement of up to $25,000 for the greateroutplacement services for a period of (i) one yeartwelve months following termination.
(II) if such termination or (ii) the period providedoccurs at any time within two years following a Change in the plan or plans pursuant to which such stock options were granted, and the lump-sum payment described in clause (a) above shall beControl (as defined below):
(1) an amount equal to threethe sum of (a) a multiple (three (3) for Mr. Bruno and two and one-half (2 ½) for Mr. Hill, Ms. Gresham and Mr. Tattoli) times the sum of:
(2) continued coverage under the Company’s medical, dental and group life insurance plans for the executive, executive’s spouse and the executive’s dependent children at no cost to the executive for thirty-six (36) months for Mr. Bruno and thirty (30)
44
months for Mr. Hill, Ms. Gresham and Mr. Tattoli, and thereafter, such coverage may be extended provided the executive pays the employee portion of the insurance premium; accelerated vesting of outstanding equity awards, with the vesting of performance-based awards measured against performance criteria as of the most recent quarter-end; and reimbursement of up to $25,000 for outplacement services for a period of twelve months following termination.
In the event that the payments and benefits received by an executive in connection with a Change in Control constitute “parachute payments” (as defined in Section 280G of the Code), the payments and benefits provided to that executive shall either be reduced to $1.00 below the amount that would subject the payments to excise taxes pursuant to Section 4999 of the Code, or (B) the highest annual bonus he receivedpaid in full, whichever will result in the three fiscal years ending priorbetter net tax position for the executive.
The 2021 Employment Agreements provide that any unvested contributions to the fiscal yearexecutives’ accounts with respect to our Nonqualified Deferred Compensation Plan would vest upon the executive reaching age 62 and would likewise immediately vest upon (i) termination of the executive’s employment due to death or Disability, (ii) non-renewal of the executive’s employment agreement with the Company, (iii) termination by the executive for Good Reason, or (iv) a Change in which occurredControl event. The 2021 Employment Agreements also provide that notwithstanding anything to the changecontrary within an individual award agreement, any restricted stock awards granted to the executive will not be forfeited upon the executive’s voluntary retirement on or after age 62. Additionally, the 2021 Employment Agreements provide benefits to each executive upon his or her voluntary retirement on or after age 62, consisting of continued coverage under the Company’s medical, dental, and group life insurance plans for the executive, the executive’s spouse and the executive’s dependent children after termination at no cost to the executive for twenty-four (24) months for Mr. Bruno and eighteen (18) months for Mr. Hill, Ms. Gresham, and Mr. Tattoli, and thereafter, such coverage may be extended provided the executive pays the employee portion of the insurance premium.
The Severance Payment or the Change in control.
The 2021 Employment Agreements contain customary confidentiality restrictions and impose noncompetition restrictions on the executives during their employment agreementsand for a period of two years following a termination of employment for any reason other than a termination by us without Cause or by the executive without Good Reason.
For purposes of the 2021 Employment Agreements, the terms below are generally use the following terms:
45
Nonqualified Deferred Compensation Plan
See the Nonqualified Deferred Compensation Table on page 43 and subsequent narrative discussion for a description of the benefits payable to the NEOs under the Nonqualified Deferred Compensation Plan upon death or separation from service and in connection with a change in control.
Equity Award Program
Awards under our PSAP and RSAP will vest in full (at target award) in the business conducted by the Company at any time during the period that he is employed by the Company and for the two-year period thereafter unless his employment with the Companyevent an NEO’s service is terminated by him for good reason of his or byher death or disability or upon the Company for cause. Notwithstanding,occurrence of a Change in Control. As of December 31, 2022, following the post-employment noncompetition and nonsolicitation restrictions terminate upon a change in controlvesting of the Company.
The tables below reflect the amount of compensation that would be payable to each of the named officersMessrs. Bruno, Hill, Ms. Gresham and Mr. Tattoli in various scenarios involving termination of the named officer'sNEO’s employment, including following a change in control. The amount of compensation payable to each named officerapplicable NEO upon voluntary termination, involuntary not-for-cause termination (non-change in control), voluntary termination for good cause or involuntary termination following a change in control, involuntary for cause termination, and termination in the event of death or disability of each named officerapplicable NEO is shown below. The amounts shown assume that the termination was effective on December 31, 20172022, and thus includes amounts earned through that time and are estimates of the amounts which would be paid out to the officersapplicable NEOs upon their termination. The amounts payable upon termination following a change in control
David M. Demshur | Voluntary Termination on 12/31/2017 ($) (1) | Early Retirement on 12/31/2017($) (1) | Involuntary Not For Cause Termination on 12/31/2017($) (1) | For Cause Termination on 12/31/2017($) | Termination related to Change-in-Control on 12/31/2017 ($) | Disability on 12/31/2017 ($) (1) | Death on 12/31/2017 ($) (1) | ||||||||||||||
| Compensation: | |||||||||||||||||||||
| Severance | 1,958,958 | 1,958,958 | 1,958,958 | — | 8,215,802 | — | — | ||||||||||||||
| Short-term Incentive | 1,939,369 | 1,939,369 | 1,939,369 | — | — | — | — | ||||||||||||||
| Long-term Incentives: | |||||||||||||||||||||
| Accelerated Equity Award Programs | — | — | — | — | 12,280,007 | — | — | ||||||||||||||
| Benefits & Perquisites: | |||||||||||||||||||||
| Health and Welfare Benefits | 623,400 | 623,400 | 623,400 | — | 623,400 | 623,400 | 623,400 | ||||||||||||||
| Outplacement Services | 979,479 | — | 979,479 | — | 979,479 | — | — | ||||||||||||||
| Excise Tax & Gross-Up | — | — | — | — | 7,484,023 | — | — | ||||||||||||||
| Total | 5,501,206 | 4,521,727 | 5,501,206 | — | 29,582,711 | 623,400 | 623,400 | ||||||||||||||
Richard L. Bergmark | Voluntary Termination on 12/31/2017 ($) (1) | Early Retirement on 12/31/2017($) (1) | Involuntary Not For Cause Termination on 12/31/2017($) (1) | For Cause Termination on 12/31/2017($) | Termination related to Change-in-Control on 12/31/2017 ($) | Disability on 12/31/2017 ($) (1) | Death on 12/31/2017 ($) (1) | ||||||||||||||
| Compensation: | |||||||||||||||||||||
| Severance | 1,047,762 | 1,047,762 | 1,047,762 | — | 3,495,982 | — | — | ||||||||||||||
| Short-term Incentive | 707,240 | 707,240 | 707,240 | — | — | — | — | ||||||||||||||
| Long-term Incentives: | |||||||||||||||||||||
| Accelerated Equity Award Programs | — | — | — | — | 4,926,025 | — | — | ||||||||||||||
| Benefits & Perquisites: | |||||||||||||||||||||
| Health and Welfare Benefits | 621,200 | 621,200 | 621,200 | — | 621,200 | 621,200 | 621,200 | ||||||||||||||
| Outplacement Services | 523,881 | — | 523,881 | — | 523,881 | — | — | ||||||||||||||
| Excise Tax & Gross-Up | — | — | — | — | 3,184,648 | — | — | ||||||||||||||
| Total | 2,900,083 | 2,376,202 | 2,900,083 | — | 12,751,736 | 621,200 | 621,200 | ||||||||||||||
Lawrence Bruno |
| Voluntary |
|
| Involuntary Not For Cause |
|
| For Cause |
|
| Termination |
|
| Disability on |
|
| Death on |
| ||||||
Compensation: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Severance |
|
| — |
|
|
| 1,640,000 |
|
|
| — |
|
|
| 4,920,000 |
|
|
| — |
|
|
| — |
|
Short-term Incentive |
|
| — |
|
|
| 820,000 |
|
|
| — |
|
|
| 820,000 |
|
|
| — |
|
|
| — |
|
Long-term Incentives: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Accelerated Equity Award Programs |
|
| — |
|
|
| 6,737,626 |
|
|
| — |
|
|
| 6,737,626 |
|
|
| 6,737,626 |
|
|
| 6,737,626 |
|
Benefits & Perquisites: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Health and Welfare Benefits |
|
| 418,500 |
|
|
| 418,500 |
|
|
| — |
|
|
| 418,500 |
|
|
| — |
|
|
| — |
|
Outplacement Services |
|
| — |
|
|
| 25,000 |
|
|
| — |
|
|
| 25,000 |
|
|
| — |
|
|
| — |
|
Accelerated Deferred Comp |
|
| — |
|
|
| 164,000 |
|
|
| — |
|
|
| 164,000 |
|
|
| 164,000 |
|
|
| 164,000 |
|
Total |
|
| 418,500 |
|
|
| 9,805,126 |
|
|
| — |
|
|
| 13,085,126 |
|
|
| 6,901,626 |
|
|
| 6,901,626 |
|
46
Christopher S. Hill |
| Voluntary |
|
| Involuntary Not For Cause |
|
| For Cause |
|
| Termination |
|
| Disability on |
|
| Death on |
| ||||||
Compensation: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Severance |
|
| — |
|
|
| 645,000 |
|
|
| — |
|
|
| 1,881,250 |
|
|
| — |
|
|
| — |
|
Short-term Incentive |
|
| — |
|
|
| 322,500 |
|
|
| — |
|
|
| 322,500 |
|
|
| — |
|
|
| — |
|
Long-term Incentives: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Accelerated Equity Award Programs |
|
| — |
|
|
| 2,346,840 |
|
|
| — |
|
|
| 2,346,840 |
|
|
| 2,346,840 |
|
|
| 2,346,840 |
|
Benefits & Perquisites: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Health and Welfare Benefits |
|
| — |
|
|
| 501,900 |
|
|
| — |
|
|
| 501,900 |
|
|
| — |
|
|
| — |
|
Outplacement Services |
|
| — |
|
|
| 25,000 |
|
|
| — |
|
|
| 25,000 |
|
|
| — |
|
|
| — |
|
Accelerated Deferred Comp |
|
| — |
|
|
| 43,000 |
|
|
| — |
|
|
| 43,000 |
|
|
| 43,000 |
|
|
| 43,000 |
|
Total |
|
| — |
|
|
| 3,884,240 |
|
|
| — |
|
|
| 5,120,490 |
|
|
| 2,389,840 |
|
|
| 2,389,840 |
|
Gwendolyn Y. Gresham |
| Voluntary |
|
| Involuntary Not For Cause |
|
| For Cause |
|
| Termination |
|
| Disability on |
|
| Death on |
| ||||||
Compensation: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Severance |
|
| — |
|
|
| 555,000 |
|
|
| — |
|
|
| 1,618,750 |
|
|
| — |
|
|
| — |
|
Short-term Incentive |
|
| — |
|
|
| 277,500 |
|
|
| — |
|
|
| 277,500 |
|
|
| — |
|
|
| — |
|
Long-term Incentives: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Accelerated Equity Award Programs |
|
| — |
|
|
| 954,656 |
|
|
| — |
|
|
| 954,656 |
|
|
| 954,656 |
|
|
| 954,656 |
|
Benefits & Perquisites: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Health and Welfare Benefits |
|
| — |
|
|
| 381,100 |
|
|
| — |
|
|
| 381,100 |
|
|
| — |
|
|
| — |
|
Outplacement Services |
|
| — |
|
|
| 25,000 |
|
|
| — |
|
|
| 25,000 |
|
|
| — |
|
|
| — |
|
Accelerated Deferred Comp |
|
| — |
|
|
| 37,000 |
|
|
| — |
|
|
| 37,000 |
|
|
| 37,000 |
|
|
| 37,000 |
|
Total |
|
| — |
|
|
| 2,230,256 |
|
|
| — |
|
|
| 3,294,006 |
|
|
| 991,656 |
|
|
| 991,656 |
|
Mark D. Tattoli |
| Voluntary |
|
| Involuntary Not For Cause |
|
| For Cause |
|
| Termination |
|
| Disability on |
|
| Death on |
| ||||||
Compensation: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Severance |
|
| — |
|
|
| 555,000 |
|
|
| — |
|
|
| 1,618,750 |
|
|
| — |
|
|
| — |
|
Short-term Incentive |
|
| — |
|
|
| 277,500 |
|
|
| — |
|
|
| 277,500 |
|
|
| — |
|
|
| — |
|
Long-term Incentives: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Accelerated Equity Award Programs |
|
| — |
|
|
| 797,260 |
|
|
| — |
|
|
| 797,260 |
|
|
| 797,260 |
|
|
| 797,260 |
|
Benefits & Perquisites: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Health and Welfare Benefits |
|
| — |
|
|
| 585,700 |
|
|
| — |
|
|
| 585,700 |
|
|
| — |
|
|
| — |
|
Outplacement Services |
|
| — |
|
|
| 25,000 |
|
|
| — |
|
|
| 25,000 |
|
|
| — |
|
|
| — |
|
Accelerated Deferred Comp |
|
| — |
|
|
| 35,000 |
|
|
| — |
|
|
| 35,000 |
|
|
| 35,000 |
|
|
| 35,000 |
|
Total |
|
| — |
|
|
| 2,275,460 |
|
|
| — |
|
|
| 3,339,210 |
|
|
| 832,260 |
|
|
| 832,260 |
|
47
Monty L. Davis | Voluntary Termination on 12/31/2017 ($) (1) | Early Retirement on 12/31/2017($) (1) | Involuntary Not For Cause Termination on 12/31/2017($) (1) | For Cause Termination on 12/31/2017($) | Termination related to Change-in-Control on 12/31/2017 ($) | Disability on 12/31/2017 ($) (1) | Death on 12/31/2017 ($) (1) | ||||||||||||||
| Compensation: | |||||||||||||||||||||
| Severance | 1,047,762 | 1,047,762 | 1,047,762 | — | 3,495,982 | — | — | ||||||||||||||
| Short-term Incentive | 707,240 | 707,240 | 707,240 | — | — | — | — | ||||||||||||||
| Long-term Incentives: | |||||||||||||||||||||
| Accelerated Equity Award Programs | — | — | — | — | 4,926,025 | — | — | ||||||||||||||
| Benefits & Perquisites: | |||||||||||||||||||||
| Health and Welfare Benefits | 551,000 | 551,000 | 551,000 | — | 551,000 | 551,000 | 551,000 | ||||||||||||||
| Outplacement Services | 523,881 | — | 523,881 | — | 523,881 | — | — | ||||||||||||||
| Excise Tax & Gross-Up | — | — | — | — | 3,296,924 | — | — | ||||||||||||||
| Total | 2,829,883 | 2,306,002 | 2,829,883 | — | 12,793,812 | 551,000 | 551,000 | ||||||||||||||
| (1) Each NEO could possibly vest in PSAP awards following termination if the performance criteria for vesting is met at the end of a Performance Period. See table of Outstanding Equity Awards at Fiscal Year End on page 36. | |||||||||||||||||||||
Pay Ratio Disclosure
Pursuant to Item 402(u) of Regulation S-K, we are required to providedisclose the following informationratio of our CEO’s compensation to the annual total compensation of our median employee with respect to fiscal 2017:
We determined that the annual total compensation of Mr. Demshur, our CEO, Mr. Bruno, for 2022 was $8,973,204 and$6,406,396 for the purpose of the CEO pay ratio calculation. We determined that the median of the annual total compensation of from the aggregate sampling of employeespopulation of our companyemployees (other than Mr. Demshur, our CEO)Bruno) was $57,546;$63,477; therefore, the ratio of these two amounts is 156101 to 1. If the CEO does not actually receive any of the non-equity incentive compensation, his total compensation would be $7,303,193 for 2017 and the ratio of our CEO's compensation to the that of the median employee would be 127 to 1. Please see the Summary Compensation table on page 3339 for our CEO's compensation.
Our most recent identification of the size, composition and global diversity of our workforce,median employee was performed in 2020, during which we used statistical sampling to identifyprepared a database including the “median employee.” Using the measure of total cash compensation consisting of base salary, allowance, bonus and pensionother cash compensation paid as provided byreflected in our payroll records for our global workforce (other than our CEO). As needed, amounts were converted from local currency to U.S. dollars.
For the median employee we grouped countries based on similarityidentified from the database in 2020, who remained active in 2022, we updated all compensation elements of the median employee for 2022 to calculate total annual compensation levelswith the same methodology used in the Summary Compensation table in accordance with SEC rules and compensation standard variances and determined an appropriate sample size for each group of countries. regulations.
The aggregate sample size covered more than two-thirds of our employee population.
Pay-Versus-Performance Disclosure
In August 2022, the SEC issued a rule requiring disclosure of the relationship between executive compensation actually paid to the achievement of the Company’s financial and operational performance objectives. The following table provides information for our NEOs calculated in accordance with SEC regulations for the year ended December 31, 2020, 2021 and 2022:
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|
|
|
| Value of Initial Fixed $100 Investment Based On: |
|
| Stated in Millions |
|
|
| ||||||||||
Year |
| Summary Compensation Table Total for First CEO (1) |
|
| Summary Compensation Table Total for Second CEO (1) |
|
| Compensation Actually Paid to First CEO (2)(5) |
|
| Compensation Actually Paid to Second CEO (2) |
|
| Average Summary Compensation Table Total for Other NEOs (1) |
|
| Average Compensation Actually Paid to Other NEOs (2)(5) |
|
| Total Shareholder Return |
| Peer Group Total Shareholder Return (3) |
|
| Net Income |
|
| ROIC Percentile Rank (4) | ||||||||
2022 |
|
| 6,406,396 |
|
|
| — |
|
|
| 4,556,233 |
|
|
| — |
|
|
| 1,602,577 |
|
|
| 1,251,954 |
|
| 54.77 |
|
| 77.80 |
|
|
| 19,658 |
|
| 72nd |
2021 |
|
| 6,548,130 |
|
|
| — |
|
|
| 3,511,963 |
|
|
| — |
|
|
| 1,512,288 |
|
|
| 790,566 |
|
| 60.07 |
| 51.07 |
|
|
| 20,219 |
|
| 100th | |
2020 |
|
| 5,445,044 |
|
|
| 12,531,614 |
|
|
| 3,820,946 |
|
|
| 9,059,322 |
|
|
| 2,027,272 |
|
|
| 1,381,972 |
|
| 71.12 |
|
| 54.86 |
|
|
| (97,497 | ) |
| 87th |
follows:
a.
b.
48
The following tables contain a breakdown of the “Compensation Actually Paid to CEO” and “Average Compensation Actually Paid to Other NEOs” included in the table above.
|
| 2022 |
|
| 2021 |
|
| 2020 |
| |||
FIRST CEO SUMMARY COMPENSATION TABLE TOTALS |
|
| 6,406,396 |
|
|
| 6,548,130 |
|
|
| 5,445,044 |
|
Add (Subtract): |
|
|
|
|
|
|
|
|
| |||
Fair value of equity awards granted during the year from the Summary Compensation Table (1) |
|
| (4,873,523 | ) |
|
| (4,939,861 | ) |
|
| (4,257,913 | ) |
Fair value at year end of equity awards granted during the year |
|
| 3,576,792 |
|
|
| 2,897,202 |
|
|
| 3,425,467 |
|
Change in fair value of equity awards granted in prior years that were unvested as of the end of the year |
|
| (370,096 | ) |
|
| (669,496 | ) |
|
| (515,960 | ) |
Change in fair value of equity awards granted in prior years that vested as of the end of the year |
|
| (183,336 | ) |
|
| (194,179 | ) |
|
| (152,691 | ) |
Equity awards granted in prior years that were forfeited during the year |
|
| — |
|
|
| — |
|
|
| — |
|
Dividends or other earnings paid on equity awards during the year |
|
| — |
|
|
| — |
|
|
| — |
|
Salary reduction due to COVID-19 Business Interruptions |
|
| — |
|
|
| (129,833 | ) |
|
| (123,000 | ) |
Total Equity Award Related Adjustments |
|
| (1,850,163 | ) |
|
| (3,036,168 | ) |
|
| (1,624,098 | ) |
COMPENSATION ACTUALLY PAID TOTALS |
|
| 4,556,233 |
|
|
| 3,511,963 |
|
|
| 3,820,946 |
|
|
| 2022 |
|
| 2021 |
|
| 2020 |
| |||
SECOND CEO SUMMARY COMPENSATION TABLE TOTALS |
|
| — |
|
|
| — |
|
|
| 12,531,614 |
|
Add (Subtract): |
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|
|
|
|
|
|
|
| |||
Fair value of equity awards granted during the year from the Summary Compensation Table (1) |
|
| — |
|
|
| — |
|
|
| (6,750,425 | ) |
Fair value at year end of equity awards granted during the year |
|
| — |
|
|
| — |
|
|
| 5,430,678 |
|
Change in fair value of equity awards granted in prior years that were unvested as of the end of the year |
|
| — |
|
|
| — |
|
|
| (1,225,401 | ) |
Change in fair value of equity awards granted in prior years that vested as of the end of the year |
|
| — |
|
|
| — |
|
|
| (469,144 | ) |
Equity awards granted in prior years that were forfeited during the year |
|
| — |
|
|
| — |
|
|
| — |
|
Dividends or other earnings paid on equity awards during the year |
|
| — |
|
|
| — |
|
|
| — |
|
Salary reduction due to COVID-19 Business Interruptions |
|
| — |
|
|
| — |
|
|
| — |
|
Actuarial Present Value of Pension Benefits |
|
| — |
|
|
| — |
|
|
| (708,000 | ) |
Pension Benefit Adjustments for CEO |
|
| — |
|
|
| — |
|
|
| 250,000 |
|
Total Equity Award Related Adjustments |
|
| — |
|
|
| — |
|
|
| (3,472,292 | ) |
COMPENSATION ACTUALLY PAID TOTALS |
|
| — |
|
|
| — |
|
|
| 9,059,322 |
|
49
|
| 2022 |
|
| 2021 |
|
| 2020 |
| |||
NON-CEO NEOS SUMMARY COMPENSATION TABLE TOTALS |
|
| 1,602,577 |
|
|
| 1,512,288 |
|
|
| 2,027,272 |
|
Add (Subtract): |
|
|
|
|
|
|
|
|
| |||
Fair value of equity awards granted during the year from the Summary Compensation Table (1) |
|
| (999,662 | ) |
|
| (932,088 | ) |
|
| (1,479,243 | ) |
Fair value at year end of equity awards granted during the year |
|
| 733,675 |
|
|
| 414,082 |
|
|
| 1,190,043 |
|
Change in fair value of equity awards granted in prior years that were unvested as of the end of the year |
|
| (53,477 | ) |
|
| (105,186 | ) |
|
| (262,584 | ) |
Change in fair value of equity awards granted in prior years that vested as of the end of the year |
|
| (31,159 | ) |
|
| (37,835 | ) |
|
| (29,016 | ) |
Equity awards granted in prior years that were forfeited during the year |
|
| — |
|
|
| — |
|
|
| — |
|
Dividends or other earnings paid on equity awards during the year |
|
| — |
|
|
| — |
|
|
| — |
|
Salary reduction due to COVID-19 Business Interruptions |
|
| — |
|
|
| (60,694 | ) |
|
| (64,500 | ) |
Total Equity Award Related Adjustments |
|
| (350,623 | ) |
|
| (721,722 | ) |
|
| (645,300 | ) |
COMPENSATION ACTUALLY PAID TOTALS |
|
| 1,251,954 |
|
|
| 790,566 |
|
|
| 1,381,972 |
|
Disclosure of Most Important Performance Measures for Fiscal Year 2022
The following table contains the five most important financial performance measures used by our Compensation Committee to link “compensation actually paid” to our First and Second CEO and other NEOs in 2022 with Company performance. Each of these performance measures are discussed further herein above.
Most Important Performance Measures |
End of Performance Period ROIC Percentile Rank |
Revenue Growth |
Expansion of Operating Margins |
EPS Growth |
Total Shareholder Return |
The charts on the following page reflect that the Compensation Actually Paid (“CAP”) over the three-year period ended December 31, 2022. Factors impacting the First and Second CEOs’ and Other NEOs’ CAP over the three-year period include:
50
Compensation Actually Paid vs. TSR (CLB & Peers)
Compensation Actually Paid vs. Net Income
Compensation Actually Paid vs. ROIC Rank
51
COMPENSATION COMMITTEE REPORT
In preparation for the filing of this proxy statement with the SEC, the Compensation Committee:
Submitted by the Compensation Committee of the Board of Supervisory Directors.
COMPENSATION COMMITTEE
Michael Straughen (Chairman)
Harvey Klingensmith
Kwaku Temeng
52
AUDIT COMMITTEE REPORT
For the year ended December 31, 2017,2022, the Audit Committee consisted of Mrs.Mmes. Carnes and Messrs. SodderlandMurray, and Mr. Straughen. The Company has determined that: (1) each member of the Audit Committee is independent, as defined in Section 10A of the Exchange Act and under the standards set forth by the NYSE and, to the extent consistent therewith, the Dutch Code;NYSE; and (2) all current Audit Committee members are financially literate. In addition, Mrs.Mmes. Carnes qualifiesand Murray each qualify as an audit committee financial expert under the applicable rules promulgated pursuant to the Exchange Act and as defined in the Dutch Code.
During the last fiscal year, and earlier this year in preparation for the filing with the SEC of the Company'sCompany’s Annual Report on Form 10-K for the year ended December 31, 2017,2022, the Audit Committee:
A copy of the Audit Committee'sCommittee’s written charter may be found on the Company'sCompany’s website at
Notwithstanding the foregoing actions and the responsibilities set forth in the Audit Committee'sCommittee’s charter, it is not the duty of the Audit Committee to plan or conduct audits or to determine that the Company'sCompany’s financial statements are complete and accurate and in accordance with generally accepted accounting principles. Management is responsible for the Company'sCompany’s financial reporting process including its system of internal controls, and for the preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States. The independent registered public accountants are responsible for expressing an opinion on those financial statements. Audit Committee members are not employees of the Company or accountants or auditors by profession. Therefore, the Audit Committee has relied, without independent verification, on management'smanagement’s representation that the financial statements have been prepared with integrity and objectivity and in conformity with accounting principles generally accepted in the United States and on the representations of the independent registered public accountants included in their report on the Company'sCompany’s financial statements.
The Audit Committee meets regularly with management and the independent and internal auditors, including private discussions with the independent registered public accountants and the Company'sCompany’s internal auditors and receives the
53
communications described above. The Audit Committee has also established procedures for (a) the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters, and (b) the confidential, anonymous submission by the Company'sCompany’s employees of concerns regarding questionable accounting or auditing matters. However, this oversight does not provide us with an independent basis to determine that management has maintained appropriate accounting and financial reporting principles or policies, or appropriate internal controls and procedures designed to assure compliance with accounting standards and applicable laws and regulations. Furthermore, our considerations and discussions with management and the independent registered public accountants do not assure that the Company'sCompany’s financial statements are
Submitted by the Audit Committee of the Board of Supervisory Directors.
AUDIT COMMITTEE
Martha Z. Carnes (Chairman)
Katherine Murray
Michael Straughen
54
INFORMATION ABOUT OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Audit Fee Summary | ||||
The Audit Committee approved in advance 100% of the audit fees, including all non-audit fees. For the 20162021 and 20172022 fiscal years, KPMG served as the Company'sCompany’s independent auditor. Set forth below is a summary of the total fees incurred with KPMG for service related to fiscal years 20172022 and 2016.2021. These fees consisted of:
| 2017 | 2016 | ||||
| Audit Fees | $2,694,000 | $2,470,000 | |||
| Audit-Related Fees | — | — | |||
| Tax Fees | 51,500 | 115,300 | |||
| All Other Fees | — | — | |||
| Total | $2,745,500 | $2,585,300 | |||
|
| 2022 |
|
| 2021 |
| ||
Audit Fees |
|
| 2,939,000 |
|
|
| 2,835,373 |
|
Audit-Related Fees |
|
| — |
|
|
| — |
|
Tax Fees |
|
| 185,000 |
|
|
| 55,000 |
|
All Other Fees |
|
| — |
|
|
| 5,500 |
|
Total |
| $ | 3,124,000 |
|
| $ | 2,895,873 |
|
Audit Fees
Audit fees consist primarily of the audit and quarterly reviews of the consolidated financial statements, assistance with and review of documents filed with the SEC in the United States and with the AFMAutoriteit Financiële Markten in the Netherlands, work performed in connection with the audit and quarterly reviews, statutory audits, and the audit of internal controls in order to comply with the Sarbanes-Oxley Act of 2002.
Audit-Related Fees
Audit-related fees consist primarily of attestation services required by statute or regulation;regulation and certain agreed-upon procedures including accounting and research work necessary to comply with generally accepted auditing standards.
Tax Fees
Tax fees include professional services provided for preparation of federal and state tax returns, review of tax returns prepared by the Company, assistance in assembling data to respond to governmental reviews of past tax filings, and tax advice, exclusive of tax services rendered in connection with the audit.
All Other Fees
The fees consist primarily of comfort letters, consents, researchidentified under this caption were for all other non-audit services, including permissible business and advisory consulting and work performed related to other public filings.
AUDIT | ||||
The Audit Committee pre-approves all audit and non-audit services to be performed by its independent auditors, and has established policies and procedures to ensure that the Company is in full compliance with the requirements for pre-approval set forth in the Sarbanes-Oxley Act of 2002 and the SEC rules regarding auditor independence. The policies and procedures are detailed as to the particular service and do not delegate the audit committee'sAudit Committee’s responsibility to management.
In accordance with these policies and procedures, management submits for approval audit and non-audit services that management may wish to have the independent auditor perform during the fiscal year, accompanied by an estimated range of fees for each service to be performed. The Audit Committee pre-approves or rejects the service and an accompanying range of fees for each service desired to be performed. Management is required to seek additional audit committeeAudit Committee pre-approval when management becomes aware that any pre-approved service will result in actual fees greater than the fees initially approved. During the course of the year, the chair of the Audit Committee has the authority to pre-approve requests for services. At each subsequent audit committeeAudit Committee meeting, the chair of the Audit Committee reports any interim pre-approvals since the last meeting.
55
AGENDA ITEMS
Item 1. Election of Class | ||||
Our Articles of Association provide for one or more Supervisory Directors. Our Board of Supervisory Directors currently has eightseven members who are divided into three classes. Each class is elected for a three-year term such that the term of one class of Supervisory Directors expires at the annual meeting each year. In 2011,
For the Company initiated steps to bring new membership to2023 Annual Meeting, the Board of Supervisory Directors, with a plan of replacing one existing non-executive Supervisory Director who will have served for longer than ten years each year over the next few years. The Succession Plan was completed as of the 2017 annual shareholder meeting, and at this time the longest tenure of any non-executive supervisory director is seven (7) years.
Candidates for Supervisory Director are recommended by the NGCRNGSCR Committee to our Supervisory Board. Our Supervisory Board then nominates selected candidates, who are elected at the annual meeting by the affirmative vote of a majority of the votes cast at the meeting. You may vote for bothall of these nominees, forany one or more of these nominees, or for none of these nominees. Under Dutch law and our Articlesthe Core Lab Delaware Bylaws, shares of Association, common sharesstock abstaining from voting will not countand broker non-votes shall be treated as votes cast at the annual meeting but will countpresent for the purposepurposes of determining the numberpresence or absence of shares represented at the meeting. Broker non-votes will not count as shares present at the annual meeting or for the purpose of determining the number of votes cast.
Unless otherwise instructed or unless the proxy is withdrawn, the accompanying proxy will be voted for the election of the two nominees listed above to serve under the terms and conditions described within this proxy statement. If at the time of, or prior to, the annual meeting2023 Annual Meeting, any of the nominees should be unable or decline to serve, the discretionary authority provided in the proxy may be used to vote for a substitute or substitutes designated by our Supervisory Board. The Supervisory Board has no reason to believe that any substitute nominees will be required. No proxy will be voted for a greater number of persons than the number of nominees named herein. Shareholders may not cumulate their votes in the election of Supervisory Directors.
The election and re-electionselections set out above will be put to a vote separately and those votes shall be considered to constitute separate sub-items of agenda item no. 1.
The Supervisory Board recommends that shareholders vote “FOR” the two Class IIII nominees for Supervisory Director as set forth above, and proxies executed and returned will be so voted unless contrary instructions are indicated thereon.
Item 2. Ratification of Appointment of KPMG as our Independent Registered Public Accounting Firm for | ||||
The Audit Committee of the Supervisory Board has recommended and the Supervisory Board has approved the appointment of the firm of KPMG LLP as our independent registered public accountants for the year ending December 31, 2018,2023, subject to approval by our shareholders. We have invited representatives of KPMG to the annual meeting2023 Annual Meeting and we expect one such representative to attend. If such representative should attend, we expect that he or she will be available to respond to questions and will have the opportunity to make a statement if he or she desires to do so.
The affirmative vote of thea majority of the votes cast at the annual meetingMeeting is required to appointratify the appointment of KPMG as our independent registered public accountants for 2018.2023. Under Dutch law and our Articlesthe Core Lab Delaware Bylaws, shares of Association, common sharesstock abstaining from voting will not countand broker non-votes shall be treated as votes cast at the annual meeting. Broker non-votes will not count as shares present at the annual meeting or for the purposepurposes of determining the numberpresence or absence of votes cast.
The Supervisory Board recommends that the shareholders vote “FOR” the appointment of KPMG as our independent registered public accountants for the year ending December 31, 20182023 and proxies executed and returned will be so voted unless contrary instructions are indicated thereon.
56
Item 3. | ||||
We and our Supervisory Board recognize that executive compensation is an important matter for our shareholders. As described in detail in the Compensation Committee'sCommittee’s report and the CD&A section of this proxy statement, the Compensation Committee is tasked with the implementation of our executive compensation philosophy and the core of that philosophy has been and continues to be to pay our executives based on our performance. In particular, the Compensation Committee strives to base awards of the substantial majority of executive compensation on performance metrics that are directly linked to the consequent long-term increase in the value of the Company for its owners - the shareholders. It is always the intention of the Compensation Committee that our NEOs be compensated competitively and consistent with our strategy, sound corporate governance principles, and shareholder interests and concerns. As described in the CD&A section, we believe our compensation program is strongly aligned with the long-term interests of our shareholders. As you consider this proposal, we urge you to read the CD&A section of this proxy statement for additional details on executive compensation, including the more detailed information about our compensation philosophy and objectives and the past compensation of the NEOs.
We believe that the shareholders, by voting for supervisory directors individually as described in Item No. 1, have had a clear ability to express their approval or disapproval of the performance of the Supervisory Board members and, specifically, any Supervisory Directors serving on the Compensation Committee; however, the United States Congress has enacted legislation requiring a non-binding advisory “Say on Pay” vote on executive compensation and we welcome the opportunity to give our shareholders an opportunity to provide us with such a vote on executive compensation at our 20182023 Annual Meeting. Furthermore, in addition to an advisory Say on Pay vote, we are asking our shareholders whether they would prefer an advisory vote on executive compensation every year, every two years or every three years.
We are therefore asking shareholders to vote on the following two resolutions:
One year _______
Two years _______
Three years _______
Section 14A of the Exchange Act, as amended, requires that we provide our stockholdersshareholders with the opportunity to vote to approve, on a non-binding, advisory basis, the compensation of our NEOs as disclosed in this proxy statement according to the compensation disclosure rules of the SEC. The Company intends to hold this vote annually, unless the shareholders approve thatthe vote be held every two or three years. At the 2017 annual meeting, the Company's shareholders were requested to conduct a non-binding advisory vote to approve the compensation of the Company's NEOs. The Supervisory Board proposal seeking approval of the compensation of the Company's NEOs for 2017 was approved with 93.28% of the votes cast in favor of such compensation at the 2017 annual meeting. Our continued focus on performance-based compensation has provided solid performance outcomes related to the Company's Total Shareholder Return and specifically compared to the S&P 500 Index and our peer group and we believe our shareholders should again approve our executive compensation program.
As an advisory vote, Items 8A3a and 8B3b are non-binding. Although the vote is non-binding, the Supervisory Board of Directors and the Compensation Committee value the opinions of our shareholders, and will carefully consider the outcome of the vote when making future compensation decisions for our named executive officersNEOs and the schedule onfrequency with which future Say-on-Paysay-on-pay proposals like Item 8A3a are presented to our shareholders. Even though
The affirmative vote of a majority of the shares of Company common stock present or represented by proxy and votingvotes cast at the annual meetingMeeting is required for approval of Item 8.
57
or other holder of record, you must instruct your bank, broker or other holder of record how to vote in order for them to vote your shares so that your vote can be counted on this proposal.
The Board recommends that shareholders vote “FOR” the approval of, on an advisory basis, the compensation philosophy, policies and procedures described in the CD&A, and the compensation of the Company’s named executive officers disclosed pursuant to the SEC’s compensation disclosure rules, including the compensation tables.
Item 4. Approval of the Amendment and Restatement of the Company’s 2014 Non-Employee Director Stock Incentive Plan |
The Company is requesting that shareholders approve the amendment and restatement of the 2014 Director Plan, the principal purpose of which is to extend the term of the plan through June 28, 2033. The 2014 Director Plan, as amended and restated, will be called the 2023 Non-Employee Director Stock Incentive Plan (the “2023 Director Plan”). Set forth below is a summary of the principal features of the 2023 Director Plan that is qualified in its entirety by reference to the full text of the 2023 Director Plan attached to this Proxy Statement as Appendix A.
General
The 2023 Director Plan is intended to provide an incentive to retain and attract persons of training, experience and ability to serve as independent directors on the Board, to encourage the sense of proprietorship of such persons, and to stimulate the active interest of such persons in our development and financial success. These objectives are to be accomplished by making awards under the 2023 Director Plan and thereby providing participants with a proprietary interest in our growth and performance. Accordingly, the 2023 Director Plan provides for granting (a) stock options that do not qualify as “incentive stock options” as defined in Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), and (b) “restricted shares” that are either (1) common shares that are restricted or subject to forfeiture provisions or (2) a credit of units to a bookkeeping account maintained by the Company evidencing accrual to a participant of unsecured and unfunded conditional rights to acquire common shares.
Number of Shares Subject to the 2023 Director Plan
No additional common shares are being authorized for issuance under the 2023 Director Plan in connection with this amended and restatement of the predecessor plan. Accordingly, from and after April 27, 2023, subject to adjustment under certain circumstances (such as upon reorganization, stock split, recapitalization, or other change in the Company’s capital structure), the aggregate maximum number of common shares authorized to be issued under the 2023 Director Plan pursuant to grants of stock options and restricted shares is equal to the sum of (a) 493,120 common shares (which is the number of common shares available under the predecessor plan, and not subject to outstanding awards, as of such date) and (b) the number of common shares subject to outstanding awards under the predecessor plan as of such date that must or may be settled in common shares. As of April 27, 2023, and prior to the amendment and restatement taking effect, there were a total of zero stock options outstanding. Common shares related to awards that are forfeited, terminated or that expire unexercised, and common shares that are withheld from an award of restricted shares to cover taxes relating to such award, shall immediately become available for awards under the 2023 Director Plan. Common shares that are withheld from an award of stock options to cover any exercise price or taxes relating to such award will not be available again for the granting of awards under the 2023 Director Plan. On April 26, 2023, the closing price of our common shares as reported by the NYSE was $20.85 per common share.
Our long-term plan is to limit the annual average dilution from our 2023 Director Plan to less than 0.15%. Annual average dilution is measured as the total number of shares under all outstanding equity awards under such plan (i.e., share awards granted, less share award cancellations), as a percentage of the weighted average number of common shares outstanding for that year. For years 2022, 2021 and 2020, the annual average dilution was approximately 0.07%, 0.06% and 0.2%, respectively.
Administration
The 2023 Director Plan will be administered by the Board. The Board has full authority, subject to the terms of the 2023 Director Plan, to establish rules and regulations for the proper administration of the 2023 Director Plan, to select the persons to whom the awards are granted and to set the date of grant and the other terms of the awards.
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Eligibility
Any individual serving as a member of the Board is eligible to participate in the 2023 Director Plan, provided that such individual is not an employee of the Company or any of its subsidiaries and has not been an employee since the date of the most recent annual meeting of shareholders. As used in this summary of the 2023 Director Plan, the term “nonemployee director” refers to the individuals described in the preceding sentence. The selection of nonemployee directors, from among those eligible, who will receive awards under the 2023 Director Plan is within the discretion of the Board. As of April 27, 2023, there were six nonemployee directors who were eligible to participate under the 2023 Director Plan.
Effective Date; Amendment and Termination of the 2023 Director Plan
The predecessor plan to the 2023 Director Plan originally became effective as of September 1, 1995. It was subsequently amended and restated effective as of May 29, 1997, June 28, 2006 and May 13, 2014. The amendment and restatement of the plan into the 2023 Director Plan is effective as of June 28, 2023, provided that the amendment and restatement is approved by our shareholders on such date at the 2023 Annual Meeting. However, if our shareholders do not approve the 2023 Director Plan at the Meeting, the amendment and restatement of the 2014 Director Plan will not be implemented and the 2014 Director Plan will continue to operate under its prior terms. If our shareholders do not approve the 2023 Director Plan at the Meeting, then, pursuant to the terms of the 2014 Director Plan, no further awards may be granted under the 2014 Director Plan after May 12, 2024. The Board may, from time to time, amend, modify, suspend or terminate the 2023 Director Plan for any purpose except that (a) no amendment or alteration that would impair the rights of a holder of an award under the 2023 Director Plan may be made without the holder’s consent, (b) no amendment or alteration will be effective prior to approval of our shareholders, to the extent such approval is then required pursuant to Rule 16b-3 under the Exchange Act, or to the extent shareholder approval is otherwise required by applicable law, and (c) no amendment to the 2023 Director Plan that would require shareholder approval pursuant to the requirements of the NYSE or any exchange on which the Company is listed will be effective prior to approval of the shareholders of the Company.
Vesting
The 2023 Director Plan requires the Board to set a minimum vesting period for any award granted under the 2023 Director Plan at one year. However, any vesting schedule may be designed to vest in installments over the minimum vesting period and may be accelerated (in whole or in part) upon the occurrence of a change in control of the Company or a separation from service, as set forth in the 2023 Director Plan or the individual award agreement.
Stock Options
Any options will be evidenced by a written contract containing provisions consistent with the 2023 Director Plan and such other provisions as the Board deems appropriate. An option granted under the 2023 Director Plan will not be treated as an incentive stock option within the meaning of Section 422 of the Code. The term of each option will be as specified by the Board at the date of grant, and the effect of the termination of a nonemployee director’s service as a director will be controlled by the terms of the option contract that evidences each option grant. The number of shares for which an option is granted to a nonemployee director will be determined by the Board. The purchase price of each common share that is subject to an option will also be determined by the Board, but (subject to adjustment under certain circumstances, such as upon a reorganization, stock split, recapitalization, or other change in the Company’s capital structure) such purchase price will be no less than the fair market value of a common share on the date that the option is granted. The purchase price upon exercise may be paid in cash, or, at the discretion of the Board, in other common shares owned by the nonemployee director, by surrendering all or part of that or any other award under the 2023 Director Plan, or by any combination thereof.
Subject to adjustment under certain circumstances, such as upon a reorganization, stock split, recapitalization, or other change in the Company’s capital structure, the terms of an outstanding option may not be amended without the approval of our shareholders so as to (a) reduce the purchase price of a common share under such option, (b) cancel such option in exchange for cash or other awards under the 2023 Director Plan when the purchase price of a common share under such option exceeds the fair market value of a common share or (c) otherwise reprice such option under generally accepted accounting principles.
Restricted Shares
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An award of restricted shares may consist of common shares or may be denominated in units of common shares. All or part of any such award may be subject to conditions established by the Board and set forth in the written agreement evidencing such award, which conditions may include, but are not limited to, (a) the attainment of one or more performance targets established by the Board, (b) the award recipient’s continued provision of services to the Company and its subsidiaries, whether in the capacity as a nonemployee director or otherwise, for a specified period of time, (c) the occurrence of any event or the satisfaction of any other condition specified by the Board in its sole discretion, or (d) a combination of any of the foregoing. Each award of restricted shares may have different conditions and restrictions, in the discretion of the Board. Dividends or dividend equivalent rights may be extended to, and made a part of, any award denominated in common shares or units of common shares, subject to such terms, conditions and restrictions as the Board may establish.
Transferability
Unless otherwise determined by the Board and provided in an award agreement, awards under the 2023 Director Plan are generally not transferrable except (a) by will or the laws of descent and distribution, (b) pursuant to a qualified domestic relations order, or (c) with the consent of the Board.
Change in Control
The 2023 Director Plan provides that each stock option will become fully exercisable and the restriction on restricted shares will lapse upon a change in control of the Company (as defined in the 2023 Director Plan).
United States Federal Income Tax Aspects of the 2023 Director Plan
Nonqualified Stock Options. As a general rule, no federal income tax is imposed on the optionee of a grant of a nonqualified stock option such as those granted under the 2023 Director Plan, and the Company is not entitled to a tax deduction by any reason of such a grant. Generally, upon the exercise of a nonqualified stock option, the optionee will be treated as receiving compensation taxable as ordinary income in the year of exercise in an amount equal to the excess of the fair market value of the shares of stock on the date of exercise over the option price paid for such shares. Upon the exercise of a nonqualified stock option granted under the 2023 Director Plan, we may claim a deduction for compensation paid at the same time and in the same amount as compensation income is recognized by the optionee, assuming any federal income tax reporting requirements are satisfied. Upon a subsequent disposition of the shares received upon exercise of a nonqualified stock option, any difference between the fair market value of the shares on the date of exercise and the amount realized on disposition would be treated as capital gain or loss.
Restricted Shares. A nonemployee director who has been granted restricted shares under the 2023 Director Plan consisting of common shares that are subject to forfeiture provisions will not realize taxable income at the time of grant, and we will not be entitled to a deduction at that time, assuming that the forfeiture provisions constitute a substantial risk of forfeiture for federal income tax purposes. Upon expiration of the forfeiture restrictions (i.e., as shares become vested), the nonemployee director will realize ordinary income in an amount equal to the excess of the fair market value of the shares at such time over the amount, if any, paid for such shares, and we will be entitled to a corresponding deduction. Dividends paid to the holder during the period that the forfeiture restrictions apply will also be compensation to the nonemployee director and deductible as such by the Company. Notwithstanding the foregoing, the recipient of such restricted shares may elect to be taxed at the time of grant of the restricted shares based upon the fair market value of the shares on the grant date, in which case (a) we will be entitled to a deduction at the same time and in the same amount, (b) dividends paid to the recipient during the period the forfeiture restrictions apply will be taxable as dividends and will not be deductible by the Company and (c) there will be no further federal income tax consequences when the forfeiture restrictions lapse.
A nonemployee director who has been granted restricted shares under the 2023 Director Plan consisting of a credit of units to a bookkeeping account maintained by the Company evidencing accrual to such nonemployee director of unsecured and unfunded conditional rights to acquire common shares will not realize taxable income at the time of the grant, and we will not be entitled to a deduction at that time. Upon expiration of the restrictions applicable to such restricted shares, the nonemployee director will realize ordinary income in an amount equal to the excess of the fair market value of the property distributed to the nonemployee director by the Company at that time over the amount, if any, paid by the nonemployee director for such property, and we will be entitled to a corresponding deduction.
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Section 162(m) of the Code. Subject to certain exceptions, Section 162(m) of the Code generally precludes a public corporation from taking a deduction for annual compensation in excess of $1 million paid to certain executive officers. Section 162(m) of the Code should not limit the deductibility of compensation paid under the 2023 Director Plan to our nonemployee directors.
Section 409A of the Code. Section 409A of the Code provides that deferred compensation, as defined therein, will be subject to an additional 20% tax unless it meets certain restrictions set forth in Section 409A of the Code and the guidance promulgated thereunder. We intend for awards issued under the 2023 Director Plan to either be exempt from the application of, or to comply with, Section 409A of the Code.
Section 401(a) of the Code. The 2023 Director Plan is not qualified under Section 401(a) of the Code.
The comments set forth in the above paragraphs are only a summary of certain of the United States federal income tax consequences relating to the 2023 Director Plan. No consideration has been given to the effect of foreign, state, local or other tax laws on the 2023 Director Plan or award recipients.
Inapplicability of ERISA
Based upon current law and published interpretations, the Company does not believe the 2023 Director Plan is subject to any of the provisions of ERISA.
New Plan Benefits
The benefits or amounts that will be received by or allocated to non-employee directors, by reason of the amendment and restatement, are not yet determinable. Future awards are in the discretion of the Board and cannot be determined at this time. The type or amount of awards that we have granted in the past may also not be representative of the awards that we may grant in the future.
The affirmative vote of holders of a majority of the common shares present or represented by proxy and entitled to vote at the Meeting is required to approve the proposed amendment and restatement of the 2014 Non-Employee Director Stock Incentive Plan.
The Board recommends that shareholders vote “FOR” the approval of the amendment and restatement of the Company’s 2014 Non-Employee Director Stock Incentive Plan, and proxies executed and returned will be so voted unless contrary instructions are indicated thereon.
Item |
The Supervisory Board does not know of any other matters that are to be presented for action at the annual meeting.2023 Annual Meeting. However, if any other matters properly come before the annual meetingMeeting or any adjournment thereof, it is intended that the accompanying proxy will be voted in accordance with the judgment of the persons voting the proxy.
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OTHER PROXY MATTERS
Information About Our | ||||
The Board has determined that it intends to hold the Company’s 2024 annual meeting of shareholders (the “2024 Annual Meeting”) on approximately May 15, 2024, at a time and location to be specified in the Company’s proxy statement for the 2024 Annual Meeting. Pursuant to Rule 14a-8 of the Exchange Act, for your proposal to be eligible for inclusion in our proxy statement for our 2024 Annual Meeting, we must receive your proposal at our registered offices in Houston, Texas by December 7, 2023, which the Company has determined to be a reasonable time before it expects to begin to print and send its proxy materials. Rule 14a-8 proposals must also comply with the requirements of Rule 14a-8 of the Exchange Act and other applicable lawlaws in order to have the right to submit a matterbe eligible for inclusion in the Company'sCompany’s proxy materialmaterials for considerationthe 2024 Annual Meeting.
Notice of shareholder proposals and shareholder director nominations to be considered at the 2019 annual meeting may submit such matter, including recommendations for nominees for supervisory directorships, to the Company. As a company registered in the Netherlands, we are governed by Dutch company law rules regarding the access rights of shareholders to submit a matter for inclusion in the Company's proxy material for consideration at an annual meeting. Effective July 1, 2013, Dutch company law rules were amended to increase the minimum threshold in order for shareholders to submit an item for the agenda of the annual meeting. Since that amendment, Dutch law requires that an agenda item may only be submitted by one or more shareholders representing at least three percent of the issued share capital of the Company. The Company’s Articles of Association follow this law and are2024 Annual Meeting, but not more restrictive than this. In order for such matter to be included in the Company's proxy materials or presentedstatement, must be in compliance with the advance notice provisions and information required by the Company’s Bylaws. Such notice must be received by the Company at our registered offices in Houston, Texas not earlier than the 2019 annual meeting,close of business on the qualified shareholder(s) must submit the matter150th day prior to the Company's Secretary atdate of the address indicated on page 5 of this proxy statement2024 Annual Meeting and not later than the 60thclose of business on the later of the 120th day beforeprior to the 2024 Annual Meeting or, if the first public announcement of the date of the 2024 Annual Meeting is fewer than 100 days prior to the date of the 2024 Annual Meeting, the 10th day following the day on which public announcement of the 2019 annualdate of the 2024 Annual Meeting is first made. Accordingly, for our 2024 Annual Meeting, assuming the meeting willis held on May 15, 2024, and that the first public announcement of the date of the 2024 Annual Meeting is not fewer than 100 days prior to the date of the 2024 Annual Meeting, notice of a nomination or proposal must be held. At this point,received by the Company anticipates conductingat our registered offices no earlier than the 2019 annualclose of business on December 17, 2023, and no later than the close of business on January 16, 2024. Under the rules of the Exchange Act, we may use discretionary authority to vote with respect to any proposal not included in our proxy materials that is presented by a shareholder in person at the 2024 Annual Meeting if the shareholder making the proposal has not given notice to us by January 16, 2024.
Any shareholder who intends to solicit proxies in support of any director nominees must comply with the content requirements of Rule 14a-19 of the Exchange Act (the SEC’s universal proxy rule) at the time it complies with the earlier deadlines in the Company’s advance notice provisions of its bylaws. Thus, if a shareholder intends to solicit proxies in support of any director nominees submitted under the advance notice provisions of the Company’s bylaws for the 2024 Annual Meeting, then such shareholder must also provide proper written notice that sets forth all the information required by SEC Rule 14a-19 to Company at our registered offices in Houston, Texas not earlier than the close of business on the 150th day prior to the date of the 2024 Annual Meeting and not later than the close of business on the later of the 120th day prior to the 2024 Annual Meeting or, if the first public announcement of the date of the 2024 Annual Meeting is fewer than 100 days prior to the date of the 2024 Annual Meeting, the 10th day following the day on which public announcement of the date of the 2024 Annual Meeting is first made. Accordingly, for our 2024 Annual Meeting, assuming the meeting in mid-May, 2019.
The Company is sending only one copy of its proxy statement to shareholders who share the same address, unless they have notified the Company that they want to continue receiving multiple copies. This practice, known as “householding,” is designed to reduce duplicate mailings and save significant printing and postage costs as well as natural resources.
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If you received householded mailingmail via post this year and you would like to have additional copies of the Company'sCompany’s proxy statement mailed to you, or you would like to opt out of this practice for future mailings, please submit your request to Mark F. Elvig,D. Tattoli, Secretary, in care of Core Laboratories LP, 6316 Windfern Road, Houston, Texas 77040 or by phone at 713-328-2673.+1 (713) 328-2673. You may also contact the Company if you received multiple copies of the annual meeting2023 Annual Meeting materials and would prefer to receive a single copy in the future.
Incorporation by Reference | ||||
The information contained in this proxy statement in the sections entitled “Compensation Committee Report” and “Report of the Audit Committee” shall not be deemed to be “soliciting material” or “filed” with the Securities and Exchange Commission, nor shall such information be incorporated by reference into any future filings with the Securities and Exchange Commission, or subject to the liabilities of Section 18 of the Exchange Act, except to the extent that the Company specifically incorporates it by reference into a document filed under the Securities Act of 1933, as amended, or the Exchange Act.
Other Information | ||||
A copy of our Annual Report on Form 10-K for the year ended December 31, 2017,2022, including the financial statements, schedules and exhibits thereto, may be obtained without charge by written request to Mark F. Elvig,D. Tattoli, Secretary, in care of Core Laboratories LP, 6316 Windfern Road, Houston, Texas 77040.
By Order of the Board of Supervisory Directors
Lawrence Bruno
Chairman
Houston, Texas
April 27, 2023
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CORE LABORATORIES 6316 WINDFERN ROAD HOUSTON, TEXAS 77040 | VOTE BY INTERNET - www.proxyvote.comUse the Internet to transmit your voting instructions and for electronic delivery of | ||
ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS | |||
If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. | |||
VOTE BY PHONE - 1-800-690-6903 | |||
Use any touch-tone telephone to transmit your voting | |||
VOTE BY MAIL | |||
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. | |||
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: | M52480-P33425-P33515 | KEEP THIS PORTION FOR YOUR RECORDS | ||
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - | ||||
DETACH AND RETURN THIS PORTION ONLY | ||||
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
CORE LABORATORIES | ||||
The Board of | For | Withhold | ||
1. To | ||||
1a) | | | ||
1b) | | | ||
The Board of | For | Against | Abstain | ||||||||||
2. To | | | | ||||||||||
3a. To approve, on an advisory basis, the compensation philosophy, policies and procedures described in the section entitled Compensation Discussion and Analysis (“CD&A”), and the compensation of | | | | ||||||||||
The Board of Directors recommends you vote 1 Year on the | 1 Year | 2 Years | 3 Years | Abstain | |||||||||
3b. To approve the selection of the frequency of shareholder votes on executive compensation, | | | | | |||||||||
The Board of Directors recommends you vote FOR the following proposal: | For | Against | Abstain | ||||||||||
4. To approve and resolve the amendment and restatement of the Company’s 2014 Non-Employee Director Stock Incentive Plan, the principal purpose of which is to extend the term of such plan through June 28, 2033. | | | | ||||||||||
NOTE: Such other business as may properly come before the annual meeting or any adjournment thereof shall be voted in accordance with the discretion of the attorneys and proxies appointed hereby. | |||||||||||||
Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name, by authorized officer. | ||||
Signature (PLEASE SIGN WITHIN BOX) | Date | Signature (Joint Owners) | Date | |
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Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and Annual Report are available at www.proxydocs.com/clb.
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M52481-P33425-P33515
CORE LABORATORIES | ||||||
Annual Meeting of Shareholders | ||||||
June 28, 2023 9:00 AM | ||||||
This proxy is solicited by the Board of | ||||||
This Proxy is being solicited on behalf of the Board of | ||||||
The undersigned hereby constitutes and appoints | ||||||
THIS PROXY IS BEING SOLICITED ON BEHALF OF THE BOARD OF | ||||||
Address Changes/Comments: | ||||||
(If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side) | ||||||
Continued and to be signed on reverse side | ||||||
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APPENDIX A
CORE LABORATORIES INC.
2023 NONEMPLOYEE DIRECTOR STOCK INCENTIVE PLAN
1. Objectives. The Core Laboratories Inc. 2023 Nonemployee Director Stock Incentive Plan (the “Plan”) is intended to provide an incentive to retain and attract persons of training, experience, and ability to serve as independent directors on the Board of Directors of Core Laboratories Inc. (the “Company”), to encourage the sense of proprietorship of such persons, and to stimulate the active interest of such persons in the development and financial success of the Company. These objectives are to be accomplished by making Awards under the Plan and thereby providing Participants with a proprietary interest in the growth and performance of the Company and its Subsidiaries. The Plan as set forth herein constitutes an amendment and restatement of the Core Laboratories Inc. 2014 Nonemployee Director Stock Incentive Plan as previously adopted and amended by the Company (the “Prior Plan”), and shall supersede and replace in its entirety such previously adopted plan. This amendment and restatement of the Prior Plan shall be effective as of June 28, 2023, provided this amendment and restatement of the Prior Plan is approved by the shareholders of the Company on such date at the Company’s 2023 Annual Meeting of Shareholders. If this amendment and restatement of the Prior Plan is not so approved by the shareholders, then this amendment and restatement shall be void and of no effect. Notwithstanding any provisions herein to the contrary, each award granted under the Prior Plan prior to the effective date of this amendment and restatement shall be subject to the terms and provisions of the Prior Plan as in effect prior to this amendment and restatement of the Prior Plan into the Plan.
2. Definitions. As used herein, the terms set forth below shall have the following respective meanings:
“Award” means the grant of an Option or Restricted Shares, whether granted singly, in combination or in tandem, to a Participant pursuant to any applicable terms, conditions, and limitations as the Board may establish in order to fulfill the objectives of the Plan.
“Award Agreement” means a written agreement between the Company and a Participant that sets forth the terms, conditions, and limitations applicable to an Award.
“Board” means the Board of Directors of the Company.
“Code” means the United States Internal Revenue Code of 1986, as amended from time to time.
“Common Shares” means the Common Shares, par value 0.02 € per share, of the Company.
“Director” means any individual serving as a member of the Board.
“Exchange Act” means the United States Securities Exchange Act of 1934, as amended from time to time.
“Fair Market Value” means, as of a particular date, the final closing price per Common Share, if the Common Shares are listed on a national stock exchange registered under section 6(a) of the Exchange Act, reported on the stock exchange composite tape on that date (or such other reporting service approved by the Board); or, if no closing price is reported on that date, on the last preceding date on which such closing price per Common Share is so reported. If the Common Shares are traded over the counter at the time a determination of the Fair Market Value of a Common Share is required to be made hereunder, its Fair Market Value shall be deemed to be equal to the average between the closing bid and asked prices of a Common Share on that date, or, if there are no quotations available for such date, on the last preceding date on which such quotations are available. In the event that the Fair Market Value of a Common Share cannot be determined as provided above at the time a determination of such value is required to be made hereunder, the determination of its Fair Market Value shall be made by the Board in good faith.
“Nonemployee Director” means any Director who is not an employee of the Company or any Subsidiary and has not been an employee since the date of the most recent annual general meeting of shareholders of the Company.
“Option” means a nonqualified stock option within the meaning of Section 83 of the Code.
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“Participant” means a Nonemployee Director to whom an Award has been made under the Plan.
“Restricted Shares” means (i) Common Shares that are restricted or subject to forfeiture provisions or (ii) a credit of units to a bookkeeping account maintained by the Company evidencing accrual to a Participant of unsecured and unfunded conditional rights to acquire Common Shares.
“Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act or any successor rule.
“Subsidiary” means any corporation, limited liability company, or other entity of which the Company directly or indirectly owns shares or other interests representing more than 50% of the voting power of all classes or series of equity securities of such entity, which have the right to vote generally on matters submitted to a vote of the holders of equity interests in such entity.
3. Eligibility. All Nonemployee Directors are eligible for Awards under the Plan. The Board in its sole discretion shall select the Participants in the Plan from time to time by the grant of Awards under the Plan. The selection of Participants and the granting of Awards under the Plan shall be entirely discretionary and nothing in the Plan shall be deemed to give any Nonemployee Director any right to participate in the Plan or to be granted an Award.
4. Common Shares Available for Awards. No additional Common Shares shall be made available for the grant of Awards under the Plan in connection with the amendment and restatement of the Prior Plan. Accordingly, from and after April, 28, 2023, subject to adjustment as provided in Section 13, there shall be available for Awards granted under the Prior Plan and the Plan wholly or partly in Common Shares (including rights or options which may be exercised for or settled in Common Shares) the sum of (i) 493,120 Common Shares (which is the number of Common Shares available under the Prior Plan (and not subject to outstanding Awards) as of such date) and (ii) the number of Common Shares subject to outstanding Awards under the Prior Plan as of such date that must or may be settled in Common Shares. The Board and the appropriate officers of the Company shall from time to time take whatever actions are necessary to file required documents with governmental authorities and stock exchanges and transaction reporting systems to make Common Shares available for issuance pursuant to Awards. Common Shares related to Awards that are forfeited, terminated or that expire unexercised, and Common Shares that are withheld from an Award of Restricted Shares to cover taxes relating to such Award, shall immediately become available for Awards hereunder. Common Shares that are withheld from an Award of Options to cover any exercise price or taxes relating to such Award shall not be available again for Awards hereunder. Any Common Shares that are issued will be issued in registered form only and no share certificates shall be issued. The Board may from time to time adopt and observe such procedures concerning the counting of shares against the Plan maximum as it may deem appropriate under Rule 16b-3.
5. Administration. The Plan shall be administered by the Board, which shall have full and exclusive power to interpret the Plan and to adopt such rules, regulations, and guidelines for carrying out the Plan as it may deem necessary or proper, all of which powers shall be exercised in the best interests of the Company and in keeping with the objectives of the Plan. The Board may, in its discretion, provide for the extension of the exercisability of an Award, accelerate the vesting or exercisability of an Award, eliminate or make less restrictive any restrictions contained in an Award, waive any restriction or other provision of the Plan or an Award, or otherwise amend or modify an Award in any manner that is either (i) not adverse to the Participant holding such Award or (ii) consented to by such Participant. The Board may correct any defect or supply any omission or reconcile any inconsistency in the Plan or in any Award in the manner and to the extent the Board deems necessary or desirable to carry it into effect. Any decision of the Board in the interpretation and administration of the Plan shall lie within its sole and absolute discretion and shall be final, conclusive, and binding on all parties concerned. No member of the Board shall be liable for anything done or omitted to be done by him or her or by any other member of the Board in connection with the performance of any duties under the Plan, except for his or her own willful misconduct or as expressly provided by statute.
6. Awards. The Board shall in its discretion determine the type or types of Awards to be made to each Participant under the Plan. Each Award made hereunder shall be embodied in an Award Agreement, which shall contain such terms, conditions, and limitations as shall be determined by the Board in its sole discretion and shall be signed by the Participant and by the Managing Director, the Chief Executive Officer, the President, the Secretary or any Vice
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President of the Company for and on behalf of the Company. The Board shall set a minimum vesting period for any Award granted under the Plan at one year; provided, however, that any vesting schedules may be designed to vest in installments over the minimum vesting period and may be accelerated (in whole or in part) upon the occurrence of a Change in Control or a separation from service, as set forth in the Plan or the individual Award Agreement. An Award Agreement may include provisions for the repurchase by the Company of Common Shares acquired pursuant to the Plan and the repurchase of a Participant’s option rights under the Plan. Awards may consist of those listed in this Section 6 and may be granted singly, in combination, or in tandem. Awards may also be made in combination or in tandem with, in replacement of, or as alternatives to grants or rights (i) under the Plan or any other Nonemployee Director plan of the Company or any of its Subsidiaries, including the plan of any acquired entity, or (ii) made to any Nonemployee Director by the Company or any Subsidiary. An Award may provide for the granting or issuance of additional, replacement or alternative Awards upon the occurrence of specified events, including the exercise of the original Award.
b)
c)
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7. Substitution of Awards; Prohibition on Repricing of Certain Options. At the discretion of the Board, a Participant may be offered an election to substitute an Award for another Award or Awards of the same or different type. Subject to the provisions of Section 13, the terms of outstanding Award Agreements may not be amended without the approval of the Company’s shareholders so as to (i) reduce the purchase price of a Common Share under any outstanding Option, (ii) cancel any outstanding Option in exchange for cash or other Awards when the purchase price of a Common Share under the Option exceeds the Fair Market Value of a Common Share or (iii) otherwise reprice any Option under generally accepted accounting principles.
8. Option Exercise. The price at which Common Shares may be purchased under an Option shall be paid in full at the time of exercise in cash or, if permitted by the Board, by means of tendering Common Shares or surrendering all or part of that or any other Award, including Restricted Shares, valued at Fair Market Value on the date of exercise, or any combination thereof. The Board shall determine acceptable methods for tendering Common Shares or Awards to exercise an Option as it deems appropriate. If permitted by the Board, payment may be made by successive exercises by the Participant. The Board may provide for procedures to permit the exercise or purchase of Awards by (i) loans from the Company (to the extent permissible under applicable law) or (ii) use of the proceeds to be received from the sale of Common Shares issuable pursuant to an Award. Unless otherwise provided in the applicable Award Agreement, in the event Restricted Shares are tendered as consideration for the exercise of an Option, a number of the shares issued upon the exercise of the Option, equal to the number of Restricted Shares used as consideration therefor, shall be subject to the same restrictions as the Restricted Shares so submitted as well as any additional restrictions that may be imposed by the Board.
9. Tax Withholding. The Company shall have the right to deduct applicable taxes from any Award payment and withhold, at the time of delivery or vesting of cash or Common Shares under the Plan, an appropriate amount of cash or number of Common Shares or a combination thereof for payment of taxes required by law or to take such other action as may be necessary in the opinion of the Company to satisfy all obligations for withholding of such taxes. The Board may also permit withholding to be satisfied by the transfer to the Company of Common Shares theretofore owned by the holder of the Award with respect to which withholding is required. If Common Shares are used to satisfy tax withholding, such shares shall be valued based on the Fair Market Value when the tax withholding is required to be made.
10. Amendment, Modification, Suspension, or Termination. The Board may amend, modify, suspend, or terminate the Plan for the purpose of meeting or addressing any changes in legal requirements or for any other purpose permitted by law except that (i) no amendment or alteration that would impair the rights of any Participant under any Award previously granted to such Participant shall be made without such Participant’s consent, (ii) no amendment or alteration shall be effective prior to approval by the Company’s shareholders to the extent such approval is then required pursuant to Rule 16b-3 in order to preserve the applicability of any exemption provided by such rule to any Award then outstanding (unless the holder of such Award consents) or to the extent shareholder approval is otherwise required by applicable legal requirements, and (iii) no material amendment to the Plan shall be effective prior to approval by the Company’s shareholders. For purposes of clause (iii) of the preceding sentence, a material amendment is any amendment that would require shareholder approval pursuant to the requirements of the New York Stock
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Exchange or any exchange on which the Company is then listed. Notwithstanding any provision herein to the contrary, unless the Plan is terminated earlier pursuant to the preceding provisions of this Section 10, no further Awards may be granted under the Plan after June 28, 2033. The Plan shall remain in effect (at least for the purpose of governing outstanding Awards) until all Options granted under the Plan have been exercised or expired and all Restricted Shares granted under the Plan have vested or been forfeited.
11. Termination of Service as a Director. Upon the termination of a Nonemployee Director’s service as a Director, any unexercised, deferred, or unpaid Awards shall be treated as provided in the specific Award Agreement evidencing the Award. In the event of such a termination, the Board may, in its discretion, provide for the extension of the exercisability of any Award, accelerate the vesting or exercisability of an Award, eliminate or make less restrictive any restrictions contained in an Award, waive any restriction or other provision of the Plan or an Award, or otherwise amend or modify the Award in any manner that is either (i) not adverse to such Participant or (ii) consented to by such Participant.
12. Assignability. Unless otherwise determined by the Board and provided in the Award Agreement, no Award or any other benefit under the Plan shall be assignable or otherwise transferable except (i) by will or the laws of descent and distribution, (ii) pursuant to a qualified domestic relations order as defined by the Code or Title I of the United States Employee Retirement Income Security Act, or the rules thereunder, or (iii) with the consent of the Board. The Board may prescribe and include in applicable Award Agreements other restrictions on transfer. Any attempted assignment of an Award or any other benefit under the Plan in violation of this Section 12 or the terms of an Award Agreement shall be null and void.
13. Adjustments.
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14. Restrictions. No Common Shares or other form of payment shall be issued with respect to any Award unless the Company shall be satisfied based on the advice of its counsel that such issuance will be in compliance with applicable federal and state securities laws. It is the intent of the Company that the Plan comply with Rule 16b-3 with respect to persons subject to Section 16 of the Exchange Act unless otherwise provided herein or in an Award Agreement, that any ambiguities or inconsistencies in the construction of the Plan be interpreted to give effect to such intention and that, if any provision of the Plan is found not to be in compliance with Rule 16b-3, such provision shall be null and void to the extent required to permit the Plan to comply with Rule 16b-3. Common Shares delivered under the Plan may be subject to such stop transfer orders and other restrictions as the Board may deem advisable under the rules, regulations, and other requirements of the Securities and Exchange Commission, any securities exchange or transaction reporting system upon which the Common Shares are then listed, and any applicable foreign and United States federal and state securities law.
15. Unfunded Plan. Insofar as it provides for Awards of Common Shares or rights thereto, the Plan shall be unfunded. Although bookkeeping accounts may be established with respect to Participants who are entitled to Common Shares or rights thereto under the Plan, any such accounts shall be used merely as a bookkeeping convenience. The Company shall not be required to segregate any assets that may at any time be represented by Common Shares or rights thereto, nor shall the Plan be construed as providing for such segregation, nor shall the Company or the Board be deemed to be a trustee of any Common Shares or rights thereto to be granted under the Plan. Any liability or obligation of the Company to any Participant with respect to a grant of Common Shares or rights thereto under the Plan shall be based solely upon any contractual obligations that may be created by the Plan and any Award Agreement with such Participant, and no such liability or obligation of the Company shall be deemed to be secured by any pledge or other encumbrance on any property of the Company. Neither the Company nor the Board shall be required to give any security or bond for the performance of any obligation that may be created by the Plan.
16. Rights as Shareholder. Unless otherwise provided under the terms of an Award Agreement, a Participant shall have no rights as a holder of Common Shares with respect to Awards granted hereunder, unless and until Common Shares are issued to such Participant.
17. Governing Law. The Plan and all determinations made and actions taken pursuant hereto, to the extent not otherwise governed by mandatory provisions of the Code or the securities laws of the United States, shall be governed by and construed in accordance with the laws of the State of Texas.
18. Effective Date of Plan. The Plan originally became effective on September 1, 1995. It was subsequently amended and restated effective as of May 29, 1997, June 28, 2006 and May 13, 2014. This amendment and restatement of the Plan shall be effective as provided in Section 1.
19. Section 409A of the Code. In the event that any Award granted pursuant to this Plan provides for a deferral of compensation within the meaning of Section 409A of the Code and the regulations promulgated thereunder (“Section 409A”), it is the general intention, but not the obligation, of the Company to design such Award to comply with Section 409A and such Award should be interpreted accordingly.
20. Severability. If any provision of this Plan is held to be illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining provisions hereof, but such provision shall be fully severable and the Plan shall be construed and enforced as if the illegal or invalid provision had never been included herein.
21. Miscellaneous. The granting of any Award shall not impose upon the Company, the Board, or any other Directors any obligation to nominate any Participant for election as a Director and the right of the shareholders of the Company to remove any person as a Director of the Company shall not be diminished or affected by reason of the fact that an Award has been granted to such person.
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