CLB 2019 Proxy Statement

42 received upon a termination of employment or a change in control as of December 31, 2018 (which are reflected in the table below) and as of the date of this filing may differ. The severance and change in control benefits that could be provided to Messrs. Bruno and Hill pursuant to the new 2019 employment agreements are described following the table belows. Employment Agreements The Demshur, Bergmark and Davis Employment Agreements During the 2018 year, Messrs. Demshur, Bergmark and Davis had employment agreements first entered into in 1998. Although Messrs. Bergmark's and Davis' employment agreements provided the same terms as that of Mr. Demshur's employment agreement, both Messrs. Bergmark's and Davis' employment agreements were terminated upon their respective retirements on December 31, 2018. Only Mr. Demshur's employment agreement was still effective at the time of this filing. Previously the employment agreements for Messrs. Demshur, Bergmark and Davis, but now only the employment agreement for Demshur includes provisions governing the payment of severance benefits if employment is terminated by the executive for any reason or by the Company for any reason other than (1) due to death or disability, (2) for cause, or (3) the executive's material breach of a material provision of the employment agreement. In such event, our executive severance benefits are comprised of: a. the payment of a lump-sum amount equal to the sum of: 200% of his base salary as in effect immediately prior to the termination; and two times 45% of the maximum annual incentive bonus he could have earned pursuant to his employment agreement; b. provision of a benefits package for the executive and his spouse and dependent children consisting of medical, hospital, dental, disability and life insurance benefits at least as favorable as those benefits provided to the executive and his spouse and dependent children immediately prior to termination, for as long as the executive and his spouse or dependent children are living; c. the provision of outplacement services at a cost not to exceed 100% of the executive's annual base salary as in effect immediately prior to the termination; and d. the full and immediate vesting and exercisability of all of his outstanding equity awards, which awards shall remain exercisable for the greater of (1) three months following such termination, or (2) the period provided in the plan or plans pursuant to which such equity awards were granted. For purposes of calculating the lifetime medical benefits, we assumed the following: • a discount rate of 4.25%; • mortality table under section 417(e)(3)(A)(ii)(l), the 2018 Applicable Mortality Table for Lump Sums under the Pension Protection Act of 2006 (PPA); • a current medical trend of 5.8% per annum, decreasing in accordance with a schedule over time to 5.5% in 2020 and 5.1% in 2021; • that medical benefits are to be coordinated with Medicare such that premiums will be reduced by 70% for persons aged 65 and older; and • that the health plan is self-funded and will continue to be so in the future. For purposes of calculating the welfare benefits, we assumed the following: • the basic life insurance benefit was valued as a whole life premium at discount rate of 3.75%; • mortality table under section 417(e)(3)(A)(ii)(l), the 2018 Applicable Mortality Table for Lump Sums under PPA; • the accidental death and disability coverage was valued as 20% of the value of basic life insurance benefit, per the current premium ratio and this benefit was assumed to continue beyond age 65; and • the long-term disability premium was escalated to 4% until age 65, reflecting the age-related incidence of disability as well as increased administrative costs; no value is attributed to the benefit beyond age 65, as long-term disability coverage is rarely available once employment ends. If the executive's employment is terminated as a result of death or disability, the executive (if living), his spouse, and his dependent children, as applicable, are entitled to the benefits described under clause (b) and (d) above. If the executive's employment is terminated for any reason within three years following a change in control, the executive is entitled to the same benefits described above except that certain outstanding stock options would remain exercisable for the greater