SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_]Confidential, for Use of the
Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
SCHLUMBERGER LIMITED
(Name of Registrant as Specified In Its Certificate)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X]No fee required.
[_]$125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or Item
22(a)(2) of Schedule 14A.
[_]$500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_]Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[_] Fee paid previously with preliminary materials.
[_]Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
Schlumberger
NOTICE OF
ANNUAL GENERAL MEETING OF STOCKHOLDERS
AND
PROXY STATEMENT
APRIL 10, 2002
Please sign your proxy card and return it in the enclosed
envelope so that you may be represented at the Meeting.
Schlumberger
Schlumberger Limited
153 East 53 Street, 57/th/ Floor
New York, New York 10022-4624
--------------
42, rue Saint-Dominique
75007 Paris, France
--------------
Parkstraat 83
2514 JG The Hague
The Netherlands
NOTICE OF ANNUAL GENERAL MEETING OF STOCKHOLDERS
To Be Held April 10, 2002
March 6, 2002
The Annual General Meeting of Stockholders of Schlumberger Limited
(Schlumberger N.V.) will be held at the Avila Beach Hotel, Penstraat 130,
Willemstad, Curacao, Netherlands Antilles, on Wednesday, April 10, 2002 at 10:30
in the morning (Curacao time), for the following purposes:
1. To elect 11 directors.
2. To report on the course of business during the year ended December 31,
2001, to adopt and approve the Company's Consolidated Balance Sheet as at
December 31, 2001, its Consolidated Statement of Income for the year ended
December 31, 2001, and the declaration of dividends by the Board of
Directors as reflected in the Company's 2001 Annual Report to Stockholders.
3. To approve the appointment of PricewaterhouseCoopers LLP as independent
public accountants to audit the accounts of the Company for 2002.
Action will also be taken upon such other matters as may come properly before
the meeting.
The close of business on February 21, 2002 has been fixed as the record
date for the meeting. All holders of common stock of record at the close of
business on that date are entitled to vote at the meeting.
By order of the Board of Directors,
Ellen Summer
Secretary
PROXY STATEMENT
March 6, 2002
This proxy statement is furnished in connection with the solicitation
by the Board of Directors of Schlumberger Limited (Schlumberger N.V.) (the
"Company") of proxies to be voted at the 2002 Annual General Meeting of
Stockholders. The approximate mailing date of this proxy statement is March 6,
2002. Business at the meeting is conducted in accordance with the procedures
determined by the Chairman of the meeting and is generally limited to matters
properly brought before the meeting by or at the direction of the Board of
Directors or by a stockholder in accordance with specified requirements
requiring advance notice and disclosure of relevant information.
The Schlumberger 2001 Annual Report to Stockholders is included in this
package as a separate document. The Company's Consolidated Balance Sheet as at
December 31, 2001, its Consolidated Statement of Income for the year ended
December 31, 2001 and the supplemental financial information with respect to
dividends included in the Annual Report are incorporated by reference as part of
this proxy soliciting material.
The Company will bear the cost of furnishing proxy material to all
stockholders and of soliciting proxies by mail and telephone. D. F. King & Co.,
Inc. has been retained by the Company to assist in the solicitation of proxies
for a fee estimated at $10,000 plus reasonable expenses. The Company will
reimburse brokerage firms, fiduciaries and custodians for their reasonable
expenses in forwarding the solicitation material to the beneficial owners.
Voting Procedure
Each stockholder of record at the close of business on February 21,
2002 is entitled to one vote for each share registered in the stockholder's
name. On that date there were 576,234,851 outstanding shares of common stock of
Schlumberger, excluding 90,865,189 shares held in treasury.
Fifty percent of the outstanding shares, exclusive of shares held in
treasury, must be present in person or by proxy to constitute a quorum for the
holding of the meeting. Abstentions and broker non-votes are counted for
determining the presence of a quorum but are not counted as votes cast in the
tabulation of votes on any matter brought before the meeting.
Shares cannot be voted at the meeting unless the owner of record is
present in person or is represented by proxy. Schlumberger is incorporated in
the Netherlands Antilles and, as required by Netherlands Antilles law, meetings
of stockholders must be held in the Netherlands Antilles. The enclosed proxy
card is a means by which a stockholder may authorize the voting of shares at the
meeting. It may be revoked at any time by written notice to the Secretary of the
Company before it is voted. If it is not revoked, the shares represented will be
voted in accordance with the proxy.
1
1. Election of Directors
It is intended to fix the number of directors at 11 and to elect a
Board of Directors of 11 members, each to hold office until the next Annual
General Meeting of Stockholders and until a director's successor is elected and
qualified or until a director's death, resignation or removal. Each of the
nominees, except Jamie S. Gorelick, Andrew Gould and Adrian Lajous, is now a
director and was previously elected by the stockholders. Don Ackerman, a
director since 1982, Victor Grijalva, a director since 1998, John Mayo, a
director since 2001 and Yoshihiko Wakumoto, a director since 1990 are not
standing for reelection. Unless instructed otherwise, the proxies will be voted
for the election of the 11 nominees named below. If any nominee is unable or
unwilling to serve, proxies may be voted for another person designated by the
Board of Directors. The Board knows of no reason why any nominee will be unable
or unwilling to serve if elected.
A majority of the votes cast is required to elect each of the nominees
for director.
The Board of Directors Recommends a Vote FOR All Nominees.
The Board of Directors' nominees for election to the Board, together
with information furnished by them with respect to their business experience,
and other information regarding them, are set forth below:
Director
Nominee, Age and Five-Year Business Experience Since
---------------------------------------------- ----------
D. EUAN BAIRD, 64; Chairman and Chief Executive Officer since October 1986. (1).......................... 1986
JOHN DEUTCH, 63; Institute Professor, Massachusetts Institute of Technology, Cambridge, Massachusetts
since January 1997; Director of U.S. Central Intelligence May 1995 to December 1996; Director of
Schlumberger Limited, May 1987 to 1993. (2).......................................................... 1997
JAMIE S. GORELICK, 51; Vice Chair of Fannie Mae, the largest source of financing for U.S. home
mortgages, since May 1997; Deputy Attorney General of the United States, March 1993 to April 1997,
both in Washington, D.C. (3)......................................................................... --
ANDREW GOULD, 55; President and Chief Operating Officer since March 1, 2002; Executive Vice President
Oilfield Services, January 1999 to March 1, 2002; Executive Vice President Oilfield Products,
February 1998 to January 1999; President, Wireline & Testing, October 1993 to February 1998.......... --
ADRIAN LAJOUS, 58; Senior Energy Advisor, McKinsey & Company, Houston, Texas, since January 2001;
Special Advisor to the President of Mexico (international oil matters), January 2000 to November
2000; Director and CEO, Pemex, Mexico's national oil company from 1990 to 1999. (4).................. --
ANDRE LEVY-LANG, 64; Independent Investor since November 1999; Chairman of the Executive Board of
Paribas, an international banking group, May 1998 to August 1999; Chairman of the Board of
Management of Compagnie Financiere de Paribas from June 1990 until May 1998, Paris. (5).............. 1992
WILLIAM T. McCORMICK, JR., 57; Chairman and Chief Executive Officer, CMS Energy Corp., a diversified
energy company, Dearborn, Michigan. (6).............................................................. 1990
DIDIER PRIMAT, 57; President, Primwest Holding N.V., an investment management company, Curacao, N.A.
(7).................................................................................................. 1988
NICOLAS SEYDOUX, 62; Chairman and Chief Executive Officer, Gaumont, a French film-making enterprise,
Paris. (7)........................................................................................... 1982
LINDA GILLESPIE STUNTZ, 47; Partner, law firm of Stuntz, Davis & Staffier P.C., since February 1995;
Partner, law firm of Van Ness Feldman, P.C., March 1993 to February 1995, both in Washington, D.C.
(8).................................................................................................. 1993
SVEN ULLRING, 66; Independent Adviser since June 2000; President and Chief Executive Officer, Det Norske
Veritas, provider of safety, quality and reliability services to maritime, offshore and other
industries from July 1985 through May 2000, Hovik, Norway. (9)...................................... 1990
(1) Mr. Baird is a director of Scottish Power, a company which supplies gas,
electricity and water services in the United Kingdom and Western United States;
Societe Generale Group, an international banking group; and AREVA, a nuclear
power and connectors company, and a trustee of Haven Capital Management Trust.
(2) Mr. Deutch is a director of Citigroup, a banking and insurance
organization; CMS Energy Corp., a diversified energy company; Cummins Engine
Company, Inc., a manufacturer of diesel engines and components; ARIAD
Pharmaceuticals, which is engaged in the discovery of novel pharmaceuticals;
and Raytheon Corporation, an electronics manufacturer. Mr. Deutch's adult son,
Paul Deutch, is employed by a unit of Schlumberger. The employment of Mr.
Deutch's son was not influenced by John Deutch's position as a director of the
Company.
(3) Ms. Gorelick is a director of United Technologies Corporation, a company
which provides high technology products and services to the aerospace industry
where she serves on its Audit, Finance and Public Issues Review Committees and
serves on the Harvard Board of Overseers, the John D. and Catherine T.
MacArthur Foundation, the Boards of America's Promise and the Carnegie
Endowment for International Peace, and is a member of the Council on Foreign
Relations and the Central Intelligence Agency's National Security Advisory
Panel.
(4) Mr. Lajous is President of Petrometrica, an energy consulting company,
Mexico City; President of Oxford Institute for Energy Studies, Oxford, U.K.;
and Senior Energy Advisor at Morgan Stanley, London.
(5) Mr. Levy-Lang is a director and member of the Compensation Committee of
AGF, a French insurance company and a director of Dexia, a Belgian financial
services company.
2
(6) Mr. McCormick is Chairman of Consumers Energy, a utility company; and a
director of Bank One, Inc., a regional bank holding company, and Rockwell
Automation Inc., a diversified producer of, among others, electronic,
industrial automation and avionics products.
(7) Mr. Primat and Mr. Seydoux are cousins.
(8) Mrs. Stuntz is a director of American Electric Power Company, Inc., an
electric and power holding company, where she is Chairman of its Finance
Committee and is a member of its Executive, Public Policy, and Directors
Committees; and a director of the Electricity Innovation Institute, a nonprofit
public benefit corporation engaged in research and technologies related to
electricity production, transmission, distribution and utilization.
(9) Mr. Ullring is Chairman of the Supervisory Board of Norsk Hydro, an energy,
fertilizer and metals company; Chairman of the Supervisory Board of Storebrand,
an insurance company; and Chairman of the Board of the Environmental Forum, all
in Oslo, Norway; and a member of the Board of Keppel Corporation, a real estate
development, shipbuilding and telecommunications company in Singapore.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information with respect to
persons known by the Company to be the beneficial owner of 5% or more of the
Common Stock.
Beneficial Ownership
of Common Stock
-----------------------------------------
Number of Percentage
Name and Address Shares of Class
---------------- -----------------------------------------
FMR Corp. (1) 43,972,478 7.638%
85 Devonshire Street
Boston, Massachusetts 02109
(1) Based on a Statement on Schedule 13G dated February 14, 2002. Such
filing indicates that FMR Corp. has sole voting power with respect to
3,016,417 shares and sole dispositive power with respect to 43,972,478
shares. FMR Corp. is the parent of Fidelity Management & Research
Company, investment adviser to the Fidelity group of investment
companies. The filing indicates that the Common Stock was acquired in
the ordinary course of business and not for the purpose of influencing
control of the Company.
The following lists the shares of Schlumberger Common Stock
beneficially owned as of January 31, 2002 by all directors and nominees, by each
of the named executive officers, and by the directors and officers as a group.
Except as footnoted, each individual has sole voting and investment power over
the shares listed by that individual's name. As of January 31, 2002, no nominee
for director owned more than 1% of the outstanding shares of the Company's
Common Stock, except Mr. Primat who owned 4.09%. All 23 directors and executive
officers as a group owned 4.33% of the outstanding shares of the Company at
January 31, 2002.
Name Shares
---- ------
Don E. Ackerman............................................................... 2,500
D. Euan Baird................................................................. 2,403,404 (1)
Pierre Bismuth................................................................ 202,092 (2)
John Deutch................................................................... 4,100 (3)
Maurice Dijols................................................................ 104,073 (4)
Jaime S. Gorelick............................................................. 0
Andrew Gould.................................................................. 329,918 (5)
Victor E. Grijalva............................................................ 786,288 (6)
Adrian Lajous................................................................. 0 (7)
Andre Levy-Lang............................................................... 4,500
Jack Liu...................................................................... 207,955
John C. Mayo.................................................................. 2,500
William T. McCormick, Jr...................................................... 10,500
Irwin Pfister................................................................. 340,740 (8)
Didier Primat................................................................. 23,557,628 (9)
Nicolas Seydoux............................................................... 252,024 (10)
Linda Gillespie Stuntz........................................................ 5,800 (11)
Sven Ullring.................................................................. 3,905
Yoshihiko Wakumoto............................................................ 2,500
All directors and executive officers as a group (23 persons).................. 24,939,904 (12)
----------
(1) Includes 699,955 shares held in a revocable grantor trust and 1,703,449
shares which may be acquired by Mr. Baird within 60 days through the
exercise of stock options.
(2) Includes 58,177 shares held in a revocable grantor trust; 135,089 shares
which may be acquired by Mr. Bismuth within 60
3
days through the exercise of stock options; and 4,800 shares in which he
shares voting and investment power.
(3) Includes 600 shares owned by Mr. Deutch's wife, as to which he disclaims
beneficial ownership.
(4) Includes 89,524 shares which may be acquired by Mr. Dijols within 60 days
through the exercise of stock options.
(5) Includes 294,918 shares which may be acquired by Mr. Gould within 60 days
through the exercise of stock options.
(6) Includes 670,389 shares which may be acquired by Mr. Grijalva within 60
days through the exercise of stock options.
(7) Excludes 300 shares held in a family trust as to which Mr. Lajous does not
have voting or investment powers.
(8) Includes 321,950 shares which may be acquired by Mr. Pfister within 60 days
through the exercise of stock options.
(9) Includes 560,000 shares as to which Mr. Primat shares investment power and
5,999,008 shares held for account of the minor children of Mr. Primat as to
which he has joint voting and investment power.
(10) Includes 15,364 shares owned by Mr. Seydoux's wife as to which he shares
voting and investment power.
(11) Includes 3,000 shares as to which Mrs. Stuntz shares voting power and 300
shares owned by a minor child in a trust for which Mrs. Stuntz serves as
trustee.
(12) Includes 3,824,123 shares which may be acquired by executive officers as a
group because they have the right to acquire such shares within 60 days
through the exercise of stock options.
Board and Committees
Schlumberger has an Audit, a Compensation, a Finance, a Nominating and a
Technology Committee.
The Audit Committee is comprised of four independent directors. It assists
the Board in fulfilling its responsibilities to oversee the Company's financial
reporting process and monitors the integrity of the Company's financial
statements and the independence and performance of the Company's auditors. The
Audit Committee recommends for appointment by the Board of Directors, subject to
approval by the stockholders, a firm of independent certified public accountants
whose duty is to examine the Schlumberger consolidated financial statements.
Mrs. Stuntz is Chair of the Audit Committee, and Messrs. Levy-Lang, Mayo and
Primat are the other members.
The Compensation Committee reviews and approves the compensation of the
officers of the Company, advises on compensation and benefits matters and
administers the Company's stock option plans. Mr. McCormick is Chair of the
Compensation Committee. Messrs. Ackerman, Seydoux and Ullring are the other
members.
The Finance Committee advises on various matters, including dividend and
financial policies and the investment and reinvestment of funds. The Finance
Committee periodically reviews the administration of the Schlumberger employee
benefit plans and those of its subsidiaries. Mr. Levy-Lang is Chair of the
Finance Committee and Messrs. Ackerman, Baird, Grijalva and Wakumoto are the
other members.
The Nominating Committee recommends to the Board the number and names of
persons to be proposed by the Board for election as directors at the annual
general meetings of stockholders. It may also recommend to the Board persons to
be appointed by the Board or to be elected by the stockholders to fill any
vacancies which occur on the Board. Mr. Seydoux is Chair of the Nominating
Committee, and Mrs. Stuntz, Messrs. Baird, Deutch and McCormick are the other
members. The Nominating Committee will consider nominees recommended by
stockholders who may submit nominations to Chair, Nominating Committee, care of
the Secretary, Schlumberger Limited, 153 East 53 Street, 57/th/ Floor, New York,
New York 10022-4624.
The Technology Committee advises the Board and senior management on various
matters including the quality and relevance of programs dealing with scientific
research, development, information and manufacturing technology and also advises
on research strategy and university relationships. Mr. Deutch is Chair of the
Technology Committee and Mr. Levy-Lang is also a member.
During 2001 the Board of Directors held five meetings. The Audit Committee
met four times; the Compensation Committee met four times; the Finance Committee
met once; the Nominating Committee met five times; and the Technology Committee
met twice. All incumbent director nominees attended at least 83% of the
aggregate of the meetings of the Board and of the committees of the Board on
which such directors served.
4
Directors who are employees of Schlumberger do not receive compensation for
serving on the Board or on committees of the Board. Board members who are not
employees receive annual fees of $40,000 each, annual stock awards of 500 shares
of Schlumberger common stock and additional annual fees of $10,000 as members of
each of the committees on which they serve, except that the Chair of each
Committee receives an annual fee of $20,000, rather than the $10,000 annual fee
for committee service.
Audit Committee Report
The Audit Committee is comprised of four directors and operates under a
written charter reviewed annually by the Board of Directors. All members of the
Audit Committee are independent as defined in Section 303.01(B)(2)(a) and (3) of
the New York Stock Exchange's listing standards. The Audit Committee assists the
Board in fulfilling its responsibilities to oversee the Company's financial
reporting process and monitors the integrity of the Company's financial
statements and the independence and performance of the Company's auditors. In
this context, we have reviewed and discussed the Company's financial statements
with Company management and the independent auditors, PricewaterhouseCoopers
LLP, including matters raised by the independent auditors pursuant to Statement
on Auditing Standards No. 61 (Communication with Audit Committees). The Audit
Committee has reviewed and discussed such other matters as we deemed
appropriate.
The Company's independent auditors provided the Audit Committee with
written disclosures required by Independence Standards Board Standard No. 1
(Independence Discussions with Audit Committees), and we discussed the
PricewaterhouseCoopers' independence with them.
We have considered whether the provision of services by
PricewaterhouseCoopers LLP not related to the audit of the Company's financial
statements and to the review of the Company's interim financial statements is
compatible with maintaining PricewaterhouseCoopers' independence.
Based on the foregoing review and discussion, and relying on the
representation of Company management and the independent auditors' report to the
Audit Committee, the Audit Committee recommended that the Board of Directors
include the audited financial statements in the Company's Annual Report on Form
10-K for the year ended December 31, 2001 filed with the Securities and Exchange
Commission.
SUBMITTED BY THE AUDIT COMMITTEE OF THE SCHLUMBERGER
BOARD OF DIRECTORS
A. Levy-Lang D. Primat
J. Mayo L. Stuntz, Chair
5
EXECUTIVE COMPENSATION
Summary of Cash and Certain Other Compensation
The following table shows the compensation paid by the Company and its
subsidiaries to the Chief Executive Officer, the next four most highly
compensated executive officers as of December 31, 2001, and to one other person
who served as an executive officer during the year but who was not an executive
officer as of December 31, 2001 (the "named officers") for the fiscal years
ending December 31, 2001, 2000 and 1999.
SUMMARY COMPENSATION TABLE
Long Term Compensation
----------------------
Annual Compensation Awards
---------------------------- ------
Securities All
Underlying Other
Name and Principal Position Year Salary ($)(2) Bonus ($)(2) Options (#) (3) Compensation ($) (4)
--------------------------- ---- ------------- ------------ --------------- --------------------
D. E. Baird..................... 2001 1,500,000 2,000,000 0 210,000
Chairman and 2000 1,500,000 1,500,000 0 175,000
Chief Executive Officer 1999 1,500,000 1,000,000 0 105,000
-------------------------------------------------------------------------------------------------------------
A. Gould........................ 2001 800,000 1,120,000 100,000 95,704
Executive Vice President, 2000 507,000 567,200 200,000 53,922
Oilfield Services 1999 589,102 310,915 54,950 36,691
-------------------------------------------------------------------------------------------------------------
I. Pfister...................... 2001 575,000 675,000 100,000 50,750
Executive Vice President, 2000 500,000 150,000 100,000 44,800
SchlumbergerSema 1999 500,000 290,000 54,949 39,719
-------------------------------------------------------------------------------------------------------------
J. Liu.......................... 2001 450,000 245,000 0 44,100
Executive Vice President 2000 400,000 180,000 100,000 39,550
Finance 1999 400,000 165,000 54,949 22,250
and Chief Financial Officer
-------------------------------------------------------------------------------------------------------------
M. Dijols (1)................... 2001 356,827 281,093 20,000 47,013
Former Vice President,
Information Technology
-------------------------------------------------------------------------------------------------------------
P. Bismuth...................... 2001 350,000 210,000 20,000 37,240
Vice President, Personnel
1) Mr. Dijols was Vice President Information Technology from May 1, 2001 until
September 17, 2001 and is now President EUA, SchlumbergerSema.
2) Salary and bonus amounts include cash compensation earned and received and
any amounts deferred under the Schlumberger Restoration Savings Plan.
3) The Company has granted no stock appreciation rights or restricted stock.
4) The 2001 amounts disclosed in this column include:
(a) Company contributions to Schlumberger Profit Sharing Plans
(b) Company contributions to the International Staff Profit
Sharing Plan
(c) Company unfunded credits to the Schlumberger Supplementary
Benefit Plan
(d) Company unfunded matching credits to the Schlumberger
Restoration Savings Plan
(a)($) (b)($) (c)($) (d) ($)
------ ------ ------ -------
Mr. Baird....................... 11,900 N/A 113,200 84,900
Mr. Gould....................... 11,900 N/A 47,888 35,916
Mr. Pfister..................... 11,900 N/A 22,200 16,650
Mr. Liu......................... 11,900 N/A 18,400 13,800
Mr. Dijols...................... 13,600 13,946 12,167 7,300
Mr. Bismuth..................... 11,900 N/A 14,480 10,860
The Company's matching credits under the Schlumberger Restoration Savings
Plan are vested one-third at three years of service, two-thirds at four
years, fully at five years or upon reaching the earliest of age 60, death
or change of control. The amounts credited under the Schlumberger
Restoration Savings Plan will be paid upon termination or retirement,
death, disability, or change in control.
6
Stock Option Grants Table
The following table sets forth certain information concerning options
granted during 2001 to the named officers. Shown are hypothetical gains that
could be realized for the respective options, based on assumed rates of annual
compound stock price appreciation of 5% and 10% from the date the options were
granted over the ten-year term of the options. Any amount realized upon exercise
of the options will depend upon the market price of Schlumberger common stock at
the time the option is exercised relative to the exercise price of the option.
There is no assurance that the amounts reflected in this table will be realized.
Option Grants in Last Fiscal Year
Individual Grants
---------------------------------------------------------- Potential Realizable
Value at Assumed Annual
% of Total Rates of Stock Price
Number of Options Appreciation
Securities Granted to Exercise for Option Term
Underlying Options Employees in Price Expiration ----------------------
Name Granted (#)(1) Fiscal Year ($/SH)(2) Date 5%($) 10%($)
---- ------------------ ------------ -------- -------- ------ -------
D. E. Baird............ 0 ---- ---- ---- ---- ----
A. Gould............... 100,000 2.43 62.375 4/18/11 $3,922,730 $9,940,969
I. Pfister............. 100,000 2.43 62.375 4/18/11 $3,922,730 $9,940,969
J. Liu................. 0 ---- ---- ---- ---- ----
M. Dijols.............. 20,000 0.49 62.375 4/18/11 $ 784,546 $1,988,194
P. Bismuth............. 20,000 0.49 62.375 4/18/11 $ 784,546 $1,988,194
------------
(1) The Company has not granted any stock appreciation rights. Options listed
above become exercisable in installments of 20% each year following the
date of grant. All outstanding stock options become fully exercisable prior
to liquidation or dissolution of the Company or prior to any
reorganization, merger or consolidation of the Company where the Company is
not the surviving corporation unless such merger, reorganization or
consolidation provides for the assumption of such stock options.
(2) The exercise price of the options is equal to the average of the high and
the low per share prices of the common stock on the options' dates of grant
and may be paid in cash or by tendering shares of common stock. Applicable
tax obligations may be paid in cash or by the withholding of shares of
common stock.
Stock Option Exercises and
December 31, 2001 Stock Option Value Table
The following table shows certain information concerning options exercised
during 2001 by the named officers and the number and value of unexercised
options at December 31, 2001. Schlumberger has not granted stock appreciation
rights. The values of unexercised in-the-money stock options at December 31,
2001 as shown below are presented pursuant to Securities and Exchange Commission
rules. Any amount realized upon exercise of stock options will depend upon the
market price of Schlumberger common stock at the time the stock option is
exercised. There is no assurance that the values of unexercised in-the-money
options reflected in this table will be realized.
Aggregated Option Exercises in Last Fiscal Year and Fiscal
Year-End Option Values
Number of Securities Value of Unexercised
Underlying Unexercised In-The-Money Options
Shares Options at FY-End (#) at FY-End ($) (2)
Acquired on Value Realized Exercisable / Exercisable/
Name Exercises (#) ($) (1) Unexercisable Unexercisable
---- ------------- -------------- ---------------------- --------------------
D. E. Baird............... 0 __ 1,703,449/ 34,479,556/
109,900 0.00
A. Gould.................. 0 __ 283,928/ 3,976,843/
323,742 333,228
I. Pfister................ 0 __ 310,960/ 4,287,425/
240,443 333,208
7
Number of Securities Value of Unexercised
Underlying Unexercised In-The-Money Options
Shares Options at FY-End (#) at FY-End ($) (2)
Acquired on Value Realized Exercisable / Exercisable /
Name Exercises (#) ($) (1) Unexercisable Unexercisable
---- ------------- -------------- ---------------------- --------------------
J. Liu.................. 0 __ 180,555/ 2,393,031/
139,344 333,218
M. Dijols............... 10,990 393,519 85,128/ 451,019/
74,770 133,271
P. Bismuth.............. 0 __ 135,089/ 1,530,732/
87,960 0.00
---------------------
(1) Market value of stock on date of exercise less exercise price.
(2) Closing price of stock on December 31, 2001 ($54.95) less exercise
price.
Employment Agreement
Effective March 1, 2002, Jack Liu assumed a new position as Senior Advisor.
Mr. Liu's employment agreement with the Company provides for his current annual
salary of $450,000 through February 28, 2003, adjusted to $337,000 for the
remainder of the agreement, which will expire on December 31, 2004, when he will
retire. Mr. Liu will receive certain supplemental pension benefits and will
continue to participate in the Company's employee benefits plans, other than
vacation and the annual cash incentive awards program.
Pension Plans
Schlumberger and certain of its subsidiaries maintain pension plans for
employees, including executive officers, providing for lifetime pensions upon
retirement after a specified number of years of service. Employees may
participate in one or more pension plans in the course of their careers with the
Company or its subsidiaries, in which case they become entitled to a pension
from each plan based upon the benefits accrued during the years of service
related to each plan. These plans are funded on an actuarial basis through cash
contributions made by the Company or its subsidiaries. Certain of the plans also
permit or require contributions by employees.
Benefits under the international staff pension plans of the Company and
certain of its subsidiaries are based on a participant's pensionable salary
(generally, base salary plus incentive) for each year in which the employee
participates in the plans and the employee's length of service with the Company
or the subsidiary. Since January 1, 1993, the benefit earned has been 3.2% of
pensionable salary for each year of service. Benefits are payable upon normal
retirement age, at or after age 55, or upon early retirement. Estimated annual
benefits from these plans payable upon retirement are: $37,052 for Mr. Baird,
$124,237 for Mr. Gould, $61,612 for Mr. Liu, $43,167 for Mr. Dijols and $36,580
for Mr. Bismuth.
Benefits under the U.S. tax qualified pension plans of the Company and
certain of its subsidiaries are based on an employee's admissible compensation
(generally, base salary plus incentive) for each year in which an employee
participates in the U.S. plans and the employee's length of service with the
Company or the subsidiary. From January 1, 1989, the benefit earned has been
1.5% of admissible compensation for service prior to the employee's completion
of 15 years of active service and 2% of admissible compensation for service
after completion of 15 years of active service. The Company has adopted a
supplementary benefit plan for eligible employees, including executive officers.
Amounts under the supplementary plan are accrued under an unfunded arrangement
to pay each individual the additional amount which would have been payable under
the plans if the amount had not been subject to limitations imposed by law on
maximum annual benefit payments and on annual compensation recognized to compute
plan benefits. Estimated annual benefits from the plans payable upon retirement
(assuming retirement at age 65) are: $43,292 for Mr. Dijols and, assuming
admissible compensation continues at the December 31, 2001 levels, estimated
annual benefits payable from the U.S. plans and the
8
supplementary benefit plan are: $715,795 for Mr. Baird; $318,441 for Mr. Gould;
$213,241 for Mr. Pfister; $206,603 for Mr. Liu and $196,849 for Mr. Bismuth.
Corporate Performance Graph
The following graph compares the yearly percentage change in the cumulative
total stockholder return on Schlumberger common stock, assuming reinvestment of
dividends on the last day of the month of payment into common stock of
Schlumberger, with the cumulative total return on the published Standard &
Poor's 500 Stock Index and the cumulative total return on Value Line's Oilfield
Services Industry Group over the preceding five-year period. The following graph
is presented pursuant to Securities and Exchange Commission rules. Schlumberger
believes that while total stockholder return is an important corporate
performance indicator, it is subject to the vagaries of the market. In addition
to the creation of stockholder value, the Schlumberger executive compensation
program is based on financial and strategic results and the other factors set
forth and discussed in the Compensation Committee Report beginning on page 9.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG SCHLUMBERGER LIMITED, S&P 500 INDEX AND VALUE LINE'S OILFIELD
SERVICES INDUSTRY INDEX
[GRAPH]
Value Line
Oilfield Services
Schlumberger Ltd. S&P 500 Industry Index
---------------- ------- -----------------
12/31/96 $100 $100 $100
12/31/97 163 133 155
12/31/98 95 171 75
12/31/99 130 208 111
12/31/00 187 189 154
12/31/01 130 166 109
Assumes $100 invested on December 31, 1996 in Schlumberger Limited stock,
in the S&P 500 Index and in Value Line's 2001 Oilfield Services Industry Index.
Reflects reinvestment of dividends on the last day of the month of payment and
annual reweighting of the Industry Peer Index portfolio.
9
Compensation Committee Report on Executive Compensation
The Compensation Committee of the Board is composed entirely of outside
Directors who review and approve compensation programs applicable to executive
officers. Specific awards for these officers are approved by the Committee.
Three programs continue to provide the core compensation vehicles for
executive officers:
- Base Salaries
- Annual Cash Incentive Awards
- Stock Option Grants
Base salaries are reviewed annually for competitiveness against a database
of comparator company information provided by outside compensation consultants.
The companies in the database are from industry segments in which Schlumberger
competes: Oilfield Services and Information Technology with SchlumbergerSema.
The companies in the database change slightly from year to year due to mergers
and acquisitions as well as the normal movement of companies into and out of the
database at their own volition.
The comparator companies used for compensation purposes are different from
those in the Corporate Performance Graph (the Value Line Oilfield Services
Industry Index).
While executive officer base salaries are reviewed annually to analyze
their position versus the competitive market, they are adjusted less frequently.
Except for significant changes in responsibility, an executive officer's base
salary may be increased every three to five years and then by a significant
amount. This has allowed the Company to focus primarily on variable compensation
during periods of low inflation.
Mr. Gould's base salary was increased to $800,000 based on increased
corporate responsibilities. Mr. Pfister's base salary was increased to $600,000
in April 2001, when he became Executive Vice President of SchlumbergerSema
following the acquisition of Sema plc by the Company. Mr. Liu's base salary was
increased to $450,000 to position him competitively in the market.
Annual cash incentive awards for each executive officer are payable early
in the calendar (fiscal) year and reflect performance against targets or
objectives established in the preceding year.
Incentive awards for executive officers are calculated as a percentage of
the base salary paid for the completed calendar year. The percent varies among
executive officer positions to reflect the different levels of impact on Company
results. For 2001, the incentive award ranges were:
0 to 100% for Mr. Baird
0 to 100% for Messrs. Gould and Pfister
0 to 75% for Mr. Liu
0 to 60% for Mr. Bismuth
With exceptional results incentive ranges can be exceeded.
One half of the incentive for each executive officer is a function of
performance against financial targets for the Company (Messrs. Baird, Liu and
Bismuth) or the business sector for which the executive officer is responsible
(Messrs. Gould and Pfister). In 2001, the Company and the business sector
targets were based on net income goals.
The second half of the incentive relates to performance against various
objectives of each executive officer. Objectives may be strategic or personal
and may relate solely to the completed fiscal year or be interim measures
against longer-term objectives. The evaluation of the achievement of objectives
is discretionary and subject to approval of the Committee.
10
Mr. Gould's cash compensation is in the top quartile of the comparator
market based on the strong financial performance of the oilfield services sector
in 2001. Mr. Pfister's cash compensation is in the third quartile of the
comparator market. His objectives were the acquisition of Sema plc and its
integration with Test and Transactions and the remaining businesses of the
Resource Management Services Group. Mr. Liu's and Mr. Bismuth's results are
based on financial goals established for the Company and specific functional and
personal objectives. Mr. Liu's and Mr. Bismuth's compensation places them in the
top half of the comparator companies.
Stock option grants are awarded on a general basis to eligible employees on
an 18-month to two-year cycle. Grants are awarded on a discretionary basis to
professional, managerial and technical employees who demonstrate exceptional
performance in their current positions, as well as the likelihood of continuing
high quality performance in the future. In addition, grants are awarded between
general reviews to recognize promotions, substantial changes in responsibility,
significant individual or team achievements, and under special circumstances. In
2001, following the acquisition of Sema plc, eligible SchlumbergerSema employees
were recognized with a stock option grant.
Of the named executive officers, Messrs. Gould, Pfister and Bismuth were
awarded stock option grants in 2001.
The stock option grants awarded by the Company are normally uniform in
their terms for executive officers as well as for other optionees: 10-year term;
vesting of 20% each year following the date of grant; and option price equal to
fair market value on the date of grant. The Company occasionally awards grants
with different vesting schedules in particular circumstances. The Company does
not utilize below-market options, stock appreciation rights, phantom stock,
restricted stock, performance units or reload options.
Section 162(m) of the Internal Revenue Code limits the deductibility of
certain compensation expenses in excess of $1,000,000 per individual. The
Committee does not believe that the cash compensation payable in excess of this
amount for fiscal year 2001 will result in any material loss of tax deduction.
Therefore, the Committee has elected not to follow the provisions of Section
162(m) with regard to cash compensation. The Company's stock option plans are
believed to be in compliance with the provisions of Section 162(m).
Bases for the Compensation of the Chief Executive Officer
As in past years, the same companies used for comparison purposes to review
base salaries of other executive officers (and managerial employees throughout
Schlumberger) are analyzed to review the base salary of the Chief Executive
Officer. The approximately 50 companies in the database are from broad industry
segments in which Schlumberger operates.
The Chief Executive Officer's salary remained at $1,500,000 during 2001.
The annual incentive range for Mr. Baird was 100% of base salary in 2001.
One-half of this award was measured against net income targets for the Company.
These targets were exceeded, so payment on the financial portion of the
incentive award is greater than 50% of base salary.
The second half of the award reflects the Committee's evaluation of Mr.
Baird's excellent performance against strategic objectives established early in
2001 for the calendar year. These objectives were a combination of acquisitions,
divestitures, and integration of new businesses. Disclosure of specific measures
applied to evaluate achievement of Mr. Baird's objectives could adversely affect
the Company's competitive position.
11
The total cash incentive awarded Mr. Baird for 2001 performance was
$2,000,000. In combination with base salary, this places him in the top quartile
of comparator market data.
Mr. Baird has no employment agreement with the Company.
SUBMITTED BY THE COMPENSATION COMMITTEE OF THE SCHLUMBERGER
BOARD OF DIRECTORS
Don E. Ackerman Nicolas Seydoux
William T. McCormick, Jr., Chair Sven Ullring
2. Financial Statements
The Company's Consolidated Balance Sheet as at December 31, 2001, its
Consolidated Statement of Income for the year ended December 31, 2001, as
audited by PricewaterhouseCoopers LLP, and the amount of dividends declared by
the Board of Directors during 2001 are submitted to the stockholders pursuant to
the Schlumberger Deed of Incorporation.
A majority of the votes cast is required for the adoption and approval of
the financial results as set forth in the financial statements and of the
declaration of dividends by the Board of Directors as reflected in the 2001
Annual Report to Stockholders.
The Board of Directors Recommends a Vote FOR Item 2.
3. Appointment of Auditors
PricewaterhouseCoopers LLP have been selected by the Board of Directors as
independent public accountants to audit the accounts of the Company for the year
2002. The Schlumberger by-laws provide that the selection of auditors is subject
to approval by the stockholders, and a majority of the votes cast is required
for such approval. A representative of PricewaterhouseCoopers LLP will attend
the 2002 Annual General Meeting and will have the opportunity to make a
statement and respond to questions.
Fees Paid to PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP has billed the Company and its subsidiaries fees
and out-of-pocket expenses as set forth in the table below for (i) the audit of
the Company's 2001 annual financial statements and reviews of quarterly
financial statements, (ii) financial information systems design and
implementation work rendered in 2001 and (iii) all other services rendered in
2001.
Financial Information
Systems Design and
Audit Fees Implementation Fees All Other Fees
---------- --------------------- --------------
Fiscal year 2001 $6,305,000 $1,385,000 $7,255,000
The Board of Directors Recommends a Vote FOR Item 3.
12
Stockholder Proposals for 2003 Annual General Meeting
In order for a stockholder proposal to be considered for inclusion in
the proxy statement for the 2003 Annual General Meeting of Stockholders, written
proposals must be received by the Secretary of the Company, 153 East 53 Street,
57/th/ Floor, New York, New York 10022-4624, no later than November 6, 2002.
Pursuant to the rules under the Securities Exchange Act of 1934, the Company may
use discretionary authority to vote with respect to stockholder proposals
presented in person at the 2003 Annual General Meeting if the stockholder making
the proposal has not given notice to the Company by January 20, 2003.
Other Matters
Stockholders may obtain a copy of Form 10-K filed with the Securities
and Exchange Commission without charge by writing to the Secretary of the
Company at 153 East 53 Street, 57/th/ Floor, New York, New York 10022-4624.
The Board of Directors knows of no other matter to be presented at the
Meeting. If any additional matter should be presented properly, it is intended
that the enclosed proxy will be voted in accordance with the discretion of the
persons named in the proxy.
Please sign, date, and return the accompanying proxy in the enclosed
envelope at your earliest convenience.
By order of the Board of Directors,
Ellen Summer
Secretary
New York, N.Y.
March 6, 2002
13
Schlumberger Limited (Schlumberger N.V.)
Proxy Solicitation on Behalf of the Board of Directors
Annual General Meeting of Stockholders
The undersigned, having received the Notice and Proxy Statement of the
P Annual General Meeting of Stockholders and the 2001 Annual Report to
Stockholders, hereby appoints Lupe A. Bosnie, Olette Pierik, Jan A. Konig
R and Leoni van Roggen and each of them, proxies, with power of
subsititution, to vote in the manner indicated on the reverse side hereof,
O and with discretionary authority as to any other matters that may properly
come before the meeting, all my (our) shares of record of Schlumberger
X Limited (Schlumberger N.V.) at the Annual General Meeting of Stockholders
to be held at the Avila Beach Hotel, Penstraat 130, Willemstad, Curacao,
Y Netherlands Antilles on April 10, 2002, and at any adjournment or
adjournments thereof.
If no other indication is made, the proxies will vote FOR the election
of the director nominees and FOR Proposals 2 and 3.
----------------- -----------------
SEE REVERSE Continued and to be signed on reverse side SEE REVERSE
SIDE SIDE
----------------- -----------------
----- --------
Please mark
X votes as in
this example
----- --------
Unless you indicate otherwise, this proxy will be voted in accordance
with the Board of Directors' recommendations. Directors recommend a
vote FOR items 1, 2 and 3.
1. Election of 11 Directors 2. Adoption and approval of FOR AGAINST ABSTAIN
Nominees: D.E. Baird, J. Deutch, J. Gorelick, A. Gould, Financials and Dividends [_] [_] [_]
A. Lajous, A. Levy-Lang, W.T. McCormick, Jr.,
D. Primat, N. Seydoux, L.G. Stuntz,
S. Ullring 3. Approval of Auditors [_] [_] [_]
FOR WITHHELD
ALL FROM ALL
NOMINEES [_] NOMINEES [_]
FOR ALL NOMINEES
EXCEPT THOSE
NOTED IN THE BLANK [_] _________________
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [_]
Please sign names exactly as printed hereon. If
signing as attorney, administrator, executor,
guardian or trustee, please give full title as
such. Please sign, date and return in the enclosed
envelope.
Signature:_________________________ Date:_______ Signature:_________________________ Date:_______