<PAGE>
===============================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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, Ltd.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] 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:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
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[_] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
SCHLUMBERGER
Schlumberger Limited
277 Park Avenue
New York, New York 10172-0266
------------
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 14, 1999
March 10, 1999
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 14, 1999 at
10:30 in the morning (Curacao time), for the following purposes:
1. To elect 12 directors.
2. To report on the course of business during the year ended December 31,
1998, to approve the Company's Consolidated Balance Sheet as at December
31, 1998, its Consolidated Statement of Income for the year ended December
31, 1998, and the declaration of dividends by the Board of Directors as
reflected in the Company's 1998 Annual Report to Stockholders.
3. To approve the appointment of PricewaterhouseCoopers LLP as independent
public accountants to audit the accounts of the Company for 1999.
Action will also be taken upon such other matters as may come properly before
the Meeting.
The close of business on February 24, 1999 has been fixed as the record date
for the Meeting. All holders of Common Stock of record at that time are
entitled to vote at the Meeting.
By order of the Board of
Directors,
JAMES L. GUNDERSON
Secretary
<PAGE>
PROXY STATEMENT
March 10, 1999
This 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 1999 Annual General Meeting of Stockholders (the
"Meeting"). The approximate mailing date of this Proxy Statement is March 10,
1999. Business at the Meeting is conducted in accordance with the procedures
determined by the presiding officer 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 Company's 1998 Annual Report to Stockholders (the "Report") has been
mailed under separate cover. The Company's Consolidated Balance Sheet as at
December 31, 1998, its Consolidated Statement of Income for the year ended
December 31, 1998 and the supplemental financial information with respect to
dividends included in the 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 $9,500 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 24, 1999 is
entitled to one vote for each share registered in such stockholder's name. On
that date there were 546,364,592 outstanding shares of Common Stock of the
Company (excluding 119,338,446 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. The Company is incorporated in the
Netherlands Antilles and, as required by the laws thereof and the Company's
Deed of Incorporation, meetings of stockholders must be held in Curacao. 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
<PAGE>
1. Election of Directors
It is intended to fix the number of directors at 12 and to elect a Board of
12 directors, 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 is now
a director and was previously elected by the stockholders. Unless instructed
otherwise, the proxies will be voted for the election of the 12 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:
<TABLE>
<CAPTION>
Nominee, Age and Director
Five-Year Business Experience Since
----------------------------- --------
<S> <C>
DON E. ACKERMAN, 65; Private Investor since 1991 (1)................. 1982
D. EUAN BAIRD, 61; Chairman and Chief Executive Officer since October
1986 (2)............................................................ 1986
JOHN DEUTCH, 60; Institute Professor, Massachusetts Institute of
Technology, Cambridge, Massachusetts since January 1997; Director of
U.S. Central Intelligence May 1995 to December 1996; Deputy
Secretary of Defense April 1994 to May 1995; Under Secretary of
Defense (Acquisition and Technology) March 1993 to 1994; Institute
Professor, Provost 1985-1990 and Dean of Science 1982-1985,
Massachusetts Institute of Technology; Director of Schlumberger
Limited, May 1987 to 1993 (3)....................................... 1997
VICTOR E. GRIJALVA, 60; Vice Chairman since April 1998; Executive
Vice President, Oilfield Services from 1994 to April 1998; from 1992
to 1994, Executive Vice President for Wireline, Testing & Anadrill.. 1998
DENYS HENDERSON, 66; Chairman, The Rank Group Plc., a diversified
leisure services concern, since March 1995; Chairman, Dalgety PLC,
January 1997 through December 31, 1998; Chairman, Zeneca Group PLC,
June 1993 to May 1995; Chairman, Imperial Chemical Industries PLC
("ICI"), June 1993 through April 1995; Chairman and Chief Executive
officer, ICI, April 1987 to June 1993, all in the United Kingdom ... 1995
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
Nominee, Age and Director
Five-Year Business Experience Since
----------------------------- --------
<S> <C>
ANDRE LEVY-LANG, 61; Chairman of the Executive Board of Paribas, an
international banking group, since May 1998; Chairman of the Board
of Management of Compagnie Financiere de Paribas, an international
banking group, from June 1990 until May 1998; Chairman of the Board
of Management of Banque Paribas, a subsidiary of Compagnie
Financiere de Paribas, from 1991 until May 1998; Chairman of the
Board of Management of Compagnie Bancaire 1989 to 1993; Chairman of
the Supervisory Board of Compagnie Bancaire from 1993 until May
1998, all in Paris. In May 1998, Compagnie Financiere de Paribas,
Banque Paribas and Compagnie Bancaire merged to become Paribas, the
new entity of which he is now Chairman of the Executive Board.
(4)................................................................. 1992
WILLIAM T. McCORMICK, JR., 54; Chairman and Chief Executive Officer,
CMS Energy Corp., a diversified energy company, Dearborn, Michigan
(5)................................................................. 1990
DIDIER PRIMAT, 54; President, Primwest Holding N.V., an investment
management company, Curacao, N.A. (6)............................... 1988
NICOLAS SEYDOUX, 59; Chairman and Chief Executive Officer, Gaumont, a
French film- making enterprise, Paris (6)........................... 1982
LINDA GILLESPIE STUNTZ, 44; Partner, law firm of Stuntz, Davis &
Staffier P.C., Washington, D.C., since February 1995; Partner, law
firm of Van Ness Feldman, P.C., Washington, D.C. March 1993 to
February 1995 (7)................................................... 1993
SVEN ULLRING, 63; President and Chief Executive Officer, Det Norske
Veritas which provides safety, quality and reliability services to
maritime, offshore and other industries, Hovik, Norway.............. 1990
YOSHIHIKO WAKUMOTO, 67; Adviser to Toshiba Corporation, a technology
company centered on electronics and energy, since July 1996; member
of Board of Toshiba Corporation from July 1988 to June 1996; from
July 1992 to June 1996, Executive Vice President of Toshiba with
responsibility for corporate planning, group companies and
information systems (1992 to 1995), and international affairs
(1996), all in Tokyo (8)............................................ 1997
</TABLE>
- --------
(1) Mr. Ackerman is also Chairman of the Board and a member of the Audit
Committee of Genicom Corporation, which is in the business of computer
printers and computer related services.
(2) Mr. Baird is also a director of Paribas, Paris, France. He is a trustee of
Haven Capital Management Trust.
(3) Mr. Deutch is also a director of Citigroup, which is in banking and
insurance; 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 and development of
novel pharmaceuticals based on signal transaction pathways and the genes
that regulate them, and of Raytheon Corporation, a maker of electronics.
He is also a director of the Sandia National Laboratories in New Mexico.
3
<PAGE>
(4) Mr. Levy-Lang is also a director and member of the Compensation Committee
of Elf-Aquitaine, a producer of oil, gas and chemicals. On January 4,
1996, Mr. Levy-Lang was notified by a French judge that he was placed
under official investigation ("mise en examen") as part of an ongoing
inquiry regarding irregularities uncovered in the 1991 financial
statements of Ciments Francais, S.A., which was at that time a subsidiary
of Compagnie Financiere de Paribas.
(5) Mr. McCormick is also a director of Bank One, Inc., a regional bank
holding company, and Rockwell International Inc., a diversified producer
of, among others, electronic, industrial automation and avionics products.
(6) Mr. Primat and Mr. Seydoux are cousins.
(7) Mrs. Stuntz is also a director of American Electric Power Company, Inc.,
an electric and power holding company, at which company she is a member of
the Finance and Directors Committees and is the Chair of the Public Policy
Committee.
(8) Mr. Wakumoto is Vice President of The Japan Foundation and Executive
Director of its Center for Global Partnerships.
Security Ownership of Certain Beneficial Owners and Management
Following are the shares of the Company's Common Stock beneficially owned as
of January 31, 1999 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 named individual has sole voting and investment power over the
shares listed by that individual's name. As of January 31, 1999, no nominee
for director owned more than 1% of the outstanding shares of the Company's
Common Stock, except Mr. Primat who owned 4.5%. All 23 directors and executive
officers as a group owned 5.3% of the outstanding shares of the Company at
January 31, 1999.
<TABLE>
<CAPTION>
Name Shares
---- ----------
<S> <C>
Don E. Ackerman................................................. 2,000
D. Euan Baird................................................... 1,941,955(1)
John Deutch..................................................... 3,600(2)
Andrew Gould.................................................... 174,000(3)
Victor E. Grijalva.............................................. 623,024(4)
Denys Henderson................................................. 5,000
Andre Levy-Lang................................................. 4,000
Arthur Lindenauer............................................... 188,091(5)
William T. McCormick, Jr........................................ 10,000
Irwin Pfister................................................... 160,635(6)
Didier Primat................................................... 24,556,236(7)
Nicolas Seydoux................................................. 251,524(8)
Linda Gillespie Stuntz.......................................... 5,000(9)
Sven Ullring.................................................... 3,172
Yoshihiko Wakumoto.............................................. 1,000
All directors and executive officers as a group (23 persons).... 28,974,883(10)
</TABLE>
4
<PAGE>
- --------
(1) Includes 1,390,000 shares which are deemed to be beneficially owned by Mr.
Baird because he has the right to acquire such shares within 60 days
through the exercise of stock options.
(2) Includes 600 shares owned by Mr. Deutch's wife, as to which he disclaims
beneficial ownership.
(3) Includes 160,000 shares which are deemed to be beneficially owned by Mr.
Gould because he has the right to acquire such shares within 60 days
through the exercise of stock options.
(4) Includes 600 shares owned by Mr. Grijalva's daughter, as to which he
disclaims beneficial ownership, and 504,000 shares which are deemed to be
beneficially owned by him because he has the right to acquire such shares
within 60 days through the exercise of stock options.
(5) Includes 162,000 shares which are deemed to be beneficially owned by Mr.
Lindenauer because he has the right to acquire such shares within 60 days
through the exercise of stock options.
(6) Includes 160,000 shares which are deemed to be beneficially owned by Mr.
Pfister because he has the right to acquire such shares within 60 days
through the exercise of stock options.
(7) Includes 560,000 shares as to which Mr. Primat shares investment power,
13,996,136 shares held by Mr. Primat as Executor of the Estate of
Francoise Primat as to which he has sole voting and investment power, and
5,000,000 shares held for account of the minor children of Mr. Primat as
to which he has joint voting and investment power.
(8) Includes 15,364 shares owned by Mr. Seydoux's wife as to which he shares
voting and investment power.
(9) Includes 3,000 shares as to which Mrs. Stuntz shares voting power.
(10) Includes 3,230,126 shares which are deemed to be beneficially owned 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
The Company has an Audit, a Compensation, a Finance and a Nominating
Committee.
The Audit Committee assesses and monitors the corporate control environment
and 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 consolidated financial statements of the Company. The
Committee confers with the independent accountants and periodically reports to
and advises the Board concerning the scope of the independent accountants'
examinations and similar matters relating to the Company's accounting
practices and internal accounting controls. The Committee also advises the
Board concerning the fees of the independent accountants. Mr. Ullring is
Chairman of the Audit Committee, and Messrs. Ackerman and Levy-Lang and Mrs.
Stuntz 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
5
<PAGE>
plans. Mr. Ackerman is Chairman of the Compensation Committee. Sir Denys
Henderson and Messrs. McCormick and Seydoux are the other members.
The Finance Committee advises on various matters including dividend and
financial policies, the borrowing of money, the purchase and sale of
securities and the investment and reinvestment of surplus funds. The Committee
periodically reviews the administration of the employee benefit plans of the
Company and its subsidiaries. Messrs. Baird, Deutch, Grijalva, Levy-Lang,
Primat and Wakumoto are the members of this Committee.
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. Also, the Committee may recommend to the
Board persons to be appointed by the Board or to be elected by the
stockholders to fill any vacancies on the Board. Mr. McCormick is Chairman of
this Committee, and Messrs. Baird, Seydoux and Ullring are the other members.
The Nominating Committee will consider nominees recommended by stockholders.
Stockholders may submit nominations to Chairman, Nominating Committee, care of
the Secretary, Schlumberger Limited, 277 Park Avenue, New York, New York
10172-0266.
During 1998 the Board of Directors held four meetings. The Audit Committee
met three times; the Compensation Committee met four times; the Finance
Committee met twice, and the Nominating Committee met once. All present
directors attended at least 75% of the aggregate of the meetings of the Board
and of the Committees of the Board on which such directors served.
Directors who are employees of the Company do not receive compensation for
serving on the Board or Committees of the Board. Board members who are not
employees receive annual fees of $40,000 each and additional annual fees of
$10,000 as members of each of the Committees on which they serve, except that
the Chairmen of the Audit, Compensation and Nominating Committees each receive
an annual fee of $20,000, rather than the $10,000 annual fee for Committee
service.
6
<PAGE>
EXECUTIVE COMPENSATION
Summary of Cash and Certain Other Compensation
The following table shows, for the fiscal years ending December 31, 1998,
1997 and 1996, the cash compensation paid by the Company and its subsidiaries,
as well as certain other compensation paid or accrued for those years, to the
Chief Executive Officer and the next four most highly compensated executive
officers of the Company:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Compensation
------------
Awards
------------
Annual Compensation Securities
Name and -------------------------- Underlying All Other
Principal Position Year Salary($)(1) Bonus($)(1) Options(#) Compensation($)(3)
------------------ ---- ------------ ----------- ------------ ------------------
<S> <C> <C> <C> <C> <C>
D.E. Baird.............. 1998 1,500,000 600,000 0 270,000
Chairman and 1997 1,500,000 1,500,000 500,000 323,000
Chief Executive Officer 1996 1,100,000 1,100,000 300,000 231,000
V.E. Grijalva........... 1998 800,000 240,000 0 112,500
Vice Chairman 1997 600,000 450,000 200,000 129,000
1996 600,000 425,000 200,000 108,350
A. Gould................ 1998 499,154(2) 152,284 40,000 63,198
Executive Vice
President,
Oilfield Services
Products
I. Pfister.............. 1998 500,000 150,000 0 72,000
Executive Vice 1997 420,411 300,000 125,000 55,112
President,
Test & Transactions
A. Lindenauer........... 1998 500,000 100,000 0 69,750
Executive Vice 1997 500,000 275,000 60,000 96,200
President, 1996 500,000 260,000 80,000 83,600
Finance
</TABLE>
- --------
(1) Salary and bonus amounts include cash compensation earned and received and
any amounts deferred under the Schlumberger Restoration Savings Plan
("Restoration Savings Plan").
(2) Mr. Gould is paid in French francs.
(3) The 1998 amounts disclosed in this column include:
(a) Company contributions to Schlumberger's Profit Sharing Plans.
Contributions are invested, and final amounts distributed depend on
investment results.
(b) Company unfunded credits to the Schlumberger Supplementary Benefit
Plan.
(c) Company unfunded matching credits to the Restoration Savings Plan.
<TABLE>
<CAPTION>
(a)($) (b)($) (c)($)
------ ------- ------
<S> <C> <C> <C>
Mr. Baird.............................................. 14,400 170,400 85,200
Mr. Grijalva........................................... 14,400 65,400 32,700
Mr. Gould.............................................. 63,198 N/A N/A
Mr. Pfister............................................ 14,400 38,400 19,200
Mr. Lindenauer......................................... 14,400 36,900 18,450
</TABLE>
The Company's matching credits under the Restoration Savings Plan are vested
one-third at three years of service, two-thirds at four years, fully at five
years or at age 60 or upon death or upon change of control. The amounts
credited under the Restoration Savings Plan will be paid upon termination or
retirement, death, disability, or change in control.
7
<PAGE>
Stock Option Grants Table
The following table sets forth certain information concerning stock options
granted during 1998 by the Company to the Chief Executive Officer and the next
four most highly compensated executive officers of the Company. In addition,
there are shown hypothetical gains that could be realized for the respective
options, based on assumed rates of annual compound stock price appreciation of
5% and 10% from the date the options are granted over the ten-year term of the
options. The actual gain, if any, realized upon exercise of the options will
depend upon the market price of the Company's Common Stock relative to the
exercise price of the option at the time the option is exercised. There is no
assurance that the amounts reflected in this table will be realized.
Option Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation
Individual Grants for Option Term
------------------------------------------------ ---------------------
Number of % of Total
Securities Options
Underlying Granted to Exercise
Options Employees in Price Expiration
Granted (#)(1) Fiscal Year ($/SH)(2) Date 5%($) 10%($)
Name -------------- ------------ --------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
D. E. Baird............. 0 -- -- -- -- --
V. E. Grijalva.......... 0 -- -- -- -- --
A. Gould................ 40,000 3.04 78.375 4/15/2008 1,971,585 4,996,383
I. Pfister.............. 0 -- -- -- -- --
A. Lindenauer........... 0 -- -- -- -- --
</TABLE>
- --------
(1) The Company has not granted any stock appreciation rights. These options
become exercisable in installments of 20% each year following the date of
grant. All outstanding stock options become fully exercisable prior to any
reorganization, merger or consolidation of the Company where the Company
is not the surviving corporation or prior to liquidation or dissolution of
the Company 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.
8
<PAGE>
Stock Option Exercises
and December 31, 1998 Stock Option Value Table
The following table sets forth certain information concerning stock options
exercised during 1998 by the Chief Executive Officer and the next four most
highly compensated executive officers of the Company and the number and value
of unexercised options at December 31, 1998. The Company has not granted stock
appreciation rights. The values of unexercised in-the-money stock options at
December 31, 1998 shown below are presented pursuant to Securities and
Exchange Commission rules. The actual amount, if any, realized upon exercise
of stock options will depend upon the market price of the Company's Common
Stock relative to the exercise price per share of Common Stock of the stock
option at the time the stock option is exercised. There is no assurance that
the values of unexercised in-the-money stock options reflected in this table
will be realized.
Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year-End Option Values
<TABLE>
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised in the Money
Options at Options at
FY-End (#) FY-End ($)(2)
Shares Acquired Value Exercisable/ Exercisable/
Name on Exercises (#) Realized ($)(1) Unexercisable Unexercisable
- ---- ---------------- --------------- ------------- -------------
<S> <C> <C> <C> <C>
D. E. Baird....... 0 -- 1,310,000/ 18,914,090/
690,000 4,391,810
V. E. Grijalva.... 40,000 1,060,000 454,000/ 6,235,278/
316,000 2,214,852
A. Gould.......... 0 -- 148,000/ 2,054,564/
132,000 605,996
I. Pfister........ 0 -- 140,000/ 1,689,219/
166,000 871,122
A. Lindenauer..... 0 -- 146,000/ 2,029,974/
104,000 757,496
</TABLE>
- --------
(1) Market value of stock on date of exercise less exercise price.
(2) Closing price of stock on December 31, 1998 ($46.375) less exercise price.
9
<PAGE>
Employment Agreement
Effective January 1, 1999, Mr. Lindenauer assumed a new part-time position
as Chairman of Schlumberger Technology Corporation, the Company's United
States subsidiary. His employment agreement with the Company provides for
annual compensation of $375,000 and will expire on April 30, 2002 when he will
retire. Mr. Lindenauer will participate in the Company's employee benefit
plans other than vacation, severance programs and the annual cash incentive
awards program.
Pension Plans
The Company 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
these plans also permit or require contributions by employees.
Benefits under the International Staff Pension Plans of the Company and
certain of its subsidiaries (the "International Plans") are based on a
participant's pensionable salary (generally, base salary plus incentive) for
each year in which the participant participates in the International Plans and
the participant's length of service with the Company or any subsidiary. From
January 1, 1993, the benefit earned is 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 the
International Plans payable upon retirement are $ 33,714 for Mr. Baird;
$57,139 for Mr. Grijalva; and $276,439 for Mr. Gould assuming pensionable
salary continues at the December 31, 1998 level for Mr. Gould.
Benefits under the U.S. tax qualified pension plans of the Company and
certain of its subsidiaries (the "U.S. plans") are based on a participant's
admissible compensation (generally, base salary plus incentive) for each year
in which the participant participates in the U.S. plans and the participant's
length of service with the Company or any subsidiary. From January 1, 1989,
the benefit earned is 1.5% of admissible compensation for service prior to the
participant'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 will be
accrued under an unfunded arrangement to pay each individual the additional
amount which would have been payable under the U.S. 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 U.S. plans payable upon retirement are
$16,066 for Mr. Gould, and, assuming admissible compensation continues at the
December 31, 1998 levels, estimated annual benefits payable from the U.S.
plans and the supplementary benefit plan are $700,569 for Mr. Baird; $310,237
for Mr. Grijalva; $188,111 for Mr. Pfister, and $232,079 for Mr. Lindenauer.
10
<PAGE>
Corporate Performance Graph
The following graph compares the yearly percentage change in the Company's
cumulative total stockholder return on its Common Stock (assuming reinvestment
of dividends at date of payment into Common Stock of the Company) 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. The Company 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 Company's executive compensation program is based on
financial and strategic results, and the other factors set forth and discussed
in the Compensation Committee Report on Page 12.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*
AMONG SCHLUMBERGER LIMITED, S&P 500 INDEX AND VALUE LINE'S OILFIELD
SERVICES INDUSTRY INDEX**
[THE FOLLOWING DATA WAS REPRESENTED BY A LINE GRAPH]
Schlumberger S&P 500 Industry Peer Index
---------------------------------------------------------
DOLLARS
-------
12/93 100 100 100
12/94 87 97 101
12/95 123 139 159
12/96 180 171 262
12/97 293 229 394
12/98 171 294 170
Assumes $100 invested on December 31, 1993 in Schlumberger Limited stock, in
the S&P 500 Index and in Value Line's 1998 Oilfield Services Industry Index.
Reflects month-end dividend reinvestment, and annual reweighting of the
Industry Peer Index portfolio.
* Total return assumes reinvestment of dividends.
** Fiscal year ending December 31.
11
<PAGE>
Compensation Committee Report on Executive Compensation
The Compensation Committee of the Company's Board is comprised entirely of
outside Directors who act on behalf of the Board to 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
For many years Schlumberger has emphasized career opportunities by
recruiting from colleges and universities in countries where the Company works
(more than 70 countries throughout the world), supporting mobility and
maintaining highly competitive compensation programs which are based on an
employee's contribution and potential rather than country of origin.
Thus, the three programs noted above are applicable not only to executive
officers but to thousands of managerial, professional and technical employees
in the Company. At all levels, employees enjoy competitive base salaries. Cash
incentive participation is added to the compensation package as employees
advance, with the size of incentive opportunity as a percent of base salary
increasing as one progresses in the organization.
Within the first few years of employment, those with strong performance as
well as outstanding future potential may be awarded stock option grants, which
are discretionary in nature.
In this way, an increasing portion of the successful employee's total
compensation becomes leveraged against yearly results and Company long-term
appreciation due to the expanding role played by cash incentives and stock
options in the total compensation package.
Many of the Company's subsidiaries also have profit sharing plans that
provide annual deferred awards which reflect the results of the fiscal year
for the subsidiary sponsoring the plan. These awards also tend to increase the
portion of total compensation which is leveraged against business results.
Base salaries are reviewed annually for competitiveness against a data base
of comparator company information provided by outside compensation
consultants. The companies in the data base reflect those broad industry
segments in which the Company competes--- oil-related, high technology and
high volume manufacturing. The companies in the data base may change slightly
from year to year due to mergers and acquisitions as well as the normal
movement of companies into and out of the data base at their own volition. The
roster of companies in the data base used for executive officer base salary
ranges is also used for professional and managerial employees of the Company
throughout the world.
12
<PAGE>
While executive officer base salary levels are studied annually, they are
adjusted less frequently. Except for significant changes in responsibility, an
executive officer's base salary may be increased only every three to five
years, and then by a significant amount. This has allowed the Company to focus
primarily on variable compensation during the period of low inflation we have
been experiencing.
Consistent with this policy, there were two salary changes among the
executive officers in 1998. Victor Grijalva's salary was increased on his
being promoted to Vice Chairman of the Company and Andrew Gould's salary was
increased on his promotion to Executive Vice President with responsibility for
the Oilfield Services Products Group.
The comparator companies used for compensation purposes are different from
those in the Corporate Performance Graph (the Value Line Oilfield Services
Industry Group). The Value Line companies do not constitute a source of
recruits nor do they reflect all the industry segments in which the company
operates.
Annual cash incentive awards for each executive officer are payable early in
the calendar (fiscal) year and reflect performance against targets or
objectives established early in the preceding calendar year.
For all executive officers incentive awards are calculated as a percent of
the base salary paid for the completed calendar year. The maximum percent
varies among executive officer positions to reflect the differing levels of
potential impact on Company results. For 1998, the incentive award ranges
were:
--0 to 100% for Mr. Baird
--0 to 75% for Messrs. Grijalva, Gould and Pfister
--0 to 60% for Mr. Lindenauer
For Mr. Pfister, 75% is a target which could be exceeded in a year of
exceptional performance.
One half of the incentive potential for each executive officer is a function
of performance against specific numerical targets for the Company (Messrs.
Baird and Lindenauer) or the business sector for which the executive officer
was responsible (Messrs. Grijalva, Gould and Pfister) during the calendar year
completed. The Company target is earnings per share; the business sector
target is net income for the sector.
The second half of the incentive potential is a reflection of 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. Achievement against
objectives is determined subjectively.
Downturns in the oil and semiconductor equipment industries adversely
affected the incentive awards of the four named executives and, therefore,
their total cash compensation for 1998 was at or below the median of available
comparator market data.
13
<PAGE>
Stock option grants are periodically considered in a Company-wide review of
those deemed eligible to receive an option grant. Such reviews are conducted
every 18 months to two years. In addition, grants typically are awarded
between general reviews to recognize promotions, substantial changes in
responsibility and significant individual or team achievements.
The Company's stock option program is unique in that grants are awarded on
an entirely discretionary basis to individuals demonstrating exceptional
performance in their current positions as well as the likelihood of continuing
high quality performance in the future.
Of the named executive officers, only Mr. Gould was awarded a stock option
grant in 1998 in conjunction with his promotion to Executive Vice President,
Oilfield Services Products Group.
Messrs. Baird, Grijalva and Lindenauer received the final grants of their
respective Schlumberger careers in 1997.
The stock option grants awarded by the Company are uniform in their terms
for executive officers as well as for all other optionees--10-year term,
vesting in 20% steps at the first through fifth anniversary of grant date, and
option price equal to fair market value on date of grant.
Schlumberger has not granted 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 1998 will result in any material loss of tax
deduction for the Company. 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
The same data base of companies used for comparison purposes to review base
salaries of other executive officers (and managerial employees throughout the
Schlumberger universe) is studied to consider the base salary of the Chief
Executive Officer. The data base reflects the industry segments in which the
Company operates, oil-related, high technology and high volume manufacturing.
The Chief Executive Officer's salary remained at $1,500,000 during 1998.
The potential cash incentive award for the Chief Executive Officer for 1998
was 100% of base salary. As with other executive officers with corporate
responsibility, one half of this award potential was a measure of performance
against targeted earnings per share for the Company. No payment was made on
this half of the incentive award due to the downturns in the oil and
semiconductor equipment industries.
14
<PAGE>
The second half of the award potential reflects the Committee's evaluation
of Mr. Baird's performance against strategic objectives established early in
1998 for the calendar year. These included a continuing focus on the Company's
core strengths to build for the future by acquiring Camco International, Inc.
to more fully address the completions market in the oilfield sector, and by
the sale of the retail petroleum systems business. Disclosure of specific
measures applied to evaluate achievement of Mr. Baird's objectives could
adversely affect the Company's competitive position.
The total cash incentive awarded Mr. Baird for 1998 performance was
$600,000. In combination with base salary, this placed him at the median of
available comparator market data.
In 1998, Mr. Baird received no stock option grant since the grant awarded in
1997 was intended by the Committee to be his last grant before retirement.
Mr. Baird has no employment agreement with the Company.
SUBMITTED BY THE COMPENSATION COMMITTEE OF THE COMPANY'S
BOARD OF DIRECTORS
Don E. Ackerman, Chairman William T. McCormick Jr.
Denys Henderson Nicolas Seydoux
15
<PAGE>
2. Financial Statements
The Company's Consolidated Balance Sheet as at December 31, 1998, its
Consolidated Statement of Income for the year ended December 31, 1998, as
audited by PricewaterhouseCoopers LLP, and the amount of dividends declared by
the Board of Directors during 1998 are submitted to the stockholders pursuant
to the Deed of Incorporation of the Company
A majority of the votes cast is required for the approval of the financial
results as set forth in such financial statements and of the declaration of
dividends by the Board of Directors reflected in the Company's 1998 Annual
Report.
The Board of Directors Recommends a Vote FOR Item 2.
3. Appointment of Auditors
In 1998 Price Waterhouse LLP, who served as auditors for the Company since
its organization, merged with Coopers & Lybrand LLP to become
PricewaterhouseCoopers LLP. PricewaterhouseCoopers LLP has been selected by
the Board of Directors as independent public accountants to audit the accounts
of the Company for the year ending December 31, 1999. The Company's 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 Meeting and
will have the opportunity to make a statement and respond to questions.
The Board of Directors Recommends a Vote FOR Item 3.
16
<PAGE>
Stockholder Proposals for 2000 Annual General Meeting
In order for a stockholder proposal to be considered for inclusion in the
Proxy Statement for the 2000 Annual General Meeting of Stockholders, written
proposals must be received by the Secretary of the Company, 277 Park Avenue,
New York, New York 10172-0266, no later than November 10, 1999. Pursuant to
the rules under the Securities Exchange Act of 1934, the Company may use
discretionary authority to vote proxies with respect to shareholder proposals
to be presented in person at the 2000 Annual General Meeting if the
shareholder making the proposal has not given notice to the Company by January
25, 2000.
Other Matters
Stockholders may obtain a copy of Form 10-K filed with the United States
Securities and Exchange Commission without charge by writing to the Secretary
of the Company at 277 Park Avenue, New York, New York 10172-0266.
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,
James L. Gunderson
Secretary
New York, N.Y.
March 10, 1999
17
<PAGE>
SCHLUMBERGER
NOTICE OF
ANNUAL GENERAL MEETING
OF STOCKHOLDERS
AND
PROXY STATEMENT
APRIL 14, 1999
----------------------------------
Please sign your proxy card and
return it in the enclosed
envelope so that you may be
represented at the Meeting.
----------------------------------
<PAGE>
Schlumberger Limited (Schlumberger N.V.)
Proxy Solicitation on Behalf of the Board of Directors
Annual General Meeting of Stockholders
P The undersigned, having received the Notice and Proxy Statement for the
Annual General Meeting of Stockholders and the 1998 Annual Report to
R Stockholders, hereby appoints A.L.A. Bosnie, Jan A. Koning, and M.P.
Webber-Dommisse and each of them, proxies, with the power of substitution,
O to vote in the manner indicated on the reverse side hereof, and with
discretionary authority as to any other matters that may properly come
X before the Meeting, all my (our) shares of record of Schlumberger Limited
(Schlumberger N.V.) at the Annual General Meeting of Stockholders to be
Y held at the Avila Beach Hotel, Penstraat 130, Willemstad, Curacao,
Netherlands Antilles on April 14, 1999, 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 ] [ SEE REVERSE ]
[ SIDE ] Continued and to be signed on reverse side [ SIDE ]
<PAGE>
[ X ] Please mark
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 12 Directors
Nominees: D.E. Ackerman, D.E. Baird, J. Deutch, V.E. Grijalva
D. Henderson, A. Levy-Lang, W.T. McCormick, Jr., D. Primat,
N. Seydoux, L.G. Stuntz, S. Ullring, Y. Wakumoto
FOR WITHHELD
ALL [ ] [ ] FROM ALL
NOMINEES NOMINEES
For, except vote withheld from the following nominees(s)
[ ]________________________________________________________
FOR AGAINST ABSTAIN
2. Approval of Financials and Dividends [ ] [ ] [ ]
3. Approval of Auditors [ ] [ ] [ ]
MARK HERE FOR THE 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: ____________
