<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
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 (S) 240.14a-11(c) or (S) 240.14a-12
SCHLUMBERGER LIMITED
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
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:
-------------------------------------------------------------------------
(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:
-------------------------------------------------------------------------
Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
<PAGE>
[LOGO OF 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 12, 2000
March 8, 2000
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 12, 2000 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,
1999, to adopt and approve the Company's Consolidated Balance Sheet as at
December 31, 1999, its Consolidated Statement of Income for the year ended
December 31, 1999, and the declaration of dividends by the Board of
Directors as reflected in the Company's 1999 Annual Report to Stockholders.
3. To approve the appointment of PricewaterhouseCoopers LLP as independent
public accountants to audit the accounts of the Company for 2000.
Action will also be taken upon such other matters as may come properly before
the meeting.
The close of business on February 24, 2000 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,
JAMES L. GUNDERSON
Secretary
<PAGE>
PROXY STATEMENT
March 8, 2000
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 2000 Annual General Meeting of Stockholders. The
approximate mailing date of this proxy statement is March 8, 2000. 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 1999 Annual Report to Stockholders has been mailed under
separate cover. The Company's Consolidated Balance Sheet as at December 31,
1999, its Consolidated Statement of Income for the year ended December 31,
1999 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 24, 2000 is
entitled to one vote for each share registered in the stockholder's name. On
that date there were 566,698,741 outstanding shares of common stock of
Schlumberger, excluding 100,361,126 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 the Schlumberger 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
Directors of 12 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 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, 66; Private Investor since 1991.(1)................. 1982
D. EUAN BAIRD, 62; Chairman and Chief Executive Officer since October
1986.(2)............................................................ 1986
JOHN DEUTCH, 61; 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; Undersecretary of
Defense (Acquisition and Technology) March 1993 to 1994; Director of
Schlumberger Limited, May 1987 to 1993.(3).......................... 1997
VICTOR E. GRIJALVA, 61; Vice Chairman since April 1998; Executive
Vice President, Oilfield Services from 1994 to April 1998; Executive
Vice President for Wireline, Testing & Anadrill from 1992 to 1994.
(4)................................................................. 1998
DENYS HENDERSON, 67; 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
ANDRE LEVY-LANG, 62; 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., 55; Chairman and Chief Executive Officer,
CMS Energy Corp., a diversified energy company, Dearborn,
Michigan.(6)........................................................ 1990
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
Nominee, Age and Director
Five-Year Business Experience Since
----------------------------- --------
<S> <C>
DIDIER PRIMAT, 55; President, Primwest Holding N.V., an investment
management company, Curacao, N.A. (7)................................ 1988
NICOLAS SEYDOUX, 60; Chairman and Chief Executive Officer, Gaumont, a
French film-making enterprise, Paris.(7)............................. 1982
LINDA GILLESPIE STUNTZ, 45; 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, 64; President and Chief Executive Officer, Det Norske
Veritas, provider of safety, quality and reliability services to
maritime, offshore and other industries, Hovik, Norway............... 1990
YOSHIHIKO WAKUMOTO, 68; Adviser to Toshiba Corporation, a technology
company centered on electronics and energy, since July 1996; member
of Board of Toshiba from July 1988 to June 1996; Executive Vice
President of Toshiba, July 1992 through June 1996, with
responsibility for corporate planning, group companies and
information systems (1992 to 1995), and international affairs (1996),
all in Tokyo. (9).................................................... 1997
</TABLE>
- --------
(1) Mr. Ackerman is Chairman of the Board and a member of the Audit Committee
of Genicom Corporation, which is in the business of computer peripherals,
electronic components, and computer related services.
(2) Mr. Baird is a director of Paribas, Paris, France. He is a trustee of
Haven Capital Management Trust.
(3) 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.
(4) Mr. Grijalva is Chairman of the Board of Directors of Transocean Sedco
Forex Inc., an offshore drilling company.
(5) Mr. Levy-Lang is a director and member of the Compensation Committee of
AGF, a French insurance company. 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.
(6) Mr. McCormick is 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.
(7) Mr. Primat and Mr. Seydoux are cousins.
3
<PAGE>
(8) Mrs. Stuntz is a director of American Electric Power Company, Inc., an
electric and power holding company. She is Chairman of its Finance
Committee and is a member of its Executive, Directors, Nuclear Oversight
and Public Policy Committees.
(9) Mr. Wakumoto is Vice President (part-time executive member of the Board)
of The Japan Foundation, a nonprofit institution funded by the Japanese
Government and incorporated under a special enactment.
Security Ownership of Certain Beneficial Owners and Management
The following table lists the shares of Schlumberger common stock
beneficially owned as of January 31, 2000 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,
2000, no nominee for director owned more than 1% of the outstanding shares of
the Company's common stock, except Mr. Primat who owned 4.3%. All 24 directors
and executive officers as a group owned 5.3% of the outstanding shares of the
Company at January 31, 2000.
<TABLE>
<CAPTION>
Name Shares
- ---- ------
<S> <C>
Don E. Ackerman.................................................. 2,000
D. Euan Baird.................................................... 2,117,664(1)
John Deutch...................................................... 3,600(2)
Andrew Gould..................................................... 244,790(3)
Victor E. Grijalva............................................... 789,781(4)
Denys Henderson.................................................. 5,000
Andre Levy-Lang.................................................. 4,000
Jack Liu......................................................... 134,832(5)
William T. McCormick, Jr. ....................................... 10,000
Irwin Pfister.................................................... 243,881(6)
Didier Primat.................................................... 24,556,236(7)
Nicolas Seydoux.................................................. 251,524(8)
Linda Gillespie Stuntz........................................... 5,000(9)
Sven Ullring..................................................... 3,305
Yoshihiko Wakumoto............................................... 2,000
All directors and executive officers as a group (24 persons)..... 29,709,962(10)
</TABLE>
- --------
(1) Includes 699,955 shares held in a revocable grantor trust and 1,417,709
shares which may be acquired by Mr. Baird 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 230,790 shares which may be acquired by Mr. Gould within 60 days
through the exercise of stock options.
4
<PAGE>
(4) Includes 600 shares owned by Mr. Grijalva's daughter, as to which he
disclaims beneficial ownership, and 670,389 shares which may be acquired
by Mr. Grijalva within 60 days through the exercise of stock options.
(5) Includes 128,583 shares which may be acquired by Mr. Liu within 60 days
through the exercise of stock options.
(6) Includes 242,878 shares which may be acquired by Mr. Pfister 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 3,772,534 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 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 Schlumberger consolidated financial statements. The
Audit 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 Schlumberger
accounting practices and internal accounting controls. The Audit 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 plans. Mr. Ackerman is Chairman of the
Compensation Committee. Messrs. Henderson, 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 Finance
Committee periodically reviews the administration of the Schlumberger employee
benefit plans and those of its subsidiaries. Messrs. Baird, Deutch, Grijalva,
Levy-Lang, Primat and Wakumoto are the members of the Finance Committee.
5
<PAGE>
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. McCormick is Chairman of the
Nominating Committee, and Messrs. Baird, Seydoux and Ullring are the other
members. The Nominating Committee will consider nominees recommended by
stockholders who may submit nominations to Chairman, Nominating Committee,
care of the Secretary, Schlumberger Limited, 277 Park Avenue, New York, New
York 10172-0266.
During 1999 the Board of Directors held five meetings. The Audit Committee
met twice; the Compensation Committee met four times; the Finance Committee
met twice, and the Nominating Committee met three times. 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, except for Denys
Henderson who attended two-thirds of all such meetings.
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 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 $10,000 annual fee for committee
service.
6
<PAGE>
EXECUTIVE COMPENSATION
Summary of Cash and Certain Other Compensation
The following table shows the compensation paid by the Company and its
subsidiaries to the Chief Executive Officer and to the next four most highly
compensated executive officers for the fiscal years ending December 31, 1999,
1998, and 1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Compensation
------------
Awards
------
Annual Compensation
------------------------------- Securities
Name and Underlying All Other
Principal Position Year Salary ($)(1) Bonus ($)(1) Options (#) (4) (5) Compensation ($) (6)
------------------ ---- ------------ ----------- ------------------- --------------------
<S> <C> <C> <C> <C> <C>
D. E. Baird ............ 1999 1,500,000 1,000,000 0 105,000
Chairman and 1998 1,500,000 600,000 0 270,000
Chief Executive Officer 1997 1,500,000 1,500,000 549,500 323,000
V.E. Grijalva........... 1999 800,000 420,000 0 52,000
Vice Chairman 1998 800,000 240,000 0 112,500
1997 600,000 450,000 219,800 129,000
A. Gould................ 1999 589,102(2) 310,915 54,950 36,691
Executive Vice 1998 499,154 152,284 43,960 63,198
President,
Oilfield Services
I. Pfister.............. 1999 500,000 290,000(3) 54,949 39,719
Executive Vice 1998 500,000 150,000 0 72,000
President, 1997 420,411 300,000 137,375 55,112
Test & Transactions
J. Liu.................. 1999 400,000 165,000 54,949 22,250
Executive Vice 1998 265,000 45,000 54,949 24,900
President,
Finance
</TABLE>
- --------
(1) Salary and bonus amounts include cash compensation earned and received and
any amounts deferred under the Schlumberger Restoration Savings Plan.
(2) Mr. Gould is paid in French francs.
(3) Includes an award of $150,000 in connection with the sale of the Retail
Petroleum Systems business.
(4) Shares were increased by a factor of 1.099 to reflect the spin-off of
Sedco Forex.
(5) The Company has granted no stock appreciation rights or restricted stock.
(6) The 1999 amounts disclosed in this column include:
(a) Company contributions to Schlumberger Profit Sharing Plans
(b) Company unfunded credits to the Schlumberger Supplementary Benefit Plan
(c) Company unfunded matching credits to the Schlumberger Restoration
Savings Plan
<TABLE>
<CAPTION>
(a)($) (b)($) (c)($)
------ ------ ------
<S> <C> <C> <C>
Mr. Baird............................................... 8,000 38,800 58,200
Mr. Grijalva............................................ 8,000 17,600 26,400
Mr. Gould............................................... 36,691 N/A N/A
Mr. Pfister............................................. 8,000 12,688 19,031
Mr. Liu................................................. 8,000 5,700 8,550
</TABLE>
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.
7
<PAGE>
Stock Option Grants Table
The following table sets forth certain information concerning options granted
during 1999 to the Chief Executive Officer and the next four most highly
compensated executive 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
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed
Annual Rates of
Stock Price
Appreciation for
Individual Grants (1) Option Term
--------------------------------------------------------- ---------------------
Number of
Securities % of Total
Underlying Options Granted
Options to Employees in Exercise Price Expiration
Name Granted (#) (2) Fiscal Year ($/SH) (3) Date 5%($) 10%($)
- ---- --------------- --------------- -------------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
D. E. Baird............. 0 -- -- -- -- --
V. E. Grijalva.......... 0 -- -- -- --
A. Gould................ 54,950 0.91 44.843 1/19/09 1,549,674 3,927,177
I. Pfister.............. 54,949 0.91 44.843 1/19/09 1,549,645 3,927,105
J. Liu.................. 54,949 0.91 44.843 1/19/09 1,549,645 3,927,105
</TABLE>
- --------
(1) The number of shares granted was increased and the exercise price was
decreased by a factor of 1.099 to reflect the spin-off of Sedco Forex.
(2) The Company has not granted any stock appreciation rights. Options 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.
(3) 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, 1999 Stock Option Value Table
The following table shows certain information concerning options exercised
during 1999 by the Chief Executive Officer and by the next four most highly
compensated executive officers and the number and value of unexercised options
at December 31, 1999. Schlumberger has not granted stock appreciation rights.
The values of unexercised in-the-money stock options at December 31, 1999 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
<TABLE>
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-The-Money
Options at Options at
Value FY-End (#) (2) FY-End ($) (2) (3)
Shares Acquired Realized Exercisable/ Exercisable/
Name on Exercises (#) ($) (1) Unexercisable Unexercisable
- ---- ---------------- ---------- ------------- ------------------
<S> <C> <C> <C> <C>
D. E. Baird....... 350,000 11,283,771 1,329,790/ 31,909,893/
483,559 4,054,684
V. E. Grijalva.... 0 -- 615,439/ 14,588,692/
230,790 2,585,979
A. Gould.......... 0 -- 206,612/ 4,745,350/
156,058 1,290,291
I. Pfister........ 0 -- 209,908/ 4,213,500/
181,332 1,737,127
J. Liu............ 0 -- 100,010/ 2,147,114/
147,262 1,513,678
</TABLE>
- --------
(1) Market value of stock on date of exercise less exercise price.
(2) Shares increased and exercise price decreased by a factor of 1.099 to
reflect the spin-off of Sedco Forex.
(3) Closing price of stock on December 31, 1999 ($56.125) less exercise price.
9
<PAGE>
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: $33,714 for Mr.
Baird; $57,139 for Mr. Grijalva; $276,635 for Mr. Gould, assuming pensionable
salary continues at the December 31, 1999 level for Mr. Gould, and $47,875 for
Mr. Liu.
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 are: $16,066 for Mr. Gould, and, assuming admissible
compensation continues at the December 31, 1999 levels, estimated annual
benefits payable from the U.S. plans and the supplementary benefit plan are:
$633,069 for Mr. Baird; $291,336 for Mr. Grijalva; $236,521 for Mr. Pfister,
and $159,529 for Mr. Liu.
10
<PAGE>
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 12.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG SCHLUMBERGER LIMITED, S&P 500 INDEX AND VALUE LINE'S OILFIELD
SERVICES INDUSTRY INDEX
SLB S&P 500 Industry Peer Index
- --------------------------------------------------------------
12/31/94 100 100 100
12/31/95 141 138 155
12/31/96 206 169 240
12/31/97 337 226 371
12/31/98 196 290 179
12/31/99 268 351 265
Assumes $100 invested on December 31, 1994 in Schlumberger Limited stock, in
the S&P 500 Index and in Value Line's 1999 Oilfield Services Industry Index.
Reflects reinvestment of dividends on the last day of the month of payment,
and reinvestment of the 1999 year-end distribution in connection with the
spin-off of Sedco Forex, and annual reweighting of the Industry Peer Index
portfolio.
11
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Compensation Committee Report on Executive Compensation
The Compensation Committee of the Board of Directors is comprised 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
For many years, Schlumberger has emphasized career opportunities by
recruiting from colleges and universities in countries where Schlumberger
works (more than 70 countries throughout the world), supporting mobility and
maintaining 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
of Schlumberger. At all levels, employees enjoy competitive base salaries.
Participation in an annual cash incentive program is added to the compensation
package as employees advance, with the size of incentive opportunity
increasing as one progresses in the organization.
Within the first few years of employment, those with strong performance as
well as outstanding 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.
The Company's subsidiaries also have profit sharing plans that provide
annual deferred awards based on 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 database
of comparator company information provided by outside compensation
consultants. The companies in the database reflect those broad industry
segments in which Schlumberger competes -- oil-related, high technology and
high volume manufacturing. The companies in the database 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 database at their own volition. The
same companies used for executive officer base salary ranges are used for
professional and managerial employees of Schlumberger throughout the world.
12
<PAGE>
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 Schlumberger
operates.
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 periods of low inflation.
Consistent with this policy, Andrew Gould's salary was increased on his
promotion to Executive Vice President with responsibility for the entire
Oilfield Services group. One named executive officer was appointed in 1999,
Jack Liu, to succeed Arthur Lindenauer as Executive Vice President, Finance.
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 year.
For all executive officers, incentive awards are calculated as a percent of
the base salary paid for the completed calendar year. The percent varies among
executive officer positions to reflect the differing levels of potential
impact on Company results. For 1999, 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. Liu
With exceptional results, the incentive ranges can be exceeded.
One-half of the incentive potential for each executive officer is a function
of performance against financial targets for the Company or the business
sector for which the executive officer is responsible. In 1999, the Company
objectives were divided between specific numerical targets and earnings; the
business sector target is net income for that 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.
The continued downturn in the oil business in 1999 affected the financial
results and the incentive awards of three named executive officers (Messrs.
Grijalva, Gould and Liu). Their total cash compensation for 1999 is at or
below the median of available comparator market data. Mr. Pfister's incentive
is based on financial results of Automated Test Equipment, Smart Cards and
Terminals, and the sale of Retail Petroleum Systems, the results of which were
finalized in 1999. Based on results, Mr. Pfister's total cash compensation is
at the median of comparator market data.
13
<PAGE>
Stock option grants were awarded in 1999 on a general basis throughout
Schlumberger to professional, managerial and technical employees deemed
eligible for consideration. Such reviews are conducted every 18 months to two
years. 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. In
addition, grants typically are awarded between general reviews to recognize
promotions, substantial changes in responsibility, and significant individual
or team achievements. The 1999 grants emphasized high potential employees
early in their careers with Schlumberger.
Of the named executive officers, Messrs. Gould, Pfister and Liu were awarded
stock option grants in 1999.
The stock option grants awarded by the Company are uniform in their terms
for executive officers as well as 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.
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 1999 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
The same database 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 database 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 1999.
The potential cash incentive award for Mr. Baird for 1999 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 specific
financial targets for the Company. These financial targets were not fully
achieved in 1999 so payment on this half of the incentive award is in
proportion to the results.
The second half of the award potential reflects the committee's evaluation
of Mr. Baird's performance against strategic objectives established early in
1999 for the calendar year. These objectives were a combination of market
growth, acquisition, and organizational changes. Disclosure of specific
measures applied to evaluate achievement of Mr. Baird's objectives could
adversely affect the Company's competitive position.
14
<PAGE>
The total cash incentive awarded Mr. Baird for 1999 performance was
$1,000,000. In combination with base salary, this places him at the median of
available 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, Chairman William T. McCormick, Jr.
Denys Henderson Nicolas Seydoux
15
<PAGE>
2. Financial Statements
The Company's Consolidated Balance Sheet as at December 31, 1999, its
Consolidated Statement of Income for the year ended December 31, 1999, as
audited by PricewaterhouseCoopers LLP, and the amount of dividends declared by
the Board of Directors during 1999 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 1999
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 2000. 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 2000 Annual General 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 2001 Annual General Meeting
In order for a stockholder proposal to be considered for inclusion in the
proxy statement for the 2001 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 8, 2000. 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 2001 Annual General Meeting if the stockholder
making the proposal has not given notice to the Company by January 22, 2001.
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 8, 2000
17
<PAGE>
[LOGO OF SCHLUMBERGER]
NOTICE OF
ANNUAL GENERAL MEETING
OF STOCKHOLDERS
AND
PROXY STATEMENT
APRIL 12, 2000
----------------------------------
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 1999 Annual Report to
Stockholders, hereby appoints A.L.A. Bosnie, Aede Gerbranda, Jan A. Koning,
and M.P. Weber-Dommisse and each of them, proxies, with power of
R substitution, to vote in the manner indicated on the reverse side hereof,
and with discretionary authority as to any other matters that may properly
come before the meeting, all my (our) shares of record of Schlumberger
Limited (Schlumberger N.V.) at the Annual General Meeting of Stockholders
O to be held at the Avila Beach Hotel, Penstraat 130, Willemstad, Curacao,
Netherlands Antilles on April 12, 2000, and at any adjournment or
adjournments thereof.
X
If no other indication is made, the proxies will vote FOR the election of
Y the director nominees and FOR Proposals 2 and 3.
- ------------- -------------
SEE REVERSE Continued and to be signed on reverse side SEE 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.
<TABLE>
<S> <C>
1. Election of 12 Directors
Nominees: D.E. Ackerman, D.E. Baird, FOR AGAINST ABSTAIN
J. Deutch, V.E. Grijalva, D. Henderson, 2. Adoption and approval of Financials [_] [_] [_]
A. Levy-Lang, W.T. McCormick, Jr., and Dividends
D. Primat, N. Seydoux, L.G. Stuntz,
S. Ullring, Y. Wakumoto
FOR WITHHELD 3. Approval of Auditors [_] [_] [_]
ALL [_] [_] FROM ALL
NOMINEES NOMINEES
For, except vote withheld from the
following nominees(s):
[_] ___________________________________
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:_____________
</TABLE>
