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 Limited
- --------------------------------------------------------------------------------
(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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(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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Notes:
[LOGO] SCHLUMBERGER
Schlumberger Limited
277 Park Avenue
New York, New York 10172-0266
------------
42, rue Saint Dominique
75007 Paris, France
------------
Laan Van Meerdervoort 55,
2517 AG The Hague,
The Netherlands
NOTICE OF ANNUAL GENERAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 9, 1997
March 7, 1997
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 9, 1997, at
10:30 o'clock in the morning (Curacao time), for the following purposes:
1. To elect 11 directors.
2. To report on the course of business during the year ended December 31,
1996, to approve the Company's Consolidated Balance Sheet as at December
31, 1996, its Consolidated Statement of Income for the year ended December
31, 1996, and the declaration of dividends by the Board of Directors as
reflected in the Company's 1996 Annual Report to Stockholders.
3. To amend the Deed of Incorporation of the Company to increase the
authorized Common Stock from 500,000,000 to 1,000,000,000 shares.
4. To approve the appointment of Price Waterhouse LLP as independent
public accountants to audit the accounts of the Company for 1997.
Action will also be taken upon such other matters as may come properly
before the Meeting.
The close of business on February 24, 1997 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,
DAVID S. BROWNING
Secretary
PROXY STATEMENT
March 7, 1997
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 1997 Annual General Meeting of Stockholders (the
"Meeting"). The approximate mailing date of this Proxy Statement is March 7,
1997. 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 requirements requiring
advance notice and disclosure of relevant information.
The Company's 1996 Annual Report to Stockholders (the "Report") has been
mailed under separate cover. The Company's Consolidated Balance Sheet as at
December 31, 1996, its Consolidated Statement of Income for the year ended
December 31, 1996 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 $9,500.00, 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, 1997 is
entitled to one vote for each share registered in such stockholder's name. On
that date there were 246,738,929 outstanding shares of Common Stock of the
Company (excluding 62,129,064 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. ELECTION OF DIRECTORS
It is intended to fix the number of directors at 11 and to elect a Board of
11 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. All of the nominees, except
John Deutch and Yoshihiko Wakumoto, are now directors and were previously
elected by the stockholders. Mr. Deutch was a director of the Company from May
15, 1987 until 1993 when he resigned to accept a position in the United States
Government. Eiji Umene, a director since 1989, has reached retirement age and
is not standing for reelection. Unless instructed otherwise, the proxies will
be voted for the election of the 11 nominees named below. If any nominee is
unable or unwilling to serve, proxies may be voted for another person
designated by the Board of Directors. The Board knows of no reason why any
nominee will be unable or unwilling to serve, if elected.
A majority of the votes cast is required to elect each of the nominees for
director.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL NOMINEES.
The Board of Directors' nominees for election to the Board, together with
information furnished by them with respect to their business experience, and
other information regarding them, are set forth below:
NOMINEE, AGE AND DIRECTOR
FIVE-YEAR BUSINESS EXPERIENCE SINCE
----------------------------- --------
DON E. ACKERMAN, 63; Private Investor, New Canaan, Connecticut (1).... 1982
D. EUAN BAIRD, 59; Chairman and Chief Executive Officer since October
1986 (2)............................................................. 1986
JOHN DEUTCH, 58; Institute Professor, Massachusetts Institute of
Technology 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; Director of Schlumberger Limited May 1987 to
1993; Institute Professor, Massachusetts Institute of Technology 1990
to 1993 (3).......................................................... --
DENYS HENDERSON, 64; Chairman, The Rank Group Plc., a diversified
leisure services concern, since March 1995; 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 (4).......................................................... 1995
2
NOMINEE, AGE AND DIRECTOR
FIVE-YEAR BUSINESS EXPERIENCE SINCE
----------------------------- --------
ANDRE LEVY-LANG, 59; Chairman of the Board of Management of Compagnie
Financiere de Paribas, an international banking group, since June
1990; Chairman of the Board of Management of Banque Paribas, a
subsidiary of Compagnie Financiere de Paribas, since 1991; Chairman
of the Board of Management of Compagnie Bancaire 1989 to 1993;
Chairman of the Supervisory Board of Compagnie Bancaire since 1993,
all in Paris (5).................................................... 1992
WILLIAM T. MC CORMICK, JR., 52; Chairman and Chief Executive Officer,
CMS Energy Corp., a diversified energy company, Dearborn,
Michigan(6)......................................................... 1990
DIDIER PRIMAT, 52; President, Primwest Holding N.V., an investment
management company, Curacao, N.A. (7)............................... 1988
NICOLAS SEYDOUX, 57; Chairman and Chief Executive Officer, Gaumont, a
French film-making enterprise, Paris (7)............................ 1982
LINDA GILLESPIE STUNTZ, 42; Partner, law firm of Stuntz & Davis 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; U.S.
Dept. of Energy May 1989 to January 1993 (8)........................ 1993
SVEN ULLRING, 61; 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, 65; Adviser to Toshiba Corporation, a technology
company centered on electronics and energy, since July 1996, and
since November 1996, Vice President, The Japan Foundation, and
Executive Director of its Center for Global Partnership; 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); from July 1990 to June 1992, Senior Vice President of
Toshiba with responsibility for international staff (1990 and 1991)
and corporate planning (1992), all in Tokyo......................... --
3
- --------
(1) Mr. Ackerman is also a director of Genicom Corporation, which is in the
business of computer peripherals, electronic components and computer
related services.
(2) Mr. Baird is also a director of Compagnie Financiere de Paribas, Paris,
France and of The BOC Group plc, a United Kingdom company in the chemical
and health care industries. He is a trustee of Haven Capital Management
Trust.
(3) Mr. Deutch is also a director of Citicorp, a bank holding company which
is the parent of Citibank, CMS Energy Corp., a diversified energy
company, and Palomar Medical Technologies, a manufacturer of laser-based
systems for cosmetic and medical procedures and of circuitry for
commercial, industrial and business use.
(4) Sir Denys is also a non-executive director of Barclays Bank PLC and is
Chairman of Dalgety PLC, a United Kingdom agricultural products holding
company.
(5) Mr. Levy-Lang is also a director 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.
(6) Mr. McCormick is also a director of First Chicago NBD Inc., a regional
bank holding company, and Rockwell International Inc., a diversified
producer of products among which are electronic, industrial automation
and avionics products.
(7) Mr. Primat and Mr. Seydoux are cousins.
(8) Ms. Stuntz is also a director of American Electric Power Company, Inc.,
an electric and power holding company.
4
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information with respect to persons known by
the Company to be the beneficial owner of 5% or more of the Common Stock.
BENEFICIAL OWNERSHIP
OF COMMON STOCK
---------------------
NUMBER OF PERCENTAGE
NAME AND ADDRESS SHARES OF CLASS
---------------- ---------- ----------
FMR Corp. (1)............................................. 25,335,833 10.29%
85 Devonshire Street
Boston, Massachusetts 02109
- --------
(1) Based on an Amendment to a Statement on Schedule 13G dated February 14,
1997. Such filing indicates that FMR Corp. has sole voting power with
respect to 1,943,559 shares and sole dispositive power with respect to
25,335,833 shares. FMR Corp. is the parent of Fidelity Management &
Research Company, investment adviser to the Fidelity group of investment
companies. The filing indicates that the Common Stock was acquired in the
ordinary course of business and not for the purpose of influencing
control of the Company.
Following are the shares of the Company's Common Stock beneficially owned as
of January 31, 1997 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, 1997, no nominee
for director owned more than 1.0% of the outstanding shares of the Company's
Common Stock, except Mr. Primat who owned 1.13%. All 20 directors and
executive officers as a group owned 1.93% of the outstanding shares of the
Company, at January 31, 1997.
NAME SHARES
---- ---------
Don E. Ackerman......... 1,000
D. Euan Baird........... 765,784(1)
John Deutch............. 1,300(2)
Victor E. Grijalva...... 205,858(3)
Denys Henderson......... 1,000
Andre Levy-Lang......... 2,000
Arthur Lindenauer....... 89,558(4)
Clermont Matton......... 158,998(5)
William T. McCormick.... 3,000
Didier Primat........... 2,780,050(6)
Nicolas Seydoux......... 428,887(7)
Ian Strecker............ 92,748(8)
Linda Gillespie Stuntz.. 1,700(9)
Sven Ullring............ 1,586
Eiji Umene.............. 1,000
Yoshihiko Wakumoto...... 0
All directors and execu-
tive officers as a
group (20 persons)..... 4,753,346(10)
5
- --------
(1) Includes 500 shares owned by Mr. Baird's children, as to which he
disclaims beneficial ownership, and 555,000 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.
(2) Includes 300 shares owned by Mr. Deutch's wife, as to which he disclaims
beneficial ownership.
(3) Includes 300 shares owned by Mr. Grijalva's daughter, as to which he
disclaims beneficial ownership, and 181,000 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.
(4) Includes 82,000 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.
(5) Includes 155,000 shares which are deemed to be beneficially owned by Mr.
Matton because he has the right to acquire such shares within 60 days
through the exercise of stock options.
(6) Includes 280,000 shares as to which Mr. Primat shares investment power.
(7) Includes 310,807 shares owned by Mr. Seydoux's wife and his daughter as
to which he shares voting and investment power.
(8) Includes 63,495 shares which are deemed to be beneficially owned by Mr.
Strecker because he has the right to acquire such shares within 60 days
through the exercise of stock options.
(9) Includes 700 shares as to which Ms. Stuntz shares voting power.
(10) Includes 1,228,645 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 Seydoux are the
other members.
6
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. Sir Denys Henderson and Messrs. Primat and Umene 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, Levy-Lang and McCormick and Ms.
Stuntz 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 1996 the Board of Directors held four meetings. The Audit Committee
met three times; the Compensation Committee held three meetings; the Finance
Committee met once, 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.
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 receive an
additional annual fee of $20,000, rather than the $10,000 annual fee for
Committee service.
In the past, the Company and its subsidiaries had banking relationships with
Banque Paribas under which funds were deposited with, and borrowed from,
Banque Paribas on terms the Company felt were competitive, reasonable, and
customary. Such relationships may continue in 1997. Mr. Levy-Lang, nominee for
election as director, is Chairman of the Board of Management of Banque
Paribas.
7
EXECUTIVE COMPENSATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table shows, for the fiscal years ended December 31, 1996,
1995 and 1994, the cash compensation paid by the Company and its subsidiaries,
as well as certain other compensation paid or accrued for those years, to the
Chief Executive Officer and the next four most highly compensated executive
officers of the Company:
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
--------------
AWARDS
--------------
ANNUAL COMPENSATION SECURITIES
NAME AND -------------------------- UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY ($)(1) BONUS ($)(1) OPTIONS (#)(2) COMPENSATION ($)(3)
------------------ ---- ------------- ------------ -------------- -------------------
D. E. Baird ............ 1996 1,100,000 1,100,000 150,000 231,000
Chairman and Chief Ex- 1995 1,100,000 1,000,000 50,000 139,417
ecutive Officer 1994 1,100,000 500,000 175,000 144,000
V. E. Grijalva ......... 1996 600,000 425,000 100,000 108,350
Executive Vice Presi- 1995 600,000 385,000 25,000 81,350
dent, Oilfield Services 1994 600,000 230,000 40,000 70,200
C. Matton .............. 1996 500,000 115,000 100,000 83,600
Executive Vice Presi- 1995 500,000 260,000 25,000 56,948
dent, 1994 500,000 160,000 40,000 56,700
Measurement & Systems
A. Lindenauer........... 1996 500,000 260,000 40,000 83,600
Executive Vice Presi- 1995 500,000 260,000 0 65,625
dent--Finance 1994 500,000 150,000 20,000 54,450
I. Strecker............. 1996 400,000 170,000 50,000 65,450
Executive Vice Presi- 1995 400,000 195,000 0 51,000
dent, Technology and 1994 400,000 110,000 10,000 45,450
Quality, Health, Safety
& Environment
- --------
(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) The Company has granted no stock appreciation rights or restricted stock.
(3) The 1996 amounts disclosed in this column include:
(a) Company contributions to the Schlumberger Profit Sharing Plan.
(b) Company unfunded credits to the Schlumberger Supplementary Benefit
Plan.
(c) Company unfunded matching credits to the Restoration Savings Plan.
(a)($) (b)($) (c)($)
------ ------- ------
Mr. Baird.............................................. 16,500 156,000 58,500
Mr. Grijalva........................................... 16,500 66,800 25,050
Mr. Matton............................................. 16,500 48,800 18,300
Mr. Lindenauer......................................... 16,500 48,800 18,300
Mr. Strecker........................................... 16,500 35,600 13,350
The Company's matching credits under the Restoration Savings Plan are vested
33 1/3% at three years of service, 66 2/3% at four years, 100% at five years
or at age 60, or upon death or upon change of control. The amounts credited
under the Restoration Savings Plan will be paid upon termination or
retirement, death, disability, or change in control.
8
STOCK OPTION GRANTS TABLE
The following table sets forth certain information concerning stock options
granted during 1996 by the Company to the Chief Executive Officer and the next
four most highly compensated executive officers of the Company. In addition,
there are shown hypothetical gains that could be realized for the respective
options, based on assumed rates of annual compound stock price appreciation of
5% and 10% from the date the options are granted over the ten-year term of the
options. The actual gain, if any, realized upon exercise of the options will
depend upon the market price of the Company's Common Stock relative to the
exercise price of the option at the time the option is exercised. There is no
assurance that the amounts reflected in this table will be realized.
OPTION GRANTS IN LAST FISCAL YEAR
POTENTIAL
REALIZABLE VALUE
AT ASSUMED ANNUAL
RATES OF STOCK
PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM
------------------------------------------------- --------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED EXERCISE
OPTIONS TO EMPLOYEES PRICE EXPIRATION
NAME GRANTED(#)(1) IN FISCAL YEAR ($/SH)(2) DATE 5%($) 10%($)
---- ------------- -------------- --------- ---------- --------- ----------
D. E. Baird............. 150,000 3.63 67.50 01/24/06 6,367,558 16,136,642
V. E. Grijalva.......... 100,000 2.42 67.50 01/24/06 4,245,038 10,757,761
C. Matton............... 100,000 2.42 67.50 01/24/06 4,245,038 10,757,761
A. Lindenauer........... 40,000 0.96 67.50 01/24/06 1,698,015 4,303,104
I. Strecker............. 50,000 1.21 67.50 01/24/06 2,122,519 5,378,880
- --------
(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 their respective 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.
9
STOCK OPTION EXERCISES AND DECEMBER 31, 1996 STOCK OPTION VALUE TABLE
The following table sets forth certain information concerning stock options
exercised during 1996 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, 1996. The Company has not granted stock
appreciation rights. The values of unexercised in-the-money stock options at
December 31, 1996 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
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT
SHARES OPTIONS AT FY-END (#) FY-END ($)(2)
ACQUIRED VALUE ------------------------- -------------------------
NAME ON EXERCISES(#) REALIZED($)(1) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- --------------- -------------- ------------------------- -------------------------
D. E. Baird............. 200,000 10,225,000 515,000/ 22,781,165/
335,000 12,931,210
V. E. Grijalva.......... 20,000 1,058,740 156,000/ 7,164,975/
174,000 6,316,850
C. Matton............... 0 -- 130,000/ 5,420,873/
170,000 6,182,862
A. Lindenauer........... 30,000 1,533,750 74,000/ 3,777,242/
56,000 1,982,748
I. Strecker............. 20,000 1,123,740 53,495/ 2,404,334/
56,000 1,888,750
- --------
(1) Market value of stock on date of exercise less exercise price.
(2) Closing price of stock on December 31, 1996 less exercise price.
10
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 of such plans based upon the benefits accrued during the
years of service related to each plan. Such 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: $33,714 for Mr. Baird; $57,139
for Mr. Grijalva; $38,223 for Mr. Matton; and $83,379 for Mr. Strecker.
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.
Assuming admissible compensation continues at the December 31, 1996 levels,
estimated annual benefits payable upon retirement at normal retirement age
(65) from the U.S. plans and the supplementary benefit plan: $603,236 for
Mr. Baird; $279,287 for Mr. Grijalva; $244,714 for Mr. Matton; $229,945 for
Mr. Lindenauer; and $195,000 for Mr. Strecker.
11
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/Equipment
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 13.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*
AMONG SCHLUMBERGER LIMITED, S&P 500 INDEX AND VALUE LINE'S OILFIELD
SERVICES/EQUIPMENT INDUSTRY GROUP**
[GRAPH]
Schlumberger S&P 500 Industry Group
- -------------------------------------------------------------------------------
12/91 100 100 100
12/92 94 108 106
12/93 98 118 124
12/94 86 120 120
12/95 121 165 184
12/96 177 203 278
Assumes $100 invested on December 31, 1991 in Schlumberger Common Stock, S&P
500 Index and Value Line's Oilfield Services/Equipment Industry Group.
* Total return assumes reinvestment of dividends.
** Fiscal year ending December 31.
12
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Schlumberger Limited Board of Directors
has only non-employee directors. The Committee acts on behalf of the Board to
review and approve those compensation programs applicable to executive
officers, as well as all specific awards under these programs.
Three programs are central to the competitive compensation provided
executive officers:
--Base Salaries
--Annual Cash Incentive Awards
--Stock Option Grants
The Company has long adhered to a compensation structure which is simple,
credible and easily applicable to its thousands of managerial and professional
employees throughout the world. Since the Company recruits college and
university graduates in more than 70 countries worldwide and then places great
emphasis on promotion from within, the clarity and equity of its compensation
programs are of obvious importance.
As managerial and professional employees are transferred throughout the
Schlumberger universe, they participate in the three programs noted above for
executive officers. Certain changes, however, will typically occur during an
extended career:
--the mix of cash compensation between base salary and annual incentive
will shift so that an increasing portion of total cash will be represented
by a variable annual incentive as an individual advances. As incentive
participation increases, base salary movement slows.
--within the first few years after being hired, employees with strong
performance and demonstrated potential may be awarded stock option grants,
which are discretionary in nature.
--with these two changes, an employee progressing within Schlumberger will
have an increasing portion of total compensation leveraged against yearly
results and Company long-term performance.
In addition to the base salary, incentive award and stock option grant
programs, many of the Company's subsidiaries have profit sharing plans which
provide annual deferred awards that reflect the results of the subsidiary
sponsoring each plan. These awards increase the portion of total compensation
which is leveraged against business results.
Base salaries are established following an annual review of comparator
company data provided by outside compensation consultants. The companies in
the data base are in oil-related, high technology and high volume
manufacturing activities. In their entirety, they create a data base which
reflects the industry segments in which the company is active. Slight changes
in the roster of participating companies take place from year to year as
companies enter or leave the data base and as companies merge or are acquired.
The companies used to establish base salary ranges for the executive officers
are the same companies used for creation of the base salary ranges for
professional and managerial employees of the Company around the world.
13
The comparator companies used for compensation purposes are different from
those in the Corporate Performance Graph (the Value Line Oilfield
Services/Equipment Industry Group). The Value Line companies are not a source
of recruits nor do they mirror all the industry segments in which the Company
operates.
At executive officer level, the Company does not adjust base salaries on an
annual basis. Rather, the pattern has been established to consider base salary
changes only every three to five years, save for a significant change in the
executive officer's level of responsibility. In the environment of low
inflation we have been experiencing, this has allowed the Company to easily
exercise its preference to place more emphasis on variable rather than fixed
compensation.
Consistent with this policy, none of the salaries of the named executive
officers was adjusted in 1996.
Annual cash incentive awards for executive officers are based on performance
against established targets or objectives for the completed fiscal year, with
payment being made early in the new year.
Maximum incentive awards reflect the potential impact of the executive
officer's position on the results of the Company. For 1996, the incentive
award ranges of the named executive officers were:
--0 to 100% of 1996 base salary for Mr. Baird,
--0 to 75% of 1996 base salary for Messrs. Grijalva and Matton,
--0 to 60% of 1996 base salary for Messrs. Lindenauer and Strecker.
For each executive officer, one-half of the incentive potential is a
function of performance against specific numerical targets established early
in the fiscal year. For executive officers with corporate responsibility
(Messrs. Baird, Lindenauer and Strecker) this is an earnings-per-share target
for the fiscal year. For Messrs. Grijalva and Matton the target is a measure
of performance against net income objectives for their respective business
sectors.
The second half of the incentive potential is a measure of performance
against various objectives of each executive officer. These objectives may be
strategic or personal and may relate to the fiscal year only or be interim
measures against a longer-range objective. Such objectives are established
early each year. Achievement is generally determined on a subjective basis and
is not typically influenced by corporate performance.
When both Company and individual performance are strong, the target delivery
for executive officers is the range between 60th and 75th percentiles of total
cash compensation in the comparator company data base discussed earlier. The
performance of the Company overall and of the Oilfield Services sector in
particular were exceptionally strong in 1996, resulting in the cash
compensation of Messrs. Grijalva, Lindenauer and Strecker exceeding the
targeted objective.
14
Stock option grants were awarded in 1996 on a general basis throughout the
Company in the group of professional, managerial and technical employees
deemed eligible for consideration. The Company periodically conducts such
comprehensive reviews of its worldwide optionable population. Additionally, it
may provide grants between these reviews in instances of promotions,
substantial changes in responsibility and significant individual or team
achievements.
Stock option grants continue to be 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.
Each of the named executive officers received a stock option grant in 1996.
The Company's stock option program, like its cash compensation program, is
designed to be simple and consistent in its terms for executive officers and
all other option grant recipients. Thus, the features of grants provided the
named executive officers--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--are precisely the same as those in grants provided all
other optionees.
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 1996 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 salary range of the Chief Executive Officer is derived from the same
comparator company data used to establish salary ranges for other executive
officers as well as a large segment of the Company's international work force.
Comparator companies are active in the oil-related, high technology and high
volume manufacturing activities which reflect the Company's own industry
segments.
The Chief Executive Officer's 1996 base salary of $1,100,000 was established
in 1992 and remained unchanged through 1996, in keeping with the Committee's
preference to consider officer salary adjustments infrequently.
The cash incentive award potential for the Chief Executive Officer in 1996
was 100% of base salary. One-half of this award was a measure of performance
against targeted earnings per share for the Company. The targeted objective
for 1996 was exceeded.
15
The second half of the incentive award is based on the Committee's
evaluation of Mr. Baird's performance against strategic objectives established
for 1996. In a year of exceptional overall financial growth for the Company,
several pivotal objectives were met or exceeded. These included penetration of
CIS and India, as well as continued expansion in China, a dramatic increase in
smart card activity and the return of the seismic business to profitability
for the year. Disclosure of the specific measures applied to evaluate
achievement of these objectives as well as the content of certain other
objectives could adversely affect the Company's competitive position.
The total cash incentive awarded Mr. Baird for 1996 performance was
$1,100,000. Base salary plus incentive placed him above the targeted 60th to
75th percentile of total cash compensation in the comparator company survey
data.
During 1996 Mr. Baird received a stock option grant of 150,000 shares. Like
the grants of all other optionees, his grant was of 10-year duration, vesting
in 20% steps on each of the first through fifth anniversary of grant date, and
priced at fair market value on grant date.
As is the case with all other executive officers of the Company, Mr. Baird
has no employment agreement.
SUBMITTED BY THE COMPENSATION COMMITTEE OF THE COMPANY'S
BOARD OF DIRECTORS
Don E. Ackerman, Chairman Didier Primat
Denys Henderson Eiji Umene
2. FINANCIAL STATEMENTS
The Company's Consolidated Balance Sheet as at December 31, 1996, its
Consolidated Statement of Income for the year ended December 31, 1996, and the
amount of dividends declared by the Board of Directors during 1996 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 1996 Annual
Report.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEM 2.
16
3. AMENDMENT OF DEED OF INCORPORATION
The Board of Directors has approved and recommended for submission to the
stockholders an amendment to the Company's Deed of Incorporation which would
increase the authorized Common Stock of the Company from its present
500,000,000 shares to 1,000,000,000 shares of U.S.$0.01 each. The authorized
Common Stock of the Company has not been increased since 1981 when the
stockholders voted to increase the authorized shares of Common Stock to
500,000,000 from 300,000,000.
As the Company enters into a new era of growth, the Board of Directors
believes that there should be a sufficient number of authorized but unissued
shares of Common Stock available for issue from time to time to enable the
Board of Directors to authorize the issuance of additional shares without
necessarily requiring an amendment to the Deed of Incorporation at the time of
such action.
The following resolution, which will be presented to the Annual General
Meeting of Stockholders, sets forth the proposed amendment to the Deed of
Incorporation of the Company and proposes to increase the authorized Common
Stock:
RESOLVED, that Section 1. of Article IV, "Capital and Shares", of the Deed
of Incorporation of the Company be, and it hereby is, amended to read in
its entirety as follows:
"1. The authorized capital of the Company shall be TWELVE MILLION UNITED
STATES DOLLARS (U.S.$12,000,000), divided into (a) one billion
(1,000,000,000) shares of Common Stock of the par value of One United
States Cent (U.S.$0.01) per share and (b) two hundred million (200,000,000)
shares of cumulative Preferred Stock of the par value of One United States
Cent (U.S.$0.01) per share, which may be issued in separate series."
The affirmative vote of a majority of the Company's shares outstanding and
entitled to vote is required for the adoption of the foregoing resolution.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEM 3.
17
4. APPOINTMENT OF AUDITORS
Price Waterhouse LLP, who have served as auditors for the Company since its
organization, have been selected by the Board of Directors as independent
public accountants to audit the accounts of the Company for the year 1997. 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 Price Waterhouse 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 4.
STOCKHOLDER PROPOSALS FOR 1998 ANNUAL GENERAL MEETING
In order for a stockholder proposal to be considered for inclusion in the
Proxy Statement for the 1998 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, 1997.
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, 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,
David S. Browning
Secretary
New York, N.Y.
March 7, 1997
18
[LOGO] SCHLUMBERGER
NOTICE OF
ANNUAL GENERAL MEETING
OF STOCKHOLDERS
AND
PROXY STATEMENT
APRIL 9, 1997
- ------------------------------------
Please sign your proxy card and
return it in the enclosed
envelope so that you may be
represented at the Meeting.
- ------------------------------------
SCHLUMBERGER LIMITED (SCHLUMBERGER N.V.)
PROXY SOLICITATION ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL GENERAL MEETING OF STOCKHOLDERS
PROXY
The undersigned, having received the Notice and Proxy Statement for the
Annual General Meeting of Stockholders and the 1996 Annual Report to
Stockholders, hereby appoints A. L. A. Bosnie, M. P. Dommisse, I. R. Gouverneur,
and M. M. H. van Dooren and each of them, proxies, with power of 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 to be held at the Avila
Beach Hotel, Penstraat 130, Willemstad, Curacao, Netherlands Antilles on April
9, 1997, 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, 3 and 4.
SEE REVERSE
Continued and to be signed on reverse side SIDE
[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, 3, and 4.
1. Election of 11 Directors
NOMINEES: D.E. Ackerman, D.E. Baird, J. Deutch, D. Henderson,
A. Levy-Lang, W.T. McCormick, Jr., D. Primat, N. Seydoux,
L.G. Stuntz, S. Ullring, Y. Wakumoto
FOR WITHHELD
ALL [_] ALL [_]
NOMINEES NOMINEES
For, except vote withheld from the following nominee(s):
___________________________________________
FOR AGAINST ABSTAIN
2. Approval of Financials and Dividends [_] [_] [_]
3. Approval of Increase in Authorized Common Stock [_] [_] [_]
4. Approval of Auditors [_] [_] [_]
MARK HERE
FOR ADDRESS [_]
CHANGE AND
NOTE AT LEFT
Please sign names exactly as printed hereon. In 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
