SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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For the Quarter ended: Commission file No.:
MARCH 31, 1997 1-4601
SCHLUMBERGER N.V.
(SCHLUMBERGER LIMITED)
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(Exact name of registrant as specified in its charter)
NETHERLANDS ANTILLES 52-0684746
-------------------- -----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
277 PARK AVENUE
NEW YORK, NEW YORK, U.S.A. 10172
42 RUE SAINT-DOMINIQUE
PARIS, FRANCE 75007
LAAN VAN MEERDERVOORT 55
THE HAGUE,
THE NETHERLANDS 2517 AG
- --------------------------------- -----------
(Addresses of principal executive (Zip Codes)
offices)
Registrant's telephone number: (212) 350-9400
Indicate by check mark whether Registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months and (2) has been subject to such filing requirements for
the past 90 days.
YES X NO
------- -------
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at April 30, 1997
- ----------------------------- -----------------------------
COMMON STOCK, $0.01 PAR VALUE 246,851,560 (*)
(*) Not adjusted for two-for-one stock split, announced April 17, 1997,
to stockholders of record on June 2, 1997.
PART I. FINANCIAL INFORMATION
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Item 1 : Financial Statements
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SCHLUMBERGER LIMITED
--------------------
(Schlumberger N.V., Incorporated in the Netherlands Antilles)
and Subsidiary Companies
CONSOLIDATED STATEMENT OF INCOME
--------------------------------
(Unaudited)
(Stated in thousands except per share amounts)
Three Months Ended
March 31,
---------------------------------------
1997 1996
REVENUE:
Operating $2,402,060 $2,027,828
Interest and other income 18,105 17,370
--------- ---------
2,420,165 2,045,198
--------- ---------
EXPENSES:
Cost of goods sold and services 1,782,788 1,549,603
Research & engineering 117,953 110,799
Marketing 74,633 73,190
General 87,781 85,259
Interest 17,819 17,343
Taxes on income 79,248 38,137
--------- ----------
2,160,222 1,874,331
--------- ---------
Net Income $ 259,943 $ 170,867
========= =========
Net Income per share (1) $ 0.53 $ 0.35
========= =========
Average shares outstanding (1) 493,426 486,715
========= =========
Dividends declared per share (1) $ 0.1875 $ 0.1875
========= =========
(1) Adjusted for two-for-one stock split, announced April 17, 1997, to
stockholders of record on June 2, 1997.
See notes to consolidated financial statements
-2-
SCHLUMBERGER LIMITED
--------------------
(Schlumberger N.V., Incorporated in the Netherlands Antilles)
and Subsidiary Companies
CONSOLIDATED BALANCE SHEET
--------------------------
(Unaudited)
Mar. 31, Dec. 31,
1997 1996
------------ ------------
ASSETS (Dollars in thousands)
- ------
CURRENT ASSETS:
Cash and short-term investments $ 1,201,625 $ 1,358,948
Receivables less allowance for doubtful accounts
(1997 - $52,826; 1996 - $58,981) 2,384,117 2,260,091
Inventories 983,609 938,974
Deferred taxes on income 217,505 222,456
Other current assets 256,646 262,148
--------- ---------
5,043,502 5,042,617
LONG-TERM INVESTMENTS, HELD TO MATURITY 379,791 323,717
FIXED ASSETS:
Property, plant and equipment 9,667,875 9,577,749
Less accumulated depreciation (6,307,034) (6,219,168)
--------- ----------
3,360,841 3,358,581
EXCESS OF INVESTMENT OVER NET ASSETS OF
COMPANIES PURCHASED less amortization 1,187,734 1,225,335
DEFERRED TAXES ON INCOME 202,702 203,983
OTHER ASSETS 163,896 170,818
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$10,338,466 $10,325,051
=========== ==========
LIABILITIES & STOCKHOLDERS' EQUITY
- ----------------------------------
CURRENT LIABILITIES:
Accounts payable and accrued liabilities $ 2,057,943 $ 2,200,161
Estimated liability for taxes on income 395,560 367,562
Bank loans 697,186 743,018
Dividend payable 92,932 92,842
Long-term debt due within one year 74,060 70,827
--------- ---------
3,317,681 3,474,410
LONG-TERM DEBT 633,813 637,203
POSTRETIREMENT BENEFITS 388,447 383,129
OTHER LIABILITIES 201,597 203,929
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4,541,538 4,698,671
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STOCKHOLDERS' EQUITY:
Common stock 824,285 818,803
Income retained for use in the business 7,305,160 7,137,744
Treasury stock at cost (2,305,607) (2,315,946)
Translation adjustment (26,910) (14,221)
--------- ---------
5,796,928 5,626,380
--------- ---------
$10,338,466 $10,325,051
========== ==========
See notes to consolidated financial statements
-3-
SCHLUMBERGER LIMITED
--------------------
(Schlumberger N.V., Incorporated in the Netherlands Antilles)
and Subsidiary Companies
CONSOLIDATED STATEMENT OF CASH FLOWS
------------------------------------
(Unaudited)
(Dollars in thousands)
Three Months Ended
March 31,
1997 1996
------------ -----------
Cash flows from operating activities:
Net income $ 259,943 $ 170,867
Adjustments to reconcile net income to
cash provided by operating activities:
Depreciation and amortization 231,942 217,013
Earnings of companies carried at equity,
less dividends received (Dividends:
1997 - $0 ; 1996 - $133) 143 727
Provision for losses on accounts receivable 1,496 4,318
Other adjustments (674) (652)
Change in operating assets and liabilities:
Increase in receivables (158,896) (63,502)
Increase in inventories (62,910) (94,459)
Decrease in deferred taxes on income 4,951 -
Decrease in accounts payable
and accrued liabilities (93,693) (17,639)
Increase (decrease) in estimated
liability for taxes on income 29,475 (11,927)
Other - net 9,056 (45,683)
-------- --------
Net cash provided by operating activities 220,833 159,063
-------- --------
Cash flows from investing activities:
Purchases of fixed assets (265,530) (219,236)
Sales/retirements of fixed assets 19,115 19,039
Decrease in investments 73,422 112,765
Decrease (increase) in other assets 2,807 (422)
-------- --------
Net cash used in investing activities (170,186) (87,854)
-------- --------
Cash flows from financing activities:
Dividends paid (92,441) (91,151)
Proceeds from exercise of stock options 15,821 50,534
Proceeds from issuance of long-term debt 49,959 9,095
Payments of principal on long-term debt (28,700) (38,849)
Net (decrease) increase in short-term debt (21,221) 18,135
--------- --------
Net cash used in financing activities (76,582) (52,236)
--------- --------
Net (decrease) increase in cash (25,935) 18,973
Cash, beginning of period 137,259 72,515
-------- --------
Cash, end of period $ 111,324 $ 91,488
======== ========
See notes to consolidated financial statements
-4-
SCHLUMBERGER LIMITED
--------------------
(Schlumberger N.V., Incorporated in the Netherlands Antilles)
and Subsidiary Companies
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
(Unaudited)
In the opinion of management, all adjustments necessary to present fairly the
financial position and the results of operations have been made in the
accompanying interim financial statements. The Company's significant accounting
policies are summarized in its 1996 Annual Report. These policies have been
consistently applied during the interim period presented in this report. The
results of operations for the three month period ended March 31, 1997 are not
necessarily indicative of the results of operations that may be expected for the
entire year.
EARNINGS PER SHARE
- ------------------
In February, 1997, the Financial Accounting Standards Board issued "Statement of
Financial Accounting Standards No. 128". The impact on the Company of the new
standard, which is effective for the fourth quarter of 1997, is that the Company
will, at that time, report "Earnings per common share - assuming dilution"
(stock option and warrant effect) along with the "Earnings per share" now
reported.
INCOME TAX EXPENSE
- ------------------
The Company and its subsidiaries operate in over 100 taxing jurisdictions.
In the third quarter of 1996, the Company recognized 50% of the US income tax
benefit related to its US subsidiary's tax loss carryforward and all temporary
differences. At March 31, 1997, the US deferred tax asset was $378 million and
the valuation allowance was $39 million.
The Company's US consolidated group has a net operating loss carryforward at
March 31, 1997 of $190 million and net deductible temporary differences were
$802 million. Significant temporary differences pertain to postretirement
medical benefits and fixed assets. Most of the tax loss carryforward will expire
in the years 2002 - 2003.
CONTINGENCIES
- -------------
The Company and its subsidiaries comply with government laws and regulations and
responsible management practices for the protection of the environment. The
Consolidated Balance Sheet includes accruals for the estimated future costs
associated with certain environmental remediation activities related to the past
use or disposal of hazardous materials. Substantially all such costs relate to
divested operations and to facilities or locations that are no longer in
operation. Due to a number of uncertainties, including uncertainty of timing,
the scope of remediation, future technology, regulatory changes and other
factors, it is possible that the ultimate remediation costs may exceed the
amounts accrued. However, in the opinion of management, such additional costs
are not expected to be material relative to consolidated liquidity, financial
position or future results of operations.
-5-
In a case in Texas involving the validity of a 1988 settlement and release in
connection with an incidental business venture, the trial court, in 1993,
rendered a judgment notwithstanding the verdict of the jury, exonerating
Schlumberger from any liability. In late 1994, a Texas Court of Appeals reversed
the trial court judgment and reinstated the jury award of about $75 million
against Schlumberger. The Texas Supreme Court granted the Schlumberger motion to
hear the case. Oral argument was held before the Texas Supreme Court on
October 11, 1995. Schlumberger and outside counsel believe the decision of the
trial court was correct. Consequently, no provision has been made in the
Consolidated Financial Statements for this matter.
In May 1996, in a case involving a $3 million contract dispute, the trial court
in Johnson County, Texas, entered judgment on jury findings adverse to
Schlumberger for $23 million in damages, which has been doubled, plus attorneys'
fees and interest. The Company and its outside counsel believe the findings and
the judgment are not supported by the evidence and law, and have filed an
appeal. Accordingly, no provision has been made in the accompanying financial
statements for this matter.
In addition, the Company and its subsidiaries are party to various other legal
proceedings. Although the ultimate disposition of these proceedings is not
presently determinable, in the opinion of the Company any liability that might
ensue would not be material in relation to the Consolidated Financial
Statements.
-6-
Item 2: Management's Discussion and Analysis of Financial Condition and Results
- -------------------------------------------------------------------------------
of Operations.
- --------------
First Quarter 1997 Compared to First Quarter 1996
-------------------------------------------------
Net income of $260 million was 52% above first quarter 1996. After giving effect
to the two-for-one stock split, announced April 17, 1997, earnings per share
were $0.53, a 51% increase compared to $0.35 a year ago.
First quarter operating revenue was $2.40 billion, 18.5% higher than the same
period last year.
Oilfield Services revenue increased 27% while rig count rose 12%. Significant
contributions from all activities, particularly Geco-Prakla and Sedco Forex, led
to the 84% growth in operating income.
Measurement & Systems revenue was flat. Growth at Electronic Transactions and
Automatic Test Equipment was offset by the decline in metering activities,
particularly in Electricity & Gas, and by unfavorable currency exchange rates.
BUSINESS REVIEW
(Stated in millions)
Oilfield Services Measurement & Systems
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First Quarter 1997 1996 % change 1997 1996 % change
- ------------- ---- ---- -------- ---- ---- --------
Operating Revenue $ 1,724 $ 1,353 27% $ 680 $ 676 1%
Operating Income(1) $ 325 $ 177 84% $ 25 $ 32 (22)%
(1) Operating income represents income before income taxes, excluding
interest expense and interest and other income.
OILFIELD SERVICES
Operating revenue for Oilfield Services was 27% above last year with strong
contributions from all activities, particularly from Geco-Prakla and Sedco
Forex. Operating income increased 84%.
North America
North American rig count grew 19%, and revenue jumped 36%, representing 21% of
Schlumberger consolidated revenue. Activity increased in all regions. Pricing
has begun to improve at varying degrees in all businesses, particularly in the
US. The greatest contributions were from Geco-Prakla, up 85%, with record sales
of non-exclusive seismic data in the US; Dowell, which rose 30%, with solid
increases in all service lines; and GeoQuest, up 77%, on strong Software
Products sales and soaring IT and Data Management revenue.
Outside North America
Rig count outside North America grew 3%, and revenue was up 24%,
representing 52% of consolidated revenue. Operating income rose 62%. All
businesses achieved strong revenue growth, with high activity in the North Sea
and West Africa. Sedco Forex was the largest contributor with a 43% increase due
to higher dayrates as well as higher activity. In
-7-
addition, Dowell, Wireline & Testing and Anadrill also contributed with revenue
increases of 25%, 15% and 32%, respectively.
During the first quarter, new technologies and activities derived from recently
developed combinations of products and services contributed strongly to results
and market share gains.
Integrated Project Management (IPM) activity increased considerably compared
with the first quarter of 1996, with overall revenue rising over 200%. Well
construction activity remained high with 38 rigs managed on behalf of our
clients. Several large projects were awarded to IPM for well construction and
completion in the CIS, Latin America and the Middle East. Working closely with
Sedco Forex, IPM will manage, on behalf of a client, drilling campaigns in the
most difficult area of southern Lake Maracaibo. Sedco Forex is now refurbishing
a fourth drilling barge chartered from Lagoven for this project.
Drilling revenues increased by 42% compared with the same quarter last year, due
to improved utilization and increased dayrates. All geographic areas
contributed. Offshore rig utilization increased from 93% to 96%, driven by high
utilization of jackups and semisubmersibles. The industry-wide average offshore
rig utilization was 93%, compared to 86% in the first quarter of 1996. Sedco
Forex land rig utilization increased to 82% from 54%, taking into account that
three land rigs and one swamp barge were retired during the period.
Consequently, 79 rigs were owned or operated at quarter end, including four
offshore units under charter and three lake barges plus three semisubmersibles
under management contract. The fleet comprised 50 offshore rigs, including 26
semisubmersibles and 16 jackups, and 29 land rigs.
In late March, the semisubmersible Sedco 707 was transferred from the North Sea
to a shipyard in France for a six-month life enhancement and deep-water upgrade,
including the installation of dynamic positioning equipment, after which the rig
will be mobilized to Brazil for a five-year contract. The semisubmersible Orca,
formerly Sedco I, was commissioned in South Africa as an early production
facility under a multiyear, integrated service contract in which both rig
management and production services will be provided.
Marine seismic activity jumped 76%, owing to continued improvement in
productivity, strong non-exclusive activity in deep water in the Gulf of Mexico
and optimal positioning of the fleet in the northern hemisphere during the
winter. Several key 4D reservoir monitoring contracts, in which repeat 3D
seismic surveys track geophysical changes over time, were awarded in the
quarter. Land seismic activity was essentially flat with backlog improving,
particularly in the Middle East. Land reorganization, initiated last year and
coupled with higher productivity levels and better pricing, contributed to
improved results. Transition Zone revenue was 17% higher than in the same
quarter last year, with all crews operating and much higher non-exclusive
activity in Louisiana. Data Processing benefited from increased onboard
processing.
Both the CMR* Combinable Magnetic Resonance and PLATFORM EXPRESS* technologies
experienced worldwide revenue growth three times higher than in the same period
last year. The new Wireline & Testing PL Flagship* production logging technology
continued to gain acceptance in the Middle East and the North Sea owing to its
unique capacity to diagnose production problems in high-angle and horizontal
wells. The
-8-
ability within Schlumberger to integrate solutions was exemplified in a
horizontal well in the North Sea, where the PL Flagship tool was run on Dowell
coiled tubing and the acquired data were interpreted, in conjunction with
seismic data, by GeoQuest. Our client was then able to identify water entry
sources and to plan effective remedial actions.
In the Gulf of Mexico, demand for our new sand control technology continued to
gain favor with operators as it saves rig time and reduces fluid loss. In one
trip in the hole, this service combines the tubing-conveyed perforating hardware
and cased-hole testing tools from Wireline & Testing with the gravel fluids and
the gravel packer from Dowell.
Coiled Tubing Drilling activity grew sharply compared with the same quarter last
year, with service provided in Venezuela, Oman, Nigeria, the US and the North
Sea. The VIPER* system, a coiled tubing measurements-while-drilling (MWD) and
motor system for slim holes, demonstrates the integration value of our oilfield
services. Contributing to the introduction of this successful new service, Sedco
Forex and Dowell brought their coiled tubing expertise, Wireline & Testing its
telemetry technology and Anadrill its motor and MWD expertise. The VIPER
system's precise orienting and control features improve the efficiency of
drilling lateral wells in existing fields.
Growth in directional and horizontal drilling services continued at a fast pace
with a 30% increase over last year. The enduring performance of our PowerPak*
steerable motors, with record runs in the North Sea and Venezuela, has helped
fuel this growth. In addition, the proven value of GeoSteering* service
persuaded many clients to increase the number of geologically steered wells,
leading to much improved hydrocarbon production. Logging-while-drilling and
measurements-while-drilling revenues rose 42% and 46%, respectively, with
continued success in the smaller hole market with the introduction of SHARP*
second-generation slim MWD technology, which extends the capability of our
current technology to ultra-short-radius drilling.
Information Technology and Data Management Services grew significantly, with
North American revenue up seven-fold over last year. Reflecting the continuing
outsourcing from our clients, multiyear contracts were awarded to GeoQuest by
two major US oil companies for exploration and production data management,
software, geoscience and services worldwide. Software Products sales increased
significantly over last year's first quarter on continued sharp growth in North
America, up 104%, and in South America, Europe and the CIS. Also during the
quarter, GeoQuest signed an agreement with a major European oil company to
jointly develop data management software applications.
MEASUREMENT & SYSTEMS
Measurement & Systems revenue was essentially flat compared to last year, after
an unfavorable exchange rate effect. A decrease at Electricity & Gas Metering in
Europe offset growth at Electronic Transactions and Water Management in the US
and South America. Orders rose 3%.
Operating income decreased 22%. Market conditions further weakened for
Electricity & Gas Metering, while pricing pressures in Europe impacted the
results of Water Management and Electronic Transactions.
-9-
In the first quarter, Automatic Test Equipment revenue increased 3% from
the same period last year, reflecting a greater volume of assembly systems and
test handlers, and higher deliveries of IDS10000* and P2X diagnostic systems.
Orders declined 10%, primarily due to significant prior-year bookings of
upgrades for the ITS9000* family of products. Revenue from the metering business
was down compared with last year, as gains in the North American and South
American markets were more than offset by declining conditions in Europe.
Metering orders were down 7%. Systems & Services revenue grew 6% compared with
the first quarter of 1996. European service activity continued to benefit from
the addition of selective contract portfolios and the growth in the service and
maintenance segment in the UK. Orders were up 15%, primarily due to an increase
in demand at Meter Communication Systems. Electronic Transactions revenue rose
28% from the same period last year, reflecting strong card growth and the
acquisition of Solaic, a French card manufacturer, and contributions from the
earlier acquisitions of Printer, Gueant and Germann. Orders increased 41%,
reflecting the inclusion of the acquired companies and strong growth of cards.
Business conditions in Asia continued to strengthen as demonstrated by the 50%
increase in orders.
Interest and other income increased $1 million from the first quarter of 1996
primarily due to higher average investment balances. Gross margin increased from
24% to 26%. Research and engineering expense increased 6% from last year but
decreased to 4.9% of operating revenue from 5.5% in 1996. Marketing expense was
up 2%. General expense, expressed as a percentage of operating revenue,
decreased from 4.2% to 3.7%. Interest expense was flat. The effective tax rate
increased 5 percentage points to 23%. Approximately 4 percentage points relate
to higher US income tax expense following the recognition of the tax loss
carryforward, as explained on page 5 on the "Income Tax Expense" section.
*Mark of Schlumberger
-10-
PART II. OTHER INFORMATION
--------------------------
Item 4: Submission of Matters to a Vote of Security Holders
- ------------------------------------------------------------
a) The Annual General Meeting of Stockholders of the Registrant ("the Meeting")
was held on April 9, 1997.
b) At the Meeting, the number of Directors was fixed at 11 and the following-
named 11 individuals were elected to comprise the entire Board of Directors
of the Registrant, 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, were directors who were previously
elected by the stockholders. Mr. Deutch was a director from May 15, 1987
until 1993 when he resigned to accept a position with the US government. Eiji
Umene, a director since 1989, had reached retirement age and did not stand
for re-election.
Don E. Ackerman
D. Euan Baird
John Deutch
Denys Henderson
Andre Levy-Lang
William T. McCormick, Jr.
Didier Primat
Nicolas Seydoux
Linda Gillespie Stuntz
Sven Ullring
Yoshihiko Wakumoto
c) The Meeting also voted (i) 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 reflected in
the Company's 1996 Annual Report to Stockholders; (ii) to amend the Company's
Deed of Incorporation to increase the authorized Common Stock from
500,000,000 to 1,000,000,000 shares; (iii) to approve the appointment of
Price Waterhouse LLP as independent public accountants to audit the accounts
of the Company for the year 1997.
The votes cast for the election of directors, for the approval of financial
statements and dividends, to increase the authorized Common Stock, and for
the approval of the appointment of Price Waterhouse LLP were as follows:
-11-
For Withheld
Don E. Ackerman 217,316,264 898,904
D. Euan Baird 217,386,883 828,285
John Deutch 217,452,961 762,207
Denys Henderson 217,430,098 785,070
Andre Levy-Lang 216,328,264 1,886,904
William T. McCormick, Jr. 217,477,321 737,847
Didier Primat 217,412,615 802,553
Nicolas Seydoux 217,411,868 803,300
Linda Gillespie Stuntz 217,464,525 750,643
Sven Ullring 217,438,659 776,509
Yoshihiko Wakumoto 217,386,617 828,551
For Against Abstain Non-vote
Financials: 216,433,318 235,256 1,546,594 - 0 -
-----------
Amendment to Deed
of Incorporation: 181,772,018 35,948,186 491,566 3,398
-----------------
Price Waterhouse: 217,689,477 192,447 333,244 - 0 -
-----------------
Item 5: Other Information
--------------------------
On April 16, 1997, the Board of Directors of the Registrant (the "Board")
declared a 2-for-1 stock split pursuant to which each holder of record of
Common Stock at the close of business on June 2, 1997 will receive one share
of the Registrant's common stock, par value $0.01 per share (the "Common
Stock"), for each share registered in the name of such holder. Pursuant to
its authority under the Schlumberger Discounted Stock Purchase Plan (the
"Plan"), the Discounted Stock Purchase Plan Committee has adjusted the Plan
to reflect the stock split by increasing by 2,012,245 the number of shares
of Common Stock that remain available for purchase under the Plan, and the
Board has authorized the reservation of a corresponding number of shares of
Common Stock (on a post-split basis) for the Plan. Following these actions,
the number of shares of Common Stock (on a post-split basis) covered by the
Registrant's registration statement on Form S-8 relating to the Plan
(registration no.33-47592) is 7,012,245 shares.
Item 6: Exhibits and Reports on Form 8-K
-----------------------------------------
(a) Exhibits : Exhibit 3(i) - Deed of Incorporation as amended April
29, 1997.
Exhibit 99 - Press and Earnings Release dated April 17,
1997, re Stock Split, Quarterly Dividend
and 1997 First Quarter Earnings.
(b) Reports on Form 8-K: None
SIGNATURE
---------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized and in his capacity as principal
financial officer.
Schlumberger Limited
(Registrant)
Date: May 15, 1997 /s/ Arthur Lindenauer
------------ ----------------------
Arthur Lindenauer
Executive Vice President - Finance
and Chief Financial Officer
-12-
INDEX TO EXHIBITS
-----------------
Exhibit No. Description Appendix
- ----------- ----------- --------
Exhibit 3(i) - Deed of Incorporation as
amended April 29, 1997. A
Exhibit 99 - Press and Earnings Release dated
April 17, 1997, re Stock Split,
Quarterly Dividend and 1997 First
Quarter Earnings. B
-13-
EXHIBIT 3(i)
[ART APPEARS HERE]
MR. G.C.A. SMEETS MR. J.W.M. THESSELING
NOTARISSEN
CURACAO
NEDERLANDSE ANTILLEN
SMEETS THESSELING VAN BOKHORST SPIGT
CURACAO NEW YORK BRUSSELS
APPENDIX A
THE UNDERSIGNED:
ANDREAS MARIA PETRUS ESHUIS, a deputy Civil Law Notary, residing in Curacao,
acting for Gerard Christoffel Antonius Smeets, a Civil Law Notary, residing in
Curacao, Netherlands Antilles;
herewith certifies:
that the limited liability company SCHLUMBERGER N.V., established on Curacao,
------------------
was legally incorporated on November 6, 1956 by deed passed before Antonius
Adrianus Gerard Smeets, at that time a civil-law notary in Curacao, the
original of which deed is in the custody of Notary Gerard Christoffel Antonius
Smeets, aforementioned, on a draft of which deed the declaration of no-objection
was granted by National Ordinance dated November 2, 1956, Number 1;
that the articles of incorporation have been amended several times;
that by deed passed before Antonius Adrianus Gerard Smeets on September 19,
1972 the original of which is in the custody of Notary Gerard Christoffel
Antonius Smeets, aforementioned, the articles of incorporation have in their
entirety been amended and laid down anew, on a draft of which deed the
declaration of no-objection was granted by Ministerial Decree of September 19,
1972 under number 8293/JAZ;
that the articles of incorporation have again been amended:
a) by deed passed before Notary Gerard Christoffel Antonius Smeets,
aforementioned, on May 7 1975, on a draft of which deed the declaration of
no-objection was granted by Ministerial Decree of May 6, 1975, under number
3961/JAZ;
b) by deed passed before Notary Gerard Christoffel Antonius Smeets,
aforementioned, on May 5, 1976 on a draft of which deed the declaration of
no-objection was granted by Ministerial Decree of May 5, 1976, under number
4055/JAZ;
c) by deed passed before Notary Gerard Christoffel Antonius Smeets,
aforementioned, on May 10, 1977 on a draft of which deed the declaration of
no-objection was granted by Ministerial Decree of May 10, 1977, under number
4902/JAZ;
d) by deed passed before Notary Gerard Christoffel Antonius Smeets,
aforementioned, on June 22, 1979 on a draft of which deed the declaration of
no-objection was granted by Ministerial Decree of June 21, 1979, under
number 3057/N.V.;
e) by deed passed before Notary Gerard Christoffel Antonius Smeets,
aforementioned on May 12, 1981 on a draft of which deed the declaration of
no-objection was granted by Ministerial Decree of May 11, 1981, under number
2064/N.V.;
APPENDIX A
- 2 -
f) by deed passed before Notary Gerard Christoffel Antonius Smeets,
aforementioned, on August 15, 1983 on a draft of which deed the declaration
of no-objection was granted by Ministerial Decree of August 12, 1983 under
number 2385/N.V.;
g) by deed passed before a substitute of Notary Gerard Christoffel Antonius
Smeets, aforementioned, on September 19, 1983 on a draft of which deed the
declaration of no-objection was granted by Ministerial Decree of September
16, 1983, under number 2706/N.V.;
h) by deed passed before Notary Gerard Christoffel Antonius Smeets,
aforementioned, on May 6, 1986 on a draft of which deed the declaration of
no-objection was granted by Ministerial Decree of May 6, 1986, under number
1137/N.V.;
i) by deed passed before Notary Gerard Christoffel Antonius Smeets,
aforementioned, on May 22, 1987 on a draft of which deed the declaration of
no-objection was granted by Ministerial Decree of May 21, 1987, under number
1066/N.V.;
j) by deed passed before the Undersigned, on April 29, 1997 on a draft of which
deed the declaration of no-objection was granted by Ministerial Decree of
April 29, 1997, under number 904/N.V.;
that the limited liability company: SCHLUMBERGER N.V. is legally existing in
-----------------
good standing under the laws of the Netherlands Antilles with articles reading
as per the attached documents.
IN WITNESS WHEREOF, I have set my hand hereunto, after having affixed the
official seal of office.
/s/ Andreas Maria Petrus Eshuis
[Notary Seal Appears here] -------------------------------
Andreas Maria Petrus Eshuis
Curacao, May 5, 1997.
APPENDIX A
ARTICLES OF INCORPORATION OF THE
LIMITED LIABILITY COMPANY
SCHLUMBERGER N.V.
NAME AND DOMICILE
Article I
1. The Company shall bear the name SCHLUMBERGER N.V.
-----------------
2. In transactions in foreign countries, the name SCHLUMBERGER LIMITED may
be used.
3. The Company is established in Curacao.
4. The Company may change its place of domicile in accordance with the
Netherlands Antilles Ordinance on Transfer of Domicile to Third Countries
pursuant to a resolution of the Board of Directors.
OBJECTS
Article II
1. The objects of the Company are:
a. to acquire, own, hold, manage and dispose of properties of whatever nature,
wherever situated, movable and immovable, corporeal and incorporeal,
including (but without limitation thereof) securities;
b. to obtain income from the disposition or grant of rights to use copyrights,
patents, designs, secret processes and formulae, trademarks and other
analogous property, from royalties (including rentals) for the use of
industrial, commercial or scientific equipment, and from compensation or
other consideration received for technical assistance or services; and
c. to establish, participate in and manage limited liability and other companies
or other undertakings of every kind or nature whatsoever, and to engage in
industry and trade.
2. In furtherance of its objects the Company is empowered, in general, to
take any and all action of a financial, economic, industrial or other nature, of
any kind whatsoever, which is in any way useful or necessary in the attainment
of such objects or is in any way connected therewith, such powers including,
without limitation, the following powers:
a. to guarantee the payment of principal, premium, interest or dividends with
respect to bonds, debentures, bills of exchange, notes and other evidences of
indebtedness, stocks and other securities, and to guarantee the performance
of any contract or obligation, entered into by any corporation, partnership,
association, trust or any other entity or juristic or natural person whether
established or domiciled within or outside the Netherlands Antilles;
b. to borrow moneys upon the issuance of its bonds, debentures, notes or other
obligations and to give security therefor; and
c. to place in trust all or any of its properties, including securities.
DURATION
Article III
The Company shall have perpetual existence.
CAPITAL AND SHARES
Article IV
APPENDIX A
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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.$0.0l)
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 different series.
2. Shares of Common Stock representing more than twenty percent (20%) of the
authorized capital of the Company have been duly issued and fully paid.
3. The remaining unissued shares of Common Stock shall be issued at such
times, under such conditions, and for such consideration, not less than the par
value thereof, as may be determined by the Board of Directors.
4. Subject to the provisions of this Article, shares of cumulative Preferred
Stock may be issued from time to time in one or more series on such terms and
conditions as may be determined by the affirmative vote of three-fourths of the
members of the Board of Directors, after considering the interests of the
holders of shares of Common Stock of the Company, for consideration not less
than the par value thereof and not less than fair value taking into account the
terms and conditions for the issuance thereof and the relative voting, dividend
and liquidation rights of such cumulative Preferred Stock.
Prior to the issuance of any series of Preferred Stock the Board of Directors
shall specify:
(a) the distinctive designation of such series and the number of shares to
constitute such series;
(b) the annual dividend rate with respect to shares of such series, which shall
be based on the consideration paid on issuance of such shares and which may
be a fixed rate or a rate that fluctuates on dividend adjustment dates set
under a formula or procedure determined by the Board of Directors prior to
issuance, subject, in all cases, to the following limitations:
(1) the annual dividend rate shall not exceed the greater of (A) twenty
percent (20%) or (B) one hundred and twenty percent (120%) of the
Standard & Poor's Weekly Preferred Stock Yield Index or, in the event the
Standard & Poor's Weekly Preferred Stock Yield Index is no longer
published, any substantially equivalent preferred stock index, most
recently published before the date of issuance or the relevant dividend
adjustment date; and
(2) the annual dividend rate shall not be less than the smaller of (A) six
percent (6%) or (B) eighty percent (80%) of the Standard & Poor's Weekly
Preferred Stock Yield Index or, in the event the Standard & Poor's Weekly
Preferred Stock Yield Index is no longer published, any substantially
equivalent preferred stock index, most recently published before the date
of issuance or
APPENDIX A
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the relevant dividend adjustment date;
(c) whether such dividends shall be payable annually or in installments;
(d) the rights, if any, of the holders of shares of such series to convert
shares of such series for shares of any other series of Preferred Stock or
for shares of Common Stock, provided that shares of any series shall not be
convertible into shares of any series senior thereto;
(e) the rights, if any, of the Company to redeem shares of such series (in which
case the directors shall specify the date on or after which the shares of
such series may be called for redemption by the Company and the
consideration to be paid therefor, or the manner by which such consideration
shall be calculated) and the rights, if any, of holders of such shares to
require the Company to purchase such shares, and the provisions, if any, of
any sinking fund or other arrangement to be used in connection with such
redemption or purchase; and
(f) any other terms and conditions of such series which are not inconsistent
with this Deed of Incorporation or Netherlands Antilles law.
Certificates for shares of Preferred Stock shall be issued bearing a legend
describing the terms and conditions thereof specified by the Board of Directors.
5. Preferred Stock of all series shall rank prior to the Common Stock with
respect to dividends and liquidation preferences. Any series of Preferred Stock
may be ranked by the Board of Directors as to dividend and liquidation
preferences, provided that no series issued after any other series shall rank
prior to such other series as to such preferences. Any such series may be ranked
equally with any one or more other series as the Board of Directors may
determine.
6. Upon liquidation of the Company, the holders of shares of any series of
Preferred Stock shall be entitled to receive, before any distribution is made to
the holders of any other series of Preferred Stock ranking junior to such series
as to liquidation preference, and before any distribution to the holders of
Common Stock, the amount of the liquidation preference of such shares which
shall not exceed the sum of:
(1) the amount paid for such Preferred Shares on issuance, plus
(2) all accumulated and unpaid dividends on such Preferred Shares to the date
fixed for distribution.
Article V
No holder of shares of the Company shall have as such shareholder any
preferential or preemptive right to purchase or subscribe for any shares of
stock or any options, warrants or rights to purchase stock or any securities
convertible into or exchangeable for stock which the Company may issue or,
except those rights of conversion, if any, of Preferred Stock specified in or
determined in accordance with Article IV.
Article VI
1. The Company may for its own account and for valuable consideration from
time to time acquire fully paid shares of stock,
APPENDIX A
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provided that at least one-fifth part of its authorized capital remains
outstanding with others than the Company itself.
2. The Company shall not acquire any voting rights by reason of
ownership of shares of its stock, and, in connection with any general
meeting of shareholders, shares owned by the Company shall not be
counted as outstanding, or as present or represented, for the purpose of
determining a quorum or for any other purpose.
Article VII
1. The Board of Directors will maintain or cause to be maintained a
register of issued shares.
2. The shares of stock shall be issued as registered shares,
represented by consecutively numbered certificates bearing the corporate
seal, or a facsimile thereof, issued in such form as may be determined
by the Board of Directors and signed by two persons designated by the
Board of Directors. The Board of Directors may provide that such
signatures, or either of them, may be effected in facsimile.
3. The Board of Directors shall determine the conditions under which
lost, stolen, mutilated or destroyed certificates shall be replaced, and
such determination shall be conclusive.
MANAGEMENT
Article VIII
1. The management of all the affairs, property and business of the
Company shall be vested in a Board of Directors, who shall have and may
exercise all powers except such as are exclusively conferred upon the
shareholders by law or by the Deed of Incorporation of the Company, as
from time to time amended.
2. With respect to the issuance of shares of stock, the Board of
Directors may, and the Management of the Company, pursuant to resolution
duly adopted by the Board of Directors may, enter into and conclude
agreements without the necessity of any action by the general meeting of
shareholders:
a. imposing special obligations upon the Company in connection with the
subscription for shares;
b. concerning the issue of shares on a basis other than that on which
participation in the Company is open to the public; or
c. providing for the payment for shares by means other than by legal
tender of the Netherlands Antilles.
3. The directors shall be elected at the annual general meeting of
shareholders. The number of persons constituting the whole Board of
Directors shall be not less than five nor more than twenty-four as fixed
and elected by the general meeting of shareholders. The number of
persons constituting the whole Board of Directors shall, until changed
at any succeeding general meeting of shareholders, be the number so
fixed and elected. Directors may be removed at any general meeting of
shareholders. At any general meeting of shareholders at which action is
taken to increase the number of the whole Board of
APPENDIX A
- 5 -
Directors or to remove a director, or at any subsequent general meeting, the
shareholders may fill any vacancy or vacancies created by such action.
4. Each director shall be elected to serve until the next annual general
meeting of shareholders and until his successor shall be elected and qualify,
or until his death, resignation or removal.
5. In the event that one or more of the directors is prevented from or is
incapable of acting as a director, the remaining directors (or the remaining
director, if there should be only one) may appoint one or more persons to fill
the vacancy or vacancies thereby created on the Board of Directors until the
next general meeting of shareholders, provided that if at any time the number of
directors then in office shall be reduced to less than a majority of the number
constituting the whole Board of Directors, the remaining directors or director
shall forthwith call a general meeting of shareholders for the purpose of
filling the vacancies in the Board of Directors, and provided further that in
the event that all of the directors are prevented from or are incapable of
acting as directors, the Company shall be temporarily managed by any person or
persons previously appointed by the Board of Directors so to act, who shall
forthwith call a general meeting of shareholders for the purpose of electing a
Board of Directors. If no such general meeting of shareholders shall be called,
and if no such person shall have been appointed, any person or persons holding
in the aggregate at least five percent of the outstanding shares of stock of the
Company may call a general meeting of shareholders for the purpose of electing a
Board of Directors.
6. Directors need not be Netherlands citizens or residents of the
Netherlands Antilles or shareholders of the Company. A majority of the whole
Board of Directors shall constitute a quorum for the conduct of any business and
the action of the majority of the directors present, in person or by proxy as
hereinafter provided, at a meeting at which a quorum is so present, shall
constitute the action of the Board of Directors. Meetings of the Board of
Directors may be held within or without the Netherlands Antilles.
Meetings may be held through conference telephone or other communication
equipment allowing all persons participating in the meeting to hear each other
or through any other device permitted by then applicable law, and participation
in a meeting through any such lawful device or arrangement shall constitute
presence at such meeting.
When action by the Board of Directors is required or permitted to be taken,
action at a meeting may be dispensed with if all the directors shall consent in
writing to such action taken or being taken. Directors may by telegram, cable or
other writing appoint a proxy to act at any meeting of the Board of Directors,
such proxy to be restricted, however, to the particular meeting specified
therein. Such proxy must be another director of the Company, provided, however,
that at any meeting of the Board of
APPENDIX A
- 6 -
Directors a director may not act as proxy for more than one director. The Board
of Directors may adopt, amend and repeal such By-Laws, rules, regulations and
resolutions as it may deem appropriate with respect to notice and the holding
of meetings and otherwise with respect to the conduct of its affairs. Such By-
Laws, rules, regulations and resolutions must be consistent with this Deed of
Incorporation.
Article IX
1. The Company shall be represented at law and otherwise, and shall be bound
with respect to third parties:
a. by those directors authorized by the Board of Directors to
represent the Company, who shall have the following titles
and occupy the following offices:
( i) Chairman;
( ii) President; or
b. by persons, who may or may not be directors, authorized by the Board of
Directors to represent the Company, who shall have the following titles and
occupy the following offices:
( i) one or more Vice Presidents;
( ii) Controller;
(iii) Treasurer;
( iv) Secretary.
The Board of Directors may also from time to time authorize other persons,
who may or may not be directors, to represent the Company, who shall have such
titles and occupy such additional offices as the Board of Directors may
determine.
2. The general meetings of shareholders may grant specific authority to the
Chairman, the President or any member of the Board of Directors to represent the
Company with respect to any particular matter as specified by such general
meeting.
3. The Board of Directors shall from time to time designate an officer of
the Company to be the Chief Executive Officer of the Company and may from time
to time designate an officer of the Company to be the Chief Operating Officer of
the Company. The persons holding the above-mentioned offices or any other
offices which the Board of Directors may from time to time authorize as herein
provided shall, respectively, have such power and authority as the Board of
Directors may from time to time grant to the holders of the offices held by
them. The Chairman, the President, the persons holding the offices specified
above or other offices authorized by the Board of Directors as herein provided,
and the chairman and members of any committee of the Board of Directors
established by the Board of Directors as hereinafter in Section 4 of this
Article IX provided, are herein sometimes collectively referred to as the
Management.
4. The Board of Directors may grant general or specific authority to
additional agents or to committees, giving such agents or committees such
general or limited powers or duties as it may deem appropriate.
APPENDIX A
- 7 -
5. The Board of Directors shall adopt and may amend and repeal such By-Laws
and other rules, regulations and resolutions, as it may deem appropriate for the
conduct of the affairs and the management of the Company, including rules,
regulations and resolutions setting forth the specific powers and duties of the
holders of the above-mentioned offices and other persons authorized by the Board
of Directors to represent the Company. Such By-Laws, rules, regulations and
resolutions must be consistent with this Deed of Incorporation.
6. The directors, the holders of the above-mentioned offices and other
persons authorized by the Board of Directors to represent the Company shall
receive such compensation as the Board of Directors may from time to time
prescribe.
7. (a) The Company shall have the power to indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Company) by reason
of the fact that he is or was a director, officer, employee or agent of the
Company, or is or was serving at the request of the Company as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise or entity against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Company, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the Company, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
(b) The Company shall have the power to indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the Company to procure a judgment
in its favor by reason of the fact that he is or was a director, officer,
employee or agent of the Company, or is or was serving at the request of the
Company as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise or entity against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the Company
and except that no indemnification shall be made in respect of any claim, issue
or matter as to which such person shall have been finally adjudged to be liable
to the Company for improper conduct unless and only to the extent that the court
in which such action or suit was brought or any other court having appropriate
jurisdiction shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses, judgments, fines
and amounts paid in settlement which the court in which the action or suit was
brought or such other court having appropriate jurisdiction shall deem proper.
APPENDIX A
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(c) To the extent that a director, officer, employee or agent of the Company
has been successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in subsections (a) and (b), or in defense of any claim,
issue or matter therein, he shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by him in connection
therewith.
(d) Any indemnification under subsections (a) and (b), (unless ordered by a
court), shall be made by the Company only as authorized by contract approved, or
by by-laws, resolution or other action adopted or taken, by the Board of
Directors or by the shareholders.
(e) Expenses incurred in defending a civil or criminal action, suit or
proceeding will be paid by the Company in advance of the final disposition of
such action, suit or proceeding upon receipt of an undertaking by or on behalf
of the director, officer, employee or agent to repay such amount if it shall
ultimately be determined that he is not entitled to be indemnified by the
Company as authorized by this Section.
(f) The indemnification and advancement of expenses provided by or granted
pursuant to the other subsections of this Article IX shall not be deemed
exclusive of any other rights to which those seeking indemnification or
advancement of expenses may be entitled under any law, by-law, agreement, vote
of stockholders or disinterested directors, or otherwise, both as to action
in his official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such a person.
(g) The Company shall have power to purchase and maintain insurance on behalf
of any person who is or was a director, officer, employee or agent of the
Company, or is or was serving at the request of the Company as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status as such,
whether or not the Company would have the power to indemnify him against such
liability under the provisions of this Section.
(h) For purposes of this Section, reference to the Company shall include, in
addition to the resulting corporation, any constituent corporation (including
any constituent of a constituent) absorbed in a consolidation or merger which,
if its separate existence had continued, would have had power and authority to
indemnify its directors, officers, and employees or agents, so that any person
who is or was a director, officer, employee or agent of such constituent
corporation, or is or was serving at the request of such constituent
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, shall stand in the same
position under the provisions of this Section with respect to the resulting or
surviving corporation as he would have with respect to such constituent
corporation if its separate existence had continued.
APPENDIX A
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MEETINGS OF SHAREHOLDERS
Article X
1. All general meetings of shareholders shall be held in Curacao.
2. The annual general meeting of shareholders shall be held on a date
determined from year to year by the Board of Directors within the period
permitted by the laws of the Netherlands Antilles, for the purpose of electing
directors, reporting on the course of business during the preceding fiscal year
and for any other purposes required by law, and for such additional purposes as
may be specified in the notice of such meeting.
3. If the annual general meeting of shareholders shall not be held on the
day above designated, the Board of Directors shall call a special general
meeting of shareholders to be held in place thereof, to be held within nine
months after the end of the preceding fiscal year, at which the above-mentioned
matters shall be dealt with, and any business transacted or elections held at
said special meeting shall have the same effect as if transacted or held at the
annual general meeting.
4. Special general meetings of shareholders may be called at any time upon
the direction of the Chairman, the President, the Board of Directors, or, in the
manner provided in Article 82 of the Code of Commerce of the Netherlands
Antilles, by one or more holders of shares representing in the aggregate a
majority of the shares of stock then outstanding.
5. Notice of meetings of shareholders, whether annual general meetings or
special general meetings, stating the time and place of the meeting, shall be
given to the shareholders not less than twenty (20) or more than fifty (50) days
prior to the date of the meeting in question by mailing written notice to each
shareholder at the address thereof appearing in the share register.
6. All notices of general meetings of shareholders shall state the matters
to be considered at the meeting.
APPENDIX A
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Article XI
1. Every shareholder has the right to attend any general meeting of
shareholders in person or by proxy, and to address the meeting and vote.
2. For the purpose of determining shareholders entitled to notice of or to
vote at any general meeting of shareholders, or entitled to receive payment of
any dividend, or in order to make a determination of shareholders for any other
proper purpose, the Board of Directors of the Company may provide that the stock
transfer books shall be closed for a stated period but not to exceed, in any
case, fifty (50) days. If the stock transfer books shall be closed for the
purpose of determining shareholders entitled to notice of or to vote at a
general meeting of shareholders, such books shall be closed for at least ten
(10) days immediately preceding such meeting. In lieu of closing the stock
transfer books, the Board of Directors may fix in advance a date as the record
date for any such determination of shareholders, such date in any case to be not
more than fifty (50) days and, in case of a general meeting of shareholders, not
less than ten (10) days prior to the date on which the particular action
requiring such determination of shareholders is to be taken. If the stock
transfer books are not closed and no record date is fixed for the determination
of shareholders entitled to notice of or to vote at a general meeting of
shareholders, or shareholders entitled to receive payment of a dividend, the
date on which notice of the meeting is mailed or the date on which the
resolution of the Board of Directors declaring such dividend is adopted, as the
case may be, shall be the record date for such determination of shareholders.
When a determination of shareholders entitled to vote at any general meeting of
shareholders has been made as herein provided, such determination shall apply to
any adjournment thereof except where the determination has been made through the
closing of stock transfer books and the stated period of closing has expired.
3. Each holder of Common Stock and Preferred Stock shall be entitled to one
vote for each share held.
Article XII
1. Except as otherwise provided herein, no action may be taken at any general
meeting of shareholders unless a quorum consisting of the holders of at least
one-half of the outstanding shares are present at such meeting in person or by
proxy.
2. If a quorum is not present in person or by proxy at any general meeting
of shareholders, a second general meeting shall be called in the same manner as
such original meeting of shareholders, to be held within two months, at which
second meeting, regardless of the number of shares represented (but subject to
the provisions of Articles XV, XVI and XVIII), valid resolutions may be adopted
with respect to any matter stated in the notice of the original meeting and also
in the notice of such second meeting or which by law is required to be brought
before the shareholders despite the absence of a quorum.
Appendix A
- 11 -
3. Subject to the provisions of Articles XV, XVI, and XVIII, a majority of
the votes cast shall be necessary to adopt any resolution at any general meeting
of shareholders.
4. The Board of Directors shall from time to time appoint a person to
preside at general meetings of shareholders.
5. At any general meeting of shareholders, a shareholder may vote upon all
matters before the meeting, even if the decision to be taken would grant him, in
a capacity other than as a shareholder, any right against the Company or would
in such other capacity relieve him of any obligation to be Company.
6. No member of the Board of Directors or of the Management and in general
no employee of the Company may act as a proxy at any general meeting of
shareholders.
DISTRIBUTION OF PROFITS
Article XIII
1. Dividends on the stock of the Company may be distributed either in cash,
property or in shares of capital stock of the Company, out of the profits of the
preceding year or years then available for distribution. To the extent that
profits of any year which are available for distribution shall not be
distributed, they shall be carried forward and, unless extinguished as the
result of subsequent operations or otherwise applied by the Board of Directors,
shall be available for distribution in any subsequent year or years.
2. If, as appears from the approved profit and loss statement, a loss has
been suffered which cannot be covered by a reserve or which cannot be
extinguished through the application of undistributed profits from previous
years or otherwise, no distribution of profits shall be effected in subsequent
years so long as such loss has not been made good.
3. The annual general meeting of shareholders shall, after the balance sheet
and profit and loss account for the fiscal year have been submitted, determine
the dividends for such fiscal year, provided, however, that if dividends are to
be distributed, the holders of Preferred Shares shall have preference as to such
dividends in accordance with the preferences of such shares as determined at the
issuance thereof, and further provided, that the Board of Directors may at any
time resolve to distribute one or more interim dividends as an advance payment
of the dividend expected to be determined by the shareholders at the annual
general meeting.
FISCAL YEAR
Article XIV
The fiscal year of the Company shall be the calendar year.
DISPOSITION OF ASSETS
Article XV
Notwithstanding any provision of Article XII, any sale or other disposition
of all or substantially all of the assets of the Company, whether for cash,
property, stock or other securities of another company, or for any other
consideration, shall be made only pursuant to a resolution duly adopted at a
general meeting of shareholders by the holder or holders of at least a majority
of the shares of the Company at the time outstanding and entitled to vote, the
notice of which meeting shall have specified the terms of such proposed sale or
other disposition; provided, however, the foregoing shall not apply to any
reorganization or rearrangement of the Company, or of any of its subsidiaries or
of any of its assets in any transaction whereby there shall be no diminution of
the beneficial interest of the shareholders of the Company in such assets.
APPENDIX A
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DISSOLUTION
Article XVI
Notwithstanding any provision of Article XII, any resolution providing for
the dissolution, liquidation or winding up of the Company shall be valid only if
duly adopted at a general meeting of shareholders by the holder or holders of at
least a majority of the shares of the Company at the time outstanding and
entitled to vote, the notice of which meeting shall have specified the nature of
any such resolution to be voted upon at such meeting.
ACTION BY SHAREHOLDERS WITHOUT MEETING
Article XVII
1. Notwithstanding any provision of Article XII, XV, XVI or XVIII, any action
which by law or by this Deed of Incorporation is required or permitted to be
taken at a general meeting of shareholders may be taken without a meeting if
taken by the written consent of the holder or holders of at least the absolute
majority of the shares of the Company outstanding and entitled to vote. Each
shareholder may evidence his consent by separate instrument which may be
executed by himself or on his behalf by a duly appointed proxy. Written notice
of any action proposed to be taken under this Article XVII shall be mailed to
each shareholder at his address appearing in the share register, such notice to
designate the date on or before which such written consent must be received by
the Secretary of the Company in order to be counted. Any shareholder may revoke
his consent by instrument received by the Secretary of the Company on or before
the date so designated, or before written consents from the holders of the
absolute majority of the shares outstanding and entitled to vote have been
received by the Secretary of the Company, whichever first occurs, and not
thereafter.
2. For the purpose of determining who is a holder of a share outstanding and
entitled to vote as referred to in Section 1 of this Article XVII, and who is
consequently entitled to notice and to give written consent to any action
proposed to be taken under this Article XVII, the Board of Directors of the
Company may provide that the stock transfer books shall be closed for a stated
period not to exceed fifty (50) days. Such books shall be closed for at least
ten (10) days immediately preceding the date on or before which written consents
must be received by the Secretary of the Company in order to be counted. In lieu
of closing the stock transfer books, the Board of Directors may fix in advance a
date as the record date for any such determination of shareholders, such date to
be not more than fifty (50) days nor less than ten (10) days prior to the date
on or before which written consents must be received by the Secretary of the
Company in order to be counted. If the stock transfer books are not closed and
no record date is fixed for the determination of shareholders, the date on which
notice of the action proposed to be taken hereunder is mailed shall be the
record date for such determination of shareholders.
Appendix A
- 13 -
AMENDMENTS
Article XVIII
1. Notwithstanding any provision of Article XII, this Deed of Incorporation
may be amended only pursuant to a resolution duly adopted at a general meeting
of shareholders by the holder or holders of at least a majority of the shares of
the Company at the time outstanding and entitled to vote, the notice of which
meeting shall have set forth the exact text of the proposed amendment or
amendments or shall have stated that a copy of such text has been deposited at
the office of the Company in Curacao for inspection by the shareholders of the
Company, and will remain available for inspection until the conclusion of said
meeting.
2. Any amendment to this Deed of Incorporation which would increase or
decrease the authorized shares of Preferred Stock or par value thereof, or the
number of shares of any series thereof, or which would alter or change the
powers, preferences or any special rights of the shares of the Preferred Stock,
or of any series thereof, so as to affect them adversely, shall require the
approval of the holders of a majority of the shares of the Preferred Stock, or
of such series, as the case may be.
I, Mrs. EYDA ELISABETH BUTOT nee BOOMGAART, a sworn translator,
residing in Curacao, knowing the Dutch and English languages, do hereby certify
that the foregoing is a true translation of the articles of incorporation of the
limited liability company:
SCHLUMBERGER N.V.
established in Curacao.
IN WITNESS WHEREOF, I have set my hand hereunto and affixed my
official seal of office on this fifth day of May nineteen hundred and ninety-
seven.
[SEAL APPEARS HERE]
Appendix A
EXHIBIT 99
- --------------------------------------------------------------------------------
Schlumberger PRESS AND EARNINGS RELEASE
SCHLUMBERGER LIMITED . 227 PARK AVENUE . NEW YORK, NY 10172. FOR FURTHER
INFORMATION: SIMONE CROOK, SCHULMBERGER LIMITED 1-212-350-9432
- --------------------------------------------------------------------------------
FOR IMMEDIATE RELEASE: THURSDAY, APRIL 17, 1997
SCHLUMBERGER EARNINGS PER SHARE INCREASE BY 51%;
BOARD APPROVES A 2-FOR-1 STOCK SPLIT
SCHLUMBERGER DECLARES STOCK SPLIT AND QUARTERLY DIVIDEND
New York, April 17--The Board of Directors of Schlumberger Limited voted a two-
for-one split of common stock of the Company to the stockholders of record on
June 2, 1997. Certificates for the new shares will be mailed on or about
July 11, 1997.
The Board also declared a quarterly dividend of 37.5 cents per share, payable on
July 11, 1997, to stockholders of record on June 2, 1997. This dividend of 37.5
cents will be paid only on shares outstanding prior to the above stock split. On
the larger number of shares outstanding after this stock split, this is
equivalent to a dividend of 18.75 cents per share.
SCHLUMBERGER 1997 FIRST QUARTER EARNINGS
New York, April 17--Schlumberger Limited reported today that 1997 first quarter
operating revenue was $2.40 billion, 18.5% higher than the same period last
year. Net income of $260 million was 52% above first quarter 1996. After giving
effect to the stock split, earnings per share were $0.53, a 51% increase
compared to $0.35 a year ago.
Oilfield Services revenue increased 27% while rig count rose 12%. Significant
contributions from all activities, spearheaded by Geco-Prakla and Sedco Forex,
led to the 84% growth in operating income.
Measurement & Systems revenue was flat. Growth at Electronic Transactions and
Automatic Test Equipment was offset by the decline in metering activities,
particularly in Electricity & Gas, and by unfavorable currency exchange rates.
Chairman and Chief Executive Officer Euan Baird commented: Oilfie1d Services
revenue continues to grow strongly despite the recent weakness in commodity
pricing. The continuing robust demand for oil and gas and the heavy investments
we are making in new technology and people, make us confident that this type of
growth rate is sustainable."
# # #
APPENDIX B
5
1,000
3-MOS
DEC-31-1997
JAN-01-1997
MAR-31-1997
1201625
0
2436943
(52826)
983609
5043502
9667875
(6307034)
10338466
3317681
0
0
0
824285
4972643
10338466
590148
2420165
392967
1782788
280367
1496
17819
339191
79248
259943
0
0
0
259943
0.53
0.53
Adjusted for the two-for-one stock split announced April 17, 1997.
