UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(Amendment No. )
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Schlumberger N.V. (Schlumberger Limited)
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Schlumberger LimitedMarch [ ] , 2016
42, rue Saint-Dominique
75007 Paris, France
5599 San Felipe, 17th Floor
Houston, Texas 77056
Parkstraat 83
2514 JG The Hague
The Netherlands
NOTICE OF 2016 ANNUAL GENERAL MEETING OF STOCKHOLDERS
To Be Held April 10, 2013
March [ ], 2013
The 2013 Annual General Meeting of Stockholders of Schlumberger Limited (Schlumberger N.V.) will be held at the Avila Beach Hotel, Penstraat 130, Willemstad, Curaçao, on Wednesday, April 10, 2013 at 10:30 a.m., Curaçao time, for the following purposes:
Date and Time | April 6, 2016, beginning at 10:00 a.m. Curaçao time | ||
Place | The Avila Beach Hotel, Penstraat 130, Willemstad, Curaçao | ||
Items of Business | 1. |
2. |
3. |
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5. Approve a resolution to amend the Company’s Articles of Incorporation to (a) allow our Board of Directors to fix the authorized number of directors at an annual general meeting, subject to stockholder approval of that number, and (b) reflect changes to the Curaçao Civil Code regarding parties having the right to attend and address general meetings of stockholders. | ||
6. Approve a resolution to fix the number of directors constituting the Board of Directors at not more than 12, subject to approval of Item 5. | ||
7. Approve our amended and restated French Sub Plan under our 2010 Omnibus Stock Incentive Plan for purposes of qualification under French law. | ||
Such other matters as may properly be brought before the | ||
Record Date | February 17, 2016 | |
Proxy Voting | Your vote is very important. Whether or not you plan to attend the Annual General Meeting in person, please (i) sign, date and | |
Brokers cannot vote for Items 1, 2 or 7 without your instructions. |
Action will also be taken on such other matters as may properly be brought before the meeting.
The close of business on February 20, 2013 has been fixed as the record date for the meeting. All holders of common stock of record at the close of business on that date are entitled to vote at the meeting.
By order of the Board of Directors,
ALEXANDER
ALEXANDER C. JUDENJUDEN
Secretary
Please sign, date and promptly return the enclosed proxy card in the enclosed envelope, or grant a proxy and give voting instructions by telephone or internet, so that you may be represented at the meeting. Instructions are on your proxy card or on the voting instruction card included by your broker. Brokers cannot vote for Items 1, 2, 5 or 6 without your instructions.
Important Notice Regarding the Availability of Proxy Materials for the Annual General Meeting of Stockholders to Be Held on April 10, 2013:6, 2016:
This proxy statement, along with the Company’sour Annual Report on Form 10-K for the fiscal year ended December 31, 20122015 and the Company’s 2012our 2015 Annual Report to Stockholders, are available free of charge on the Company’sour website at http://investorcenter.slb.com.
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ITEM 4. APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | ||||
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March [ ], 2013, 2016
This proxy statement is furnished in connection with the solicitation by the Board of Directors of Schlumberger Limited (Schlumberger N.V.) (“Schlumberger” or the “Company”) of proxies to be voted at its 20132016 annual general meeting of stockholders, which will be held at the Avila Beach Hotel, Penstraat 130, Willemstad, Curaçao, on Wednesday, April 10, 20136, 2016 beginning at 10:3000 a.m., Curaçao time. To gain admittance to the meeting, stockholders of record and beneficial owners as of the close of business on the record date for the meeting, February 20, 201317, 2016, must present a passport or other government-issued identification bearing a photograph and, for beneficial owners, proof of ownership as of the record date, such as the top half of the proxy card or voting instruction card that was sent to you with this proxy statement.
The approximate mailing date of this proxy statement is March [ ], 2013., 2016. Business at the meeting is conducted in accordance with the procedures determined by the Chairman of the meeting and is generally limited to matters properly brought before the meeting by or at the direction of the Board of Directors or by a stockholder in accordance with specified requirements requiring advance notice and disclosure of relevant information.
The Schlumberger 20122015 Annual Report to Stockholders is provided concurrently with this proxy statement, and stockholders should refer to its contents in considering agenda Item 3.
Items to be Voted on at the Annual General Meeting
The agenda for the 20132016 annual general meeting includes the following items:
Agenda Item | Board Recommendation | |||
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• Item1: Election of | FOR | |||
• | Item2: | FOR | ||
• | Item3: Approval of the Company’s Consolidated Balance Sheet as at December 31, | FOR | ||
• | Item 4 | FOR | ||
• Item 5: Approval of amendments to the Company’s Articles of Incorporation to (a) allow our Board of Directors to fix the authorized number of directors at an annual general meeting, subject to stockholder approval of that number, and (b) reflect changes to the Curaçao Civil Code regarding parties having the right to attend and address general meetings of stockholders. A copy of the text of these amendments has been deposited at the office of the Company in Curaçao for inspection by the stockholders of the Company, and shall remain available for inspection until the conclusion of the Annual General Meeting. | FOR |
Agenda Item | Board Recommendation | |||
• Item 6 | FOR | |||
• Item 7: Approval of our amended and restated French Sub Plan under our 2010 Omnibus Stock Incentive Plan for purposes of qualification under French law. | FOR |
Each stockholder of record at the close of business on the record date, February 20, 2013,17, 2016, is entitled to one vote for each director nominee and one vote for each of the other proposals to be voted on with respect to each share registered in the stockholder’s name. A stockholder of record is a person or entity who held shares on that dateregisteredin its name on the records of Computershare Trust Company, N.A. (“Computershare”), Schlumberger’s stock transfer agent. Persons who held shares on the record date through a broker, bank or other nominee are consideredreferred to asbeneficialowners.
Shares cannot be voted at the meeting unless the owner of record is present in person or is represented by proxy. Schlumberger is incorporated in Curaçao and, as providedrequired by Curaçao law, meetings of stockholders are held in Curaçao. Because many stockholders cannot personally attend the meeting, it is necessary that a large number be represented by proxy.
On February 20, 2013,17, 2016, there were [ ] shares of Schlumberger common stock of Schlumberger outstanding and entitled to vote.
Holders of at least one-half of the outstanding shares entitling the holders thereof to vote at the meeting must be present in person or by proxy to constitute a quorum for the taking of any action at the meeting.
Votes Required to Adopt Proposals
To be elected, director nominees must receive a majority of votes cast (the number of shares votedvotes cast “for” a director nominee must exceed the number of votes cast “against” that nominee). Approval of each of the other matters on the agenda also requires the affirmative vote of the majority of votes cast. In addition,cast with respectthe exception of Item 5 (approval of amendments to Items 5Articles of Incorporation), which must receive the support of a majority of the Company’s shares outstanding and 6, the New York Stock Exchange (the “NYSE”) stockholder approval rules require that the total votes cast as to each such item also represent over 50% of all shares entitled to vote onat the proposal.annual general meeting to be approved.
Effect of Abstentions and Broker Non-Votes
Abstentions and proxies submitted by brokers that do not indicate a vote because they do not have discretionary voting authority and have not received instructions from thebeneficialowner of the shares as to how to vote on a proposal (so-called “broker non-votes”) will be considered as present for quorum purposes. If a quorum is not present at the meeting, the Board may call a second general meeting of stockholders, at which the quorum requirement will not apply.
Brokers holding shares must vote according to specific instructions they receive from thebeneficialowners of those shares. If brokers do not receive specific instructions, brokers may in some cases vote the shares in their discretion. However, the NYSENew York Stock Exchange (the “NYSE”) precludes brokers from exercising voting discretion on certainother proposals without specific instructions from the beneficial owner, as follows:
Discretionary Items. Under NYSE rules, brokers will have discretion to vote on Items 3 (financial statements)(approval of financial statements and dividends), 4 (appointment of auditors)independent registered public accounting firm) 5 (approval of amendments to Articles of Incorporation) or 6 (approval of the number of directors) without instructions from thebeneficialowners.
Nondiscretionary Items. Brokers cannot vote on Items 1 (election of directors), 2 (advisory vote to approve executive compensation), 5 (adoptionor 7 (approval of 2013 Schlumberger Omnibus Incentive Plan) or 6 (amendment and restatement of the Company’s Discounted Stock PurchaseFrench Sub Plan) without instructions from thebeneficialowners. Therefore, if your shares are held in “street name” by a broker and you do not instruct your broker how to vote on the election of directors or the advisory vote to approve executive compensation, the adoption of the 2013 Schlumberger Omnibus Incentive Plan or the approval of an amendment and restatement of the Company’s Discounted Stock Purchase Plan, your broker willnotbe able to vote for you on those matters.
Abstentions and broker non-votes willdo not be tabulated in determiningaffect the outcome of the vote on the election of directors or on any of the other proposals, and do not count in determiningother than on Item 5 (approval of amendments to Articles of Incorporation), where they have the total votes cast on Items 5 and 6 for purposeseffect of NYSE stockholder approval rules.a vote against the proposal.
Stockholders with shares registered in their names with Computershare and participants who hold shares in the Schlumberger Discounted Stock Purchase Plan may authorize a proxy:
by the internet at the following internet address: http://www.proxyvote.com;
telephonically by calling 1-800-690-6903; or
by completing and mailing their proxy card.
The internet and telephone voting facilities for stockholders of record will close at 11:59 p.m. Eastern time on Tuesday, April 9, 2013.12, 2016. The internet and telephone voting procedures have been designed to authenticate stockholders and to allow you to vote your shares and to confirm that your instructions have been properly recorded.
A number of banks and brokerage firms participate in programs that also permit beneficial stockholders to direct their vote by the internet or telephone. If you are a beneficial owner whose shares are held in an account at a bank or brokerage firm that participates in such a program, beneficial stockholdersyou may direct the vote of thesethose shares by the internet or telephone by following the instructions on the voting form.
By providing your voting instructions promptly, you may save the Company the expense of a second mailing.
All shares entitled to vote and represented by properly executed proxies received prior to the meeting and not revoked will be voted at the meeting in accordance with your instructions. If you are a stockholder with shares registered in your name with Computershare and you submit a properly executed proxy card but do not direct how to vote on each item, the persons named as proxies will vote as the Board recommends on each proposal.
Changing Your Vote or Revoking Your Proxy
If you are a stockholder of record, you can change your vote or revoke your proxy at any time before the polls close by timely delivery of a properly executed, later-dated proxy (including an internet or telephone vote) or by voting by ballot at the meeting. If you hold shares through a broker, bank or other nominee, you must follow the instructions of your broker, bank or other nominee to change or revoke your voting instructions.
All of our directors are elected annually at our annual general meeting of stockholders. Our stockholders are requested to elect a10 nominees to the Board of Directors, of 11 members, each to hold office until the next annual general meeting of stockholders and until a director’s successor is elected and qualified or until a director’s death, resignation or removal. Each of the nominees is now a director and was previously elected by the stockholders at the 20122015 annual general meeting. All of the nominees for election have consented to being named in this proxy statement and to serve if elected. If any nominee is unable or unwilling to serve, the Board of Directors may designate a substitute nominee or reduce the size of the Board of Directors.nominee. If the Board designates a substitute nominee, proxies may be voted for that substitute nominee. The Board knows of no reason why any nominee will be unable or unwilling to serve if elected.
Having exceeded the normal retirement age of 70 under our Corporate Governance Guidelines, Tony Isaac, our former chairman of the Board, retired at our 2015 annual general meeting.
Shares represented by properly executed proxies will be voted, if authority to do so is not withheld, for the election of each of the 1110 nominees named below. If you hold your shares in “street name,” you should know that your broker will not vote your shares for the 11 nominees listed below without your specific voting instructions.
Required Vote
Each director nominee must receive a majority of the votes cast to be elected.BrokersIf you hold your shares in “street name,” please be aware that brokers do not have discretion to vote on this proposal without your instruction. If you do not instruct your broker how to vote on this proposal, your broker will deliver a non-vote on this proposal.
Recommendation of the Board
The Board of Directors Recommends a Vote FOR All Nominees.
The Board believes that each director nominee possesses the qualities and experience that the Nominating and Governance Committee believes that nominees should possess, as described in detail below in the section entitled “Corporate Governance—Director Nominations.” The Board seeks out, and the Board is comprised of, individuals whose background and experience complement those of other Board members. The nominees for election to the Board, together with biographical information furnished by each of them and information regarding each nominee’s director qualifications, are set forth below. There are no family relationships among executive officers and directors of the Company.
Director Nominees
PETER L.S. CURRIE, 56,59, has been a director of the Company since 2010. He2010 and is the Board’s Lead Independent Director. Since April 2004, he has been President of Currie Capital LLC, a private investment firm, since April 2004.firm. Mr. Currie served as ais the lead independent director of Clearwire Corporation, a wireless internet service provider, from 2005 to June 2011 and was a member of both its compensation committee and its audit committee, which he chaired. From 2006 to 2010, he was a director of Sun Microsystems, a network computing infrastructure product and service company, and a member of its audit committee. Mr. Currie has also served on the boards of CNET Networks, Inc. from December 2005 to June 2008, where he was on the audit committee; and Safeco Corporation from July 2005 to September 2008, where he also served on the nominating and governance committee and on the audit committee, which he chaired during his last year on the committee. Mr. Currie also is a director at several private companies including Twitter, Inc., where he chairs both the audit committee and the nominating and governance committee, having served on its board since November 2010. He also serves on the board of directors of New Relic, Inc. (since March 2013), where he chairs its audit committee and is a member of its compensation committee. Mr. Currie previously served on the boards of directors of Clearwire Corporation, CNET Networks, Inc., Safeco Corporation, and Sun Microsystems, Inc., and is a director at several privately-held companies. He is also President of the board of trustees of Phillips Academy. Mr. Currie brings to the Board strong financial and operational expertise as a result of his extensive board and committee experience at both public and privateprivately-held companies; experience serving as Chief Financial Officerchief financial officer of two public companies (McCaw Cellular Communications Inc. and Netscape Communications Corp.); and experience serving in senior operating positions in investment banking, venture capital and private equity.
TONY ISAAC, 71,
V. MAUREEN KEMPSTON DARKES, 67, retired, has been a director of the Company since 2003,2014. She was Group Vice President and President Latin America, Africa and Middle East, of General Motors Corporation (“GM”), an automotive manufacturer, from January 2002 until her retirement in December 2009, and was a member of its Automotive Strategy Board until her retirement from GM. Ms. Kempston Darkes has been a director of Enbridge Inc., a leading energy transportation and distribution company, since November 2010, and is the non-executive Chairmana member of the Board. He was the former Chief Executiveits corporate social responsibility committee, its safety and reliability committee and its human resources and compensation committee. She also is a member of The BOC Group plc, an international group with three business segments consisting of Gases and Related Products, Vacuum Technology and Supply Chain
Solutions, from September 1999 to October 2006, when he retired. Since October 2000, Mr. Isaac has served on the board of GDF SUEZ Energy International (formerly known as International Power plc)directors of Brookfield Asset Management Inc., a global asset management company (since April 2008), where she chairs the risk management committee and is a member of the management resources and compensation committee; Balfour Beatty plc, an independent power producer,infrastructure services company (since July 2012), where she chairs the safety and served as chairmansustainability committee and is a member of itsboth the nomination and the remuneration committees; and Canadian National Railway Company (since 1995), where she chairs the environment, safety and security committee, and is a member of the corporate governance and nominating committee, finance committee, audit committee from February 2011 to August 2012. He is alsoand the senior non-executive director of the Hogg Robinson Group, a corporate travel services company, where he serves on its remuneration and nomination committees, and is chairman of its auditstrategic planning committee. Mr. IsaacMs. Kempston Darkes brings to the Board extensive automotive industry experience, servingas the Company continues to focus on boards of large, multinational companies. As a former chief executive, Mr. Isaac also has valuableproduct reliability and execution, as well as proven leadership abilities and experience in Latin America, Africa and the operation of a worldwide business faced with a myriad of international businessMiddle East. The Board also benefits greatly from Ms. Kempston Darkes’ audit committee experience and political issues. Mr. Isaac’s experience as senior non-executive director of all boards on which he has served makes him an effective non-executive Chairman of the Board.financial expertise.
K. VAMAN KAMATH, 65,PAAL KIBSGAARD, 48, has been a director of the Company since 2010. He has been the non-executive2011, Chairman of the Board of ICICI Bank Limited, a banking institution, since May 2009, and was Managing Director and Chief Executive Officer of ICICI Bank Limited from 2002 to May 2009. He chairs its Credit, Risk and Customer Service Committees, and is a member of its Fraud Monitoring, Information Technology Strategy and its Board Governance, Remuneration and Nomination committees. Mr. Kamath has been the non-executive Chairman of the Board of Infosys Limited, an information technology services company, since August 2011, and has served on its board of directors since May 2009. Mr. Kamath also served on Infosys’ audit and nomination committees, and was chairman of its compensation committee, in each case until October 2011. He was also a director of Lupin Limited, a pharmaceutical company, from January 2010 to November 2011 and of Great Eastern Shipping Co. Limited, a shipping company, from May 2010 to November 2011. Mr. Kamath brings to the Board a deep understanding of India (a large and critical market for Schlumberger) and of Asia generally, both of which are of immense value to the Board. As a banker with more than 40 years’ experience, Mr. Kamath has extensive CEO experience and expertise in corporate finance, international banking, financial reporting, and mergers and acquisitions. Mr. Kamath’s leadership abilities and experience in India and Asia enable him to make valuable contributions to the Board.
PAAL KIBSGAARD, 45, has been a director of the Company since 2011April 2015 and has served as Chief Executive Officer of the Company since August 2011. He was the Company’s Chief Operating Officer from February 2010 to July 2011, and President of the Reservoir Characterization Group from May 2009 to February 2010. Prior to that, Mr. Kibsgaard served as Vice President, Engineering, Manufacturing and Sustaining, from November 2007 to May 2009, and as Vice President of Personnel from April 2006 to November 2007. Mr. Kibsgaard brings to the Board a thorough knowledge of the Company’s operational activities worldwide as a result of his service in various global leadership positions in the Company. Mr. Kibsgaard has been with the Company since 1997, and began his career as a reservoir engineer. He has held numerous operational and administrative management positions within the Company in the Middle East, Europe and the U.S., and As a result of his service in various global leadership positions in the Company, he brings to the Board a valuableunique operational perspective toand thorough knowledge of the Board.Company’s operational activities worldwide. The Board believes that Mr. Kibsgaard’s service as Chairman and Chief Executive Officer offersis an important link between management and the Board, enabling the Board to perform its oversight function with the benefit of his perspectives on the Company’s business.
NIKOLAY KUDRYAVTSEV, 62,65, has been a director of the Company since 2007. Since June 1997, he has been the Rector of the Moscow Institute of Physics and Technology, the most prestigious institute of theoretical and applied physics in Russia. In 2012,Technology. Mr. Kudryavtsev was electedhas been chairman of the Board of Rectors of the cityCity of Moscow and Moscow region.Region since 2012, and was elected Vice President of the Russian Rectors Union in 2014. Mr. Kudryavtsev brings to the Board valuable management and finance experience, as well as deep scientific and technological expertise. This provides the Board with valuable insight regarding the Company, its products and current technology, as well as the future technological needs of the Company and the industry. Mr. Kudryavtsev also provides the Board with a particularly valuable Russian vantage point, which is useful for both the development of the Company’s business and understanding of the needs of the Company’s growing population of Russian employees. The Board is aided immensely by Mr. Kudryavtsev’s sensitivity to Russian culture and risk at the field level.
ADRIAN LAJOUS, 69, has been a director of the Company since 2002. Since January 2011, he has served as President of Petrométrica, an energy consulting company. From 2001 to September 2012, he was an outside consultant serving as Senior Energy Advisor to McKinsey & Company, a consulting firm. Mr. Lajous is a director of Ternium, S.A. (since 2006), a flat and long steel producer, and serves on its audit committee. He is also a director of Trinity Industries, Inc. (since 2006), a volume producer of freight and tank railcars, and serves
on its audit and its finance and risk management committees. From 1994 to 1999, Mr. Lajous was Chief Executive Officer of Petróleos Mexicanos (“Pemex”), Mexico’s national oil company. He served as Director General of Pemex and Chairman of the Board of the Pemex group of operating companies from 1994 to 1999. Mr. Lajous brings to the Board his extensive knowledge of and experience in the energy industry and its participants, as well as a deep understanding of operations in difficult political and regulatory environments. He also has significant knowledge of the issues affecting the international oil and gas industry, particularly in Mexico and Latin America. Through his service on the boards of Pemex and Ternium S.A., he has valuable experience in governance, compensation and audit issues.
MICHAEL E. MARKS, 62,65, has been a director of the Company since 2005. He has been a Managing Partner of Riverwood Capital, LLC, (formerly Bigwood Capital, LLC), a private equity firm, since March 2007. From January 2007 to January 2008, Mr. Marks was a Senior Advisor to Kohlberg Kravis Roberts & Co., a private equity firm, and was a Member of that firm from January 2006 to January 2007. From 1994 to 2006, Mr. Marks served as the Chief Executive Officer of Flextronics, Inc., a leading producer of advanced electronic manufacturing services. Mr. Marks also served as a director of Flextronics from 1991 to 2008. He was appointed Chairman of the Board of Flextronics effective upon his retirement as Chief Executive Officer in 2006 and served in that role until his retirement from the board of Flextronics in 2008, and he previously served as Chairman of the Board of Flextronics from 1993 to 2003. Mr. Marks has been a director of SanDisk, a memory products company, since 2003 and became chairman of its boardChairman in January 2011. He also chairs its nominating and governance committee. Mr. Marks is alsothe lead independent director at GoPro, Inc., a consumer camera company, and is a member of its compensation committee and is chairman of its nominating and governance committee.and its compensation and leadership committees. From 20071991 to 2010, he was2008, Mr. Marks served as a director at Flextronics, Inc., a leading producer of advanced electronic manufacturing services, and was its Chief Executive Officer from January 1994 to January 2006. From 2006 to 2008, he was Chairman of the Board of Flextronics Mr. Marks previously served on the boards of directors of Sun Microsystems a network computing infrastructure product and service company,Calix, and was a member of its audit committee. Until December 2010, Mr. Marks wasis a director of Calix (since 2009), a provider of broadband communications access systems and software.at several privately-held companies. Mr. Marks brings to the Board his familiarity with world-class manufacturing from the field level to the
boardroom based on his experience at Flextronics, and because he has run a large, diversified global corporation with many of the same issues that Schlumberger faces. As a former chief executive and as a public company director at various other companies, Mr. Marks has been involved in succession planning, compensation, employee management and the evaluation of acquisition opportunities. Almost all companies of which Mr. Marks has beenMarks’ significant experience as a director have been involved in some form of technology business,at various technology-driven companies, as well as his finance and thismergers and acquisitions experience, isare especially relevant to Schlumberger’s technology-oriented business and growth strategy.
INDRA K. NOOYI, 60, has been a director of the factCompany since April 2015. She is the Chairman and Chief Executive Officer of PepsiCo, a global food and beverage company. She was named President and CEO in 2006, and assumed the additional role of Chairman of PepsiCo’s Board of Directors in 2007. She was elected to PepsiCo’s Board of Directors and became President and Chief Financial Officer in 2001, after serving as Senior Vice President and Chief Financial Officer since 2000. Mrs. Nooyi also served as PepsiCo’s Senior Vice President, Corporate Strategy and Development from 1996 until 2000, and as PepsiCo’s Senior Vice President, Strategic Planning from 1994 until 1996. The Board believes that manyit benefits greatly from Mrs. Nooyi’s proven leadership as Chairman and CEO of its acquisition targets are technology companies.a global public company. The Board also believes that her expertise in developing and directing corporate strategy and finance, mergers and acquisitions, and organizational and talent management enables her to make valuable contributions to the Board.
LUBNA S. OLAYAN, 57,60, has been a director of the Company since 2011. She has beenis the deputy chairperson and Chief Executive Officer and deputy chairperson of Riyadh-based Olayan Financing Company, the holding entity for The Olayan Group’s operations in the Kingdom of Saudi Arabia and the Middle East, since 1986. Since 2001,East. Ms. Olayan has beenis a Principal and a Board member of Olayan Investments Company Establishment, the parent company of The Olayan Group, a private multinational enterprise engagedwith diverse commercial and industrial operations in manufacturing, distribution and services. She is a member of the Board of Directors of Olayan Investment Company Establishment, the parent company of The Olayan Group. In her capacity as CEO of Olayan Financing Company, Ms. Olayan is responsible for The Olayan Group’s operating businesses and investments in Saudi Arabia and the Middle East. These include more than 40 companies engaged in product manufacturing, distributionEast and services, often in partnership with leading multinationals. Ms. Olayan also serves as a non-executive director and memberan actively managed portfolio of various corporate and advisory boards.international investments. Since December 2004, Ms. Olayanshe has been a Directordirector of Saudi Hollandi Bank, becoming the first woman to join the board of a Saudi publicly-listed company,company. She was elected Vice Chairman in January 2014 and is a member of its executive committee and its nomination and remuneration committee. Ms. Olayan is a non-executive director and member of numerous international advisory boards, such as Rolls Royce Group plc and Akbank. Ms. Olayan also serves on the boards of various non-governmental organizations, as well as of various educational institutions, including King Abdullah University of Science and Technology. Ms. Olayan served as a non-executive director of WPP plc, a public company and one of the largestmultinational communication services businesses in the world,company, from March 2005 to June 2012, and was a member of its nomination committee. Ms. Olayan is also a member of the International Advisory Boards of Rolls Royce Group plc (since 2006), Akbank (since 2008) and the National Bank of Kuwait (since 2010). Ms. Olayan also serves on the boards of various non-governmental organizations, including the Asia Business Council, Al Fanar (venture philanthropy) and the Down’s Syndrome Charitable Association in Saudi Arabia, and on the boards of various educational institutions, including Cornell University and King Abdullah University of Science and Technology. Ms. Olayan brings to the Board proven leadership abilities and experience in Saudi Arabia and the Middle East, which enable her to make valuable contributions to the Board. Ms. Olayan has extensive business experience in Saudi Arabia and the Middle East and a deep understanding of those areas, which are critical to the Company.
Company and enable her to make valuable contributions to the Board. The Board benefits from her proven leadership abilities, extensive CEO experience and expertise in corporate finance, international banking, distribution and manufacturing. Ms. Olayan also brings a critical international perspective on business and global best practices. Ms. Olayan’s service on the Boardsboards of Trusteestrustees of Cornell University and of King Abdullah University of Science and Technology, and her connections to the scientific community and her experience in university relations, also are of great value to Schlumberger and its efforts in technology leadership and employee recruiting and retention.
LEO RAFAEL REIF, 62,65, has been a director of the Company since 2007. Since July 2012, Mr. Reif has served asbeen President of the Massachusetts Institute of Technology (“MIT”) since July 2012. He previously served as, having been MIT’s Provost, Chief Academic Officer and Chief Budget Officer from August 2005 to July 2012. Mr. Reif was head of the Electrical Engineering and Computer Science Department at MIT from September 2004 to July 2005, and an Associate Department Head for Electrical Engineering in the Department of Electrical Engineering and Computer Science at MIT from January 1999 to August 2004. Mr. Reif brings to the Board valuable management and finance expertise. As a scientist, he has deep scientific and technological expertise about the Company’s products and current technology, as well as about anticipated future technological needs of the Company and the industry. The Board values Mr. Reif’s connections to the U.S. scientific community, as well as his expertise in university relations and collaborations, which are of high importance to Schlumberger and its efforts in technology leadership and employee retention. Mr. Reif provides the Board with a critical U.S. scientific perspective, which is of immense value in the oversight of the Company’s strategy.
TORE I. SANDVOLD, 65,68, has been a director of the Company since 2004. He has been executive Chairman of Sandvold Energy AS, an advisory company in the oil and energy industry, since September 2002. Mr. Sandvold is a director of Rowan Companies plc (since 2013), a provider of international and domestic contract drilling services, where he serves on its audit committee and its health, safety and environment committee. He has also been a member, since 2003, of the board of directors of Teekay Corporation, (since 2003), a leading provider of international crude oil and petroleum product transportation services, where he is a member ofserves on its nominating and governance committee. From 20011990 to 2002,2001, Mr. Sandvold served as Director General of the Norwegian Ministry of Oil & Energy, with overall responsibility for Norway’s national and international oil and gas policy. From 2001 to 2002, he was executive Chairman of Petoro AS, the Norwegian state-owned oil company. He also served as Chairman of Misen Energy AB, a Swedish upstream oil and gas company from December 2011 to November 2014, and was its acting Chief Executive Officer from September 2012 to May 2014. Mr. Sandvold is also a member of the boards of directors of Lambert Energy Advisory Ltd; Njord Gas Infrastructure, and Energy Policy Foundation of Norway. Mr. Sandvold brings to the Board experience working in the area of energy policy for more than 35approximately 40 years, and he has broad experience in developing domestic and international energy policies for Norway as a career civil servant. He also has extensive experience dealing with global energy institutions such as the Organization of the Petroleum Exporting Countries and the International Energy Agency, and in negotiating with global energy companies. Mr. Sandvold has finance experience and a solid understanding of business opportunities, both as concerns acquisition targets and the industry in general.
HENRI SEYDOUX, 52,55, has been a director of the Company since 2009. Since 1994, he has been Chairman and Chief Executive Officer of Parrot S.A., a global wireless products manufacturer. Mr. Seydoux is an entrepreneur with great initiative. He founded Parrot S.A. in 1994 as a private company and took it public in 2007. As the chief executive of a dynamic and innovative technology company, Mr. Seydoux brings to the Board entrepreneurial drive and management skills. He also has family ties to the founding Schlumberger brothers, and having grown up in the Schlumberger family culture, is well placed to see that the Company continues its historical commitment to Schlumberger’s core values. His service on the Board addresses the Company’s need to preserve the Company’s unique culture and history while fostering innovation.
Schlumberger is committed to adhering to sound principles of corporate governance and has adopted corporate governance guidelines that the Board believes are consistent with Schlumberger’s values, promote the effective functioning of the Board, its committees and the Company. These guidelines are on our website at http://www.slb.com/about/guiding_principles/corpgovernance/corpgov_guidelines.aspx.
Governance Framework—Highlights
The following are some highlights of our corporate governance practices and policies:
Board Independence; Committees Structure
All of our director nominees are independent of the Company and management, except for our CEO. This is substantially above the NYSE requirement that a majority of directors be independent.
Mr. Isaac, an independent member of the Board, serves as Chairman of the Board.
All independent directors meet regularly in executive session.
Only independent directors serve on our Audit, Compensation, Finance, Nominating and Governance and Science and Technology Committees.
Majority Voting; Stockholder Authority
We have a majority vote standard for uncontested director elections.
All of our directors are elected annually. We do not have a classifiedstaggered board.
One or more stockholders representing 10% or more of outstanding shares can call a special stockholders meeting by following the procedural requirements set forth in our By-Laws.
Executive Stock Ownership Guidelines
We have executive stock ownership guidelines, designed to align executive and stockholder interests. For a description of the guidelines applicable to our executive officers and other senior members of management, see “Compensation Discussion and Analysis—Executive Stock Ownership Guidelines.”
Risk Oversight
The full Board of Directors directly oversees risk management for the Company.
The Audit Committee reviews and assesses financial reporting risk. It also reviews all significant finance-related violations of Company policies brought to its attention, and once per year reviews and assesses summaries of all finance-related violations.
The Finance Committee oversees finance-related risks on a quarterly basis and recommends guidelines to control cash, pension investments, banking relationships and currency exposures.
The Compensation Committee reviews and assesses the Company’s overall compensation program and its effectiveness at linking executive pay to performance, aligning the interests of our executives and our stockholders and providing for appropriate incentives.
The Nominating and Governance Committee oversees compliance-related risk and the Company’s Ethics and Compliance program.
Hedging Policyand Pledging Policies
Our directors and executive officers are prohibited from hedging their ownership of Schlumberger stock.
Furthermore, our directors and executive officers are prohibited from pledging their Schlumberger stock.Political Contributions
Schlumberger has a long-standing policy prohibiting the contribution of Schlumberger funds or assets to political parties or organizations, or their leaders, or to candidates for any public office.
Corporate Governance Guidelines Schlumberger is committed to adhering to sound principles of corporate governance and has adopted corporate governance guidelines that the Board believes are consistent with Schlumberger’s values, and that promote the effective functioning of the Board, its committees and the Company. Our Board periodically, and at least annually, reviews and revises, as appropriate, our Corporate Governance Guidelines to ensure that they reflect the Board’s corporate governance objectives and commitments. Our Corporate Governance Guidelines are on our website at http://www.slb.com/about/guiding_principles/corpgovernance/corpgov_guidelines.aspx.
Schlumberger’s Corporate Governance Guidelines provide that at least a majority of the Board will consist of independent directors. This standard reflects the NYSE corporate governance listing standards.
Our Board has adopted director independence standards, which can be found in Attachment A to our Corporate Governance Guidelines, and which meet or exceed the independence requirements in the NYSE listing standards. Based on the review and recommendation by the Nominating and Governance Committee, the Board of Directors has determined that each current director and director nominee listed above under “Election of Directors” is “independent” under the listing standards of the NYSE and our director independence standards, except Mr. Kibsgaard, who is our CEO and therefore does not qualify as independent. The Board also previously determined that Tony Isaac, who served as director until the 2015 annual general meeting and did not stand for re-election, and K. Vaman Kamath, who served as a director through July 2015, were independent.
In addition to the Board-level standards for director independence, each member of the Audit Committee meets the heightened independence standards required for audit committee members under the NYSE’s listing standards.
The Board of Directors has determined thatstandards, and each director nominee listed above under “Election of Directors” is “independent” under the published listing standardsmember of the NYSE, except Mr. Kibsgaard, who is our CEO and therefore does not qualify as independent. The Board previously determined that Andrew Gould, our former CEO who served as Chairman ofCompensation Committee meets the Board until the 2012 annual general meeting and did not stand for re-election, was not considered to be independent. In addition, the Board of Directors determined that Philippe Camus, who also served as director until the 2012 annual general meeting and did not stand for re-election, was independent.
The NYSE listing standards include objective tests that can disqualify a director from being treated as independent, as well as a subjective test, under which the Board must affirmatively determine that each independent director has no material relationship with Schlumberger or management. In making itsheightened independence determinations, the Board considered all material relationships with each director and each new director nominee, and all transactions since the start of 2010 between Schlumberger and each current director and director nominee and members of their immediate families or entities associated with them.
As contemplated by NYSE rules then in effect, the Company adopted categorical standards in 2004 to assist the Board in making independence determinations. Under the rules then in effect, relationships that fell within the categorical standards were not required to be disclosed in the proxy statement and their impact on independence was not required to be separately discussed. A relationship falls within these current categorical standards if it:
is a type of relationship addressed in Section 303A.02(b) of the NYSE Listed Company Manual, but under those rules does not preclude a determination of independence; or
is a type of relationship addressed in Item 404 of SEC Regulation S-K, but under that item does not require disclosure; or
consists of charitable contributions by the Company to an organization where a director is an executive officer but the contributions did not exceed the greater of $1 million or 2% of the organization’s gross revenue in any of the last 3 years.
None of the non-employee directors was disqualified from “independent” status under the objective NYSE listing standards. In making its subjective determination that each non-employee director is independent, the Board reviewed additional information provided by the directors and the Company with regard to any business or personal activities or associations as they may relate to Schlumberger and Schlumberger’s management. The Board considered the transactions in the context of the NYSE’s objective listing standards, the categorical standards noted above and, for directors serving on committees, the additional standards established for members of audit committees, and the SEC and U.S. Internal Revenue Service standards for compensation committee members. Based on allmembers under NYSE listing standards adopted in 2013, which Schlumberger implemented in advance of the foregoing, the Board made a subjective determination as required by NYSE rules that, because of the nature of the transaction, the director’s relationship with the entity and/or the amount involved, no relationships exist that,compliance date.
Transactions Considered in the opinion of the Board, would impair the director’s independence.
Independence Determinations. The Board’s independence determinations included a review of transactions that occurred since the beginning of 2013 with entities associated with the independent directors or members of their immediate family. In making its independence determinations, the Board considered that Mr. Currie, Mr. Isaac, Mr. Kamath, Ms. Kempston Darkes, Mr. Kudryavtsev, Mr. Lajous,Marks, Ms. Nooyi, Ms. Olayan, Mr. Reif and Mr. Camus (who
served on the Board until April 2012)Sandvold each have served as directors, executive officers, trustees, outside consultants or advisory board members at companies and universities that have had commercial business dealingsrelationships with the Company, all of which were ordinary course businesscommercial transactions involving significantly less than 1% of either company’sentity’s annual revenues. The Board also considered that the Company has made charitable contributions in 2015 to The Massachusetts Institute of Technology, of which Mr. Reif is the President, of approximately $330,000, relating to educational grants and to The Moscow Institute of Physics and Technology, ofsponsored fellowships, for which Mr. Kudryavtsev is the Rector, which likewise wereReif received no personal benefit. This amount was significantly less than the greater of $1 million or 2% of that organization’sthe university’s consolidated gross revenues for any of the past three years, and from which the directors received no personal benefit.years.
The Nominating and Governance Committee believes that nominees should, in the judgment of the Board, be persons of integrity and honesty, be able to exercise sound, mature and independent business judgment in the best interests of our stockholders as a whole, be recognized leaders in business or professional activity, have background and experience that will complement those of other Board members, be able to actively participate in Board and Committee meetings and related activities, be able to work professionally and effectively with other Board members and Schlumberger management, be available to remain on the Board long enough to make an effective contribution and have no material relationship with competitors, customers or other third parties that could present realistic possibilities of conflict of interest or legal issues.
The Nominating and Governance Committee also believes that the Board should include appropriate expertise and reflect gender, cultural and geographical diversity, in light of the entire Board’s current composition and range of diversity. Schlumberger has approximately 95,000 employees worldwide, representing more than 140 nationalities, and values gender, cultural and geographical diversity in its directors as well. Three of the Company’s 10 director nominees are women. Of the 10 director nominees, four are citizens of the United States of America; two are citizens of Norway; and one director nominee is a citizen of each of Canada, France, Russia, and Saudi Arabia.
The Company’s very diverse Board also evidences the Board’s commitment to have directors who represent countries where Schlumberger operates. In addition, the exceptionally broad and diverse experience of Board members is in keeping with the goal of having directors whose background and experience complement those of other directors. The Nominating and Governance Committee’s evaluation of director nominees takes into account their ability to contribute to the Board’s diversity, and the Nominating and Governance Committee annually reviews its effectiveness in balancing these considerations in the context of its consideration of director nominees.
Applying the criteria above, the Nominating and Governance 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 meeting of stockholders. In obtaining the names of possible nominees, the Nominating and Governance Committee makes its own inquiries and will receive suggestions from other directors, management, stockholders and other sources, and its process for evaluating nominees identified in unsolicited recommendations from security holders is the same as its process for unsolicited recommendations from other sources. From time to time, the Committee retains executive search and board advisory consulting firms to assist in identifying and evaluating potential nominees. During 2015, the Committee retained New York-based Russel Reynolds Associates, a third-party executive search firm, for this purpose. Consideration of new Board candidates typically involves a series of internal discussions, review of information concerning candidates, and interviews with selected candidates. Board members typically suggest candidates for nomination to the Board.
The Nominating and Governance Committee must first consider all potential director nominees before they are contacted by other Company directors or officers as possible nominees and before they are formally considered by the full Board. The Nominating and Governance Committee will consider nominees recommended by security holdersstockholders who meet the eligibility requirements for submitting stockholder proposals for inclusion in the next proxy statement and submit their recommendations in writing to:
Chair, Nominating and Governance Committee
c/o Secretary, Schlumberger Limited
5599 San Felipe, 17th Floor
Houston, Texas 77056
by the deadline for such stockholder proposals referred to at the end of this proxy statement. Unsolicited recommendations must contain all of the information that would be required in a proxy statement soliciting proxies for the election of the candidate as a director, a description of all direct or indirect arrangements or understandings between the recommending security holder and the candidate, all other companies to which the candidate is being recommended as a nominee for director, and a signed consent of the candidate to cooperate with reasonable background checks and personal interviews, and to serve as a director of the Company, if elected.
The Nominating and Governance Committee believes that nominees should, in the judgment of the Board, be persons of integrity and honesty, be able to exercise sound, mature and independent business judgment in the best interests of the stockholders as a whole, be recognized leaders in business or professional activity, have background and experience that will complement those of other board members, be able to actively participate in Board and Committee meetings and related activities, be able to work professionally and effectively with other Board members and Schlumberger management, be available to remain on the Board long enough to make an effective contribution and have no material relationship with competitors, customers or other third parties that could present realistic possibilities of conflict of interest or legal issues.
The Nominating and Governance Committee also believes that the Board should include appropriate expertise and reflect gender, cultural and geographical diversity, in light of the entire Board’s current composition and range of diversity. Schlumberger has more than 118,000 employees worldwide, representing more than 140 nationalities, and values gender, cultural and geographical diversity in its directors as well. Two of the Company’s current directors are women. Of the 11 director nominees, three are citizens of the United States of America; two are citizens of Norway; and one director nominee is a citizen of each of France, Great Britain, Russia, Mexico, India and Saudi Arabia. The Company’s very diverse Board also evidences the Board’s
commitment to have directors who represent countries where Schlumberger operates. In addition, the exceptionally broad and diverse experience of Board members is in keeping with the goal of having directors whose background and experience complement those of other directors. The Nominating and Governance Committee’s evaluation of director nominees takes into account their ability to contribute to the Board’s diversity, and the Nominating and Governance Committee annually reviews its effectiveness in balancing these considerations in the context of its consideration of director nominees.
The Board recognizes that one of its key responsibilities is to evaluate and determine an appropriate board leadership structure so as to ensure independent oversight of management. The Board believes that there is no single, generally accepted board leadership structure that is appropriate for all companies, and that the right
structure may vary for a single company as circumstances change. As such, our independent directors consider the Board’s leadership structure at least annually.annually, and may modify this structure from time to time to best address the Company’s unique circumstances and advance the best interests of all stockholders, as and when appropriate.
TheIn 2011, the independent members of the Board have determined, based on its annual consideration of the Board’s leadership structure, that the separation of the roles of Chairman of the Board and CEO and appointment of an independent, non-executive Chairman of the Board iswas an appropriate board leadership structure at this time because it allows our CEO to focus on leadingthat time. Accordingly, the Company’s complex international business operations while providing the Board experienced and independent leadership. The independent members of the Board appointed Tony Isaac as the independent, non-executive Chairman of the Board in April 2012.2012, and Mr. Isaac who previously served asin this capacity until the Board’s lead independent director, continues to fulfill the responsibilities he performed as lead independent director, including setting the agendas for, and presiding over executive sessions of non-management directors, as well as serving as Chairman. 2015 annual general meeting.
In light ofconnection with Mr. Isaac’s appointment asplanned retirement from the Board in 2015, the independent non-executive Chairmanmembers of the Board gave thoughtful consideration to the Board no longer has a designated lead independent director. The Board may modify thisBoard’s leadership structure from time to time to best addressand determined that recombining the Company’s unique circumstances, to advanceChairman and CEO positions under the leadership of Mr. Kibsgaard upon Mr. Isaac’s retirement was in the best interests of all stockholders, as and when appropriate. In the event that the Company modifiesand the stockholders. This determination was based on the Board’s strong belief that, as the individual with primary responsibility for managing the Company’s day-to-day operations and with extensive knowledge and understanding of the Company, Mr. Kibsgaard is best positioned to chair regular Board meetings as the directors discuss key business and strategic issues and to focus the Board’s attention on the issues of greatest importance to the Company and its stockholders. Furthermore, combining the roles of Chairman and CEO in Mr. Kibsgaard creates a clear line of authority that promotes decisive and effective leadership, both within and outside the Company. In making this leadershipjudgment, the Board took into account its evaluation of Mr. Kibsgaard’s performance as CEO and as a current member of the Board, his positive relationships with the other directors, and the strategic perspective he would bring to the role of Chairman.
In connection with its decision to recombine the roles of Chairman and CEO under Mr. Kibsgaard, the Board recognized the importance of having a board structure inthat would continue to promote the future and appoints aappropriate exercise of independent judgment by the Board. Thus, the Board appointed Peter Currie lead independent director, that director’s responsibilities would, as previously, be expected to include settingwho was selected by and from the agendaindependent directors, and who has the following leadership authority and responsibilities:
In considering its leadership structure, the Board also took into account that Schlumberger’s current governance practices provide for strong independent leadership, active participation by independent directors and
independent evaluation of, and communication with, many members of senior management. These governance practices are reflected in our Corporate Governance Guidelines and our various committee charters, which are available on our website. The Board believes that its risk oversight programs, discussed immediately below, would beare effective under a variety of board leadership frameworks and therefore do not materially affect the Board’s choice of leadership structure.
The Board’s Role in Risk Oversight
The role that the Board fulfills in risk oversight is set out in our Corporate Governance Guidelines. The Board assesses major risks facing the Company and options for their mitigation, in order to promote the Company’s stockholders’ and other stakeholders’ interests in the long-term health and the overall success of the Company and its financial strength.
The full Board is actively involved in overseeing risk management for the Company. It does so in part through its oversight of the Company’s Executive Risk Committee (the “ERC”) comprised of more than half a dozen top executives of the Company from various functions, each of whom supervises day-to-day risk management throughout the Company. The ERC is not a committee of the Board. The ERC ensures that the Company identifies all potential material risks facing the Company and implements appropriate mitigation measures. The Company’s risk identification is performed at two levels: the ERC performs a
corporate-level risk mapping exercise, which involves the CEO and several other members of senior management, and while maintaining oversight, delegates operational (field-level) risk assessment and management to the Company’s various Areas, Technologies and Functions and to its Research, Engineering, Manufacturing and Sustaining organization. To the extent that the ERC identifies recurring themes from the operational risk mapping exercises, they are acted on at the corporate level. Members of the ERC meet formally at least once a year, and more frequently on an ad hoc basis, to define and improve the risk mapping process, and to review and monitor the results of those exercises and those that have been delegated. The ERC reports directly to the CEO and to the full Board, and periodicallyannually presents to the full Board a comprehensive report as to its risk mapping efforts for that year.
In addition, each of our Board committees considers the risks within its areas of responsibilities.responsibility. For example, the Finance Committee considers finance-related risks on a quarterly basis and recommends guidelines to control cash, pension investments, banking relationships and currency exposures. The Compensation Committee reviews and assesses the Company’s overall compensation program and its effectiveness at linking executive pay to performance, aligning the interests of our executives and our stockholders and providing for appropriate incentives. The Nominating and Governance Committee oversees governance- and compliance-related riskrisks and reviews and discusses the Company’s Ethics and Compliance and Ethics program’sProgram’s quarterly statistical report and the various allegations, disciplinary actions and training statistics brought to its attention. The Audit Committee reviews and assesses risks related to financial reporting. The Audit Committee also discusses all significant finance-related violations of Company policies brought to its attention from time to time, and once per year reviews a summary of all finance-related violations. Additionally, the outcome of the Company’s Audit Risk assessment is presented to the Audit Committee annually; this assessment identifies internal controls risks and drives the internal audit plan for the coming year. All significant violations of the Company’s Code of EthicsConduct and related corporate policies are reported to the Nominating and Governance Committee and as(if finance-related) to the Audit Committee, and, when appropriate, are reported to the full Board. Once a year, the Deputy General Counsel, Compliance delivers to the full Board a comprehensive Annual Compliance Report. The risks identified within the Ethics and Compliance and Ethics programProgram are incorporated into the ERC’s enterprise risk management program described above.
Meetings of the Board of Directors and its Committees
During 2012,2015, the Board of Directors held sixfive meetings. Schlumberger has an Audit, a Compensation, a Nominating and Governance, a Finance, and a Science and Technology Committee. During 2012,2015, the Audit Committee met fivefour times; the Compensation Committee met fivefour times; the Finance Committee met threefour times; the Nominating and Governance Committee met four times; and the Science and Technology Committee met one time.two times.
Each of our current directors attended at least 75%100% of the meetings of the Board and the committees on which theyhe or she served in 2012. 2015 (held during the period he or she served).
From time to time between meetings, Board and committee members may confer with each other and with management and independent consultants regarding relevant issues, and representatives of management may meet with the independentsuch consultants on behalf of the relevant committee.
Members of the Committees of the Board of Directors as of February 1, 2016
Name of Director | Audit Committee | Compensation Committee | Nominating and Governance Committee | Finance Committee | Science and Technology Committee | |||||||||
Peter L.S. | X | Chair | ||||||||||||
V. Maureen Kempston Darkes | Chair | |||||||||||||
| ||||||||||||||
| ||||||||||||||
Paal Kibsgaard | ||||||||||||||
Nikolay Kudryavtsev | X | X | ||||||||||||
| ||||||||||||||
Michael E. Marks | Chair | X | ||||||||||||
| X | X | ||||||||||||
Lubna S. Olayan | X | X | ||||||||||||
Leo Rafael Reif | X | Chair | ||||||||||||
Tore I. Sandvold | X | |||||||||||||
Henri Seydoux | X | X |
* Lead independent director.
Audit Committee
The Audit Committee consists of fourthree directors, each of whom meets the independence and other requirements of the NYSE’s listing standards. The Audit Committee assists the Board in its oversight of the integrity of the Company’s financial statements, legal and regulatory compliance, the independent registered public accounting firm’s qualifications, independence, performance and related matters, and the performance of Schlumberger’s internal audit function. The authority and responsibilities of the Audit Committee include the following:
evaluate the independence and qualification of the Company’s independent registered public accounting firm;
recommend for stockholder approval the independent registered public accounting firm to audit the accounts of the Company for the year;
review with the Company’s independent registered public accounting firm the scope and results of its audit, and any audit issues or difficulties and management’s response;
discuss with management Schlumberger’s risk assessment and risk management policies;
discuss Schlumberger’s annual audited financial statements and quarterly unaudited financial statements with management and the Company’s independent registered public accounting firm;
review with management, the internal audit department and the independent registered public accounting firm the adequacy and effectiveness of the Company’s disclosure and internal control procedures, including any material changes or deficiencies in such controls;
discuss Schlumberger’s earnings press releases with management and the independent registered public accounting firm Schlumberger’s earnings press releases;firm;
review Schlumberger’s financial reporting and accounting standards and principles, significant changes in such standards or principles or in their application and the key accounting decisions affecting the Company’s financial statements;
review with the internal audit department the status and results of the Company’s annual internal audit plan, assessments of the adequacy and effectiveness of internal controls, and the sufficiency of the department’s resources;
establish procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls, or auditing matters, as well as for confidential submission by employees, and others, if requested, of concerns regarding questionable accounting or auditing matters; and
prepare an annual audit committee report for Schlumberger’s annual proxy statement.
The Company’s independent registered public accounting firm is accountable to the Audit Committee. The Audit Committee pre-approves all engagements, including the fees and terms for the integrated audit of the Company’s consolidated financial statements.
The Board of Directors has determined that each Committee member has sufficient knowledge in financial and auditing matters to serve on the Committee. In addition, the Board of Directors has determined that Messrs. Currie,Mr. Kamath, who was a director in 2015, qualified and Lajous each qualifyMrs. Nooyi currently qualifies as an “audit committee financial expert” under applicable SEC rules. The Audit Committee operates pursuant to a written charter, which is available on the Company’s website at http://www.slb.com/about/guiding_principles/corpgovernance/audit_committee.aspx.
Compensation Committee
The Compensation Committee consists of four directors, each of whom meets the independence requirements of the NYSE’s listing standards. The purposepurposes of the Compensation Committee isare to assist Schlumberger’s Board of Directors in discharging its responsibilities with regard to executive compensation; periodically review non-executive directors’ compensation; oversee Schlumberger’s general compensation philosophy; serve as the administrative committee under Schlumberger’s stock plans; and prepare the annual Compensation Committee Report required by the rules of the SEC. The authority and responsibilities of the Compensation Committee include the following:
annually review and approve the objectives, evaluate the performance, and review and recommend the compensation of the Company’s Chief Executive Officer to the full BoardBoard’s independent directors, meeting in an executive session of independent directors.
review and approve the evaluation process and compensation structure for the Company’s executive officers and approve their annual compensation, including base salary, annual cash incentive and long-term equity incentives;
select appropriate peer companies against which the Company’s executive compensation is compared;
review incentive compensation and equity-based plans, and advise management and the Board of Directors on the design and structure of the Company’s compensation and benefits programs and policies, and to approve changes thereto, or to recommend changes to the Board;
administer and make awards under the Company’s stock option plans, and review and approve annual stock allocation under those plans;
monitor trends and best practices in director compensation and stock ownership guidelinespolicies, and recommend changes to the Board as it deems appropriate in accordance with Schlumberger’s Corporate Governance Guidelines;
monitor and review the Company’s overall compensation and benefits program design to ensureassess such programs’ continued competitiveness and consistency with established Company compensation philosophy, corporate strategy and objectives, and alignment with stockholder interests;
philosophy, corporate strategy and objectives, linkage of pay to performance, and alignment with stockholder interests, including any material risks of such programs; |
review and make recommendations to the Board regarding people-related strategies and initiatives, such as recruitment, retention and diversity management;
establish and administer stock ownership guidelinespolicies for executive officers and other key position holders;
review and discuss with the Company’s management the Compensation Discussion and Analysis (“CD&A”) required to be included in the Company’s annual proxy statement, and based on such review and discussion, to determine whether or not to recommend to the Board that the CD&A be included;
submit abe directly responsible for the appointment, compensation and oversight of the work of any consultants and other advisors retained by the Compensation Committee Report recommending to the Board that the CD&A be included in the Company’s annual proxy statement.
The Compensation Committee may delegate specific responsibilities to one or more individual committee members to the extent permitted by law, regulation, NYSE listing standards and Schlumberger’s governing documents. The design and day-to-day administration of all compensation and benefits plans and related policies, as applicable to executive officers and other salaried employees, are handled by teams of the Company’s human resources, finance and legal department employees.
Role of the Independent Consultant.The Compensation Committee has retained Pay Governance LLC (“Pay Governance”) as its independent consultant with respect to executive compensation matters. Pay Governance reports only to, and acts solely at the direction of, the Compensation Committee. Schlumberger’s management does not direct or oversee the activities of Pay Governance with respect to the Company’s executive compensation program. Pay Governance prepares compensation surveys for review by the Compensation Committee at its July and October meetings.meeting. One of the purposes of the JulyOctober meeting is to assess compensation decisions made in January of that year in light of comparative data to date; one of the purposesanother purpose of the October meeting is to prepare for the annual executive officer compensation review the following January. Pay Governance works with the Company’s executive compensation department to compare compensation paid to the Company’s executive officers with compensation paid for comparable positions at companies included in the compensation surveys conducted by Pay Governance at the direction of the Compensation Committee. Pay Governance and the Company’s executive compensation department also compile annual compensation data for each executive officer. The Compensation Committee has also instructed Pay Governance to prepare an analysis of each named executive officer’s compensation. The Compensation Committee has also retained Pay Governance as an independent consulting firm with respect to non-employee director compensation matters. Pay Governance prepares an analysis of competitive non-employee director compensation levels and market trends using the same peer groups as those used in the executive compensation review.
The Compensation Committee has assessed the independence of Pay Governance pursuant to SEC rules and has concluded that its work did not raise any conflict of interest that would prevent Pay Governance from independently representing the Compensation Committee.
Procedure for Determining Executive Compensation; Role of Management.The Compensation Committee evaluates all elements of executive officer compensation each January, after a review of achievement of financial and personal objectives with respect to the prior year’s results. The purpose is to determine whether any changes in the officer’s compensation are appropriate. The CEO does not participate in the Compensation Committee’s deliberations with regard to his own compensation. At the Compensation Committee’s request, the CEO reviews with the Compensation Committee the performance of the other executive officers, but no other executive officer has any input in executive compensation decisions. The Compensation Committee gives substantial weight to the CEO’s evaluations and recommendations because he is particularly able to assess the other executive officers’ performance and contributions to the Company. The Compensation Committee
independently determines each executive officer’s mix of total direct compensation based on the factors described in “Compensation Discussion and Analysis—Framework for Setting Executive Compensation in 2012—2015—Relative Size of Direct Compensation Elements.” Early in the calendar year, financial and personal objectives for each executive officer are determined for that year. The Compensation Committee may, however, review and adjust compensation at other times as the result of new appointments or promotions during the year.
The following table summarizes the approximate timing of significant compensation events:
Event | Timing | |
Establish Company financial | January of each fiscal year for current year, though for 2015 the objectives were established in January for the first half of the year and in July for the second half of the year | |
Establish | Early in the first quarter of the fiscal year for current year and finalized during April | |
Perform competitive assessment to determine how Schlumberger’s compensation decisions compared to decisions made by companies included in the compensation surveys | ||
Independent compensation consultant provides analysis for the Compensation Committee to evaluate executive compensation | October of each year for compensation in the following fiscal year | |
Evaluate Company and executive performance (achievement of objectives established in previous fiscal year) and recommend incentive compensation based on those results | Results approved in January of each fiscal year for annual cash incentive compensation with respect to prior year. The incentive earned in prior fiscal year is paid in February of the current fiscal year. | |
Review and recommend executive base salary and determine equity-based grants | January of each fiscal year for base salary for that year and for equity-based grants |
The Compensation Committee operates pursuant to a written charter, which is available on the Company’s website at http://www.slb.com/about/guiding_principles/corpgovernance/compensation_committee.aspx.
Nominating and Governance Committee
The Nominating and Governance Committee consists of fivefour directors, each of whom meets the independence requirements of the NYSE’s listing standards. The authority and responsibilities of the Nominating and Governance Committee include the following:
lead the search for individuals qualified to become members of the Board;
evaluate the suitability of potential nominees for membership on the Board;
periodicallyrecommend to the Board the number and names of director nominees at the next annual general meeting of stockholders and to propose director nominees to fill any vacancies on the Board;
recommend to the Board the number and names of proposed nominees for election as director at the annual meeting of stockholders and, in the case of a vacancy on the Board, the name of an individual to fill the vacancy;
consider the resignation of a director who has changed his or her principal occupation or employer, and inform the Board as to whether or not the Nominating and Governance Committee recommends that the Board accept the resignation;
review the direct and indirect relationships of members of the Board with the Company or its management and assist the Board with its determination of the independence of its members;
monitor trends, changes in law and NYSE listing standards, as well as best practices in corporate governance, and to periodically review the Company’s Corporate Governance Guidelines and recommend changes as it deems appropriate in those guidelines, in the corporate governance provisions of the Company’s By-Laws and in the policies and practices of the Board;
perform the functionsBoard in light of the Committee under the Company’s Policysuch trends, changes and best practices as appropriate;
quarterly review the Company’s Ethics and Compliance Program;
annually review and make recommendations to the Board regarding its process for evaluating the effectiveness of the Board and its committees;
oversee the annual assessmentevaluation of Board effectiveness and report to the Board;
periodicallyannually review and make recommendations to the Board regarding new director orientation and director continuing education;
annually recommend to the Board committee membership and chairs, and review periodically with the Board committee rotation practices;
approve the membership of any Schlumberger executive officer on another listed company’s board, and receive timely information from non-employee directors of any new listed company board to which they have been nominated for election as director and of any change in their existing status as director on any other listed company board; and
advise the Board on succession planning.
The Nominating and Governance Committee operates pursuant to a written charter, which is available on the Company’s website at http://www.slb.com/about/guiding_principles/corpgovernance/nomgov_committee.aspx.
Finance Committee
The Finance Committee advises the Board and management on various matters, including dividends, financial policies and the investment of funds. The authority and responsibilities of the Finance Committee include the following:
recommend investment and derivative guidelines for the cash and currency exposures of the Company and its subsidiaries;
review the actual and projected financial situation and capital needs of the Company as needed, regarding:
the capital structure of the Company, including the respective level of debt and equity, the sources of financing and equity and the Company’s financial ratios and credit rating policy;
the Company’s dividend policy; and
the issuance and repurchase of Company stock;
review the insurance principles and coverage of the Company and its subsidiaries, as well as financing risks, including those associated with currency and interest rates;
oversee the investor relations and stockholder services of the Company;
review the financial aspects of any acquisitions submitted to the Board and, as delegated to the Finance Committee by the Board, review and approve any acquisitions covered by such delegation;
review the administration of the employee benefit plans of the Company and the performance of fiduciary responsibilities of the administrators of the plans; and
function as the Finance Committee for pension and profit-sharing trusts as required by U.S. law.
The Finance Committee operates pursuant to a written charter, which is available on the Company’s website at http://www.slb.com/about/guiding_principles/corpgovernance/finance_committee.aspx.
Science and Technology Committee
The Science and Technology Committee advises the Board and management on matters involving the Company’s research and development programs. The authority and responsibilities of the Science and Technology Committee include the following:
review, evaluate and advise the Board and management regarding the long-term strategic goals and objectives and the quality and direction of the Company’s research and development programs;
review and advise the Board and management on the Company’s major technology positions and strategies relative to emerging technologies and changing market requirements;
monitor and evaluate trends in research and development, and recommend to the Board and management emerging technologies for building the Company’s technological strength;
recommend approaches to acquiring and maintaining technology positions;
advise the Board and management on the scientific aspects of major acquisitions and business development transactions; and
assist the Board with its oversight responsibility for enterprise risk management in areas affecting the Company’s research and development.
The Science and Technology Committee operates pursuant to a written charter, which is available on the Company’s website at http://www.slb.com/about/guiding_principles/corpgovernance/tech_committee.aspx.
The Board has established a process for all interested parties, including stockholders and other security holders, to send communications, other than sales-related communications, to one or more of its members, including to the independent or non-management directors as a group. Interested parties may contact the Board or any Schlumberger director (including the Chairman of the Board) by writing to them at the following address:
Schlumberger Limited
c/o the Secretary
5599 San Felipe, 17th Floor
Houston, Texas 77056
All such communications will be forwarded to the Board member or members specified.
Director Attendance at Annual General Meeting
The Board’s policy regarding director attendance at the annual general meeting of stockholders is that directors are welcome, but not required, to attend, and that the Company will make all appropriate arrangements for directors who choose to attend. None of the directorsTony Isaac attended the annual general meeting of stockholders in 2012, which was held in Curaçao as required by Curaçao law.2015.
Policies and Procedures for Approval of Related Person Transactions
In January 2007, the Board formally adopted a written policy with respect to “related person transactions” to document procedures pursuant to which such transactions are reviewed, approved or ratified. Under SEC rules, “related persons” include any director, executive officer, director nominee, or greater than 5% stockholder of the Company since the beginning of the previous fiscal year, and their immediate family members. The policy applies to any transaction in which:
the Company is a participant;
any related person has a direct or indirect material interest; and
the amount involved exceeds $120,000, but excludes any transaction that does not require disclosure under Item 404(a) of SEC Regulation S-K.
The Nominating and Governance Committee, with assistance from the Company’s Secretary and General Counsel, is responsible for reviewing and, where appropriate, approving or ratifying any related person transaction involving Schlumberger or its subsidiaries and related persons. The Nominating and Governance Committee approves only those related person transactions that are in, or are not inconsistent with, the best interests of the Company and its stockholders.
In 2012,Since the beginning of 2015, there were no related person transactions under the relevant standards.
Corporate Governance Guidelines and Code of EthicsConduct
Copies of Schlumberger’s Corporate Governance Guidelines and Schlumberger’sSchlumberger has adopted a Code of Ethics are available at the Company’s corporate governance websiteConduct that applies to all of its directors, officers (including its chief executive officer, chief financial officer, chief accounting officer, controller and any person performing similar functions) and employees. Our Code of Conduct is located at http://www.slb.com/about/guiding_principles.aspx.codeofconduct.aspx.
ITEM 2. ADVISORY RESOLUTION TO APPROVE EXECUTIVE COMPENSATION
We are asking stockholders to approve, on an advisory basis, the Company’s executive compensation as reported in this proxy statement. As described below in the “Compensation Discussion and Analysis” section of this proxy statement, the Compensation Committee has structured our executive compensation program to achieve the following key objectives:
to attract, motivate and retain talented executive officers;
to motivate progress toward Company-wide financial and personal objectives while balancing rewards for short-term and long-term performance; and
to align the interests of our executive officers with those of stockholders.
We urge stockholders to read the “Compensation Discussion and Analysis” beginning on page 2120 of this proxy statement, which describes in more detail how our executive compensation policies and procedures operate and are designed to achieve our compensation objectives, as well as the Summary Compensation Table and other related compensation tables and narrative, appearing on pages 3946 through 53,62, which provide detailed information on the compensation of our named executive officers. The Compensation Committee and the Board of Directors believe that the policies and procedures articulated in the “Compensation Discussion and Analysis” are effective in achieving our goals and that the compensation of our named executive officers reported in this proxy statement has contributed to the Company’s recent and long-term success.
In accordance with Section 14A of the Exchange Act, and as a matter of good corporate governance, we are asking stockholders to approve the following advisory resolution at the 20132016 annual general meeting of stockholders:
RESOLVED, that the stockholders of Schlumberger Limited (the “Company”) approve, on an advisory basis, the compensation of the Company’s named executive officers disclosed in the Compensation Discussion and Analysis, the Summary Compensation Table and the related compensation tables, notes and narrative in the Proxy Statement for the Company’s 20132016 annual general meeting of stockholders.
This advisory resolution, commonly referred to as a “say-on-pay” resolution, is non-binding on the Board of Directors. Although non-binding, the Board and the Compensation Committee will review and consider the voting results when making future decisions regarding our executive compensation program.
The Board of Directors has adopted a policy providing for an annual “say-on-pay” advisory votes.vote. Unless the Board of Directors modifies its policy on the frequency of holding “say-on-pay” advisory votes, the next “say-on-pay” advisory vote will occur in 2014.2017.
Required Vote
A majority of the votes cast is required to approve this Item 2.BrokersIf you hold your shares in “street name,” please note that brokers do not have discretion to vote on this proposal without your instruction. If you do not instruct your broker how to vote on this proposal, your broker will deliver a non-vote on this proposal.
Recommendation of the Board
The Board of Directors Recommends a Vote FOR Item 2.
COMPENSATION DISCUSSION AND ANALYSIS
The following Compensation Discussion and Analysis (“CD&A”) describes Schlumberger’s compensation policies and practices as they relate to our executive officers identified in the Summary Compensation Table below (the “named executive officers” or the “NEOs”). The purpose of the CD&A is to explain what the elements of compensation are; why our Compensation Committee selects these elements; and how the Compensation Committee determines the relative size of each element of compensation. Included in this CD&A are decisions made in 20122015 affecting 20122015 base salaries and long-term equity incentives (“LTIs”), as well as annual cash incentive awards earned in 20122015 but paid in February 2013.early 2016.
20122015 Executive Summary
2012 Overview
Schlumberger delivered strong financial results despite the difficult operating environment throughout the oil and gas industry in 2012, with all three2015. Highlights of our Product Groups recording double-digit revenue growth amid an uncertain and challenging world macroeconomic environment. Highlights of our2015 performance include:
we had record full-year revenue of $42.15$35.5 billion despite the worst industry downturn since the mid-1980’s;
international revenue grew by $4 billion, or 16%;
North America revenue grew by 9% over 2011, a result of strong offshore activity in the Gulf of Mexico amid a challenging land market; and
we increased our annual dividend per share by 10% in 2012, from $1.00 per share to $1.10 per share, and returned approximately $2.4$4.6 billion to our stockholders in 2012 through dividends and stock repurchases.
Schlumberger management also took several other key operational, strategic, and economic measures in 20122015 to continue to better position the Company for the long-term. Schlumberger’s executivesSchlumberger achieved the following goals, among others, many of which were also aligned with their individualour executives’ personal objectives:
in November 2012, Schlumberger entered intowe continued our series of transformational initiatives to improve global productivity, increase manufacturing efficiency, reduce fixed costs and streamline the Company, all to leverage both our size and breadth of our offerings to generate a key strategic agreement with Cameron International Corporation with respectfurther competitive advantage;
continuing Schlumberger’swe continued our technology leadership by investing approximately $1.2$1.1 billion in research and engineering;engineering.
Relative Stock Price Results
As of the end of 2015, despite the intense decline in customer capital expenditures and the sharpest decline in land activity since 1986, our management team has positioned Schlumberger very strongly over the past three years relative to market conditions and other participants in our industry. The graph below shows the significant percentage change in the market price of our common stock relative to the WTI price of crude oil and the Philadelphia Oil Service Sector (“OSX”) over the last three years.
retaining valuable technical employees;
Schlumberger’s stock price increased by 70% between December 31, 2012 and
continuing June 30, 2014, compared to implement mechanisms necessaryan increase of 14% for the WTI price of crude oil and an increase of 41% for the OSX over the same period. We then maintained our gains relative to keep coststhese two market indicators, as our stock price declined only 40% between June 30, 2014 and December 31, 2015, compared to a decrease of 64% for the WTI price of crude oil and a decrease of 49% for the OSX over the same period. Oil prices ultimately reached a 12-year low in line with activity.December 2015.
Executive Compensation Program Overview
Schlumberger’sSchlumberger is the world’s largest oilfield services company and the only such company included in the S&P 100 Index. The Company’s success in delivering strong long-term stockholder returns and financial and operational results is a result of attracting, developing and retaining the best talent globally. A highly competitive compensation package is critical to this objective and, to this end, the Compensation Committee generally seeks to compensatetarget total direct compensation (i.e., base salary plus annual cash incentives plus LTI awards) for our namedNEOs and other executive officers betweenat or very close to the 50th and 75th percentilespercentile of the Company’s two main executive compensation peercomparator groups. This rangeIn the view of the Compensation Committee, the 75th percentile is the proper level to target because of Schlumberger’s leading position in the oilfield services industry; because the market for executive talent in the oil and gas industry is exceptionally competitive; and because our executives are very highly sought after, not only a guide, and theby our direct oilfield service competitors but also by other leading companies.
The Compensation Committee retains the flexibility to set elements of target compensation at higher percentiles forbased on strong business performance, for retention, for key skills in critical demand, and for positions that are of high internal value. The Committee also may pay above the 75th percentile for performance that significantly exceeds the Company’s and an individual’s goals, or for purposes of retention, motivation or reward. Elements of our executives’ total direct compensation and actual payments may also be below our main comparator groups’ median as a result of our pay-for-performance philosophy, as discussed below with respect to the Company’s annual cash incentive.below.
Our executive compensation program is multi-faceted and is designed to achieve a number of goals, as detailed in this CD&A. Executive Compensation Best Practices
The following is a summary of some of our executive compensation practices and policies that demonstrate important aspects of Schlumberger’sour culture and values.
The primary elements of our compensation program are base salary; annual cash incentive, which is based upon performance against pre-established financial and individual goals; and long-term equity incentives.
A significant portion of executive pay is in the form of variablelong-term equity compensation that is at risk, in order to align executive compensation with the Company’s business strategy and create long-term stockholder value.
We maintain no employment, severance or change-in-control agreementsThe primary elements of our compensation program for our named executive officers.
We have a compensation recovery, or “clawback,” policy that allows our Board to recoup performance-based cash awards in the event of specified restatements of financial results.
Executives are offered very limited perquisites and do not participate in any executive pension or insurance plans other than those providing supplemental benefits (available to all eligible employees) to cover income that exceeds regulatory limits.
Summary of Executive Compensation Practices We Do Not Engage in
The following is a summary of some of the executive compensation practices we do not engage in.
We haveEquity awards granted to our NEOs since October 2010 do not provide for automatic acceleration upon a compensation recovery, or “clawback,” policy that allows our Boardchange in control, and provide for the same rights on a termination following a change in control as apply prior to recoup performance-based cash awardsa change in control. The only rights to vesting on termination are provided in the event of specified restatements of financial results.
Our executive officers have no employment, severance or change-in-control agreements, except for—agreements entered into in connection with phased retirement.
CommencingOur directors and executive officers are prohibited from pledging, or using as collateral, their Schlumberger stock in 2013, we will be granting performance stock unitsorder to certainsecure personal loans or other obligations, which includes holding shares of our executive officers, including our named executive officers.
Overview of Compensation Decisions for 20122015
The main elements and goals of Schlumberger’s executive compensation program did not change from fiscal year 2011. The Compensation Committee continued to focus on achievingstrengthening the right mixlink between pay and level of compensationperformance to retain and motivate our top executives through a year that was marked by uncertain business conditions.
The following are some actions taken byupstream capital expenditure spending cuts that resulted in significantly lower E&P investment levels. As a result, and as more fully discussed elsewhere in this CD&A, the Compensation Committee took the following actions in 2012:2015:
Payout of the EPS component of the financial half of the annual cash incentive in February 2013 for performance in 2012the first six months of 2015 was 85%74% of target, and payout for the second six months of 2015 was 88% of target. Payout of the relative performance incentive was 175%. These combined for an average payout of 128.1% under the financial half of the 2015 annual cash incentive, well below the maximum 300% potential payout.
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Executive Compensation Philosophy
In keeping with the Company’s pay-for-performance culture, Schlumberger’s long-standing compensation philosophy is to pay senior executives and other professional-level employees for performance that is evaluated against personal and Company financial goals that are established atas described below in the beginning of the calendar year and reviewed at the end of the year against actual performance.section entitled “—Annual Cash Incentive Decisions for 2015.” Schlumberger’s compensation program is driven by the need to
recruit, develop, motivate and retain top talent, both in the short-term and long-term, by establishing compensation at levels that areis competitive and to promoteby promoting the Company’s values of people, technology and profitability. Promotion from within the Company is a key principle at Schlumberger, and all executive officers, including the named executive officers, have reached their current positions through career development with the Company. Schlumberger sees diversity of its work forceworkforce as both a very important part of its cultural philosophy and a business imperative, as it enables the Company to serve clients anywhere in the world. Schlumberger believes its use of a consistent approach to compensation at all levels irrespective of nationality is a strong factor in achieving a diverse workforce comprising top global talent. While the amount of compensation may be different, the components of a professional-level employee’s compensation package are the same and are applied using broadly the same methodology. Exceptions to this principle are generally due to local (i.e., country-specific) requirements.
Schlumberger’s compensation program is designed so that the higher an executive’s position in the Company, the larger the proportion of compensation that is contingent on positivestrong long-term stock price performance, the Company’s financial performance and/or individual performance, described as “at-risk” compensation. The Company believes that having a significant portion of executive compensation at-risk more closely aligns the interests of its executives with the long-term interests of Schlumberger and its stockholders. Accordingly, our named executive officers receive a greater percentage of their compensation through at-risk pay tied to Company performance than our other executives.
Schlumberger’s executive compensation program consists of three primary elements, comprising theour executives’ total direct compensation:
base salary;
annual cash incentives, based upon Company and individual performance; and
long-term equity incentives.
These elements allow the Company to remain competitive and attract, retain and motivate top executive talent with current and potential future financial rewards. At the same time, this relatively simple compensation program is applied and communicated consistently to our exempt employees of more than 140 nationalities workingoperating in approximately 80 countries globally.85 countries.
Framework for Setting Executive Compensation in 2012
Executive Compensation Goals
In establishing executive compensation, Schlumberger believes that:
compensation and benefits should be competitive with peer companies that compete with the Company for business opportunities and/or executive talent;
annual cash incentive awards should reflect progress toward Company-wideCompany financial and personal objectives;
stock option awards should encourage the creation of long-term stockholder value;
the Company’s policies should encourage executives to hold stock through stock optionequity-based awards and stock ownership guidelines that align their interests with those of our other stockholders.
Management of Executive Compensation
The Compensation Committee reviews and recommends our chief executive officer’s compensation to the independent members of Schlumberger’sthe Board of Directors and reviews and recommendsapproves the compensation of our other executive officer compensation.officers. The specific duties and responsibilities of the Compensation Committee are described in the section of this proxy statement entitled “Corporate Governance—Board Committees—Compensation Committee” above.
Role of Compensation Consultant
The Compensation Committee has engaged the independent executive compensation consulting firm of Pay Governance LLC with respect to executive compensation matters. For more information on this engagement, see the section of this proxy statement entitled “Corporate Governance—Board Committees—Compensation Committee” above.
Relative Size of Direct Compensation Elements
The Compensation Committee reviews the elements of total direct compensation for the NEOs throughout the year, to evaluate whether each element of direct compensation remains at levels that are competitive with companies in Schlumberger’s two main peer groups described below. The Compensation Committee relies on its own judgment in making these compensation decisions after its review of external market practices of companies comprising the two peer groups, including the size and mix of direct compensation for executives in those companies. The Compensation Committee seeks to achieve an appropriate balance between annual cash rewards that encourage achievement of annual financial and non-financial objectives, and long-term equity incentiveLTI awards that encourage positive long-term stock price performance, with a greater emphasis on long-term equity incentivesLTI awards for more senior executives. However, the Compensation Committee does not aim to achieve a specific target of cash versus equity-based compensation.
While the external market data provide important guidance in making decisions on executive compensation, the Compensation Committee does not set compensation based on market data alone. When determining the size and mix of each element of an NEO’s total direct compensation, the Compensation Committee also considers the following factors:
the size and complexity of the executive’s scope of responsibilities;
leadership;leadership, management and technical expertise;expertise, performance history;history, growth potential, and position in reporting structure;
overall Company and individual performance;
retention needs;
the recommendations of the CEO (except for his own compensation); and
internal pay equity.
TheBased on market data provided by Pay Governance, the charts below show the average percentage of 20122015 base salary, target cash incentive and 20122015 LTI compensation established by the Compensation Committee in January 20122015 for the NEOs who served throughout 2015, in comparison to the Company’s two external peer groups, based on findings from Pay Governance, andmain comparator groups. The charts demonstrate that Schlumberger’s pay mix is close togenerally aligns with that of both peer groups.groups, though Schlumberger provides a slightly higher proportion of at-risk LTI compensation. This data is based on target opportunity levels and will differ from the total compensation figures shown in the Summary Compensation Table.
The Compensation Committee may, at its discretion, modify thean NEO’s mix of base pay, annual cash incentive and LTIs, or otherwise adjust an NEO’s total compensation, to best fit his or her specific circumstances. For example, the Committee may award more cash and not award a stock optionan LTI grant to an executive officer whothat is approaching retirement. This provides more flexibility to the Committee to compensate executive officers appropriately as they near retirement, when they may only be able to partially fulfill the five-year vesting
required for stock options.options or retire prior to the end of a three-year performance period for PSUs. The Committee may also increase the size of stock option grants to an executive officer if the total number of career stock options granted does not adequately reflect the executive’s current position and level of responsibility within the Company, after a review of external market practice and the other factors described immediately above.
Pay-for-Performance Relative to Oil Industry Peer Group
As part of the Compensation Committee’s annual review of our executive compensation program, the Committee in July 2015 directed Pay Governance to prepare a comparative pay-for-performance assessment in July 2012 against companies in theour oil industry peer group on a year-over-year (2011) basis.as identified in the “Peer Group Companies and Benchmarking” section below. The comparative assessment comparedexamined the actual annual cash incentive paid for 2011degree of alignment between our NEOs’ compensation and our performance relative to named executive officers of these companies as measured by total shareholder return (“TSR”) and EPS, each on a percentage of their target annual cash incentive, against the actual annual cash incentive paidone-year (2014) and a three-year (2012-2014) basis, and in both cases ending on December 31, 2014. TSR reflects share price appreciation, adjusted for Schlumberger’s NEOs, as a percentage of their target. These results were then compared with net income growth, revenue growth,dividends and stock splits. EPS represents diluted earnings per share (EPS) growthfrom continuing operations, excluding charges and total shareholder return (TSR), for Schlumberger and such other companies, over full-year 2011. Incredits.
For its one-year analysis, the Compensation Committee reviewed the 2011 actual cash incentive paid in 2014 to our CEO against actual cash incentive paid in 2014 to other CEOs in companies comprising the oil industry peer group. It then separately reviewed cash incentive paid to Schlumberger’s other named executive officers for 2014 against cash incentive paid over the same period to non-CEO named executive officers in companies comprising the oil industry peer group. The Committee deemed it appropriate to restrict its review to the cash incentive component of total direct compensation for purposes of the one-year analysis, given the relatively short period under review.
For its three-year analysis, the Compensation Committee reviewed the 2012-2014 total realizable compensation of Schlumberger’s CEO against other CEOs in companies comprising the oil industry peer group.
It then separately reviewed Schlumberger’s other executive officers against other executive officers in companies comprising the oil industry peer group.
Pay Governance’s analysis demonstratedgroup; however, information regarding total realizable compensation of the second- through fifth-highest paid officers at the non-United States companies that Schlumberger’s 2011 EPS growth and TSR both were at approximately the 25th percentile ofare included in the oil industry peer group (e.g., BG Group, BP plc, Eni SpA, Royal Dutch Shell and Total) was not available. As a result, our NEOs’ total realizable compensation (other than that its net income growthof our CEO) was slightly above the 40th percentile. Revenue growth year-over-year wascompared only against total realizable compensation of named executive officers at the 97th percentile ofUS-incorporated companies in the oil industry peer group largely due to acquisitions by(for which data was available).
“Total realizable compensation” for the Company in 2010. The analysis also demonstrated thatthree-year period consisted of the following:
Because the one- and two-year PSUs that were between 104% and 111% of our other NEOs’ target cash bonus opportunities,granted in January 2013 were generallyspecial (one-time) transition awards granted only in the lower one-thirdyear of the oil industry peer group. The average cash incentive payout for all NEOs as a group (including the CEO) was at the 28th percentile of the oil industry peer group, which was very closely aligned with Schlumberger’s one-year TSR and EPS growth, being at approximately the 25th percentile. Over three years (annualized), Schlumberger’s relative performance was also generally consistent with its one-year results for net income and revenue growth, while relative EPS improved from the bottom quartile of the oil industry peer group during the one-year periodtransition to the third quartile of the oil industry peer group overPSUs, the three-year (annualized) period,analysis was conducted both with and TSR was dramatically higher overwithout these one-time awards taken into account.
Pay Governance’s analysis demonstrated the three-year (annualized) period (75th percentile of the oil industry peer group) than over the one-year period (25th percentile of the oil industry peer group). following:
One-Year (2014) SLB Performance | One-Year SLB Cash Incentive Payout (%) | |||||
•TSR: | 52nd percentile in oil industry group | •CEO: | 62nd percentile in oil industry group | |||
•EPS Growth: | 43rd percentile in oil industry group | •Other NEOs: | 56th percentile in the US companies in the oil industry group | |||
Three-Year (2012-2014) SLB Performance | Three-Year SLB Total Realizable Compensation (%) | |||||
•Cumulative TSR: | 71st percentile in oil industry group | Excluding Transitional PSUs: | ||||
•Cumulative EPS Growth: | 86th percentile in oil industry group | •CEO: | 52nd percentile in oil industry group | |||
•Other NEOs: | 44th percentile in the US companies in the oil industry group | |||||
Including Transitional PSUs: | ||||||
•CEO: | 71st percentile in oil industry group | |||||
•Other NEOs: | 63rd percentile in the US companies in the oil industry group |
Based on all of the foregoing, the Compensation Committee concluded that pay and performance were appropriately aligned as follows:
Pay Mix and Internal Pay Equity Review
In January 2012,2015, the Compensation Committee carried out an analysis of pay mix and internal pay equity. In carrying out its analysis, the Committee considered the relative size of direct compensation elements of companies in Schlumberger’s two peermain comparator groups, as well as internal factors. RegardingWith regard to pay mix, the Committee also reviewed the elements of compensation for the Company’s executive officers, including the NEOs, both in relation to each other and in comparison with the average pay mix of the Company’s executive officers. Based on its review, the Committee concluded that the mix of base salary, incentive cash bonus and LTI was appropriate for each of Schlumberger’s executive officers, including the NEOs.
The Compensation Committee also reviewed internal pay equity in October 2012.2015. The Committee reviewed the CEO position in relation to the other executive officer positions, and the executive officer positions both in relation to one another and in comparison with the average of the other executive officer positions. The Committee noted that the ratio of total direct compensation between the CEO and the second-highest paid executive officer (Mr. Ayat) was similar to that in the yearthree prior to the CEO transition.years. The Committee also noted that
the levels of total direct compensation for the second-third to the fifth-highest paid officers were very closely clustered together.together, consistent with their relative positions within the Company. As a result of the foregoing, the Committee concluded that internal pay equity was appropriate.
Peer Group Companies and Benchmarking
The Compensation Committee refers toconsiders the formal executive compensation surveyssurvey data prepared by Pay Governance when it reviews and determines executive compensation. The Committee also uses information on the executive compensation practices at various “peer group” companies when considering design changes to the Company’s executive compensation program. To prepare for its executive compensation analysis, the Company’s executive compensation department works with Pay Governance to match Company positions and responsibilities against survey positions and responsibilities and to compile the annual compensation data for each executive officer.
The surveys indicateCompany has two main executive compensation peer groups, the oil industry and general industry peer groups (our “main comparator groups”). Beginning in October 2013, the Compensation Committee approved the addition, as described below, of two new peer groups, which remained effective for 2015 compensation decisions as to a very small number of executive officers, only one of which — our EVP Technology — is an NEO. The 2015 compensation of our EVP of Technology was not determined by reference to our two main comparator groups, but to these two new comparator groups.
The survey data prepared by Pay Governance summarize the compensation levels and practices of our two main comparator groups ofand the two additional peer companies:groups. These four comparator groups are made up of:
thean oil industry peer group which includescomprised of companies in the oil services, exploration and production (“E&P”), refining and pipeline industries, andwith annual revenues greater than $15 billion (one of our two main comparator groups);
thea general industry peer group which includescomprised of large companies with significant international operations.operations (the other of our two main comparator groups);
A different comparator peer group is used for the 2015 relative performance component of the annual cash incentive, and is described below in “—Annual Cash Incentive Decisions for 2015—2015 Relative Performance Incentive (RPI).”
The Compensation Committee’s selection criteria for companies comprising the twofour peer groups include:
competition for executive talent;
revenue and market capitalization;
global presence and scope of international operations;operations (except for the lower-revenue oil industry peer group); and
companies viewed as leaders in their industry.
The Committee, with the assistance of Pay Governance, twice annually reviews specific criteria and recommendations regarding companies to add to or remove from the two comparator groups. As a general matter, the Company selects suitable comparator companies such that companies in each of our two main comparator groups, at the median, approximate Schlumberger’s estimated revenue in the then-current year and its then-current market capitalization. The Compensation Committee modifies the peer group criteria as appropriate while seeking to ensure a satisfactory degree of stability, to provide a consistent basis for comparison. ChallengesA challenge facing the Company in determining the companies appropriate for inclusion in each peer group included the Company’s acquisitions in 2010 of Smith International, Inc. and Geoservices and its significant growth over that period;our two main comparator groups for 2015 executive compensation decisions was the Company’s relatively high market capitalization, and revenue (renderingrendering it difficult to position the Company inSchlumberger at the median of each peer group with respect to both attributes); and the difficulties of obtaining sufficient compensation data for all benchmarked positions.group.
Oil Industry Peer Group
The higher-revenue oil industry peer group comprises companies in the oilfield services, explorationoil and production,gas E&P, refining and pipeline industries.industries with annual revenues greater than $15 billion. Because of Schlumberger’s significant international operations, the Compensation Committee approved the inclusion ofthis peer group includes non-U.S. energy and energy-related companies that also metmeet the criteria set forth above.
The Compensation Committee included oil exploration and production (“includes E&P”)&P companies in this peer group after consideration ofbased on a number of factors. First, because Schlumberger is significantly larger than all of its direct competitors in the oilfield services industry in terms of revenue and market capitalization, the Compensation Committee believedbelieves that the addition of E&P companies provides a more appropriate and complete comparator group. In addition, the Committee believedbelieves that the inclusion of E&P companies wasis appropriate because market consolidation hadhas reduced the number of direct competitors in the oilfield services industry, thus increasing the prominence of E&P companies as competitors for executive talent.
In April 2011,July 2014, the Compensation Committee reviewed the companies constituting our two main comparator groups based on the criteria set forth above. At the time of its review, Schlumberger’s 2014 revenue was forecast to be approximately $49 billion. Applying the selection criteria set forth above, the Compensation Committee approved the following changes inremoval of Murphy Oil Corporation from the oil industry peer group due to its
significant asset divestitures resulting in annual revenues less than $15 billion, effective for 20122015 compensation decisions:
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In August 2010, we acquired Smith and in April 2010 Baker Hughes Incorporated acquired BJ Services Company. Both Smith and BJ Services were part of our oil industryadded to or removed from this peer group and were removed as a result of the acquisitions. In balancing the attributes sought for the oil industry peer group, the Compensation Committee added National Oilwell Varco.
group. As a result of the foregoing:
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Schlumberger was in the 48th percentile of the oil industry peer group in terms of revenue, and in the 71st percentile of that peer group in terms of market capitalization, and
The following companies comprisedwere included in the oil industry peer group effective for 2012relevant 2015 compensation decisions:
Higher-Revenue Oil Industry Peer Group
Oil services, E&P, refining and pipeline companies with annual revenue of more than $15B
• | • Baker Hughes | • BG Group | • BHP Billiton | • BP plc | ||||
| ||||||||
• Chevron |
| • ConocoPhillips | • Eni SpA | |||||
• Enterprise Products Partners | • Exxon Mobil | |||||||
• Halliburton | • Hess | • Marathon |
| |||||
• National Oilwell Varco | • Occidental Petroleum | |||||||
• Phillips 66 | • Royal Dutch | • | • | |||||
| • Valero | |||||||
• Weatherford |
General Industry Peer Group
The general industry peer group provides data from large companies with significant international operations, and supplements the compensation data from the oil industry peer group, whose companies are closer to Schlumberger in industry type but have widely varying revenue sizes. The general industry peer group group:
The Compensation Committee also considers data from the second peer group as it deems necessary or advisable to the extent that data from the first peer group may not exist, or may be insufficient, for some executive officer positions. The second group is also particularly relevant for non-operations positions, where the skills and experience may be easily transferable to other industries outside the oil and gas industry.
In April 2011,July 2014, the Compensation Committee, applying the selection criteria set forth, approved the following changes inremoval of four companies — Dell Inc., Xstrata, Abbott Laboratories and Nokia — from the general industry peer group, effective for 20122015 compensation decisions:
following reviewdecisions. The removal of how Schlumberger comparedeach of these companies was due to peerstheir ceasing to be a public reporting company or being no longer in termsa sufficiently relevant industry. Additionally, in light of size asthe removal of these companies and applying the criteria set forth above, Fluor Corporation was added to the general industry peer group. No other companies were added to or removed from this peer group. As a result of acquisitions by the Company in 2010 and relative changes in market capitalization,foregoing:
as a result of the foregoing change, the number of constituent companies increased to 44, with newly-added companies denoted in the table below.
When approving the April 2011 increase in the general industry revenue range, the Compensation Committee considered that, with the then-current revenue range of $25 billionpeer group decreased from 49 to $50 billion approved in September 2010, the Company would have been in the 45th percentile based on projected 2011 full-year revenue
and above the 90th percentile based on projected 2011 market capitalization. In approving the increase in the general industry revenue range, the Committee also noted that keeping the bottom band of the revenue range at $25 billion, while increasing the top band of the revenue range to $80 billion, would place Schlumberger near the 40th percentile in terms of projected 2011 revenue, and at the 87th percentile in terms of projected 2011 market capitalization.
In connection with the changes described above, the Compensation Committee selected theThe following companies forcomprised the general industry peer group effective for 2012:relevant 2015 compensation decisions:
General Industry Peer Group
RevenueAnnual revenue of $25B to $80B$90B with technical and global focus
• | • | • | • Alstom | • Amazon.com | ||||||
• Anglo American | • Archer Daniels | • AstraZeneca PLC | • | • | ||||||
• |
| • Caterpillar Inc. | • Cisco Systems | • | • Compagnie de Saint-Gobain | |||||
• | • | • Dow Chemical | • E.I. Dupont de Nemours | • | ||||||
• | • General Dynamics | • GlaxoSmithKline | • | • | ||||||
• Intel | • International Paper | • Johnson Controls | • Johnson & | • |
| |||||
• | • | • | • Novartis AG | • | ||||||
• PepsiCo, Inc. | • Pfizer | • Procter & | • Raytheon | • Rio Tinto plc | ||||||
• Roche Holding AG | • Sanofi | • Schneider Electric | • Unilever | • United Technologies | ||||||
• UPS |
* | Added to the group for 2015 executive compensation decisions. |
Additional Peer Groups for Select Positions
As stated above, in October 2013, the Compensation Committee approved the addition of two new peer groups for 2014, which remained effective for certain 2015 compensation decisions. These peer groups were added to address select executive officer positions for which the Committee believed executive compensation data was no longer available or insufficient among the two main comparator groups.
The two additional peer groups serve as an additional point of reference for the Committee, given the scope and level of responsibility of executive positions as to which the Committee requires additional compensation data. Prior to the introduction of these two peer groups, the Committee had determined that select executives who held very senior positions within the Company (including our EVP Technology) could, by virtue of their leadership experience and professional background at Schlumberger, become chief executives of other, smaller companies in the oil and gas industry.
As a result, the Committee believed that it was appropriate, when reviewing and setting the compensation of our EVP Technology and other select executives for 2015, also to compare their total direct compensation against those of chief executive officer positions at smaller oil and gas companies with then-current annual revenues between $2.5 billion and $10 billion.
In addition, the Committee determined that it was appropriate to compare the compensation of our EVP Technology against that of the top R&D executives at other companies in the S&P 500 with R&D expenditures, at the median, very close to Schlumberger’s R&D expenditures. As a result, the 2015 compensation of our EVP Technology was not determined by reference to our two main comparator groups, but to these two comparator groups.
Lower-Revenue Oil Industry Peer Group
The lower-revenue oil industry peer group, introduced in October 2013, comprises smaller companies in the oilfield services, oil and gas E&P, refining and pipeline industries, with annual revenues between $2.5 billion and $10.0 billion. Among our NEOs, this peer group is relevant only for the compensation of our EVP Technology.
In October 2014, the Compensation Committee, upon review of the criteria for the lower-revenue oil industry peer group, decided not to add to, or remove any companies from, this peer group, with the result that the following 18 companies formed this peer group effective for relevant 2015 compensation decisions:
Smaller Oil Industry Companies
Oil services, E&P, refining and pipeline companies with annual revenue between $2.5B and $10.0B
• AMEC plc | • Cameron International | • CGG-Veritas | • Diamond Offshore Drilling | • Dresser-Rand Group Inc. | ||||
• | • | • FMC Technologies | • Helmerich & Payne, Inc. | • John Wood Group plc | ||||
• McDermott International | • Noble Corp. | • Oceaneering International | • Oil States International | • Patterson-UTI Energy | ||||
• SBM Offshore | • Subsea 7 SA | • Superior Energy Services |
R&D Focused Peer Group — Similar R&D Expenditures
The R&D-focused peer group, also introduced in October 2013, comprises large companies with significant international operations, some of which also are in our general industry peer group. While the 2013 consolidated revenue of these companies ranged from approximately $2.4 billion to $86.6 billion, their R&D expenditures, at the median, approximated Schlumberger’s R&D expenditures in that year. As with the lower-revenue oil industry peer group, this peer group is relevant only for the compensation of our EVP Technology.
In October 2014, the Compensation Committee, upon its review of the criteria for the R&D-focused peer group, determined not to add to, or remove any companies from, to this peer group. The following 40 companies formed the R&D-focused peer group effective for relevant 2015 compensation decisions:
General Industry Peer Group Companies with R&D Focus
Median R&D expenses similar to Schlumberger’s R&D expenses
• 3M Company | • AbbVie Inc. | • Adobe Systems | • Advanced Micro Devices | • Allergan Inc. | ||||
• Applied Materials | • Baxter International | • Biogen Idec Inc. | • Boeing | • Boston Scientific | ||||
• Broadcom Corp. | • Caterpillar Inc. | • Celgene Corp. | • Corning Inc. | • Cummins Inc. |
• Danaher Corp. | • Deere & Co. | • Dell Inc. | • Dow Chemical | • E.I. Dupont de Nemours | ||||
• eBay Inc. | • Electronic Arts Inc. | • EMC Corp. | • Forest Laboratories | • Gilead Sciences | ||||
• Juniper Networks | • LSI Corp. | • Medtronic, Inc. | • Micron Technology | • Monsanto | ||||
• Motorola Solutions | • NetApp, Inc. | • NVIDIA Corp. | • Raytheon Co. | • Seagate Technology | ||||
• Symantec | • Texas Instruments | • United | • | • Yahoo! Inc. |
* Denotes a companyThe table below summarizes the executive compensation peer groups that was addedare referred to when reviewing and establishing the groupcompensation of our various NEOs for 2012.2015.
Oil Industry Peer Group Revenue more than $15 | General Industry Peer Group | Smaller Oil Industry Revenue $2.5 billion- | R&D-Focused Similar R&D | |||||
All NEOs (except EVP Technology) | ü | ü | ||||||
EVP Technology | ü | ü |
Elements of Compensation
Base Salary
Base salary is the fixed portion of an executive’s annual cash compensation, which provides some stability of income since the other compensation elements are variable and not guaranteed. On appointment to an executive officer position, base salary is set at a level that is competitive with base salaries in the two peerapplicable comparator groups for that position and takes into account other factors described below. Generally, the Compensation Committee targets base salaries for executive officers to be betweenat or near the 50th and the 75th75th percentile of botheach of the peer groups.
Base salaries for each executive officer position are compared annually with similar positions in boththe applicable peer groups. Base salary changes for executive officers, except the CEO, are recommended by the CEO and subject to approval by the Compensation Committee, taking into account:
comparable salaries for executives with similar responsibilities in the twoapplicable peer groups;
comparison to internal peer positions;
the Company’s performance during the year relative to the previous year and to its market peers;
individual business experience and potential; and
overall individual performance.
The base salary of the CEO is reviewed by the Compensation Committee in executive session and recommended by the Compensation Committee to the independent members of the Board of Directors for approval, based on the same criteria as above. In addition to periodic reviews based on the factors described
above, the Compensation Committee may adjust an executive officer’s base salary during the year if the executive officer is promoted or if there is a significant change in his or her responsibilities. In this situation, the CEO (in the case of executive officers other than himself) and the Compensation Committee carefully consider these new responsibilities, external pay practices, retention considerations and internal pay equity, as well as past
performance and experience. Base salary may also be reduced, such as when an executive officer moves to a position of lesser responsibility in the Company. Alternatively, base salary can be frozen for a number of years until it falls in line with comparable positions in the twoapplicable compensation peer groups.
Base Salary Decisions in 20122015
The Compensation Committee carried out a review of the compensation of each of the executive officers in January 2012.2015. Upon review of comparative market data for both peerthe applicable comparator groups, and taking into consideration that base salary decisions for 2011 generally positionedmost of our NEOs at or slightly above the 75th percentile of both peer groups,were already positioned competitively from a market perspective, the Committee determined not to increase the base salary of anyonly one NEO in January 2015. Mr. Al Moaharbel’s salary was increased from $700,000 to $770,000 so that his salary was no longer below the median for 2012.his position in both comparator groups. In April 2015, our CEO assumed the role of Chairman of the Board. In that month, the Compensation Committee again considered his base salary and approved an increase in his salary from $1.7 million to $2.0 million in light of his new, additional role as Chairman of the Board.
Annual Cash Incentive
The Company pays annual performance-based cash incentives to its executives to foster a results-driven, pay for performance culture and to align their interests with those of Schlumberger’s stockholders. The Compensation Committee selects performance-based measures that it believes will strike the balance between motivating an executive to increase operating results in the near-term and driving profitable long-term Company growth and value for stockholders. Incentive cash payments are made each February according to the achievement of both personal and Company financial (Company) objectives duringestablished as described below in the previous fiscal year.section entitled “—Annual Cash Incentive Decisions for 2015.”
The 2015 target annual cash incentive ranges from 0% tofor our CEO was 150% of his base salary, for the CEO and from 0% to75% or 100% of base salary for the other NEOs, depending on thetheir position. HalfOne half of Schlumberger’s potential cash incentive range is based on the satisfactory completion of personal objectives established at the beginning of the year, while the other half of the potential range is based on the achievement of a pre-establishedpersonal objectives, while the other half is based on Company financial goal, which isperformance against criteria, as described below in the section below entitled “Annual“—Annual Cash Incentive Decisions for 2012.2015.”
The financial half of the incentive cash payment for NEOs has an incremental financial element, which means that the maximum incentive opportunity can in some years be up to 300% of target with respect to the financial part, based on achievement of superior financial results. This enhanced incentive applies to the CEO and our other executive officers. The personal half of the incentive cash payment has no positive incremental element, meaning the maximum payout with respect to this half of the target annual cash incentive is 100% of target. Under this approach, the maximum incentive opportunity based on both financial and personal objectives combined cannot exceed 200% of target.
The Compensation Committee reviews and recommends to the fullindependent directors of the Board the financial objectives for both the CEO and reviews and approves the financial objectives for the other executive officers. The Committee approvesbelieves that, with regard to financial targets or financial performance goals, it is important to establish criteria that, while very difficult to achieve in an uncertain global economy, are realistic. When considering the personal objectivesCompany’s operating results for the CEO and assesses his performance against those objectives in determining the annual cash incentive award, subject to final approval by the Board. The CEO approves the personal objectives for the other executive officers, including the other NEOs, and assesses each such officer’s performance against their pre-determined objectives.
Annual Cash Incentive Decisions for 2012
Annual Cash Incentive Ranges
There were no changes in the cash incentive ranges for anypurposes of the NEOs in 2012.
Financial Objective
As in previous years, the financial half of the annual cash incentive for all executive officers in 2012 was based on diluted earnings per share from continuing operations (“EPS”).
The Compensation Committee selected EPS as the most appropriate measure upon which to base the financial portion of the annual cash incentive, because it is the primary basis on which we set our performance expectations for the year; we believe that consistent EPS growth leads to long-term stockholder value; and EPS is
the metric most widely used by investors and analysts to evaluate the performance of Schlumberger. When considering the Company’s operating results, the Compensation Committee has the discretion to decide whether to take into account the effect on EPS of unusual or infrequent charges or gains, depending on the nature of the item. The Compensation Committee exercises its discretion when it believes that executives and other employees would be unfairly harmedinappropriately penalized by, or would unfairlyinappropriately benefit from, these items.
The Committee approves the personal objectives for the CEO and assesses his performance against those objectives in determining his annual cash incentive award, subject to final approval by the independent directors of the Board. The CEO approves the personal objectives for the other executive officers, including the other NEOs, and assesses each such officer’s performance against their pre-determined objectives, subject to final approval of the Committee.
Annual Cash Incentive Decisions for 2015
Annual Cash Incentive Targets
In April 2015, the Compensation Committee approved an increase to Mr. Schorn’s annual cash incentive range from 75% to 100% (expressed as a percentage of base salary), effective January 1, 2015, as a result of the increased level of responsibility in Mr. Schorn’s position. There were no other changes in the target annual cash incentive ranges for any of the other NEOs in 2015.
Financial Objectives
The financial half of the annual cash incentive opportunity for all executive officers had, prior to 2013, been based solely on EPS. In July 2013, the Compensation Committee approved the inclusion of a relative performance incentive (“RPI”) component to the financial half of the annual cash incentive, and the Compensation Committee maintained this approach for 2015. As a result, the financial half of the NEOs’ 2015 annual cash incentive was based equally on achievement of (i) EPS targets and (ii) relative financial performance criteria.
2015 EPS Targets
The Compensation Committee selected EPS as an absolute measure upon which to base half of the financial portion of the annual cash incentive because it is the primary absolute basis on which we set our performance expectations for the year. We believe that consistent EPS growth leads to long-term stockholder value; and EPS is the metric most widely used by investors and analysts to evaluate the performance of Schlumberger.
The process used to set these annual EPS targets starts with a review of plans and projections following bottom-up planning from the field, which considers factors such as:
activity growth potential;
pricing;
anticipated exploration and production (E&P) spending; and
introduction of new technology.
In January 2012,light of severely reduced industry visibility the Compensation Committee decided thatdetermined at its January 2015 meeting to divide the maximum incentive opportunity forEPS component of the financial-based portionfinancial performance goals of theour annual cash incentive would be 300% as in some previous years. Theprogram into two six-month periods for 2015. As a result, the Compensation Committee also believed it was important to setdetermined EPS targets which, while very difficult to achieve in an uncertain global economy, were realistic.
for the six-month period from January 1 through June 30 at its January 2015 meeting, and approved the EPS targets for the six-month period from July 1 through December 31 at its July meeting. The Compensation Committee approved the following EPS performance targets and corresponding payouts for the financialfirst six-month period of 2015 at its January 2015 meeting, for purposes of the 2015 annual cash incentive:
H1 2015 EPS Performance Targets | % of EPS Portion of Financial Half | |
(Payout %) | ||
Less than $1.70 | 0% | |
$1.70 | 25% | |
$2.20 | 50% | |
$2.70 | 100% | |
$3.20 | 150% |
Reflecting the continued challenges in the industry, the Company’s expectation that the challenging conditions would continue, and the limited visibility for business conditions, the Compensation Committee approved the following EPS performance targets and corresponding payouts for the second half of 2015 at its July 2015 meeting, for purposes of the 20122015 annual cash incentive were as follows:incentive:
H2 2015 EPS Performance Targets | % of EPS Portion of Financial Half | |
(Payout %) | ||
Less than $1.20 | 0% | |
$1.20 | 25% | |
$1.50 | 50% | |
$1.80 | 100% | |
$2.10 | 150% |
anFor EPS result of at least $4.00 was needed to trigger a payment of 50% of the financial half of the incentive payment, below which no financial incentive would be paid. The EPS threshold of $4.00 represented a 14% increase against EPS of $3.51 actually earned for 2011;
an EPS result of at least $4.60 was needed to trigger a payment of 100% of the financial half of the incentive payment, which represented a 31% increase against EPS actually earned in 2011;
an EPS result of at least $5.00 was needed to achieve 200% of the financial half of the incentive payment, which represented a 43% increase against EPS actually earned for 2011; and
an EPS result of at least $5.40 was needed to achieve 300% of the financial half of the incentive payment, which represented a 54% increase against EPS actually earned for 2011.
If the EPS result achieved wasresults between any two targets, then the financial incentive payment would bepayout is prorated. As in prior years, noNo cash incentive would beis paid if the minimum 2012 EPS target wasis not met. met for the applicable six-month period.
2015 Relative Performance Incentive (RPI)
The EPS targets above includedRPI component of the projected full-year results from Schlumberger’s Distribution businesses, which Schlumberger divestedannual cash incentive is based on our one-year performance in each of our four geographic areas as compared against the performance of Halliburton and Baker Hughes in their corresponding geographic areas, measured by:
The Committee believes that the RPI cash incentive component:
Halliburton and Baker Hughes were selected as our RPI comparator companies for 2015 because we believe they are the only oilfield service companies that have a resemblance to us in terms of 2012. Asscale, scope and nature of business operations, and because we and our investors believe these divested businesses comprised Schlumberger’s entire previously-reported Distribution segment,two companies constitute our main global business competitors. The Compensation Committee decided to exclude the results of this segment were classified in 2012 as discontinued operations in Schlumberger’s consolidated statementour WesternGeco business for purposes of income.assessing our relative performance because Halliburton and Baker Hughes have no seismic operations. The EPS targets above contemplated an earnings per share contribution from these divested businessesperformance of $0.06. Therefore, the Compensation Committee decided thatour RPI comparator companies for purposes of calculating relative performance is derived from their reported company results.
The RPI payout, if any, to our NEOs is based on the financial halfsum of the cash incentive payment, it would reduceour overall rankings achieved in each of our four geographic areas worldwide, comparing year-over-year revenue growth and margin improvement in each geographic area against that of our two RPI comparator companies. References to “geographic areas” are to our geographic areas as to which financial results are publicly reported (e.g., North America, Latin America, Middle East & Asia and Europe/CIS/Africa), and for the EPS targets aboveRPI comparator companies, the same or their nearest equivalent reported geographic area.
The best performance achievable by $0.06.us in each geographic area is an overall ranking of “1,” meaning that we achieved the highest revenue and margin growth performance overall in a geographic area as compared against our two comparator companies; conversely, the worst performance achievable by us in a given
Schlumberger’s 2012 EPS was $4.06,
geographic area is an overall ranking of “3.” Thus, our maximum overall possible achievement in all geographic areas combined for a given year is “4” — being the sum of overall “1” rankings in each geographic area — which included chargeswould require that our performance equal or exceed that of $0.11 related toour two RPI comparator companies in both financial performance criteria for all four geographic areas. Conversely, our worst overall possible achievement in all geographic areas would be “12,” which would require that our two RPI comparator companies outperform us in all four geographic areas as described above.
The following table illustrates how a hypothetical overall ranking would be determined for three companies in a geographic area, taking into account their year-over-year relative performance in both revenue and margin growth:
North America | Revenue Rank | Margin Rank | Overall Area Rank | |||
Company A | 3 | 3 | 3 | |||
Company B | 1 | 2 | 1 | |||
Company C | 2 | 1 | 1 |
In this example, Company B ranked highest in revenue in the continued integrationarea, and second-highest in margin growth, for a raw score of Smith3 (sum of “1” and certain workforce reductions. “2” scores). Company C, meanwhile, ranked second-highest in revenue growth and highest in margin growth, for a raw score of 3 (sum of “2” and “1” scores). Company A, meanwhile, performed behind both Company B and C in both categories, for a raw score of 6 (sum of “3” scores in both categories). Thus, Company B and C tied for the best overall area rank — “1”— because each achieved the lowest total raw score of “3.”
The Compensation Committee decided that for purposes of calculatingapproved the financial half of the cash incentive payment, it would exclude these charges as they either resulted from actions that werefollowing performance payout matrix in the Schlumberger’s best interest or did not relate to Schlumberger’s ongoing operations. Schlumberger’s 2012 EPS, excluding these charges, was $4.17, representing a preliminary payout of almost 70% of the financial half of the annual cash incentive. early 2015:
RPI Performance Payout Matrix
Total Areas Ranking (RPI Achievement) | % of Total RPI Portion Payout | |
4-5 | 250% | |
6 | 175% | |
7 | 100% | |
8 | 50% | |
9-12 | 0% |
The Compensation Committee however, further considered that retains the discretion to increase the total RPI payout to a maximum of 300% upon an RPI achievement of 4, being the highest achievement level attainable, as the Committee deems appropriate. The Committee also retains the discretion to increase or decrease the total RPI payout to take into account such factors as overall Company performance, extraordinary items affecting financial results or such other factors as the Committee deems appropriate.
EPS Results.Schlumberger’s 2012 EPS, excluding charges and credits, showed superior relative growth year-over-year as comparedwas $1.94 for the six-month period from January 1, 2015 to June 30, 2015, while EPS on a GAAP basis was $1.64 for the projected relative growthsame period, reflecting $0.30 of 2012 earnings per share,charges attributable to currency devaluation loss in Venezuela and workforce reductions. Schlumberger’s EPS, excluding charges and credits, was $1.43 for the six-month period from July 1, 2015 to December 31, 2015, while EPS on a GAAP basis was a loss of both$0.02, reflecting $1.45 of charges primarily attributable to workforce reductions and an incentivized leave of absence program, fixed asset impairments, inventory write-downs, impairment of an SPM project, facility closures, geopolitical events in the Company’s top two competitors,Middle East, contract termination costs and other items associated with the current market conditions. Please see the reconciliation of these non-GAAP measures to the comparable GAAP measures on Appendix A. As in prior
years, the Compensation Committee evaluated performance based on their actual results forEPS excluding charges and credits, consistent with the manner in which the Company presents EPS in its earnings announcements and presentations to investors. Furthermore, the Committee believed that the $0.30 of charges in the first nine monthshalf of 2012 and consensus estimates for their fourth quarter earnings. Additionally, consideration was given to the well-executed divestitures of the businesses comprising the Distribution segment,2015 and the fact$1.43 of charges in the second half of 2015 resulted in EPS on a GAAP basis that seniordid not reflect Schlumberger’s operating trends and arose largely from actions that management was able
took in order to generate cash proceeds in excessproactively address the industry downturn and other events outside of $1 billion from the sales ofmanagement control. Based on these businesses. As a result of the foregoing considerations,results, the Compensation Committee approved a payout of 85%74% of target for the financialfirst half of 2015 and 88% of target for the second of 2015, resulting in a combined percentage of 81% of target for the EPS component of the annual cash incentive.
IndividualRPI Results. According to the RPI Performance Payout Matrix above, we achieved an RPI result in 2015 of 6, corresponding to a total RPI payout of 175% of target. Accordingly, the Committee approved an RPI payout of 175% out of a possible 250%.
Personal Objectives
The second halfFifty percent of thean executive’s annual cash incentive opportunity is relatedtied to achievement of personal objectives that are specific to each executive officer position and may relate to:
technologyGroup or geographical profitability or revenue growth;
market penetration;
acquisitions or divestitures; and
non-financial goals that are important to the Company’s success, including:
people-related objectives such as retention and diversity;
ethics and compliance;
safety objectives;
new technology introduction; and
any other business priority.
The award for the personal half of the annual cash incentive opportunity was based on the specific results each named executive officer achieved, as approved by the Compensation Committee. Personal objectives are set at the start of the fiscal year. At the end of the fiscal year, the CEO uses his judgment to evaluate the performance of the other NEOs against their personal objectives, taking into account performance for the just-completed fiscal year versus predefined commitments for the fiscal year; unforeseen financial, operational and strategic issues of the Company; and any other information deemed relevant by the CEO. The Compensation Committee evaluates the performance of the CEO in a similar way, subject to approval by independent directors of the full Board.
Mr. Kibsgaard hadKibsgaard’s 2015 objectives relatingrelated to customer engagement,personnel, recruiting and training; research development and manufacturing improvements; improvements in service quality; and implementation of the transformation program, each of which he achieved.
Messrs. Kibsgaardachieved, and Belani had objectives relating to research and product development,(b) specific business projects including the transaction with Cameron International Corporation, which they eachhe mainly achieved.
Messrs. PaiMr. Ayat’s 2015 objectives related to (a) completion of certain mergers and Belani had objectives relatingacquisitions; improving free cash flow as a percentage of earnings; the response rate to the improvementethics inquiries; and implementing our transformation program plan for our segments, all of the Company’s code of ethics, which they eachhe achieved, and (b) growth compared to our largest competitor, which he mainly achieved.
Messrs. Kibsgaard, Pai, Oestdahl and Belani hadMr. Belani’s 2015 objectives relatingrelated to (a) new technology revenue; improving free cash flow as a percentage of earnings; improvements in service quality; health, safety and the environmentenvironmental (HSE) improvements; and Quality, which they each mainly achieved.
Messrs. Kibsgaard and Pai had objectives relating to people, including diversity and talent management, which they each achieved.
Messrs. Pai, Oestdahl, Belani and Ayat had objectives relating to infrastructure and logistics, which they each mainly achieved.
Messrs. Oestdahl, Belani and Ayat had objectives relating to information technology, which they each achieved.
Messrs. Kibsgaard, Oestdahl, Belani and Ayat had objectives on the expansionimplementation of the subsea business,transformation program, each of which they each achieved.
Messrs. Ayat, Paihe achieved, and Oestdahl had objectives on cost management and efficiency,(b) growth compared to our largest competitor, which they eachhe mainly achieved.
2012Mr. Schorn’s 2015 objectives related to (a) improving free cash flow as a percentage of earnings; improvements in service quality; HSE improvements; and implementation of the transformation program, each of which he achieved, and (b) growth compared to our largest competitor, which he mainly achieved.
Mr. Al Mogharbel’s 2015 objectives related to (a) improving free cash flow as a percentage of earnings; operation team performance; and implementation of the transformation program, each of which he achieved, and (b) improvements in service quality, and growth compared to our largest competitor, both of which he mainly achieved.
2015 Annual Cash Incentive as a Percentage of Base Salary
Name | Total Incentive Range Eligibility (%) | Financial Half Range Eligibility (%) | Financial Half Incentive Achieved (%) | Personal Half Range Eligibility (%) | Personal Half Incentive Achieved (%) | Total 2012 Incentive Paid as a % of Base Salary(1) | Total Incentive Range Eligibility (%) | Financial Half Range Eligibility (%) | Financial Half Incentive Achieved (%)(1) | Personal Half Range Eligibility (%) | Personal Half Incentive Achieved (%)(2) | Total 2015 Incentive Paid as a % of Base Salary(3) | ||||||||||||||||||||||||
P. Kibsgaard | 0-150 | 75 | 63.75 | 75 | 71.25 | 135.00 | 0-150 | 75 | 96.07 | 75 | 73.00 | 169.07 | ||||||||||||||||||||||||
S. Ayat | 0-100 | 50 | 42.50 | 50 | 45.50 | 88.00 | 0-100 | 50 | 64.04 | 50 | 47.50 | 111.54 | ||||||||||||||||||||||||
S. Pai | 0-100 | 50 | 42.50 | 50 | 42.50 | 85.00 | ||||||||||||||||||||||||||||||
A. Belani | 0-100 | 50 | 64.04 | 50 | 48.75 | 112.79 | ||||||||||||||||||||||||||||||
K.-E. Oestdahl | 0-100 | 50 | 42.50 | 50 | 44.50 | 87.00 | ||||||||||||||||||||||||||||||
P. Schorn | 0-100 | 50 | 64.04 | 50 | 47.50 | 111.54 | ||||||||||||||||||||||||||||||
A. Belani | 0-100 | 50 | 42.50 | 50 | 43.00 | 85.50 | ||||||||||||||||||||||||||||||
K. Al Mogharbel | 0-75 | 37.5 | 48.03 | 37.5 | 35.63 | 83.66 |
(1) |
(2) | Represents the personal objectives payout percentage (out of a range of 0 to 100%) multiplied by the percentage of base salary attributable to the personal objectives half of the annual cash incentive opportunity. |
(3) | Equals the sum of both the financial half and the personal half of the annual cash incentive achieved, expressed as a percentage of base salary. |
Long-Term Equity Compensation—Stock OptionsCompensation
Stock optionsLong-term equity incentives make up the largest portion of the compensation of our NEOs. They are designed to give named executive officersNEOs and other high-value employees a longer-term stake in the Company, provide incentives for future performance,the creation of sustained stockholder value, act as a long-term retention tool and alignmotivation tools, and directly tie employee and stockholder interests over the longer term. Schlumberger
Our LTI awards for 2012 continuedour NEOs and other senior executives are delivered through and equal mix of three-year PSUs and stock options, consistent with market practices at many companies in our main comparator groups. In January 2015 (as in 2014) our NEOs and other senior executive officers received 50% of their target LTI compensation in the form of three-year PSUs and 50% in the form of stock options. For the 2015 PSU grants, the Committee established performance goals using Return on Capital Employed (“ROCE”) as its useperformance measure to determine payouts, as more fully discussed below under “— 2015 PSU Performance Measure and Goals.” This performance measure was also used for the 2013 and 2014 PSU grants.
We believe that the inclusion of PSUs in our LTI compensation program:
further aligns our executives’ interests with those of our stockholders;
While PSUs further align our executives’ compensation with the stock price returns experienced by our stockholders and encourage our executives to achieve strategic and financial goals that support our long-term performance, the Compensation Committee believes that stock options are also a form of performance-based compensation. Because of this, stock options remain a significant component of our senior executive’s LTI compensation. This reflects the Compensation Committee’s strong belief that our senior executives’ long-term equity incentive compensation should remain directly linked to the performance of our stock, since the value of stock options as its primary long-term incentive for executive officers as it believes that they best align employee incentives with stockholder interests. Since a financial gain from stock options is possible only after the price ofsolely tied to the Company’s common stock has increased,price, and any decline in the Company believes that grantsCompany’s stock price should also have a negative impact on our executives’ pay.
Value of stock options motivate executives and other employees toward behavior that benefits all stockholders.Long-Term Equity Awards
The Compensation Committee grants stock optionsdetermines the value of LTI awards to reward past performance but also to retain executive officers and to provide incentivesat its first meeting as described above in the section entitled “— Annual Cash Incentive Decisions for future exceptional performance.2015.” The value of a stock optionan LTI grant increases with the level of position,an executive’s responsibility at the Company, and for the CEO and our other named executive officersNEOs is typically the largest element of thetheir total direct compensation package. In determining the value of grants of stock options to be madeLTI awards granted to executive officers, the Compensation Committee (in the case ofapproving the CEO’s grant) and the CEO (in the case of recommendations forrecommending grants for the other NEOs), consider numerous first considers market data on the LTI value for the most comparable positions in the Company’s two main comparator groups, as well as several other factors, including:which may include:
the Company’s financial and operating performance during the relevant period;
review of total direct compensation for comparable positions in the comparator groups;
the size and mix of the compensation elements for anthe executive officer;
retention;
achievement of non-financial goals;
the executive officer’s contribution to the Company’s success;
the level of competition for executives with comparable skills and experience;
the total value and number of stock optionsequity-based awards granted to an executive over the course of his or her career, together with the retentive effect of additional stock option grants;equity-based awards; and
a review of the internal equity of peer position career grants.
Once the dollar value of the stock option grant for a named executive officerCompensation Committee has been determined, based on the relevant factors above factors, it is converted into ain its discretion, the target dollar value of LTI awards for an NEO, the Committee grants 50% of this value in PSUs and 50% in stock options. The Committee believes that this mix of PSUs and stock options strikes an appropriate balance between rewarding increases in the market value of our common stock (stock options) and tying long-term compensation to achievement of specific performance goals that are not based on the stock market (PSUs). The target number of stock options onPSUs awarded to an estimated fair value basis on the dateexecutive is determined by dividing 50% of the Compensation Committee meeting usingtotal target LTI value by the Black-Scholes formula.
The tables below detail the approximate grant date fair value and number of stock options granted in 2012 to the named executive officers. The approximateestimated grant date fair value of each grant was used by the Compensation Committee to determinea PSU; the number of options granted. awarded is determined by dividing 50% of the total target LTI value by the estimated grant date fair value using the Black-Scholes formula.
The actual grant date fair value of each grant, computed in accordance with applicable accounting standards, is disclosed in the Grants of Plan-Based Awards Forfor Fiscal Year 20122015 table below.
The tables below detail the estimated grant date fair value and number of PSUs and stock options granted in 2015 to the NEOs. Because of differences in how the grant date fair values given to equity compensationof PSU and option awards bymust be calculated for accounting purposes, the amounts reported in the Summary Compensation CommitteeTable may not reflect the same proportion of PSUs and stock options. These grant date values are approximate grant date accounting values only, and the actual value that may be realized by an NEO may realize depends on factors such as the NEO’s continued service, and Schlumberger’s future stock price performance.performance and the achievement of certain pre-established performance goals.
Stock OptionAnnual Long-Term Equity Grants in 2012for 2015
January 2012 Stock Option Grants.
Name | Approximate Fair Value of Grant | Number of Options Granted | ||||||
P. Kibsgaard | $ | 11,000,000 | 429,000 | |||||
S. Ayat | $ | 3,500,000 | 137,000 | |||||
S. Pai | $ | 3,500,000 | 137,000 | |||||
K.-E. Oestdahl | $ | 3,500,000 | 137,000 | |||||
A. Belani | $ | 3,250,000 | 127,000 |
The Compensation Committee approved (and in the case of Mr. Kibsgaard, our Chairman and CEO, the independent members of the Board of Directors approved) the following awards for the NEOs in January 2012 approved these awards2015. The Compensation Committee, based on its review of comparativecomparator peer groupsgroup data presented to the Committee.Committee, determined to hold LTI grant values flat in 2015 for all of our NEOs. The Compensation Committee’s decisions also took into account internal pay equity amongfollowing table shows the NEOs.grant values of the NEOs’ 2014 annual LTI awards and the year-over-year percentage change between the two amounts.
Number of Options Granted Target Number of PSUs Target Value of 2015 Grants Target Value of 2014 Grants P. Kibsgaard S. Ayat A. Belani P. Schorn K. Al Mogharbel |
to Mr. Ayat, $3,500,000 in stock options, whichKibsgaard’s 2015 LTI grant was near(i) at the 75th percentile of the oil industry peer group and (ii) between the 50th and 75th percentile of the general industry peer group;
to Mr. Pai, $3,500,000 in stock options, whichAl Mogharbel’s 2015 LTI grant was between the 50th and 75th percentiles of the oil industry peer group and nearat the 75th percentile of both the oil industry and the general industry peer group;
The 2015 PSUs will vest and convert to Mr. Oestdahl, $3,500,000 inshares of our common stock options, which was betweenat the 50th and 75th percentilesend of the oil industry peer groupthree-year performance period ending December 31, 2017, contingent on continued employment and nearachievement of a pre-determined performance target. No shares will be issued under the 75th percentilePSUs if we do not achieve a pre- established threshold performance level. No dividends will accrue or be paid on any PSUs during the performance period. Stock options vest ratably in equal installments over five years.
2015 PSU Performance Measure and Goals
The Compensation Committee set goals for the 2015 PSUs based on Return on Capital Employed (“ROCE”) goals for the Company over the applicable performance period. ROCE is a measure of the general industry peer group;efficiency of our capital employed. We calculate ROCE as a ratio, the numerator of which is (a) income from continuing operations, excluding charges and
creditsplus (b) after-tax net interest expense, and the denominator of which is (x) stockholders’ equity, including non-controlling interests (average of beginning and end of each quarter in the year),plus (y) net debt (average of beginning and end of each quarter in the year). The Compensation Committee has the discretion to Mr. Belani, $3,250,000 in stock options, which was aboveadjust the 75th percentileCompany’s income from continuing operations to take into account the effect of significant impacts or activities that are not representative of underlying business operations, such as acquisitions, divestitures, asset impairments and restructurings. Furthermore, the Committee evaluates, and may adjust for, the effect of acquisitions or divestments on a case-by-case basis for purposes of the general industry peer group (there being insufficient dataROCE calculation.
We selected ROCE because we believe that it is a comprehensive indicator of long-term Company and management performance, as it measures both profitability as well as the efficiency with which we deploy and utilize our capital. Our selection of ROCE as the performance measure for comparisonthe 2015 PSUs is also consistent with our strategic direction and transformation initiatives. Furthermore, ROCE measures performance in a way that is tracked and understood by investors. The Compensation Committee believes that tying a part of our senior
executives’ LTI pay to achievement of challenging ROCE targets will help to increase revenue and improve margins through pricing and continued focus on cost control. We chose an absolute measure rather than a relative one such as total shareholder return and EPS growth due to greater ability of our executives and key employees to directly impact our performance results. Furthermore, the Committee considered the difficulty of finding suitable comparators, insofar as oil industry peer group).and gas E&P companies have a different business model than we do, and because we are much larger than all of our direct oilfield service competitors.
There wereThe performance period for the 2015 PSUs began on January 1, 2015 and ends on December 31, 2017. Vesting is conditioned upon the Company’s achievement of annual pre-determined threshold ROCE of at least 12.5% for the performance period, subject to continued employment. In calculating such achievement, the Company’s average annual ROCE will be used, calculated as the average ROCE for each calendar year contained in the performance period. See “—Potential Payments Upon Termination or Change in Control for Fiscal Year 2015—Termination of Employment—PSUs” and “—Potential Payments Upon Termination or Change in Control for Fiscal Year 2015—Change of Control—PSUs,” beginning on page 57 for more information.
The Compensation Committee approved the PSU goals as described above in the section entitled “—Annual Cash Incentive Decisions for 2015” after of the Company’s historical ROCE. The Committee also considered our internal forecasts at the time of grant, which indicated that achieving the target level of performance would be difficult but attainable. Our ROCE for 2012, 2013 and 2014 was 15.1%, 16.3% and 16.9%, respectively.
The number of PSUs that will vest and convert to shares as of the vesting date can range from 0% to 250% of the number of PSUs awarded, depending on our performance during the performance period as illustrated in the following table. At the end of the measurement period, the Compensation Committee will certify the ROCE achieved and will determine the percentage of target shares earned based on the table below. In no other awards of stock optionsevent will payout exceed 250%. If the ROCE achieved is less than or equal to 12.5%, no shares will be issued.
Average Annual ROCE Achieved | % of Target Shares Earned (Payout %)(1) | |
Less than or equal to 12.5% | 0% | |
15% (“Target”) | 100% | |
20% | 200% | |
Greater than or equal to 25% | 250% |
(1) Fractional shares rounded up to the next whole share. Number of shares determined by linear interpolation between performance levels.
2013 Three-Year PSU Achievement
In January 2016, the Compensation Committee determined the results of the three-year performance period for the three-year PSUs issued in January 2013, relative to the performance criteria established as described below in the section entitled “—Annual Cash Incentive Decisions for 2015.” Average Annual ROCE achieved for the period 2013-2015 was 14.53%, representing achievement of 81.2% of target according to the table above. However, the Compensation Committee exercised its discretion and awarded our NEOs 100% of the target shares under the three-year PSUs. The Compensation Committee exercised this discretion in 2012.light of the excellent performance of the management team in mitigating effects of the downturn and the resulting strong performance as measured by ROCE, margins and free cash flow relative to our competitors and others in the industry.
Stock OptionLong-Term Equity Awards — Granting Process
The Compensation Committee is responsible for granting optionslong-term equity-based compensation under Schlumberger’sour stock option and omnibus incentive plans. The Committee approves a preliminary budget for stock optionequity-based grants for the following year at each October Compensation Committee meeting. Management determines the allocation for groups within the Company and individual recommendations are made by the heads of the Groups and approved by the CEO. The Compensation Committee approves and grants all stock optionequity-based awards, including executive officer awards, which are recommended by the CEO, except for his own. Awards for executive officers other than the CEO are granted by the Compensation Committee and discussed with the Board of Directors. Awards for the CEO are granted by the Committee following approval by the full Board.
The regular Board of Directors and Compensation Committee meeting schedule is set at least a year in advance with Board meetings held quarterly, generally on the third or fourth Thursday of January, April, July and
October, and the committee meetings held the day before each Board meeting. The timing of these committee meetings is not determined by any of the Company’s executive officers and is usually two days in advance of the Company’s announcement of earnings. The Compensation Committee sets the equity award grant date as the day of the Board meeting. The Company does not time the release of material non-public information for the purpose of affecting the values of executive compensation. At the time stock optionequity grant decisions are made, the Compensation Committee is aware of the earnings results and takes them into account, but it does not adjust the size or the mix of grants to reflect possible market reaction. Generally,
Typically, annual stock option grants of equity-based awards to the NEOs and other senior executive officers are made at the January meeting of the Compensation Committee, althoughwhile such annual grants for the rest of the Company’s eligible employees are made at the April meeting of the Committee. However, specific grants may be made at other regular meetings, to recognize the promotion of an employee, a change in responsibility or a specific achievement.
The exercise price for all stock options granted to executive officers and other employees is the average of the high and low trading price of the Schlumberger common stock on the NYSE on the date of grant, which has been Schlumberger’s practice for many years.
Stock options generally have five-year ratable vesting, except for those granted to employees in France, which have four-year cliff vesting (meaning that all options vest at a single point in time). The Board and the Compensation Committee have the discretion to grant stock optionsequity awards with different vesting schedules as they deem necessary.
Important Factors in Understanding Schlumberger’s Use of Stock Options
The Company’s stock optionequity incentive plans do not permit the following:
granting of stock options at a price below the fair market value on the grant date;
re-pricing, or reducing the exercise price of a stock option;
substituting a new option grant with an exercise price lower than the exercise price of an outstanding option grant; or
granting options with a “reload” feature.
Executive Stock Ownership Guidelines
The Compensation Committee and management believe strongly in linking executive long-term rewards to stockholder value. In the second half of 2011, the Company reviewed its executive stock ownership guidelines in light of current practice and to further strengthen corporate governance. As a result, theThe Board of Directors, upon recommendation of the Nominating and Governance Committee and the Compensation Committee, adopted revised executive stock ownership guidelines in 2011 applicable to executive officers and other key position holders.
As a result of the 2011 review, senior Senior executives are required to hold the numbers of shares equal to the multiple of base salary set forth below.
Title | Stock Ownership Multiple | |||
Chief Executive Officer | 6x base salary | |||
Executive Vice Presidents | 3x base salary | |||
Executive Officers (non-EVP) | 2x base salary | |||
Key Staff Positions | 1x base salary |
All executives subject to the revised guidelines must retain 50% of net shares acquired upon the exercise of stock options and the vesting of PSUs and restricted stock units (“RSUs”), after payment of applicable taxes, until they achieve the required ownership level. The guidelines provide that executives have five years to comply withsatisfy the ownership requirements. After the 5-yearfive-year period, executives who have not met their minimum stock ownership requirement must retain 100% of the net shares acquired upon stock option exercises and any PSU and RSU vesting until they achieve their required ownership level.
Prohibition on Speculation in Schlumberger Stock
Schlumberger’s insider trading policy prohibits executives from speculating in the Company’s stock, which includes, but is not limited to, short selling; buying or selling publicly-traded options, including writing covered calls; pledging;calls, pledging, and hedging or any other type of derivative arrangement on the Company’s stock that has a similar economic effect.
Benefits
Retirement Benefits
In line with Schlumberger’s aim to encourage long-term careers with the Company and to promote retention, retirement plans are provided, where possible, for all employees, including named executive officers, according to local market practice. Schlumberger considers longer-term benefit plans to be an important element of the total compensation package. The pension plans provide for lifetime benefits upon retirement after a specified number of years of service and take into account local practice with respect to retirement ages. They are designed to complement but not be a substitute for local government plans, which may vary considerably in terms of the replacement income they provide, and other Company sponsored savings plans. Employees may participate in multiple retirement plans in the course of their career with the Company or its subsidiaries, in which case they become entitled to a benefit from each plan based upon the benefits earned during the years of service related to each plan. The qualified plans are funded through cash contributions made by the Company and its subsidiaries based on actuarial valuations and/or regulatory requirements.
Some of the Schlumberger U.S. retirement plans are non-qualified plans that provide an eligible employee with additional retirement savings opportunities that cannot be achieved with tax-qualified plans due to limits on annual compensation that can be taken into account or annual benefits that can be provided under qualified plans.
Officers and other employees in the United States whose compensation exceeds the qualified plan limits are eligible to participate in non-qualified excess benefit programs for 401(k), profit-sharing and pension, whereby they receive correspondingly higher benefits. Employees and executive officers assigned outside the United States are entitled to participate in the applicable plans of the country where they are assigned, including supplemental plans where available.
Retirement Practices
The Company has a practice of phased retirement, which, at the discretion of the Company, may be offered to executive officers (other than the CEO) whothat are approaching retirement. This practice involves a transition into retirement whereby the individual ceases being an executive officer and relinquishes primary responsibilities. He or she remains an employee and generally receives lesser salary over time for reduced responsibilities and reduced working time. The arrangements are typically in place for an average of two to three years, as agreed at the start of the term. The purpose is to allow the outgoing executive officer to support the incoming executive officer for a period of time to provide for a smooth succession and to provide resources to
the Company in particular areas of expertise.expertise while refraining from joining a competitor. In these circumstances, the Company maintains pension contributions and other benefits such as medical and insurance, and the executive officer continues to vest in previously granted stock options. The executive officer, however, is no longer eligible for additional stock optionsequity incentive compensation or, once his or her work time is reduced, for an annual cash incentive.
Other Benefits
Schlumberger seeks to provide benefit plans, such as medical coverage and life and disability insurance, on a country-by-country basis in line with market conditions. Where the local practice is considered to be less than the Schlumberger minimum standard, the Company generally offers this Schlumberger standard. Executive officers are eligible for the same benefit plans provided to other employees, including medical coverage and life and disability insurance as well as supplemental plans chosen and paid for by employees who wish additional coverage. There are no special insurance plans for our named executive officers.
Limited Perquisites
Schlumberger provides only minimum perquisites to its executive officers, which (as to the named executive officers)NEOs) have been identified in the narrative notes to the Summary Compensation Table. The same perquisites are generally available to all professional-level employees. For example, relocation assistance is provided to all employees based on a Company-wide basis.
No Employment Agreements
Schlumberger doesOur executive officers do not have employment, severance or change-in-control agreements, for any of its executive officers, except for thoseagreements entered into in connection with phased retirement as described above. The Company’s executive officers serve at the will of the Board of Directors, which enables the Company to terminate their employment using judgment as to the terms of any severance arrangement and based on specific circumstances at the time.time they cease being executive officers.
Recoupment of Performance-Based Cash Awards
On the recommendation of the Compensation Committee in July 2006, the Board of Directors adopted a policy on recouping performance-based cash awards in the event of specified restatements of financial results. Under the policy, if financial results are significantly restated due to fraud or intentional misconduct, the Board will review any performance-based cash awards paid to executive officers who are found to be personally responsible for the fraud or intentional misconduct that caused the need for the restatement and will, to the extent permitted by applicable law, require recoupment of any amounts paid in excess of the amounts that would have been paid based on the restated financial results.
20122015 “Say-on-Pay” Advisory Vote to Approve Executive Compensation
Schlumberger provided stockholders a “say-on-pay” advisory vote to approve its executive compensation in April 2012 under recently adopted rules.2015. At Schlumberger’s 20122015 annual general meeting of stockholders, stockholders expressed substantial support for the compensation of its NEOs, with approximately 98%96.6% of the votes cast for approval of the “say-on-pay” advisory vote. The Compensation Committee carefully evaluated the results of the 20122015 annual advisory “say-on-pay” vote at its April meeting. The Compensation Committee also considers numerous other factors in evaluating Schlumberger’s executive compensation program as discussed in this CD&A. While each of these factors informed the Committee’s decisions regarding the NEOs’ compensation, the Compensation Committee did not implement changes to our executive compensation program as a result of the stockholder advisory vote.
Impact of Accounting and Tax Treatment
Accounting Treatment
The fair value of each stock option award is estimated on the date of grant using the Black-Scholes option pricing model in accordance with applicable accounting standards. Once the fair value of each award is determined, it is expensed in the Company’s income statement ratably over the vesting period.
Tax Treatment
Schlumberger grants both incentive stock options and non-qualified stock options according to U.S. tax regulations. The Company has a qualified French sub plan for stock options, restricted stock and restricted stock units to comply with French regulatory requirements. Stock options granted under the French sub plan have four-year cliff vesting rather than the usual five-year ratable vesting, and restricted stock and restricted stock units granted under the French sub plan have two-year cliff vesting and a two-year holding period rather than the usual three-year cliff vesting schedule.
Section 162(m) of the Internal Revenue Code limits the deductibility of certain compensation expenses in excess of $1,000,000 per individual covered employee. The Company’s stock optionequity incentive plans are intended to provide qualifiedstock options that qualify as performance-based compensation for purposes of Section 162(m) andso that stock options are not expected to be subject to the $1 million limitation. PSUs are also intended to meet the requirements for qualified performance-based compensation exempt from the deduction limitations of Section 162(m). The Compensation Committee believes that the lost deduction on cash compensation payable in excess of the $1 million limitation for the named executive officers is not material relative to the benefit of being able to adjust incentives as determined appropriate under a plan that is not subject to the conditions of Section 162(m). Section 409A ofAccordingly, the Internal Revenue Code requiresCompensation Committee retains the discretion to pay compensation that “deferred compensation” either comply with certain deferral election and payment rules or beis subject to a 20% additional tax. The Company’s compensation programs and awards are designed to make them exempt from or compliant with Section 409A.the $1,000,000 deductibility limit.
The Compensation Committee has reviewed and discussed with the Company’s management the Compensation Discussion and Analysis included in this proxy statement. Based on that review and discussion, the Compensation Committee has recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement.
SUBMITTED BY THE COMPENSATION COMMITTEE OF THE SCHLUMBERGER BOARD OF DIRECTORS
Peter L.S. Currie Michael E. Marks, Chair | Indra K. Nooyi Lubna S. Olayan |
EXECUTIVE COMPENSATION TABLES AND ACCOMPANYING NARRATIVE
20122015 Summary Compensation Table
The following table showssets forth the compensation paid by the Company and its subsidiaries for the fiscal year ended December 31, 20122015 to the Chief Executive Officer, the Chief Financial Officer, and the next three most highly compensated executive officers who were serving as executive officers as of December 31, 2012 (collectively, the2015 (each an “NEO” or a “named executive officers” or the “NEOs”officer”).
Name and Principal Position | Year | Salary ($) | Bonus ($)(5) | Stock Awards ($) | Option Awards ($)(6) | Non-Equity Incentive Plan Compensation ($)(5) | Change in Pension Value & Nonqualified Deferred Compensation Earnings ($)(7) | All Other Compensation ($)(8) | Total ($) | |||||||||||||
P. Kibsgaard(1) | 2012 | 1,700,000 | — | — | 10,879,440 | 2,295,000 | 831,932 | 104,283(9) | 15,810,655 | |||||||||||||
Chief Executive | 2011 | 1,425,117 | — | — | 8,488,590 | 1,690,300 | 381,835 | 251,992 | 12,237,834 | |||||||||||||
2010 | 979,416 | — | — | 2,670,820 | 1,072,510 | 203,730 | 27,006 | 4,953,482 | ||||||||||||||
S. Ayat | 2012 | 1,000,000 | — | — | 3,474,320 | 880,000 | 747,789 | 65,043(10) | 6,167,152 | |||||||||||||
Executive Vice President and | 2011 | 941,667 | — | — | 5,908,840 | 918,100 | 628,901 | 100,535 | 8,498,043 | |||||||||||||
| 2010
|
| 900,000 | — | — | 2,392,100 | 1,012,500 | 513,898 | 113,320 | 4,931,818 | ||||||||||||
S. Pai(2) | 2012 | 900,911 | — | — | 3,425,000 | 765,766 | 1,127,217 | 98,726(11) | 6,317,620 | |||||||||||||
Executive Vice President, Operations | 2011 | 967,382 | — | — | 2,698,960 | 753,007 | 680,742 | 133,850 | 5,233,941 | |||||||||||||
| 2010
|
| 796,813 | — | — | 4,491,811 | 644,489 | 598,600 | 101,303 | 6,633,016 | ||||||||||||
K.-E. Oestdahl(3) | 2012 | 823,681 | — | — | 3,474,320 | 716,602 | 363,391 | 159,421(12) | 5,537,415 | |||||||||||||
Executive Vice President, Operations | 2011 | 875,411 | — | — | 2,256,800 | 682,378 | 409,173 | 429,285(13) | 4,653,047 | |||||||||||||
A. Belani(4) | 2012 | 900,000 | — | — | 3,220,720 | 769,500 | 837,595 | 107,193(14) | 5,835,008 | |||||||||||||
Executive Vice President, Technology | 2011 | 886,661 | — | — | 4,054,470 | 736,600 | 606,705 | 287,557 | 6,571,993 | |||||||||||||
2010 | 724,879 | — | — | 1,485,620 | 586,321 | 425,995 | 116,987 | 3,339,802 |
Name and Principal Position | Year | Salary ($) | Bonus ($)(1) | Stock Awards ($)(2) | Option Awards ($)(3) | Non-Equity Incentive Plan Compensation ($)(1) | Change in Pension Value & Nonqualified Deferred Compensation Earnings($)(4) | All Other Compensation ($)(5) | Total($) | |||||||||||||||||||||||||
P. Kibsgaard | 2015 | 1,925,000 | — | 6,022,706 | 5,995,640 | 3,254,600 | 931,676 | 145,180(6) | 18,274,802 | |||||||||||||||||||||||||
Chairman and Chief Executive Officer | 2014 | 1,700,000 | — | 5,999,742 | 5,993,880 | 2,916,650 | 1,765,398 | 142,704 | 18,518,374 | |||||||||||||||||||||||||
2013 | 1,700,000 | — | 11,399,619 | 5,740,350 | 3,056,800 | 779,191 | 161,580 | 22,837,540 | ||||||||||||||||||||||||||
S. Ayat | 2015 | 1,000,000 | — | 2,005,173 | 2,006,060 | 1,115,400 | 388,393 | 130,126(7) | 6,645,152 | |||||||||||||||||||||||||
EVP and Chief Financial Officer | 2014 | 1,000,000 | — | 1,999,914 | 1,987,920 | 1,168,750 | 1,002,252 | 131,986 | 7,290,822 | |||||||||||||||||||||||||
2013 | 1,000,000 | — | 3,959,571 | 1,988,000 | 1,199,750 | 406,247 | 112,800 | 8,666,368 | ||||||||||||||||||||||||||
A. Belani | 2015 | 900,000 | — | 1,803,937 | 1,803,200 | 1,015,100 | 348,110 | 116,708(8) | 5,987,055 | |||||||||||||||||||||||||
EVP, Technology | 2014 | 900,000 | — | 1,798,242 | 1,807,200 | 1,045,150 | 1,001,860 | 118,896 | 6,671,348 | |||||||||||||||||||||||||
2013 | 900,000 | — | 3,565,023 | 1,789,200 | 1,081,600 | 512,244 | 100,170 | 7,948,237 | ||||||||||||||||||||||||||
P. Schorn | 2015 | 768,049 | — | 1,609,888 | 1,600,340 | 856,682 | 357,054 | 213,989(9) | 5,406,002 | |||||||||||||||||||||||||
President, Operations | 2014 | 827,815 | — | 1,596,570 | 1,596,360 | 702,649 | 877,258 | 177,201 | 5,777,853 | |||||||||||||||||||||||||
K. Al Mogharbel | 2015 | 764,167 | — | 1,609,888 | 1,600,340 | 639,300 | 128,734 | 313,939(10) | 5,056,368 | |||||||||||||||||||||||||
President, Drilling Group |
(1) |
The annual cash incentive paid to |
(2) | The amounts reported for 2013, 2014 and 2015 reflect the introduction of PSUs in January 2013 and a reduction in the amount of stock options granted. For 2015, each amount reflected in the “Stock Award” column is the aggregate grant date fair value for standard three-year PSUs at target level performance that were granted in January 2015. For 2014, each amount reflected in the “Stock Award” column is the aggregate grant date fair value for standard three-year PSUs at target level performance that were granted in January 2014. For 2013, these amounts also include the transitional one- and two-year PSUs granted in connection with introduction of the PSU program. Each amount reflects an accounting expense and does not correspond to actual value that may be realized by an NEO in the future. The number of PSUs granted in 2015 to each NEO is provided in the Grants of Plan-Based Awards for Fiscal Year 2015 table on page 48. The grant date fair value of these awards is calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation—Stock Compensation (ASC Topic 718), as described in Note 13, “Stock-based Compensation Plans,” to the Consolidated Financial Statements contained in our Annual Report on Form 10-K for the year ended December 31, 2015. |
The value of the 2015 PSUs at the grant date, assuming achievement of the maximum performance level of 250%, would be: Mr. Kibsgaard — $15,056,756; Mr. Ayat — $5,012,932; Mr. Belani — $4,509,843; Mr. Schorn — $4,024,720; and Mr. Al Mogharbel — $4,024,720.
The NEOs may never realize any value from the PSUs and, to the extent that they do, the amounts realized may have no correlation to the amounts reported above.
The amount reflected in |
Stock Option Grant Date | ||||||||
1/19/2012 (5-year vest options) | 1/19/2012 (4-year vest options) | |||||||
Dividend yield | 1.5% | 1.5% | ||||||
Expected volatility | 38.7% | 39.5% | ||||||
Risk-free interest rate | 1.5% | 1.4% | ||||||
Expected option life | 7.0 years | 6.5 years |
1/15/2015 (5-year vest options) | ||
Dividend yield | 2.61% | |
Expected volatility | 36.27% | |
Risk-free interest rate | 1.60% | |
Expected option life | 7 years |
The NEOs may never realize any value from these stock options and, to the extent that they do, the amounts realized may have no correlation to the amounts reported above.
(4) | The |
All of the perquisites included and described in the column “All Other Compensation” and the accompanying footnotes are generally available to all of the Company’s |
The amount disclosed for Mr. Kibsgaard consists of the following: |
Item | ||||||||
Unfunded credits to the Schlumberger Supplementary Benefit Plan | $ | 94,209 | $ | 137,230 | ||||
Contributions to Schlumberger Profit-Sharing Plans | $ | 7,500 | $ | 7,950 | ||||
Perquisites: | ||||||||
Tax preparation | $ | 2,574 | ||||||
Total | $ | 104,283 | $ | 145,180 |
The amount disclosed for Mr. Ayat consists of the following: |
Item | ||||||||
Unfunded credits to the Schlumberger Supplementary Benefit Plan | $ | 50,043 | $ | 57,113 | ||||
Unfunded credits to the Schlumberger Restoration Savings Plan | $ | 57,113 | ||||||
Contributions to Schlumberger Profit-Sharing Plans | $ | 7,500 | $ | 7,950 | ||||
Contributions to Schlumberger 401(k) Plan | $ | 7,500 | $ | 7,950 | ||||
Total | $ | 65,043 | $ | 130,126 |
Item | ||||
Contributions to Schlumberger Non-U.S. Profit-Sharing Plans | $ | 96,152 | ||
Perquisites: | ||||
Tax preparation | $ | 2,574 | ||
Total | $ | 98,726 |
Item | ||||
Contributions to Schlumberger Non-U.S. Profit Sharing Plans | $ | 87,573 | ||
Contributions to the Norway DC Pension Plan | $ | 8,685 | ||
Perquisites: | ||||
Relocation allowance | $ | 1,638 | ||
Child education expenses | $ | 57,529 | ||
Tax preparation | $ | 2,574 | ||
French lessons | $ | 1,422 | ||
Total | $ | 159,421 |
The amount disclosed for Mr. Belani consists of the following: |
Item | ||||
Unfunded credits to the Schlumberger Supplementary Benefit Plan | $ | 50,404 | ||
Unfunded matching credits to the Schlumberger Restoration Savings Plan | $ | 50,404 | ||
Contributions to Schlumberger Profit-Sharing Plans | $ | 7,950 | ||
Contributions to Schlumberger 401(k) Plan | $ | 7,950 | ||
Total | $ | 116,708 |
Item | ||||
Unfunded credits to the Schlumberger Supplementary Benefit Plan | $ | 41,598 | ||
Unfunded matching credits to the Schlumberger Restoration Savings Plan | $ | 41,598 | ||
Contributions to Schlumberger Profit-Sharing Plans | $ | 7,500 | ||
Contributions to Schlumberger 401(k) Plan | $ | 7,500 | ||
Perquisites: | ||||
Relocation expenses—movement of household goods | $ | 1,560 | ||
Temporary housing | $ | 4,348 | ||
Tax preparation | $ | 3,089 | ||
Total | $ | 107,193 |
(9) | The amount disclosed for Mr. Schorn consists of the following: |
Item | ||||
Unfunded credits to the Schlumberger Supplementary Benefit Plan | $ | 68,871 | ||
Contributions to Schlumberger Profit-Sharing Plans | $ | 15,900 | ||
Perquisites: | ||||
Tax Assistance Related to Relocation | $ | 5,358 | ||
Vacation Travel Allowance | $ | 6,754 | ||
Children Education | $ | 24,940 | ||
Housing Allowance | $ | 92,166 | ||
Total | $ | 213,989 |
(10) | The amount disclosed for Mr. Al Mogharbel consists of the following: |
Item | ||||
Unfunded credits to the Schlumberger Supplementary Benefit Plan | $ | 32,860 | ||
Unfunded matching credits to the Schlumberger Restoration Savings Plan | $ | 65,719 | ||
Contributions to Schlumberger Profit-Sharing Plans | $ | 7,950 | ||
Contributions to Schlumberger 401(k) Plan | $ | 15,900 | ||
Perquisites: | ||||
Vacation Travel Allowance | $ | 42,762 | ||
Children Education | $ | 148,748 | ||
Total | $ | 313,939 |
Grants of Plan-Based Awards for Fiscal Year 20122015
The following Grants of Plan-Based Awards table provides additional information about stock and option awards and equity incentive plan awards granted to Schlumberger’sour named executive officers during the year ended December 31, 2012.2015.
Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(2) | Estimated Possible Payouts Under Equity Incentive Plan Awards(3) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/Sh)(4) | Closing Market Price on Grant Date ($/Sh) | Full Grant Date Fair Value of Stock and Option Awards ($) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name | Grant Date | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(1) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/Sh)(2) | Closing Market Price on Grant Date ($/Sh) | Full Grant Date Fair Value of Stock and Option Awards ($) |
Award | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | ||||||||||||||||||||||||||||||||||||||||||||||
Threshold ($) | Target ($) | Maximum ($) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
P. Kibsgaard | 650,250 | 2,231,250 | 5,100,000 | 736,313 | 2,526,563 | 5,414,063 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Option | 1/15/15 | 266,000 | 77.795 | 76.63 | 5,995,640 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
1/19/2012 | 429,000 | $ | 72.11 | $ | 72.86 | 10,879,440 | 3-year PSU | 1/15/15 | 83,800 | 209,500 | 6,022,706 | |||||||||||||||||||||||||||||||||||||||||||||||||
S. Ayat | 255,000 | 875,000 | 2,000,000 | 255,000 | 875,000 | 1,875,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
1/19/2012 | 137,000 | $ | 72.11 | $ | 72.86 | 3,474,320 | Option | 1/15/15 | 89,000 | 77.795 | 76.63 | 2,006,060 | ||||||||||||||||||||||||||||||||||||||||||||||||
3-year PSU | 1/15/15 | 27,900 | 69,750 | 2,005,173 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
S. Pai | 229,732 | 788,297 | 1,801,822 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
1/19/2012 | 137,000 | $ | 72.11 | $ | 72.86 | 3,425,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
K.-E. Oestdahl | 210,039 | 720,721 | 1,647,362 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
1/19/2012 | 137,000 | $ | 72.11 | $ | 72.86 | 3,474,320 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
A. Belani | 229,500 | 787,500 | 1,800,000 | 229,500 | 787,500 | 1,687,500 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
1/19/2012 | 127,000 | $ | 72.11 | $ | 72.86 | 3,220,720 | Option | 1/15/15 | 80,000 | 77.795 | 76.63 | 1,803,200 | ||||||||||||||||||||||||||||||||||||||||||||||||
3-year PSU | 1/15/15 | 25,100 | 62,750 | 1,803,937 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
P. Schorn | 195,852 | 672,043 | 1,440,092 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Option | 1/15/15 | 71,000 | 77.795 | 76.63 | 1,600,340 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
3-year PSU | 1/15/15 | 22,400 | 56,000 | 1,609,888 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
K. Al Mogharbel | 146,147 | 501,485 | 1,074,610 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Option | 1/15/15 | 71,000 | 77.795 | 76.63 | 1,600,340 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
3-year PSU | 1/15/15 | 22,400 | 56,000 | 1,609,888 |
(1) |
(2) | These columns show the possible payouts for each |
TheActual cash incentive amounts actually earned for 2012 and payable in 20132015 are reflected in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table. For information regarding the annual cash incentive paid to Schlumberger’s named executive officersNEOs with respect to 20122015 performance, please see “Compensation Discussion and Analysis—Elements of Compensation—Annual Cash Incentive Decisions for 2012.2015.”
(3) |
(4) |
The stock options granted in January 2012 vest in five equal annual installments, except for options granted to employees in France, including Mr. Pai, which are subject to four-year cliff vesting.
Outstanding Equity Awards at Fiscal Year-End 20122015
The following table provides information regarding unexercised stock options outstanding and outstanding PSU awards for each of our named executive officersNEOs as of December 31, 2012.2015.
Option Awards | Option Awards | Stock Awards | ||||||||||||||||||||||||||||||||||||
Name | Option Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable(1) | Number of Securities Underlying Unexercised Options (#) Unexercisable(1) | Option Exercise Price ($) | Option Expiration Date | Option/PSU Grant Date | Number of Securities Underlying Unexercised Options Exercisable(1)(#) | Number of Securities Underlying Unexercised Options Unexercisable(1) (#) | Option Exercise Price | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares Units of Stock That Not Vested | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(2) | ||||||||||||||||||||||||
P. Kibsgaard | 7/19/2006 | 6,000 | 0 | 63.545 | 7/19/2016 | 1/17/2008 | 47,000 | 0 | 84.930 | 1/17/2018 | ||||||||||||||||||||||||||||
1/21/2010 | 9,400 | 0 | 68.505 | 1/21/2020 | ||||||||||||||||||||||||||||||||||
2/4/2010 | 12,800 | 0 | 63.760 | 2/4/2020 | ||||||||||||||||||||||||||||||||||
1/17/2008 | 37,600 | 9,400 | 84.930 | 1/17/2018 | 1/20/2011 | 110,400 | 27,600 | 83.885 | 1/20/2021 | |||||||||||||||||||||||||||||
1/22/2009 | 0 | 40,000 | 37.845 | 1/22/2019 | 7/21/2011 | 100,000 | 25,000 | 89.995 | 7/21/2021 | |||||||||||||||||||||||||||||
4/23/2009 | 60,000 | 40,000 | 45.880 | 4/23/2019 | 1/19/2012 | 85,800 | 171,600 | 72.110 | 1/19/2022 | |||||||||||||||||||||||||||||
1/21/2010 | 18,800 | 28,200 | 68.505 | 1/21/2020 | 1/17/2013 | 46,200 | 138,600 | 73.250 | 1/17/2023 | |||||||||||||||||||||||||||||
2/4/2010 | 25,600 | 38,400 | 63.760 | 2/4/2020 | 1/17/2013 | 80,900(3) | 3,454,835 | 80,900(4) | 6,909,669 | |||||||||||||||||||||||||||||
1/20/2011 | 27,600 | 110,400 | 83.885 | 1/20/2021 | 1/16/2014 | 39,800 | 159,200 | 88.765 | 1/16/2024 | |||||||||||||||||||||||||||||
7/21/2011 | 25,000 | 100,000 | 89.995 | 7/21/2021 | 1/16/2014 | 71,400(5) | 6,098,274 | |||||||||||||||||||||||||||||||
1/19/2012 | 0 | 429,000 | 72.110 | 1/19/2022 | 1/15/2015 | 0 | 266,000 | 77.795 | 1/15/2025 | |||||||||||||||||||||||||||||
1/15/2015 | 83,800 | |||||||||||||||||||||||||||||||||||||
S. Ayat | 1/18/2006 | 60,000 | 0 | 54.235 | 1/18/2016 | 1/18/2006 | 60,000 | 0 | 54.235 | 1/18/2016 | ||||||||||||||||||||||||||||
1/17/2007 | 100,000 | 0 | 58.455 | 1/17/2017 | 1/17/2007 | 100,000 | 0 | 58.455 | 1/17/2017 | |||||||||||||||||||||||||||||
1/17/2008 | 48,000 | 12,000 | 84.930 | 1/17/2018 | 1/17/2008 | 60,000 | 0 | 84.930 | 1/17/2018 | |||||||||||||||||||||||||||||
1/22/2009 | 75,000 | 50,000 | 37.845 | 1/22/2019 | 1/22/2009 | 125,000 | 0 | 37.845 | 1/22/2019 | |||||||||||||||||||||||||||||
1/21/2010 | 38,000 | 57,000 | 68.505 | 1/21/2020 | 1/21/2010 | 95,000 | 0 | 68.505 | 1/21/2020 | |||||||||||||||||||||||||||||
1/20/2011 | 37,600 | 150,400 | 83.885 | 1/20/2021 | 1/20/2011 | 150,400 | 37,600 | 83.885 | 1/20/2021 | |||||||||||||||||||||||||||||
1/19/2012 | 0 | 137,000 | 72.110 | 1/19/2022 | 1/19/2012 | 82,200 | 54,800 | 72.110 | 1/19/2022 | |||||||||||||||||||||||||||||
1/17/2013 | 32,000 | 48,000 | 73.250 | 1/17/2023 | ||||||||||||||||||||||||||||||||||
S. Pai | 1/18/2006 | 80,000 | 0 | 54.235 | 1/18/2016 | |||||||||||||||||||||||||||||||||
7/19/2006 | 30,000 | 0 | 63.545 | 7/19/2016 | ||||||||||||||||||||||||||||||||||
1/17/2008 | 32,000 | 8,000 | 84.930 | 1/17/2018 | ||||||||||||||||||||||||||||||||||
1/22/2009 | 51,000 | 34,000 | 37.845 | 1/22/2019 | ||||||||||||||||||||||||||||||||||
4/23/2009 | 36,000 | 24,000 | 45.880 | 4/23/2019 | ||||||||||||||||||||||||||||||||||
1/21/2010 | 0 | 47,000 | 68.505 | 1/21/2020 | ||||||||||||||||||||||||||||||||||
2/4/2010 | 0 | 68,000 | 63.760 | 2/4/2020 | ||||||||||||||||||||||||||||||||||
10/21/2010 | 0 | 83,334 | 64.225 | 10/21/2020 | ||||||||||||||||||||||||||||||||||
1/20/2011 | 0 | 88,000 | 83.885 | 1/20/2021 | ||||||||||||||||||||||||||||||||||
1/19/2012 | 0 | 137,000 | 72.110 | 1/19/2022 | ||||||||||||||||||||||||||||||||||
K.-E. Oestdahl | 1/17/2008 | 16,000 | 4,000 | 84.930 | 1/17/2018 | |||||||||||||||||||||||||||||||||
1/22/2009 | 0 | 4,800 | 37.845 | 1/22/2019 | ||||||||||||||||||||||||||||||||||
4/23/2009 | 0 | 6,000 | 45.880 | 4/23/2019 | ||||||||||||||||||||||||||||||||||
1/21/2010 | 6,000 | 9,000 | 68.505 | 1/21/2020 | 1/17/2013 | 28,100(3) | 1,200,011 | 28,100(4) | 2,400,021 | |||||||||||||||||||||||||||||
1/20/2011 | 8,000 | 32,000 | 83.885 | 1/20/2021 | 1/16/2014 | 13,200 | 52,800 | 88.765 | 1/16/2024 | |||||||||||||||||||||||||||||
4/21/2011 | 0 | 30,000 | 90.065 | 4/21/2021 | 1/16/2014 | 23,800(5) | 2,032,758 | |||||||||||||||||||||||||||||||
1/19/2012 | 0 | 137,000 | 72.110 | 1/19/2022 | 1/15/2015 | 0 | 89,000 | 77.795 | 1/15/2025 | |||||||||||||||||||||||||||||
1/15/2015 | 27,900 | |||||||||||||||||||||||||||||||||||||
A. Belani | 1/18/2006 | 100,000 | 0 | 54.235 | 1/18/2016 | 1/17/2007 | 46,577 | 0 | 58.455 | 1/17/2017 | ||||||||||||||||||||||||||||
1/17/2007 | 50,000 | 0 | 58.455 | 1/17/2017 | 1/22/2009 | 125,000 | 0 | 37.845 | 1/22/2019 | |||||||||||||||||||||||||||||
1/17/2008 | 48,000 | 12,000 | 84.930 | 1/17/2018 | 1/21/2010 | 59,000 | 0 | 68.505 | 1/21/2020 | |||||||||||||||||||||||||||||
1/22/2009 | 75,000 | 50,000 | 37.845 | 1/22/2019 | 1/20/2011 | 25,800 | 25,800 | 83.885 | 1/20/2021 | |||||||||||||||||||||||||||||
1/21/2010 | 23,600 | 35,400 | 68.505 | 1/21/2020 | 1/19/2012 | 76,200 | 50,800 | 72.110 | 1/19/2022 | |||||||||||||||||||||||||||||
1/20/2011 | 25,800 | 103,200 | 83.885 | 1/20/2021 | 1/17/2013 | 28,800 | 43,200 | 73.250 | 1/17/2023 | |||||||||||||||||||||||||||||
1/19/2012 | 0 | 127,000 | 72.110 | 1/19/2022 | 1/17/2013 | 25,300(3) | 1,080,437 | 25,300(4) | 2,160,873 | |||||||||||||||||||||||||||||
1/16/2014 | 12,000 | 48,000 | 88.765 | 1/16/2024 | ||||||||||||||||||||||||||||||||||
1/16/2014 | 21,400(5) | 1,827,774 | ||||||||||||||||||||||||||||||||||||
1/15/2015 | 0 | 80,000 | 77.795 | 1/15/2025 | ||||||||||||||||||||||||||||||||||
1/15/2015 | 25,100 | |||||||||||||||||||||||||||||||||||||
P. Schorn | 1/17/2008 | 20,000 | 0 | 84.930 | 1/17/2018 | |||||||||||||||||||||||||||||||||
4/17/2008 | 20,000 | 0 | 93.970 | 4/17/2018 | ||||||||||||||||||||||||||||||||||
1/21/2010 | 6,000 | 0 | 68.505 | 1/21/2020 | ||||||||||||||||||||||||||||||||||
1/20/2011 | 36,000 | 9,000 | 83.885 | 1/20/2021 | ||||||||||||||||||||||||||||||||||
1/19/2012 | 37,200 | 24,800 | 72.110 | 1/19/2022 | ||||||||||||||||||||||||||||||||||
1/17/2013 | 20,000 | 30,000 | 73.250 | 1/17/2023 | ||||||||||||||||||||||||||||||||||
1/17/2013 | 17,600(3) | 751,608 | 17,600(4) | 1,503,216 | ||||||||||||||||||||||||||||||||||
1/16/2014 | 10,600 | 42,400 | 88.765 | 1/16/2024 | ||||||||||||||||||||||||||||||||||
1/16/2014 | 19,000(5) | 1,622,790 | ||||||||||||||||||||||||||||||||||||
1/15/2015 | 0 | 71,000 | 77.795 | 1/15/2025 | ||||||||||||||||||||||||||||||||||
1/15/2015 | 22,400 | |||||||||||||||||||||||||||||||||||||
K. Al Mogharbel | 1/18/2006 | 0 | 0 | 54.235 | 1/18/2016 | |||||||||||||||||||||||||||||||||
1/17/2007 | 0 | 0 | 58.455 | 1/17/2017 | ||||||||||||||||||||||||||||||||||
10/18/2007 | 3,000 | 0 | 110.775 | 10/18/2017 | ||||||||||||||||||||||||||||||||||
4/17/2008 | 8,000 | 0 | 93.970 | 4/17/2018 | ||||||||||||||||||||||||||||||||||
1/22/2009 | 1,600 | 0 | 37.845 | 1/22/2019 | ||||||||||||||||||||||||||||||||||
1/19/2012 | 9,000 | 6,000 | 72.110 | 1/19/2022 | ||||||||||||||||||||||||||||||||||
4/18/2013 | 8,000 | 12,000 | 70.925 | 4/18/2023 | ||||||||||||||||||||||||||||||||||
7/18/2013 | 20,000 | 30,000 | 78.305 | 7/18/2023 | ||||||||||||||||||||||||||||||||||
7/18/2013 | 16,500 | |||||||||||||||||||||||||||||||||||||
1/16/2014 | 10,600 | 42,400 | 88.765 | 1/16/2024 | ||||||||||||||||||||||||||||||||||
1/16/2014 | 19,000 | |||||||||||||||||||||||||||||||||||||
1/15/2015 | 0 | 71,000 | 77.795 | 1/15/2025 | ||||||||||||||||||||||||||||||||||
1/15/2015 | 22,400 |
(1) | Options granted |
(2) | Market value equal to the product of (x) $69.75, the closing price of Schlumberger’s common stock at December 31, 2015, and (y) the number of unvested PSUs reflected in the previous column. |
(3) | Reflects the number of three-year PSUs at the target award level that were issued in January 2013 and that will vest on January 17, 2016, subject to the achievement of the applicable performance conditions. |
(4) | Reflects the target number of three-year PSUs that were issued in January 2014 and that will vest on January 16, 2017, subject to the achievement of applicable performance conditions. |
(5) | Reflects the target number of three-year PSUs that were issued in January 2015 and that will vest on January 15, 2018, subject to the achievement of applicable performance conditions. |
Option Exercises and Stock Vested for Fiscal Year 20122015
The following table sets forth certain information with respect to stock options exercised, restricted stock units and PSUs that vested during 2015 for our NEOs.
Option Awards | Stock Awards | |||||||||
Name (a) | Number of Shares Acquired on Exercise (#) (b) | Value Realized on Exercise ($) (c) | Number of Shares Acquired on Vesting (#) (d) | Value Realized on Vesting ($) (e)(1) | ||||||
P. Kibsgaard | 0 | 0 | 52,990 | $4,212,440 | ||||||
S. Ayat | 0 | 0 | 18,406 | $1,143,184 | ||||||
A. Belani | 0 | 0 | 16,572 | $1,317,391 | ||||||
P. Schorn | 0 | 0 | 11,528 | $916,418 | ||||||
K. Al Mogharbel | 0 | 0 | 18,000 | $1,568,110 |
(1) | Value realized on vesting was calculated by multiplying the number of shares acquired on vesting (column d) by the average of the high and low prices of shares of Schlumberger common stock on January 17, 2015, January 19, 2015 or April 29, 2015, as applicable. |
Stock Awards (Columns (d) and (e))
The following table provides details of the named executive officers during 2012. Option awardstock awards vested and value realized is calculated by subtracting the aggregate exercise price of the options exercised from the aggregate market value of the shares of Schlumberger common stock.in 2015.
Option Awards | ||||||||||||||||||||||||
Name | Number of Shares Acquired on Exercise(#) | Value Realized on Exercise($) | Grant Date | Release Date | Number of Shares | Stock Price on Release Date | Value Realized on Release ($) | Description | ||||||||||||||||
P. Kibsgaard | 20,000 | $ | 791,000 | 1/17/2013 | 1/17/2015 | 52,990 | $ 79.495 | $4,212,440 | Shares underlying vested PSUs | |||||||||||||||
S. Ayat | 0 | $ | 0 | 1/17/2013 | 1/17/2015 | 18,406 | $ 79.495 | $1,463,184 | Shares underlying vested PSUs | |||||||||||||||
S. Pai | 100,000 | $ | 5,103,700 | |||||||||||||||||||||
K.-E. Oestdahl | 16,200 | $ | 519,066 | |||||||||||||||||||||
A. Belani | 0 | $ | 0 | 1/17/2013 | 1/17/2015 | 16,572 | $ 79.495 | $1,317,391 | Shares underlying vested PSUs | |||||||||||||||
P. Schorn | 1/17/2013 | 1/17/2015 | 11,528 | $ 79.495 | $916,418 | Shares underlying vested PSUs | ||||||||||||||||||
K. Al Mogharbel | 1/19/2012 | 1/19/2015 | 8,000 | $ 79.495 | $635,960 | Shares underlying vested RSUs | ||||||||||||||||||
K. Al Mogharbel | 4/29/2012 | 4/19/2015 | 10,000 | $ 93.215 | $932,150 | Shares underlying vested RSUs |
Pension Benefits for Fiscal Year 2012
Schlumberger maintains the following pension plans for its named executive officers and other employees, which provide for lifetime pensions upon retirement, based on years of service:
Schlumberger Limited Pension Plan (“SLB Pension Plan”);
Schlumberger Technology Corporation Pension Plan (“STC Pension Plan”);
Schlumberger Pension Plan for US Taxpayers Employed Abroad (“SLB USAB Pension Plan”);
Schlumberger Technology Corporation Supplementary Benefit Plan (“STC Supplementary Plan”);
Schlumberger French Supplementary Pension Plan (“SLB French Supplementary Plan”); and
Schlumberger International Staff Pension Plan (“SLB International Staff Pension Plan”).
The following table and narrative disclosure set forth certain information with respect to pension benefits payable to the named executive officers.
Name | Plan Name | Number of Years of Credited Service (#)(1) | Present Value of Accumulated Benefits ($)(2) | Payments During Last Fiscal Year | Plan Name | Number of Years of Credited Service (#)(1) | Present Value of Accumulated Benefits ($)(2) | Payments During Last Fiscal Year | ||||||||||||||||||||
P. Kibsgaard | SLB Pension Plan | 4.75 | 135,822 | 0 | SLB Pension Plan | 7.75 | 343,813 | 0 | ||||||||||||||||||||
STC Pension Plan | 5.00 | 166,031 | 0 | STC Pension Plan | 5.00 | 211,660 | 0 | |||||||||||||||||||||
SLB Supplementary Plan | 4.75 | 1,159,878 | 0 | SLB Supplementary Plan | 7.75 | 4,281,714 | 0 | |||||||||||||||||||||
STC Supplementary Plan | 4.25 | 235,405 | 0 | STC Supplementary Plan | 4.25 | 300,100 | 0 | |||||||||||||||||||||
SLB International Staff Pension Plan | 3.20 | 174,101 | 0 | SLB International Staff Pension Plan | 3.20 | 210,216 | 0 | |||||||||||||||||||||
S. Ayat | SLB Pension Plan | 6.25 | 442,389 | 0 | SLB Pension Plan | 9.25 | 666,530 | 0 | ||||||||||||||||||||
STC Pension Plan | 0.75 | 72,470 | 0 | STC Pension Plan | 0.75 | 72,699 | 0 | |||||||||||||||||||||
SLB Supplementary Plan | 6.25 | 2,167,997 | 0 | SLB Supplementary Plan | 9.25 | 3,736,492 | 0 | |||||||||||||||||||||
STC Supplementary Plan | 0.50 | 5,242 | 0 | STC Supplementary Plan | 0.50 | 5,259 | 0 | |||||||||||||||||||||
SLB French Supplementary Plan | 0.75 | 173,223 | 0 | SLB French Supplementary Plan | 0.75 | 176,647 | 0 | |||||||||||||||||||||
SLB International Staff Pension Plan | 10.60 | 814,496 | 0 | SLB International Staff Pension Plan | 10.60 | 815,081 | 0 | |||||||||||||||||||||
S. Pai | SLB Pension Plan | 5.00 | 298,200 | 0 | ||||||||||||||||||||||||
A. Belani | SLB Pension Plan | 10.75 | 863,536 | 0 | ||||||||||||||||||||||||
STC Pension Plan | 7.25 | 272,400 | 0 | STC Pension Plan | 2.58 | 52,242 | 0 | |||||||||||||||||||||
SLB Supplementary Plan | 5.00 | 1,252,511 | 0 | SLB Supplementary Plan | 10.75 | 3,441,623 | 0 | |||||||||||||||||||||
STC Supplementary Plan | 3.75 | 388,518 | 0 | STC Supplementary Plan | 2.58 | 127,533 | 0 | |||||||||||||||||||||
SLB French Supplementary Plan | 3.25 | 1,531,292 | 0 | SLB International Staff Pension Plan | 10.00 | 617,420 | 0 | |||||||||||||||||||||
SLB International Staff Pension Plan | 9.60 | 387,272 | 0 | |||||||||||||||||||||||||
K.-E. Oestdahl | SLB International Staff Pension Plan | 19.00 | 2,124,972 | 0 | ||||||||||||||||||||||||
A. Belani | SLB Pension Plan | 7.75 | 597,166 | 0 | ||||||||||||||||||||||||
P. Schorn | STC Pension Plan | 10.59 | 499,324 | 0 | ||||||||||||||||||||||||
STC Pension Plan | 2.58 | 50,008 | 0 | SLB USAB Pension Plan | 2.33 | 161,047 | 0 | |||||||||||||||||||||
SLB Supplementary Plan | 7.75 | 1,877,692 | 0 | SLB USAB Supplementary Plan | 2.33 | 813,786 | 0 | |||||||||||||||||||||
STC Supplementary Plan | 2.58 | 122,081 | 0 | STC Supplementary Plan | 8.67 | 790,758 | 0 | |||||||||||||||||||||
SLB International Staff Pension Plan | 10.00 | 593,194 | 0 | SLB International Staff Pension Plan | 10.50 | 528,520 | 0 | |||||||||||||||||||||
K. Al Mogharbel | SLB International Staff Pension Plan | 16.20 | 1,113,390 | 0 |
(1) | The Company does not grant and does not expect to grant extra years of credited service to its named executive officers under the pension plans. The “Number of Years of Credited Service” column reflects each named executive officer’s actual years of service as a participant in each plan. |
(2) | The present value of accumulated benefits is calculated using the |
Tax-Qualified Pension Plans
BothThe SLB Pension Plan, the STC Pension Plan and the SLB USAB Pension Plan are all U.S. tax-qualified pension plans. The SLB Pension Plan and the STC Pension Plan are U.S. tax-qualified pension plans. These plans have substantially identical terms. The SLB USAB Pension Plan, the material terms of which are described below, has similar, but not identical, terms. Employees may participate in any one or both of these plans in the course of their careers with Schlumberger, in which case they become entitled to a pension from each such plan based upon the benefits accrued during the years of service related to eachsuch plan. These plans are funded through cash contributions made by the Company and its subsidiaries based on actuarial valuations and regulatory requirements. Benefits under these plans are based on an employee’s admissible compensation (generally base salary and cash incentive) for each year in which an employee participates in the plan, and the employee’s length of service with Schlumberger.
Since January 1, 1989, the benefit earned under the SLB Pension Plan and the STC Pension Plan has been 1.5% of admissible
compensation for service prior to the employee’s completion of 15 years of active service and 2% of admissible compensation for service after completion of 15 years of active service. Since 2009, the benefit earned under the SLB USAB Pension Plan has been 3.5% of admissible compensation for all service. Normal retirement under these plans is at age 65; however, early retirement with a reduced benefit is possible at age 55 or as early as age 50 with 20 years of service. Additionally, under the “rule of 85,” an employee or executive officer who terminates employment after age 55 and whose combined age and service is 85 or more, is eligible for retirement with an unreduced pension. Mr.Messrs. Ayat isand Belani are eligible for retirement with an unreduced pension under the rule of 85. The benefits are usually paid as a lifetime annuity.
In 2004, the above plansSLB Pension Plan and the STC Pension Plan were amended to generally provide that employees hired on or after October 1, 2004 would not be eligible to participate. Newly-hired employees are eligible to participate in an enhanced defined contribution plan, which provides a Company contribution, depending on thean employee’s 401(k) contribution and the profitability of the Company in anya given year. None of the named executive officers were affected by this change.
Schlumberger Supplementary Benefit Plans—Nonqualified Pension
Both theThe SLB Supplementary Plan and the STC Supplementary Plan containeach provide non-tax-qualified pension benefits. Each of these plans, which have substantially identical terms, provides an eligible employee with benefits equal to the benefits that the employee is unable to receive under the applicable qualified pension plan due to the U.S. Internal Revenue Code of 1986, as amended (the “Code”), limits on (i) annual compensation that can be taken into account under qualified plans and (ii) annual benefits that can be provided under qualified plans.
The retirement age under nonqualified pension plans is the same as under the tax-qualified pension plans. These benefits are subject to forfeiture if the employee leaves the Company or its subsidiaries before the age of 50 with five years of service, engages in certain dishonest acts or has violated a confidentiality arrangement involving the Company or its affiliates. Mr.Messrs. Ayat isand Belani are eligible for retirement with an unreduced pension under the rule of 85, described above. Nonqualified plan benefits are paid to an employee upon separation from service, provided the employee has attained the age of 55, or if earlier, the age of 50 with 20 years of service. Payment is made as a joint and survivor annuity, if married; otherwise, payment is made as a life-only annuity. Payment to key employees is delayed six months following separation from service. These nonqualified plan benefits are payable in cash from the Company’s general assets and are intended to qualify as “excess benefit plans” exempt from certain requirements of Title I of the Employee Retirement Income Security Act of 1974 (“ERISA”).
French Supplementary Pension Plan
Effective January 2006, the Company adopted the SLB French Supplementary Plan for exempt employees in France. The plan complements existing national plans and provides a pension beginning after age 60 when an employee retires from Schlumberger and is eligible for a French state pension under the current rules
at the time of retirement. The benefit is equivalent to 1.5% of admissible compensation (generally base salary and cash incentive) above the earnings cap for fewer than fifteen15 years of service and 2% of admissible compensation for more than fifteen15 years of service. No employee contributions are required or permitted. The benefit is paid as a life-timelifetime annuity. If an eligible employee leaveswere to leave the Company before the minimum age of 60 to receive his or is otherwise not entitled to aher French pension, then the employee would not receive a benefit under the plan. If the eligible employee is terminated after age 55, is not subsequently employed and is otherwise entitled to a French pension, then the employee would receive a benefit under the plan. The Company does not grant and does not expect to grant extra years of credited service under the tax-qualifiedsupplementary pension plans to named executive officers.
International Staff Pension Plan
Recognizing the need to maintain a high degree of mobility for certain of the Company’s employees who otherwise would be unable to accumulate any meaningful pension because they are required to work in many different countries, the Company maintains the SLB International Staff Pension Plan for such employees. All of the Company’s named executive officers have either been in the SLB International Staff Plan at some time during their career prior to becoming an executive officer or are in the plan because of their current assignment.
This plan provides for a lifetime annuity upon retirement based on a specified number of years of service. The plan is funded through cash contributions made by the Company or its subsidiaries, along with mandatory contributions by employees.
BenefitsPrior to January 2010, benefits under this plan arewere based on a participant’s admissible compensation (base salary, geographical or rotational coefficient, as applicable, and performance or incentive bonus)cash incentive) for each year in which the employee participatesparticipated in the plan and the employee’s length of service. The benefit earned up to December 31, 2009 is 2.4% of admissible compensation prior to completion of 15 years of service, and 3.2% of admissible compensation for each year of service after 15 years. Those employees who remained with Schlumberger beyondFollowing the completion of 20 years of service, hadthe benefit earned with respect to the first 15 years of service upgradedis increased to 3.2%. Benefits are payable upon normal retirement age, at or after age 55, or upon early retirement with a reduction, at or after age 50 with 20 years of service. Messrs. Ayat and Belani are eligible for normal retirement with no reduction.
Since January 1, 2010, the benefit earned has been equal to 3.5% of admissible compensation regardless of an employee’s years of service. Benefits earned on or after this date are payable upon normal retirement age, at or after age 60, or upon early retirement with a reduction, at or after age 55.
Nonqualified Deferred Compensation for Fiscal Year 20122015
The following table and narrative disclosure set forth certain information with respect to nonqualified deferred compensation payable to the named executive officers.NEOs.
Name | Plan Name | Executive Contributions in Last FY ($)(1) | Company Contributions in Last FY ($)(2) | Aggregate Earnings in Last FY ($) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last FYE ($) | Plan Name | Executive Contributions in Last FY ($)(1) | Company Contributions in Last FY ($)(2) | Aggregate Earnings in Last FY ($) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last FYE ($)(3) | ||||||||||||||||||||||||||||||
P. Kibsgaard | SLB Supplementary Plan | 0 | 94,209 | 96,394 | 0 | 374,334 | SLB Supplementary Plan | 0 | 137,230 | 124,282 | 0 | 827,231 | ||||||||||||||||||||||||||||||
SLB Restoration Savings Plan | 0 | 0 | 2,385 | 0 | 85,142 | SLB Restoration Savings Plan | 0 | 0 | 583 | 0 | 87,091 | |||||||||||||||||||||||||||||||
International Staff Plan | 0 | 0 | 8,978 | 0 | 94,653 | International Staff Plan | 0 | 0 | (191 | ) | 0 | 117,830 | ||||||||||||||||||||||||||||||
S. Ayat | SLB Supplementary Plan | 0 | 50,043 | 76,107 | 0 | 298,236 | SLB Supplementary Plan | 0 | 57,113 | 54,315 | 0 | 522,772 | ||||||||||||||||||||||||||||||
SLB Restoration Savings Plan | 0 | 0 | 9,562 | 0 | 341,315 | |||||||||||||||||||||||||||||||||||||
International Staff Plan | 0 | 0 | 101,377 | 0 | 1,095,936 | |||||||||||||||||||||||||||||||||||||
S. Pai | SLB Supplementary Plan | 0 | 0 | 33,079 | 0 | 327,054 | ||||||||||||||||||||||||||||||||||||
SLB Restoration Savings Plan | 0 | 0 | 38,102 | 0 | 1,359,974 | |||||||||||||||||||||||||||||||||||||
International Staff Plan | 0 | 96,152 | 141,409 | 0 | 547,158 | |||||||||||||||||||||||||||||||||||||
K.-E. Oestdahl | International Staff Plan | 0 | 87,573 | 62,464 | 0 | 320,029 | ||||||||||||||||||||||||||||||||||||
Norway DC Pension Plan | 0 | 8,685 | 7,616 | 0 | 16,301 | SLB Restoration Savings Plan | 114,225 | 57,113 | 62,721 | 0 | 904,943 | |||||||||||||||||||||||||||||||
International Staff Plan | 0 | 0 | (1,651 | ) | 0 | 1,356,062 | ||||||||||||||||||||||||||||||||||||
A. Belani | SLB Supplementary Plan | 0 | 41,598 | 60,572 | 0 | 266,260 | SLB Supplementary Plan | 0 | 50,404 | 47,896 | 0 | 464,537 | ||||||||||||||||||||||||||||||
SLB Restoration Savings Plan | 207,990 | 41,598 | 65,122 | 0 | 1,128,069 | SLB Restoration Savings Plan | 252,023 | 50,404 | 61,900 | 0 | 2,088,056 | |||||||||||||||||||||||||||||||
International Staff Plan | 0 | 0 | 74,262 | 0 | 838,416 | International Staff Plan | 0 | 0 | (43,483 | ) | 0 | 984,204 | ||||||||||||||||||||||||||||||
P. Schorn | SLB Supplementary Plan | 0 | 68,871 | 74,689 | 0 | 310,694 | ||||||||||||||||||||||||||||||||||||
STC Restoration Savings Plan | 0 | 0 | 4,133 | 0 | 617,586 | |||||||||||||||||||||||||||||||||||||
International Staff Plan | 0 | 0 | (363 | ) | 0 | 224,198 | ||||||||||||||||||||||||||||||||||||
K. Al Mogharbel | STC Supplementary Plan | 0 | 32,860 | 27,404 | 0 | 61,354 | ||||||||||||||||||||||||||||||||||||
STC Restoration Savings Plan | 65,719 | 65,719 | 65,695 | 0 | 197,133 | |||||||||||||||||||||||||||||||||||||
International Staff Plan | 0 | 0 | (732 | ) | 0 | 451,624 |
(1) | The amounts reported in the “Executive Contributions in Last FY” column represent elective contributions of a portion of a named executive officer’s base salary and non-equity incentive plan compensation to the SLB Restoration Savings Plan or STC Restoration Savings Plan (which amounts are also included as |
(2) | The amounts reported in the “Company Contributions in Last FY” column represent Schlumberger’s contributions to each named executive officer’s SLB Supplementary Plan, SLB Restoration Savings Plan, |
(3) | The amounts reported in the “Aggregate Balance at Last FYE” column represent balances from the SLB Restoration Savings Plan, the SLB Supplementary Plan |
SLB Supplementary Benefit Plan—Non-Qualified Profit Sharing
The SLB Supplementary Plan provides certain non-tax-qualified defined contribution benefits for eligible employees, including named executive officers. Schlumberger Technology Corporation maintains a planthe STC Supplementary Plan with substantially identical terms.
The SLB Supplementary Plan providesand the STC Supplementary Plan provide an eligible employee with discretionary Company profit sharing contributions that are not permissible under the applicable tax-qualified plan due to Code limits on (1) annual compensation that can be taken into account under the qualified plan and (2) annual benefits that can be provided under the qualified plan. These nonqualified plan benefits are credited with earnings and losses as if they were invested in the qualified plan, with the same employee investment elections as the qualified plan. An employee forfeits all rights under the SLB Supplementary Plannon-qualified plans if the employee terminates employment before completing four years of service, engageengages in certain dishonest acts or has violated a confidentiality arrangement involving the Company or the Company’sits affiliates. These nonqualified plan benefits are paid in a lump-sum payment following the end of the year in which the employee terminates active service, or the employee can elect to receive payment in installments of five or ten years following the termination of service. If the employee dies before full payment of these benefits, the unpaid benefits are paid in a lump sum to the beneficiaries designated under the applicable qualified plan. Payment to key employees is delayed six months following separation from service.
SLB Restoration Savings Plan
The SLB Restoration Savings Plan, a non-qualified deferred compensation plan, provides certain defined contribution benefits for eligible employees, including the named executive officers.officers and other eligible employees. The SLB Restoration Savings Plan allows an eligible employee to defer compensation (and receive an associated employer match) that the employee cannot defer under the applicable tax-qualified plan because of Code limits on the amount of compensation that can be taken into account.
An eligible employee may elect in advance to defer a percentage (from 1% to 15% or, effective January 1, 2013, up to 50%) of his or her compensation (generally base salary and cash incentive) over the Code annual compensation limits. The election cannot be changed during the year. The Company makes an annual matching contribution with respect to each employee’s deferrals for a year, if the employee is still employed by the Company or an affiliate on the last day of the year. For employees who participate in a Schlumberger pension plan, the amount of the matching contribution is equal to one-half of the first 6% deferred by the employee in profitable years. For employees who do not participate in a Schlumberger pension plan, the matching contribution is 100% onof the first 6% deferred by the employee. Historically, the Company has not made a matching contribution in non-profitable years; provided, however, that effective January 1, 2013, theThe match is made each payroll period and is not contingent on profits.profitability of the Company. Employees’ accounts are credited with interest,earnings, calculated to mirror the interest earnings of the Short-Term Fixed Income Fundrelevant funds under the Schlumberger Master Profit Sharing Trust which was 2.88% in 2012. Matchingas chosen by the employee. If the employee is eligible for the SLB Savings and Profit Sharing Plan, matching contributions and related interestearnings vest based on the employee’s years of service, as follows:
2 years | 33 1 | |||
3 years | 66 2 | |||
4 years | 100% vested |
If the employee is eligible for the SLB Savings and Profit Sharing Plan for U.S. Taxpayers Employed Abroad, matching contributions and related earnings vest based on the employee’s years of service, as follows:
2 years | 20% vested | |||
3 years | 40% vested | |||
4 years | 60% vested | |||
5 years | 80% vested | |||
6 years | 100% vested |
An employee’s account fully vests on his or her death, his or her 60th birthday or plan termination. An employee’s vested account balance is paid in a single lump sum (subject to tax withholding) following the participant’s death, qualifying disability, retirement or other qualifying termination of employment or the employee can elect to receive payment in installments of five or ten years for contributions made after June 30, 2015, following the termination of employment. However, an employee forfeits all benefits under the plan if a determination is made that the employee has engaged in certain dishonest acts or violated a confidentiality arrangement involving Schlumberger or its affiliates. Payment to key employees is delayed six months following separation from service.
SLB International Staff Profit-Sharing Plan
Schlumberger maintains the SLB International Staff Profit-Sharing Plan, which provides for an annual employer contribution based on admissible compensation (base salary, geographical or rotational coefficient, as applicable, and performance or incentive bonus)cash incentive). Amounts allocated to the participants’ accounts share in
investment gains and/or losses of the trust fund and are generally distributed in a lump sum upon the satisfaction of certain conditions on termination of employment. Benefits earned under the SLB International Staff Profit-Sharing Plan will be forfeited upon a determination by the SLB International Staff Profit-Sharing Plan’s administrator that the employee’s separation from service was due to or in circumstances of fraud or misconduct detrimental to the Company, an affiliate or any customer.
Potential Payments Upon Termination or Change in Control for Fiscal Year 2012
No Additional Payments Upon Termination or Change in Control
Schlumberger’sOur named executive officers generally receive the same benefits as other employees. As is the case with other compensation arrangements, any differences are generally due to local (country-specific) requirements. In line with this practice, executive officers do not have employment agreements, “golden parachutes” or change in control agreements, except for employment agreements entered into in connection with phased retirement.retirement as described above. The Company’s executive officers serve at the will of the Board of Directors, which enables the Company to terminate their employment using judgment as to the terms of any severance arrangement and based on specific circumstances at the time they cease being executive officers.
All salaried employees who receive stock options, and all senior executives who receive PSUs, are subject to the same terms and conditions in the event of a termination or change in control.
Phased Retirement
The CompanySchlumberger has a practice of phased retirement, which may be offered to executive officers (other than the CEO) approaching retirement, at the discretion of the Company. Please readSee “Compensation Discussion and Analysis—Benefits—Retirement Practices” for a more detailed discussion.Practices.”
Stock Options
All salaried employees who receive stock options are subject to the same terms and conditions in the event of a termination or change in control, except for certain options assumed in connection with the acquisition of Smith (none of which are held by any named executive officer).
Termination of Employment
Stock Options.This section summarizes the consequences for named executive officersNEOs and other employees under the Company’sour stock option plans and standard form of stock option award agreement in the event an option holder’s employment terminates.
Reason for Termination of Employment | Vesting | Post-Employment Exercise Period | ||
Voluntary termination with consent of the Company or termination by the Company other than for cause | No additional vesting | Exercisable (to the extent exercisable at termination) at any time within three months after termination. | ||
Termination by the Company for cause | None | Vested and unvested options forfeited immediately. | ||
Disability | Full vesting | Exercisable at any time during the 60-month period after termination due to disability or during the remainder of the option period, whichever is shorter.* | ||
Retirement (as defined in the applicable plan or award agreement) | Effective for grants after April 1, 2015, continued vesting as if still employed with the Company | Effective for grants on or after April 1, 2015, exercisable for 10 years from the original grant date. | ||
Special Retirement (as defined in the applicable plan or award agreement) | No additional vesting | Exercisable (to the extent exercisable at termination) at any time during the 60-month period after termination due to retirement or during the remainder of the option period, whichever is shorter. | ||
Death | Full vesting | Exercisable at any time during the 60-month period after termination due to death or during the remainder of the option period, whichever is shorter.* |
* | In order to preserve U.S. preferential tax treatment, the additional 60-month exercise period following a termination due to disability is not applicable to incentive stock options granted prior to January 2008, and such awards are exercisable for only |
Notwithstanding the vesting and exercisability provisions described above, an option holder may forfeit his or her right to exercise stock options, and may have certain prior option exercises rescinded, if such holder engages in “detrimental activity” within one year after termination of employment (or five years after termination of employment in the event of retirement or disability).
If an optionee dies following termination of employment, but during the period in which the optionee would otherwise be able to exercise the option, then the person entitled under the option holder’s will or by the applicable laws of descent and distribution will be entitled to exercise the option until the earlier of (i) 60 months following the date of the optionee’s termination of employment or (ii) the expiration of the original term. Death following termination of employment will not result in any additional vesting, so that the option will be exercisable to the extent provided in the matrix above based on the circumstances of the optionee’s termination of employment.
PSUs. This section summarizes the consequences for NEOs holding PSUs granted under the Company’s 2010 Omnibus Stock Incentive Plan and 2013 Omnibus Stock Incentive Plan and subject to the Company’s standard form of three-year PSU award, in the event the PSU holder’s employment terminates.
PSUs are treated as follows upon the holder’s termination of employment with the Company and its subsidiaries prior to the vesting date (i.e., the three-year anniversary of the grant date).
For these purposes “retirement” is defined as termination of employment with the Company and all subsidiaries either at or after (i) age 60 and completion of at least 25 years of service with the Company and all subsidiaries or (ii) age of 55 and completion of at least 20 years of service with the Company and all subsidiaries subject to the approval of the compensation committee; “special retirement” is defined as termination of employment with the Company and all subsidiaries either at or after (i) age 55 or (ii) age 50 and completion of at least 10 years of service with the Company and all subsidiaries; and “disability” is defined as a disability (whether physical or mental impairment) which totally and permanently incapacitates the holder from any gainful employment in any field which the holder is suited by education, training, or experience, as determined by the Compensation Committee.
Change in Control
Stock Options.Pursuant to Schlumberger’s stock optionsoption plans and standard form of stock option award agreement (other than awards issued under the 2010 Omnibus Stock Incentive Plan and awards proposed to be issued under the 2013 Omnibus Stock
Incentive Plan), in the event of any reorganization, merger or consolidation wherewherein Schlumberger is not the surviving corporation, or upon the liquidation or dissolution of Schlumberger, all outstanding stock option awards will, unless alternate provisions are made by Schlumberger in connection with the reorganization, merger or consolidation for the assumption of such awards, become fully exercisable and vested, and all holders will be permitted to exercise their options for 30 days prior to the cancellation of the awards as of the effective date of such event. Under both the 2010 Omnibus Stock Incentive Plan and the 2013 Omnibus Stock Incentive Plan, the Compensation Committee retains the discretion to adjust outstanding awards in the event of corporation transactions and outstanding options may be, but are not required to be, accelerated upon such a transaction.
The following table sets forth the intrinsic value of the unvested stock options held by each named executive officer as of December 31, 20122015 that would become vested upon the occurrence of death, disability or a change in control in which Schlumberger is not the surviving entity and alternative provisions are not made for the assumption of awards, as described in the preceding paragraphs. Due to the number of factors that affect the nature and amount of any benefits provided upon these events, any amounts actually paid or distributed may be different. Factors that could affect these amounts include the time during the year of any such event and the price of Schlumberger common stock.
Name | Amount($)(1) | ||||||
P. Kibsgaard | |||||||
S. Ayat | |||||||
| |||||||
| |||||||
A. Belani | |||||||
P. Schorn | 0 | ||||||
K. Al Mogharbel | 0 |
(1) |
If Schlumberger merges or consolidates with another entity and is the surviving entity, then a holder of stock options granted pursuant to Schlumberger’s stock options plans will be entitled to receive, upon exercise or vesting, in lieu of the number of shares with respect to which the award is exercisable or vested, the number and class of shares of stock or other securities that the holder would have been entitled to receive under the terms of such merger or consolidation if, immediately prior to such event, such holder had been the holder of record of the number of shares of Schlumberger common stock equal to the number of shares as to which such award is then exercisable or vested.
PSUs. Under Schlumberger’s 2010 Omnibus Stock Incentive Plan and the 2013 Omnibus Stock Incentive Plan, in the event of a merger, consolidation, acquisition of property or stock, separation, spinoff, reorganization or liquidation, the Board of Directors may, in its sole discretion, (1) provide for the acceleration of the vesting of any awards, including PSUs, or (2) decide to cancel any awards, including PSUs, and deliver cash to the holders in an amount that the Board of Directors determines in its sole discretion is equal to the fair market value of such awards on the date of such event. However, no current agreement with respect to the PSUs currently provides for any definitive special treatment upon such a merger, consolidation, acquisition of property or stock, separation, spinoff, reorganization or liquidation.
The following table sets forth the value of the unvested PSUs at target held by each NEO as of December 31, 2015 that would become vested upon the occurrence of a merger, consolidation, acquisition of property or stock, separation, spinoff, reorganization or liquidation assuming that the Board of Directors elects to accelerate the vesting of PSUs as provided in the previous paragraph. Due to the number of factors that affect the nature and amount of any benefits provided upon these events, any amounts actually paid or distributed may be different. Factors that could affect these amounts include the price of Schlumberger common stock and achievement by the Company of the relevant performance metric.
Name | Amount ($)(1) | |||||||
P. Kibsgaard | 16,467,975 | |||||||
S. Ayat | 5,566,050 | |||||||
A. Belani | 5,008,050 | |||||||
P. Schorn | 4,115,250 | |||||||
K. Al Mogharbel | 4,038,525 |
(1) | Calculated based on the product of the closing price of Schlumberger common stock on December 31, 2015 ($69.75) and the number of outstanding, unvested three-year PSUs (at target) held by the executive as of that date. |
Retirement Plans
Schlumberger’s pension plans and non-qualified deferred compensation plans include the same terms and conditions for all participating employees in the event of a termination or change in control. Other than the Schlumberger Restoration Savings Plan, none of Schlumberger’s non-qualified plans provide for the accelerated payment of benefits upon a change in control. For more information on these plans, see “Executive Compensation—the Pension Benefits”Benefits for Fiscal Year 2015 table and “—accompanying narrative above and the Nonqualified Deferred Compensation.”Compensation for Fiscal Year 2015 table and accompanying narrative above.
The following table sets forth the amounts as of December 31, 20122015 of benefit payments that would be accelerated under the Schlumberger Restoration Savings Plan upon a change in control.
Name | Amount ($) | |||||||
P. Kibsgaard | ||||||||
S. Ayat | ||||||||
| ||||||||
| ||||||||
A. Belani | ||||||||
P. Schorn | 617,586 | |||||||
K. Al Mogharbel | 131,414 |
Retiree Medical
Subject to satisfying certain age, service and contribution requirements, allmost U.S. employees excluding employees who became Schlumberger employees as a result of the Smith acquisition, are eligible to participate in a retiree medical program. Generally, this program provides comprehensive medical, prescription drug and vision benefits for retirees and their dependents until attaining age 65. Historically, for Schlumberger employees who turned age 40 prior to 2014, and excluding those employees who became Schlumberger employees as a result of the Smith acquisition, retiree medical benefits continue beyond age 65, at which time Medicare becomes primary and the Schlumberger plan becomes secondary, paying eligible charges after Medicare has paid. However, effective April 1, 2015, participants who reach age 65 will no longer continue in Schlumberger medical coverage after reaching age 65, but instead will receive a monthly contribution to a health reimbursement arrangement that can be used to purchase Medicare supplemental coverage and pay other tax-deductible expenses.
DIRECTOR COMPENSATION IN FISCAL YEAR 20122015
Following its annual review in July 2015 of comparative market data provided by Pay Governance, the Compensation Committee determined not to increase non-employee director compensation.
Non-employee directors receive an annual cash retainer of $100,000 plus an additional annual fee of $10,000 for membership on eacha committee. The chair of each committee receives an additional annual fee of $20,000 in lieu of the additional annual fee of $10,000 for committee membership. Directors who are employees of Schlumberger do not receive compensation for serving on the Board. Additionally, Schlumberger’s current practice is to grant each newly-appointed or elected non-employee director (including non-employee directors re-elected at the AGM) shares of Schlumberger common stock each April. Effective April 30, 2012,2015, Schlumberger granted each such non-employee director 2,250 shares of Schlumberger common stock.
Although Schlumberger’s Directors Stock and Deferral Plan provides that annual stock awards to non-employee directors may be in the form of shares of common stock, shares of restricted common stock or restricted stock units, Schlumberger’s practice has been to issue only shares of common stock to its non-employee directors.stock. Schlumberger directors have never received restricted common stock or restricted stock units as director compensation.
Mr. Tony Isaac was electedDuring his services as our non-executive Chairman, of the Board in April 2012, having previously served as Schlumberger’s independent lead director. On January 19, 2012, the Board, upon recommendation of the Compensation Committee and based on market data provided by Pay Governance, determined thatMr. Isaac, in consideration of the additional responsibilities required of an independent non-executive Chairman of the Board, Mr. Isaac’sreceived annual compensation for service as independent non-executive Chairman of the Board would be $400,000, in addition to amounts otherwise payable to Mr. Isaac as a director, as described in the paragraph above. Accordingly, the amount for Mr. Isaac in the Director Compensation table below (under the “Fees Earned or Paid in Cash” column) includes this increased compensation, prorated from June 2012.based on his retirement date of April 8, 2015. Mr. Isaac did not participate in any discussions or in the decision regarding his compensation.
compensation prior to his retirement. Mr. Gould, our former Chief Executive Officer whoKamath retired from that position in August 2011, continued to serve as Chairman of the Board untilafter the 2012 annual general meeting of stockholders (not standingJuly 16, 2015 meeting. Accordingly, the amount for re-election) and as an executive officer until April 30, 2012, at which time he ceased being an employee ofMr. Kamath in the Company. Mr. Gould did not receive any additionalDirector Compensation table below (under the “Fees Earned or Paid in Cash” column) includes his prorated compensation forbased on his service as a director in 2012.retirement date.
The following table provides information on Schlumberger’s compensation for non-employee directors in 2012.2015.
Name | Fees Earned or Paid in Cash ($)(1) | Stock Awards(2) ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value & Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Total(3) ($) | Fees Earned or Paid in Cash(1) ($) | Stock Awards(2) ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value & Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Total(3) ($) | ||||||||||||||||||||||||||||||||||
Philippe Camus(4) | 32,500 | — | — | — | — | — | 32,500 | |||||||||||||||||||||||||||||||||||||||||
Peter L.S. Currie | 120,000 | 166,815 | — | — | — | 29,878(5) | 316,693 | 130,000 | 212,873 | — | — | — | 13,018 | (4) | 355,891 | |||||||||||||||||||||||||||||||||
V. Maureen Kempston Darkes | 117,500 | 212,873 | — | — | — | — | 330,373 | |||||||||||||||||||||||||||||||||||||||||
Tony Isaac | 430,000 | 166,815 | — | — | — | — | 596,815 | 132,500 | 20,930 | (6) | — | — | — | 14,551 | (7) | 167,981 | ||||||||||||||||||||||||||||||||
K. Vaman Kamath | 127,500 | 166,815 | — | — | — | 11,402(5) | 305,717 | 97,500 | 212,873 | — | — | — | — | 342,873 | ||||||||||||||||||||||||||||||||||
Nikolay Kudryavtsev | 120,000 | 166,815 | — | — | — | — | 286,815 | 120,000 | 212,873 | — | — | — | — | 332,873 | ||||||||||||||||||||||||||||||||||
Adrian Lajous | 130,000 | 166,815 | — | — | — | 14,806(5) | 311,621 | |||||||||||||||||||||||||||||||||||||||||
Michael E. Marks | 130,000 | 166,815 | — | — | — | 34,379(5) | 331,194 | 130,000 | 212,873 | — | — | — | — | 342,873 | ||||||||||||||||||||||||||||||||||
Elizabeth A. Moler | 110,000 | 166,815 | — | — | — | 14,230(5) | 291,045 | |||||||||||||||||||||||||||||||||||||||||
Indra K. Nooyi | 90,000 | 212,873 | — | — | — | — | 302,873 | |||||||||||||||||||||||||||||||||||||||||
Lubna S. Olayan | 130,000 | 166,815 | — | — | — | — | 296,815 | 120,000 | 212,873 | — | — | — | — | 332,873 | ||||||||||||||||||||||||||||||||||
Leo Rafael Reif | 130,000 | 166,815 | — | — | — | — | 296,815 | 130,000 | 212,873 | — | — | — | 13,006 | (4) | 355,879 | |||||||||||||||||||||||||||||||||
Tore I. Sandvold | 120,000 | 166,815 | — | — | — | — | 286,815 | 120,000 | 212,873 | — | — | — | — | 332,873 | ||||||||||||||||||||||||||||||||||
Henri Seydoux | 120,000 | 166,815 | — | — | — | — | 286,815 | 120,000 | 212,873 | — | — | — | — | 332,873 |
(1) | Reflects cash fees earned, without taking into account any election to defer receipt of such fees. Ordinarily, the annual cash retainer is paid in cash, but non-employee directors can elect to have their retainer paid in stock or deferred under the Schlumberger 2004 Stock and Deferral Plan for Non-Employee Directors. |
TheIf an independent director joins our Board or becomes Chair of a committee of our Board after the start of any year, he or she will receive compensation prorated according to the number of months during which he or she served in that position during that year. As a result, the fees disclosed in this column are subject to adjustment in cases where, as with Ms. Indra K. Nooyi, a non-employee director has served less than one full year or has changed committee memberships or chairmanships during the year.
(2) | The amounts reported reflect the aggregate grant date fair value of the stock awards granted in |
(3) | Schlumberger reimburses non-management directors for travel and other business expenses incurred in the performance of their services for Schlumberger. |
(4) |
Represents amounts paid for spousal airfare in connection with |
(5) | Mr. Isaac did not stand for re-election at the April 2015 annual general meeting of |
(6) | Represents the fair market value in 2003 of 1,000 deferred shares issued to Mr. Isaac upon his retirement from the Board in May 2015. |
(7) | Represents amounts |
Director Stock Ownership Guidelines
The Board believes that ownership of Schlumberger stock by Board members aligns their interests with the interests of the Company’s stockholders. Accordingly, the Board has established a guideline that each non-employee Board member must, within five years of joining the Board, own at least 10,000 Schlumberger common shares or restricted stock units. As of December 31, 2012,2015, each of our current non-employee directors who have been Board members for at least five years is in compliance with these stock ownership guidelines.
EQUITY COMPENSATION PLAN INFORMATION
The table below sets forth the following information as of the end of December 31, 2015 for all equity compensation plans approved by our stockholders. Schlumberger currently has no equity compensation plans, other than 401(k) savings plans, that are not approved by our stockholders.
Plan category | (a) Number of securities to be issued upon exercise of outstanding options, warrants and rights | (b) Weighted-average exercise price of such outstanding options, warrants and rights(1) | (c) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | |||||||||
Equity compensation plans approved by security holders | 44,659,039 | (2) | $ | 80.649 | 27,281,679 | (3) | ||||||
Equity compensation plans not approved by security holders | — | — | — | |||||||||
|
|
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|
| |||||||
Total | 44,659,039 | (2) | $ | 80.469 | 27,281,679 | (3) |
(1) | The weighted average price does not take into account the shares issuable upon vesting of outstanding PSUs or restricted stock units (“RSUs”), which have no exercise price. |
(2) | This amount includes 3,572,500 RSUs and PSUs (with PSUs calculated at target) awarded under our equity compensation plans. The PSUs are payable in common stock after the relevant performance period is ended. RSUs are subject to three-year cliff vesting, except for RSUs granted prior to April 2013 to employees in France, which are subject to two-year cliff vesting. RSUs are forfeited upon retirement. Also includes 41,086,539 shares of common stock issuable upon the exercise of outstanding stock options assumed in the 2010 acquisition of Smith. |
(3) | Includes 114,437 shares of common stock issuable under Schlumberger’s 2004 Stock and Deferral Plan for Non-Employee Directors. |
Equity compensation plans approved by Schlumberger stockholders include the 2013 Omnibus Stock Incentive Plan; the 2010 Schlumberger Omnibus Stock Incentive Plan; the Schlumberger Discounted Stock Purchase Plan, as amended; the Schlumberger 2004 Stock and Deferral Plan for Non-Employee Directors; the Schlumberger 2008 Stock Incentive Plan, as amended; and the Schlumberger 2005 Stock Incentive Plan, as amended; the Schlumberger 2001 Stock Option Plan, as amended; and the Schlumberger 1998 Stock Option Plan, as amended.
ITEM 3. APPROVAL OF FINANCIAL STATEMENTS AND DIVIDENDS
Following completion of the audit procedures performed by PricewaterhouseCoopers LLP, the Company’s independent registered public accounting firm, the following are submitted to the Company’s stockholders for approval pursuant to Schlumberger’s Articles of Incorporation:
the Company’s Consolidated Balance Sheet as at December 31, 2012;
its Consolidated Statement of Income for the year ended December 31, 2012, as audited by PricewaterhouseCoopers LLP;2015; and
the amount of dividends declared by the Board of Directors during 2012.
These items are included in the Schlumberger 20122015 Annual Report to Stockholders, which is provided concurrently with this proxy statement. Stockholders should refer to these items in considering this agenda item.
Required Vote
A majority of the votes cast is required for the approval of the financial results as set forth in the financial statements and of the declaration of dividends by the Board of Directors as reflected in the Company’s 20122015 Annual Report to Stockholders.Brokers have discretion to vote on this proposal without your instruction. If you do not instruct your broker how to vote on this proposal, your broker willmay vote on this proposal in its discretion.
Recommendation of the Board
The Board of Directors Recommends a Vote FOR Item 3.
ITEM 4. APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
PricewaterhouseCoopers LLP has been selected by the Audit Committee as the independent registered public accounting firm to audit the annual financial statements of the Company for the year 2013.ending December 31, 2016. Although ratification is not required by our By-Laws or otherwise, as a matter of good corporate governance, we are asking stockholders to approve the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm. If the selection is not approved, the Audit Committee will consider whether it is appropriate to select another independent registered public accounting firm.
A representative of PricewaterhouseCoopers LLP is expected to attend the 20132016 annual general meeting of stockholders, will have the opportunity to make a statement if he or she desires to do so, and will be available to respond to appropriate questions.
Fees Paid to PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP has billed the Company and its subsidiaries the fees set forth in the table below for:
the audit of the Company’s 20122015 and 20112014 annual financial statements and reviews of quarterly financial statements and other audit services, and
the other services described below that were billed in 20122015 and 2011.
Year Ended December 31, | Year Ended December 31, | |||||||||||||||
2012 | 2011 | 2015 | 2014 | |||||||||||||
(in thousands) | (in thousands) | |||||||||||||||
Audit Fees(1) | $ | 14,889 | $ | 12,957(2) | $ | 13,970 | $ | 15,004 | ||||||||
Audit-Related Fees | $ | 731 | $ | 669 | $ | 650 | $ | 1,161 | ||||||||
Tax Fees | $ | 2,323 | $ | 1,862 | $ | 1,646 | $ | 2,023 | ||||||||
All Other Fees | $ | 3,970 | $ | 1,649 | $ | 409 | $ | 220 | ||||||||
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Total | $ | 21,913 | $ | 17,134 | $ | 16,675 | $ | 18,408 | ||||||||
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(1) Includes of fees for statutory audits.
(2) Consists of fees for employee benefit plan audits and other audit-related items.
(3) Consists of fees for tax compliance, tax planning and other permitted tax services.
(4) Consists of fees for permitted advisory services.
The Audit Committee considers the provision of services by PricewaterhouseCoopers LLP not related to the audit of the Company’s annual financial statements and the review of the Company’s interim financial statements when evaluating PricewaterhouseCoopers LLP’s independence.
Audit Committee’s Pre-Approval Policy and Procedures
The Audit Committee pre-approves all services provided to the Company and its subsidiaries by Schlumberger’s independent registered public accounting firm. The Audit Committee has adopted a schedule for annual approval of the audit and related audit plan, as well as approval of other anticipated audit related services; anticipated tax compliance, tax planning and tax advisory services; and other anticipated services. In addition, the Audit Committee (or an authorized committee member acting under delegated authority of the committee) will consider any proposed services not approved as part of this annual process. During 2012, no matters2015 and 2014, all audit and non-audit services were taken on without pre-approval underpre-approved by thede minimisprovisions of the Sarbanes-Oxley Act. Audit Committee.
Required Vote
A majority of the votes cast is required to approve this Item 4.Brokers have discretion to vote on this proposal without your instruction. If you do not instruct your broker how to vote on this proposal, your broker will vote on this proposal in its discretion.
Recommendation of the Board
The Board of Directors Recommends a Vote FOR Item 4.
ITEM 5. APPROVAL OF AMENDMENT TO THE COMPANY’S ARTICLES OF INCORPORATION
The Board of Directors has proposed for stockholder approval an amendment to Schlumberger’s Articles of Incorporation to (a) allow the Board of Directors to fix the authorized number of directors at an annual general meeting, subject to stockholder approval of that number, and (b) make other technical and conforming modifications to reflect changes to the Curaçao Civil Code regarding among, other things, the identification of parties having the right to attend and address general meetings of the Company’s stockholders.
The proposed amendment was adopted, subject to stockholder approval, by the unanimous vote of the Board of Directors on January 21, 2016. This summary of the Articles of Incorporation is a summary of the principal features proposed to be amended, and does not purport to be a complete description of all of the provisions of Schlumberger’s Articles of Incorporation. This summary is qualified in its entirety by the full text of the Articles of Incorporation as proposed to be amended, which is set forth as Appendix B to this proxy statement.
Reasons for the Proposed Amendment to the Company Articles of Incorporation
Currently under the Company’s Articles of Incorporation, the size of the Board of Directors may range from five (5) to 24, and is set based on the number of directors elected at each annual general meeting of stockholders. The Board of Directors believes that it is advisable and in the best interests of Schlumberger’s stockholders to allow the Company stockholders to set the desired size of the Board of Directors at the annual general meeting, subject to stockholder approval, at a number that may exceed the number of directors to be elected at the annual general meeting. This will allow the Board of Directors to adjust the size of the Board between annual general meetings, but not above the stockholder-approved limit, so that the Board may conduct a search for, and add, additional directors not yet identified at the time of the annual general meeting.
Any director named by the Board will serve a term that lasts until the next annual general meeting of stockholders, and such new directors then will be subject to election by the vote of the stockholders during the next annual general meeting.
The other amendments to the Company’s Articles of Incorporation reflect new requirements of the Curaçao Civil Code related to the parties having a right to attend and address general meetings of stockholders.
Resolutions Adopting the Proposed Amendment
The following resolutions, which will be presented to stockholders at the 2016 Annual General Meeting of Stockholders, will adopt the proposed amendment to Schlumberger’s Articles of Incorporation as described above:
RESOLVED, Section 8.3 of Article 8 of Schlumberger’s Articles of Incorporation is hereby amended and restated to read in its entirety as follows:
8.3. The number of persons constituting the whole Board of Directors shall be not fewer than five (5) nor more than twenty-four (24), as fixed from time to time by the Board of Directors, subject to approval by stockholders of the Company at a general meeting of stockholders. The authorized maximum number of persons constituting the whole Board of Directors shall, until changed at the occasion of any succeeding general meeting of stockholders, be the number so fixed. The directors shall be elected at a general meeting of stockholders by a majority of votes cast, in person or by proxy, by the stockholders entitled to vote; provided, that directors shall be elected by a plurality of the votes cast if, as of a date that is five (5) business days in advance of the date the Company files its definitive proxy statement (regardless of whether thereafter revised or supplemented) with the United States Securities and Exchange Commission, the number of nominees exceeds the number of directors to be approved at such meeting, as fixed by the Board of Directors in accordance with these Articles of Incorporation. For purposes of this Article 8.3, a majority of the votes cast means that the number of votes cast “for” a director exceeds the number of votes cast “against” that director. If the number of directors elected at a
general meeting of stockholders is smaller than the authorized number of directors as fixed in accordance with these Articles of Incorporation, the Board of Directors shall be authorized, but not obligated, to appoint additional directors such that the total number of directors does not exceed the authorized number of directors as fixed by the Board of Directors in accordance with these Articles of Incorporation, any such appointment to be effective until the next general meeting of stockholders. The Board of Directors shall also be authorized, but not obligated, to appoint directors at any time to fill any vacancy or vacancies on the Board of Directors, any such appointment to be effective until the next general meeting of stockholders. Directors may be suspended or dismissed at any general meeting of stockholders. A suspension as referred to in this Article automatically terminates if the person concerned has not been dismissed within two (2) months after the day of suspension. At any general meeting of stockholders at which action is taken to suspend or dismiss a director, or at any subsequent general meeting, the stockholders shall be authorized, but not obligated, to appoint directors at any time to fill any vacancy or vacancies on the Board of Directors created by (i) such action or (ii) any increase of the authorized maximum number of persons constituting the whole Board of Directors.
RESOLVED, that the amendments to the Articles of Incorporation of Schlumberger to reflect the persons allowed to attend a general meeting of stockholders under Curaçao law be, and they hereby are, adopted to read in their entirety as set forth in Appendix B to Schlumberger’s Proxy Statement dated March [ ], 2016 and in the form presented to this meeting.
RESOLVED, that each lawyer of STvB Advocaten (Curaçao) N.V., Curaçao counsel to Schlumberger, is authorized to execute and file in Curaçao the notarial deed of amendment effecting such amendments.
Required Vote
A vote in favor of this proposal by a majority of the shares of the Company outstanding and entitled to vote is required to approve this Item 5.Brokers have discretion to vote on this proposal without your instruction. If you do not instruct your broker how to vote on this proposal, your broker may vote on this proposal in its discretion.
Effectiveness of Amendment
If stockholders approve the proposed amendment, it will become effective when the notarial deed is executed and filed which the Company anticipates having executed as soon as practicable following stockholder approval.
Recommendation of the Board
The Board of Directors Recommends a Vote FOR Item 5.
ITEM 6. RESOLUTION TO FIX THE SIZE OF THE BOARD
As discussed in Item 5 above, the Board of Directors believes that it is advisable and in the best interests of Schlumberger’s stockholders to allow the Company’s stockholders to fix the size of the Board of Directors at the annual general meeting at a number that may exceed the number of directors to be elected. Subject to stockholder approval of the amendments to the Company’s Articles of Incorporation as set forth in Item 5, the Board of Directors has proposed to fix the number of directors constituting the Board of Directors at not more than 12 directors. If stockholders approve fixing the size of the Board of Directors at not more than 12 directors, the Board of Directors will be authorized to conduct a search for additional directors and to name up to an additional two directors to the Board of Directors prior to the next annual general meeting of stockholders.
Any director named by the Board will serve a term that lasts until the next annual general meeting of stockholders, and such new directors then will be subject to election by the vote of the stockholders at the next annual general meeting. The Board of Directors has not yet determined to name any additional individuals to the Board of Directors to fill the additional seats proposed to be authorized by this Item, and there is no assurance that the Board will identify two additional individuals to name to the Board of Directors before the next annual general meeting of stockholders.
Required Vote
A majority of the votes cast is required to approve this Item 6. Brokers have discretion to vote on this proposal without your instruction. If you do not instruct your broker how to vote on this proposal, your broker may vote on this proposal in its discretion.
Recommendation of the Board
The Board of Directors Recommends a Vote FOR Item 6.
ITEM 7. APPROVAL OF THE AMENDED AND RESTATED FRENCH SUB PLAN UNDER THE SCHLUMBERGER 2010 OMNIBUS STOCK INCENTIVE PLAN FOR PURPOSES OF QUALIFICATION UNDER THE MACRON LAW IN FRANCE
Proposal
As required under applicable French law, we are asking our stockholders to approve the French Sub Plan for Restricted Units, as amended and restated (the “French Sub Plan”), which operates under the Schlumberger 2010 Omnibus Stock Incentive Plan (the “Omnibus Plan”) for the purpose of qualifying under the Macron Law in France, so that restricted stock units and performance stock units that are granted under the French Sub Plan to individuals who are subject to taxation under French law (including, but not limited to, certain grants previously approved by the Compensation Committee of our Board of Directors and described below) may qualify as “Free Share Grants” which are subject to favorable tax treatment. Any such Free Share Grants will be satisfied from the existing share reserve of the Omnibus Plan and will have terms consistent with the existing terms of the Omnibus Plan. Free Share Grants under the Macron Law are subject to lower taxation on the receipt of the grant by the individual and also subject to lower withholding taxes on the Company.
This Item does not propose to make any changes to the Omnibus Plan itself, nor to increase the number of shares currently authorized for issuance under the Omnibus Plan.
Effect of the Proposal
Schlumberger or its subsidiaries employ individuals who are subject to taxation under French law. Due to the recent enactment on July 10, 2015 of the Macron Law, certain equity compensation awards granted under the French Sub Plan will qualify as “free share grants,” if so designated by the Compensation Committee of our Board of Directors, assuming that stockholders approve the amended and restated French Sub Plan. Such stockholder approval would allow such grants to qualify as “free share grants,” which would result in preferential tax treatment for grantees who are subject to taxation under French law.
Consequently, pursuant to the Macron Law, the Company is soliciting its stockholders for approval of the amended and restated French Sub Plan for purposes of Macron Law qualification in France, so that equity grants that are made under the French Sub Plan to individuals who are subject to taxation under French law (including, but not limited to, certain grants previously approved by the Compensation Committee of our Board of Directors and described below) may qualify as “free share grants.”
The Macron Law Proposal will not in any manner alter the Omnibus Plan and will not increase the number of shares of Company common stock reserved for grant pursuant to awards issued under the Omnibus Plan. In addition, in the event that the amended and restated French Sub Plan is not approved, the Company may still grant equity awards to employees of the Company or its subsidiaries who are subject to taxation under French law; however, in that event, it is possible that such grants would not benefit from the provisions of the Macron Law relating to “free share grants.”
Summary of the Omnibus Plan
Under the terms of the Omnibus Plan, the Compensation Committee may, subject to applicable law, grant awards to persons outside the United States under such terms and conditions as may, in its judgment, be necessary or advisable to comply with the laws of the applicable foreign jurisdictions and, to that end, may establish sub-plans. Pursuant to this provision, the Compensation Committee previously adopted the French Sub Plan under the Omnibus Plan. The Compensation Committee adopted amendments to the French Sub Plan that are intended to address the conditions for being able to grant Free Share Grants under the Macron Law, and is submitting for stockholder approval the French Sub Plan as so amended so that restricted stock units granted under the French Sub Plan may qualify as Free Share Grants.
This summary of the French Sub Plan is a summary of the principal features of the French Sub Plan, and does not purport to be a complete description of all of the provisions of the French Sub Plan. This summary is qualified in its entirety by the full text of the French Sub Plan, which is set forth as Appendix C to this proxy statement.
Purpose of the Plan
The Board of Directors approved the Omnibus Plan, subject to stockholder approval, for the purpose of providing incentives to our employees in order to:
The Board of Directors recommends the amendments to the French Sub Plan to take advantage of the favorable tax provisions for both the Company and the recipient of restricted stock units and performance stock units when issued under an incentive plan qualified under the Macron Law to employees in France.
Types of Awards
The amendments to the French Sub Plan affect only restricted stock units and performance stock units available to our French employees, and do not affect the terms of the Omnibus Plan or awards granted pursuant to it.
A maximum of 1,381,595 shares remain available to be the subject of future awards of restricted stock units or performance stock units under the French Sub Plan, which number shall be adjusted in connection with stock splits, stock dividends, reorganizations and similar events as and to the extent permitted under the Omnibus Plan. The terms, conditions and limitations applicable to awards of restricted stock units and performance stock units will be determined by our Compensation Committee. Restricted stock units intended to qualify as Free Share Grants will be subject to a restriction period under which such shares will not be delivered earlier than three years from the grant date, except that the Compensation Committee may provide for earlier delivery upon termination of employment by reason of death. Performance stock units intended to qualify as Free Share Grants will be subject to a restriction period under which such shares will not be delivered earlier than three years from the grant date, except that the Compensation Committee may provide for earlier vesting upon termination of employment by reason of death. Awards of restricted stock units and performance stock units may not be transferred to any third party except in the event of the eligible employee’s death.
Term
Awards may be granted under the Omnibus Plan on or before April 6, 2020. Awards may be granted under the French Sub Plan until the termination of the Omnibus Plan.
Eligible Participants: | All employees of Schlumberger and our subsidiaries are eligible under the Omnibus Plan. Employees of Schlumberger or its subsidiaries in France and directors of a Schlumberger subsidiary with a management function in France are eligible under the French Sub Plan. As of January 31, 2016, approximately 1,600 employees would qualify for grants under the French Sub Plan. | |
Ineligible Participants: | Directors who are not also employees and any person who owns, directly or indirectly, stock representing more than 10% of the total combined voting power or value of all classes of our stock. | |
Shares Available for Issuance under the Omnibus Plan: | A total of 30 million shares of Schlumberger common stock are subject to the Omnibus Plan. The Amendments to the French Sub Plan will not increase the number of shares or awards available under the Omnibus Plan. The number of |
shares available for issuance under the Omnibus Plan is subject to adjustment to reflect stock splits, reorganizations and similar events. The provisions of the Omnibus Plan permit the grant of stock and stock-based awards, including stock options, incentive stock options and stock appreciation rights. The French Sub Plan provides for the grant of restricted stock units and performance stock units, and does not provide for the grant of stock options. Except for the Awards conditioned on stockholder approval of the amended and restated French Sub Plan as described below, the awards that will be made in the future under the French Sub Plan are not currently determinable, and such awards are within the discretion of the Compensation Committee. |
Stockholder approval of the amended French Sub Plan is a condition to approval of the following awards, which were granted in January 2016, subject to stockholder approval of this Item. Should our stockholders not approve this Item, such awards will be granted under the previous French Sub Plan and ineligible for the preferential tax treatment.
Name | # of Shares | Grant Date Value ($) | ||||||
P. Kibsgaard | 0 | $0 | ||||||
S. Ayat | 0 | $0 | ||||||
A. Belani | 0 | $0 | ||||||
P. Schorn | 0 | $0 | ||||||
K. Al Mogharbel | 0 | $0 | ||||||
All current executive officers as a group | 7,100 | $439,632 | ||||||
All directors as a group | N/A | N/A | ||||||
All employees, other than executive officers, as a group | 28,500 | $1,764,720 |
Material Tax Consequences
If the French Sub Plan is approved by stockholders and restricted stock units and performance stock units otherwise qualify under the Macron Law, grants of Free Share Grants to French-resident employees subject to the French social security regime should be subject to 15.5% social security taxes on the value of such awards at the time of vesting, in contrast to currently being subject to a combined 18% social security tax rate. The vesting gain continues to be subject to progressive income tax rates that employees pay upon ultimate sale of shares received under such Free Share Grants but under the Macron Law such tax rates can be reduced by 50% or more if the shares are held for a specified number of years. In addition, under the Macron Law, the employing company will be subject to a 20% social security tax upon vesting of qualifying RSUs, in contrast to the current 30% social security tax that is imposed upon grant of restricted stock units (and which currently is not refunded if restricted stock units are forfeited before vesting). The tax consequences of participating in the French Sub Plan may vary with respect to individual situations and it should be noted that income tax laws, regulations and interpretations thereof change frequently. Participants should rely upon their own tax advisors for advice concerning the specific tax consequences applicable to them, including the applicability and effect of state, local and foreign tax laws.
The Board of Directors believes that it is in the best interests of the Company and its stockholders to enable the Company to grant Free Share Grants under the French Sub Plan that would qualify for the income and social security tax and social treatment authorized under the Macron Law. If stockholders do not approve the
French Sub Plan, the Company expects to continue to rely on its existing qualified French Sub-plan to grant restricted stock units to French employees, or may make alternative compensation arrangements. In addition, nothing in this proposal precludes the Company from making any payment or granting equity awards that do not qualify for such tax treatment, and submission of this proposal to the Company’s stockholders should not be viewed as a guarantee that all grants to individuals subject to taxation under French law will qualify as Free Share Grants under the Macron Law.
Required Vote
A majority of the votes cast is required to approve this Item 7.Brokers do not have discretion to vote on this proposal without your instruction. If you do not instruct your broker how to vote on this proposal, your broker will deliver a non-vote on this proposal.
Recommendation of the Board
The Board of Directors Recommends a Vote FOR Item 7.
During 2012,2015, the Audit Committee periodically reviewed and discussed the Company’s financial statements with Company management and PricewaterhouseCoopers LLP, the Company’s independent registered public accounting firm, PricewaterhouseCoopers LLP, including matters raised by the independent registered public accounting firm pursuant to applicable Public Company Accounting Oversight Board (“PCAOB”) requirements. The Audit Committee also discussed with the Company’s management and independent registered public accounting firm the reviewevaluation of the Company’s reporting and internal controls undertaken in connection with certifications by the Company’s Chief Executive Officer and Chief Financial Officer pursuant to the Sarbanes-Oxley Act of 2002 in certain of the Company’s filings with the SEC. The Audit Committee reviewed and discussed such other matters as it deemed appropriate, including the Company’s compliance with Section 404 of the Sarbanes-Oxley Act of 2002 and the other provisions of the Sarbanes-Oxley Act of 2002, and rules adopted or proposed to be adopted by the SEC and the NYSE. The Audit Committee also discussed with PricewaterhouseCoopers LLC the matters required to be discussed by the independent registered public accounting firm with the Audit Committee under applicable rules adopted by the PCAOB.
The Company’s independent registered public accounting firm provided the Audit Committee with the written disclosures and the letter concerning independence required by Public Company Oversight Board Rule 3526 (Communicationapplicable requirements of the PCAOB regarding the independent registered public accounting firm’s communications with the Audit Committees Concerning Independence) and Public Company Oversight Board Rule 3524 (Audit Committee, Pre-approval of Certain Tax Services), and the Committee discussed PricewaterhouseCoopers LLP’s independence with them.
Based on the foregoing reviews and discussions, the Audit Committee recommended that the Board include the audited financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 20122015, as filed with the SEC.
SUBMITTED BY THE AUDIT COMMITTEE OF THE SCHLUMBERGER
BOARD OF DIRECTORSSEC on January 27, 2016.
ITEM 5. APPROVAL OF THE ADOPTION OF THE 2013 SCHLUMBERGER OMNIBUS INCENTIVE PLAN
We are requesting that our stockholders vote in favor of the adoption of the 2013 Schlumberger Omnibus Stock Incentive Plan (the “2013 Incentive Plan”).
Most of our competitors employ a wide range of incentive instruments. We have traditionally granted only stock options or restricted stock units covering shares of common stock, but have determined to grant performance share units to certain executives, including the named executive officers, commencing in 2013. Approval of the 2013 Incentive Plan would provide for 35 million additional shares for Schlumberger to grant long-term incentives to its employees and would provide for continued flexibility with regard to award types and the terms and conditions of awards.
In order to continue to attract and retain valuable employees, we are seeking approval of the 2013 Incentive Plan to provide (i) additional shares issuable to employees and (ii) continued flexibility in the types and terms of incentive instruments that we issue in order to remain competitive. In addition, as of December 31, 2012, there were only 11,297,415 shares available in the aggregate for grants under our 2005 Stock Incentive Plan, our 2008 Stock Incentive Plan and our 2010 Incentive Plan.
The 2013 Incentive Plan provides for the grant to our employees of stock options, cash, stock appreciation rights, and stock awards, which may include restricted stock or restricted stock units. A stock option gives the holder the right to purchase a specified number of shares of stock, at a fixed exercise price, in the future. Stock appreciation rights give the holder the right to receive a payment, in cash or shares of stock, equal to the fair market value of a specified number of shares of stock on the date the right is exercised over a specified strike price. Restricted stock is common stock that is restricted or subject to forfeiture provisions. Restricted stock units are units evidencing the right to receive shares of common stock that are restricted or subject to forfeiture provisions.
In order for awards under the 2013 Incentive Plan to be eligible to qualify as “performance-based compensation” for purposes of Section 162(m) of the Code, the material terms of the performance goals under which compensation may be paid must be disclosed to and approved by the Company’s stockholders every five years. The material terms include (i) the employees eligible to receive compensation, (ii) a description of the business criteria on which the performance goals are based and (iii) the maximum amount of compensation that can be paid to an employee under the performance goals. Each of these aspects is discussed below, and approval of the 2013 Incentive Plan will constitute approval of the material terms of the performance goals.
Schlumberger’s Board of Directors approved the 2013 Incentive Plan on January 17, 2013, subject to stockholder approval.
Required Stockholder Vote
A majority of the votes cast is required for approval of the 2013 Incentive Plan, provided that the total votes cast on the proposal represents over 50% of all shares entitled to vote on this Item.Brokers do not have discretion to vote on this proposal without your instruction. If you do not instruct your broker how to vote on this proposal, your broker will deliver a non-vote on this proposal. Broker non-votes and abstentions could prevent the total votes cast on the proposal from representing over 50% of all shares entitled to vote, but will not otherwise have an effect on the vote.
Summary of the 2013 Incentive Plan
The following summary of certain major features of the 2013 Incentive Plan is subject to the specific provisions contained in the full text of the 2013 Incentive Plan, which is attached to this proxy statement as Appendix A.
Purpose of the 2013 Incentive Plan
The Board approved the 2013 Incentive Plan, subject to stockholder approval, for the purpose of providing incentives to our employees in order to:
retain employees with a high degree of training, experience and ability;
attract new employees whose services are considered particularly valuable;
encourage the sense of proprietorship of such persons; and
promote the active interest of such persons in our growth and financial success.
Summary of Key Terms
The following is a summary of the key provisions of the 2013 Incentive Plan.
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non-qualified and incentive stock options;
stock appreciation rights;
stock awards, including restricted stock and restricted stock units (a term that includes performance stock units); and
cash awards.
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no more than 1,000,000 shares consisting of stock options, stock appreciation rights, restricted stock or restricted stock units.
no more than $20 million for the grant date value of cash awards.
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shares of common stock not issued or delivered as a result of the net settlement of an outstanding stock appreciation right or stock option, or
shares of common stock used to pay the exercise price or withholding taxes related to an outstanding stock appreciation right or stock option award.
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Number of Shares Remaining for Future Grant
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Repricing, or reducing the exercise price of a stock option or stock appreciation right;
Substituting a new option or stock appreciation right grant with an exercise price lower than the exercise price of an outstanding option or stock appreciation right grant;
Reload grants; or
Granting awards under the 2013 Incentive Plan with respect to more than 1,000,000 shares to any one participant during any year.
Stock Options
Vesting
The Compensation Committee will determine at the time of grant when each stock option will vest. The Compensation Committee’s current practice is to grant options that vest in five equal annual installments beginning on the first anniversary of the grant date, except where local conditions dictate a different vesting schedule.
Exercise Price
The exercise price of stock options granted under the 2013 Incentive Plan may not be less than the fair market value (the mean between the high and low sales prices on the New York Stock Exchange on the grant date) of the common stock on the date of grant. As of March [ ], 2013, the mean between the high and low sales prices of Schlumberger common stock on the New York Stock Exchange was $[ ] per share.
Option Term
The option term may not be longer than 10 years.
Payment of Purchase Price
The purchase price to be paid upon exercise of a stock option may be paid, subject to the rules established by the Compensation Committee, as follows:
in cash or by certified check;
by the tender or delivery of shares of our common stock with a fair market value at the time of exercise equal to the total option price; or
by a combination of the preceding methods.
Stock options also may be exercised through “cashless exercise” procedures approved by the Compensation Committee involving a broker or dealer approved by the Compensation Committee. Schlumberger may require, prior to issuing common stock under the 2013 Incentive Plan, that the participant remit an amount in cash, or authorize withholding of common stock in connection with the option exercise, sufficient to satisfy tax withholding requirements
Termination of Employment
The 2013 Incentive Plan grants the Compensation Committee broad discretion to designate the treatment of stock options following an option holder’s termination of employment with Schlumberger or any of its subsidiaries. However, the Compensation Committee currently expects that the consequences of termination of
employment on outstanding stock options will be consistent with past stock options awards. The following table and paragraph following the table summarize the Compensation Committee’s past practice with regards to treatment of stock options in the event an option holder’s employment terminates.
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V. Maureen Kempston Darkes, Chair | ||||
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If an optionee dies following termination of employment, but during the period in which the optionee would otherwise be able to exercise the option, then the person entitled under the option holder’s will or by the laws of descent and distribution will be entitled to exercise the option until the earlier of
60 months following the date of the optionee’s termination of employment, or
the expiration of the original term.
Death or disability following termination of employment will not result in any additional vesting, so that the option will be exercisable to the extent provided in the matrix above based on the circumstances of the optionee’s termination of employment.
Stock Appreciation Rights
Awards may also be in the form of rights to receive a payment, in cash or common stock, equal to the fair market value or other specified value of a number of shares of common stock on the rights exercise date over a specified strike price (“stock appreciation rights”). All stock appreciation rights granted under the 2013 Incentive Plan must have a grant price per share that is not less than the fair market value of a share of common stock on the date of grant and a term of no more than 10 years.
Stock Awards
A maximum of 7.5 million shares may be the subject of stock awards, such as restricted stock or restricted stock unit awards. The terms, conditions and limitations applicable to grants of restricted stock and restricted stock units will be determined by our Compensation Committee. Restricted stock and restricted stock units will be subject to a restriction period totaling at least three years from the grant date (the vesting, lapse, or termination of which may be no more rapid in combination than pro rata over three years), except that the Compensation Committee may provide for earlier vesting upon a change of control or termination of employment by reason of death, disability or retirement. Furthermore, up to 1.75 million shares of stock may be issued as restricted stock or restricted stock units having a restriction period of three years or less.
Cash Awards
Awards may also be in the form of grants denominated in cash. The terms, conditions and limitations applicable to any cash awards granted pursuant to the 2013 Incentive Plan will be determined by the Compensation Committee.
Performance Awards
At the discretion of the Compensation Committee, any of the above-described employee awards may be made in the form of a performance award. A performance award is an award that is subject to the attainment of one or more performance goals. The terms, conditions and limitations applicable to any performance award will be determined by the Compensation Committee.
The 2013 Incentive Plan permits, but does not require, the Compensation Committee to structure any performance award made to a named executive officer as performance-based compensation. At the discretion of the Compensation Committee, certain awards under the 2013 Incentive Plan may be intended to qualify as performance-based compensation under Section 162(m) of the Code. Section 162(m) of the Code generally limits the deductibility for federal income tax purposes of annual compensation paid to a company’s executive officers to $1 million per covered executive in a taxable year. The Compensation Committee and the Board of Directors may take deductibility and nondeductibility of compensation into account but retain the discretion to authorize the payment of potentially nondeductible amounts.
In making qualified performance awards, the Compensation Committee may base a performance goal on one or more of the following business criteria that may be applied to the participant, one or more business units, divisions or sectors of Schlumberger, or Schlumberger as a whole, or by comparison with a peer group of companies:
revenue and income measures (which include revenue, gross margin, income from operations, net income, net sales, earnings per share, earnings before interest, taxes, depreciation and amortization (“EBITDA”), and economic value added (“EVA”));
expense measures (which include costs of goods sold, selling, finding and development costs, general and administrative expenses and overhead costs);
operating measures (which include productivity, operating income, funds from operations, cash from operations, after-tax operating income, market share, margin and sales volumes);
cash flow measures (which include net cash flow from operating activities and working capital);
liquidity measures (which include earnings before or after the effect of certain items such as interest, taxes, depreciation and amortization, and free cash flow);
leverage measures (which include debt-to-equity ratio and net debt);
market measures (which include market share, stock price, growth measures, total shareholder return and market capitalization measures);
return measures (which include return on equity, return on capital employed, return on assets and return on invested capital);
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measures relating to acquisitions, dispositions or customer satisfaction.
Performance goals need not be based upon an increase or positive result under a particular business criterion and could include, for example, maintaining the status quo or limiting economic losses.
Clawback
The award agreement may provide that an employee granted an award may forfeit his or her right to such award or be required to return common stock or cash received as a result of the exercise or vesting of an award if such holder engages in “detrimental activity” (as defined by the Compensation Committee in the award agreement under the 2013 Incentive Plan) during or following termination of employment. Under Schlumberger’s current standard terms for stock options grants, forfeiture may occur due to detrimental activity within one year after termination of employment (or five years after termination of employment in the event of retirement or disability).
Transferability
Unless otherwise determined by the Compensation Committee in an award agreement, no award will be assignable or otherwise transferable. Any attempted assignment of an award will be void.
Administration
The Compensation Committee will administer the 2013 Incentive Plan. The Compensation Committee has full power and authority to:
to select the employees to be granted awards;
to determine the terms of awards to be made;
to determine the time when awards are to be granted and any conditions that must be satisfied before an award is granted;
to establish objectives and conditions for earning awards;
to determine the terms and conditions of award agreements (which shall not be inconsistent with the 2013 Incentive Plan) and which parties must sign each award agreement;
to determine whether the conditions for earning an award have been met and whether a performance award will be paid at the end of an applicable performance period;
except as otherwise provided in the 2013 Incentive Plan, to modify the terms of awards made under the 2013 Incentive Plan;
to determine if, when and under what conditions payment of all or any part of an award may be deferred;
to determine whether the amount or payment of an award should be reduced or eliminated;
to determine the guidelines and/or procedures for the payment or exercise of awards; and
to determine whether a performance award should qualify, regardless of its amount, as deductible in its entirety for federal income tax purposes, including whether a performance award granted to an executive officer should qualify as performance-based compensation.
The Compensation Committee may correct any defect or supply any omission or reconcile any inconsistency in the 2013 Incentive Plan or in any award in the manner and to the extent the Compensation Committee deems necessary or desirable to further the purposes of the 2013 Incentive Plan or to avoid unanticipated consequences or address unanticipated events (including any temporary closure of a stock
exchange on which the Schlumberger’s common stock is traded, disruption of communications or natural catastrophe) deemed by the Compensation Committee to be inconsistent with the purposes of the 2013 Incentive Plan or any award agreement, provided that no such action shall be taken absent stockholder approval to the extent required by the 2013 Incentive Plan. The Compensation Committee may, subject to applicable law, grant awards to persons outside the United States under such terms and conditions as may, in its judgment, be necessary or advisable to comply with the laws of the applicable foreign jurisdictions and, to that end, may establish sub-plans, modified option exercise procedures and other terms and procedures.
Except with respect to matters related to awards to executive officers or other awards intended to qualify as qualified performance-based compensation under Section 162(m), the Compensation Committee may delegate to the Chief Executive Officer and to other senior officers of Schlumberger or to such other committee of the Board of Directors its duties under the 2013 Incentive Plan pursuant to such conditions or limitations as the Compensation Committee may establish.
Amendment or Termination
The Board of Directors or the Compensation Committee may amend, modify, suspend or terminate the 2013 Incentive Plan for the purpose of addressing any changes in legal requirements or for any other lawful purpose, except that
no amendment that would adversely affect the rights of any participant under any award previously granted to such participant may be made without the consent of such participant, and
no amendment will be effective prior to its approval by the stockholders of Schlumberger to the extent such approval is otherwise required by applicable law or the requirements of any exchange on which the common stock is listed.
Additionally, no stock option or stock appreciation right may be repriced, replaced, regranted through cancellation or modified without stockholder approval (except in connection with a change in Schlumberger’s capitalization) if the effect would be to reduce the exercise price for the shares underlying such stock option or stock appreciation right.
Adjustments
In the event of any subdivision or consolidation of shares or other capital readjustment, or the payment of a stock dividend or other increase or reduction of the number of shares of our common stock outstanding without compensation therefor in money, services or property, then the number of shares subject to the 2013 Incentive Plan and the 2013 Incentive Plan limits in the number of shares subject to awards granted to an individual participant in any calendar year will be proportionally adjusted and the number of shares of common stock with respect to which outstanding awards or other property subject to an outstanding award granted under the Incentive Plan will:
in the event of an increase in the number of outstanding shares, be proportionately increased, and the cash consideration (if any) payable per share of common stock shall be proportionately reduced; and
in the event of a reduction in the number of outstanding shares, be proportionately reduced, and the cash consideration (if any) payable per share of common stock shall be proportionately increased.
In the event of any corporate merger, consolidation, acquisition of property or stock, separation, spinoff, reorganization or liquidation, the Board of Directors may make certain adjustments to awards as it deems equitable, including, providing for the substitution of a new award (or other arrangement) or the assumption of the award, prior to the transaction providing for the acceleration of the vesting and exercisability of or the lapse of restrictions with respect to the award, and cancelling any outstanding award in exchange for cash in an amount deemed by the Board to be equal to the fair market value of the award.
Consistent with past practice, we currently expect that any award agreement documenting an award under the 2013 Incentive Plan will not contain a contractual right to an automatic acceleration upon a change in control.
Rather, we expect that any acceleration of vesting of an award in connection with a transaction would be made only where (i) a transaction results in a change in control of Schlumberger and (ii) in connection with such transaction the outstanding awards are not assumed by Schlumberger’s successor.
U.S. Federal Income Tax Consequences
The following discussion of tax consequences relates only to U.S. federal income tax matters. The tax consequences of participating in the 2013 Incentive Plan may vary according to country of participation. Also, the tax consequences of participating in the 2013 Incentive Plan may vary with respect to individual situations and it should be noted that income tax laws, regulations and interpretations thereof change frequently. Participants should rely upon their own tax advisors for advice concerning the specific tax consequences applicable to them, including the applicability and effect of state, local and foreign tax laws.
Stock Options and Stock Appreciation Rights
Some of the options issued under the 2013 Incentive Plan are intended to constitute “incentive stock options” within the meaning of Section 422 of the Code, while other options granted under the 2013 Incentive Plan are non-qualified stock options. The Code provides for tax treatment of stock options qualifying as incentive stock options that may be more favorable to employees than the tax treatment accorded non-qualified stock options. Generally, upon the exercise of an incentive stock option, the optionee will recognize no income for U.S. federal income tax purposes, although the optionee may subsequently recognize income if the shares are disposed of prior to the holding period described below. The difference between the exercise price of the incentive stock option and the fair market value of the stock at the time of purchase is an item of tax preference which may require payment of an alternative minimum tax.
On the sale of shares acquired by exercise of an incentive stock option (assuming that the sale does not occur within two years following the date of grant of the option or within one year following the date of exercise), any gain will be taxed to the optionee as long-term capital gain. Except with respect to death or permanent and total disability (in which case the optionee has one year to exercise and obtain incentive stock option treatment), an optionee has three months after termination of employment in which to exercise an incentive stock option and retain incentive stock option tax treatment at exercise. An option exercised more than three months after an optionee’s termination of employment, including termination due to retirement, cannot qualify for the tax treatment accorded incentive stock options. Such option would be treated as a non-qualified stock option instead.
In contrast, upon the exercise of a non-qualified option, the optionee recognizes taxable income (subject to withholding) in an amount equal to the difference between the fair market value of the shares on the date of exercise and the exercise price. Upon any sale of such shares by the optionee, any difference between the sale price and the fair market value of the shares on the date of exercise of the non-qualified option will be treated generally as capital gain or loss.
Participants will not realize taxable income upon the grant of a stock appreciation right. Upon the exercise of a stock appreciation right, the participant will recognize ordinary income (subject to withholding by Schlumberger) in an amount equal to the cash or fair market value of the shares of stock received on the date of exercise of the stock appreciation right. The participant will generally have a tax basis in any shares of stock received on the exercise of a stock appreciation right that equals the fair market value of such shares on the date of exercise. Subject to the limitations discussed below, Schlumberger will be entitled to a deduction for U.S. federal income tax purposes that corresponds as to timing and amount with the compensation income recognized by the participant under the foregoing rules.
Subject to the discussion below under “Certain Tax Code Limitations on Deductibility,” under rules applicable to U.S. corporations, no deduction is available to the employer corporation upon the grant or exercise of an incentive stock option (although a deduction may be available if the employee sells the shares so purchased before the applicable holding period expires), whereas, upon exercise of a non-qualified stock option or stock
appreciation right, the employer corporation is entitled to a deduction in an amount equal to the income recognized by the employee. A non-U.S. corporation, such as Schlumberger, is entitled to deductions only to the extent allocable to “effectively connected income” which is subject to U.S. federal income tax.
Stock Awards
A participant generally will not have taxable income upon the grant of stock awards, such as restricted stock or restricted stock units. Instead, he or she will recognize ordinary compensation income in the first taxable year in which his or her interest in the stock underlying the award becomes either (i) freely transferable or (ii) no longer subject to substantial risk of forfeiture. In general, a participant will recognize ordinary compensation income in an amount equal to the fair market value of the stock when it first becomes transferable or is no longer subject to a substantial risk of forfeiture, unless the participant makes an election to be taxed on the fair market value of the stock underlying the award when it is received.
An employee will be subject to withholding for federal, and generally for state and local, income taxes at the time the employee recognizes income under the rules described above with respect to an award of restricted stock or restricted stock units. The tax basis of a participant in the stock received will equal the amount recognized by the employee as compensation income under the rules described in the preceding paragraph, and the employee’s holding period in such shares will commence on the date income is so recognized. Upon later disposition of stock received that has been held for the requisite holding period, the employee will generally recognize capital gain or loss equal to the difference between the amount received in the disposition and the amount previously recognized as compensation income.
Subject to the discussion below under “Certain Tax Code Limitations on Deductibility,” Schlumberger will be entitled to a deduction for U.S. federal income tax purposes that corresponds as to timing and amount with the compensation income recognized by the participant under the foregoing rules to the extent the deduction is allocable to “effectively connected income” which is subject to U.S. federal income tax.
Certain Tax Code Limitations on Deductibility
Section 162(m) of the Code provides that certain compensation received in any year by a “covered employee” in excess of $1 million is non-deductible by Schlumberger for federal income tax purposes. Section 162(m) provides an exception, however, for “qualified performance-based compensation.” The Compensation Committee may determine to designate awards granted to “covered employees” as qualified performance-based compensation. However, the Compensation Committee may award compensation that is or may become non-deductible, and expects to consider whether it believes such grants are in the best interest of Schlumberger, balancing tax efficiency with long-term strategic objectives.
Code Section 409A
Section 409A of the Code generally provides that any deferred compensation arrangement must satisfy specific requirements, both in operation and in form, regarding (1) the timing of payment, (2) the advance election of deferrals, and (3) restrictions on the acceleration of payment. Failure to comply with Section 409A may result in the early taxation (plus interest) to the participant of deferred compensation and the imposition of a 20% penalty on the participant on such deferred amounts included in the participant’s income. Schlumberger intends to structure awards under the 2013 Incentive Plan in a manner that is designed to be exempt from or comply with Section 409A.
Code Section 457A
Section 457A of the Code has significantly changed the rules applicable to deferred compensation paid to U.S. persons by certain foreign corporations and other entities. We expect that stock options, stock-settled stock appreciation rights, restricted stock and restricted stock units granted under the 2013 Incentive Plan will be exempt from Section 457A. However, stock appreciation rights that may be settled in cash may be subject to Section 457A, as well as cash awards or stock units that are not paid within one year after vesting.
Section 457A requires that any compensation paid under a deferred compensation plan of a nonqualified entity must be included in the participant’s income at the time such amounts are no longer subject to a substantial risk of forfeiture. Therefore, stock appreciation rights that may be settled in cash as well as cash awards or stock units that are not paid within one year after vesting may result in income inclusion upon vesting, even though the participant has not exercised the stock appreciation right or received delivery of cash or shares of stock at that time. Schlumberger currently intends to grant awards that are exempt from Section 457A.
EQUITY COMPENSATION PLAN INFORMATION
The table below sets forth the following information as of the end of December 31, 2012 for all equity compensation plans approved and not approved by our stockholders.
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Equity compensation plans approved by Schlumberger stockholders include the 2010 Schlumberger Omnibus Stock Incentive Plan; the Schlumberger Discounted Stock Purchase Plan, as amended; the Schlumberger 2004 Stock and Deferral Plan for Non-Employee Directors; the Schlumberger 2008 Stock Incentive Plan, as amended; and the Schlumberger 2005 Stock Incentive Plan, as amended; the Schlumberger 2001 Stock Option Plan, as amended; the Schlumberger 1998 Stock Option Plan, as amended; and the Schlumberger 1994 Stock Option Plan, as amended.
Recommendation of the Board
The Board of Directors recommends that you vote “FOR” Item 5.
ITEM 6. APPROVAL OF THE AMENDMENT AND RESTATEMENT OF THE SCHLUMBERGER DISCOUNTED STOCK PURCHASE PLAN
We are requesting that our stockholders vote in favor of approving an amendment and restatement of the Schlumberger Discounted Stock Purchase Plan (as amended, the “DSPP”), that would increase the number of shares available for purchase under the DSPP by 22,000,000 shares. The proposed amendment and restatement of the DSPP was approved by the Board as of January 1, 2013, subject to approval by our stockholders. No other changes are being made to the DSPP.
The DSPP was originally approved by the Board and our stockholders in 1988. In 1998 and in 2010, the DSPP was amended and restated with the approval of our stockholders. The DSPP was amended and restated in 2010 to increase the number of shares authorized for issuance under the DSPP by 10,000,000 and to update the DSPP to reflect changes to U.S. tax laws. The following summary of certain major features of the DSPP is subject to the specific provisions contained in the full text of the DSPP, which is attached to this proxy statement as Appendix B.
Required Vote
A majority of the votes cast is required for approval of the amendment and restatement of the Discounted Stock Purchase Plan, provided that the total votes cast on the proposal represents over 50% of all shares entitled to vote on this Item.Brokers do not have discretion to vote on this proposal without your instruction. If you do not instruct your broker how to vote on this proposal, your broker will deliver a non-vote on this proposal. Broker non-votes and abstentions could prevent the total votes cast on the proposal from representing over 50% of the outstanding shares, but will not otherwise have an effect on the vote.
Purpose of the DSPP and Proposed Amendment and Restatement
The DSPP is designed to encourage and assist all employees of Schlumberger and its subsidiaries to acquire an equity interest in Schlumberger through the purchase of common stock. The proposed amendment and restatement is designed to allow an additional 22,000,000 shares to be granted pursuant to the DSPP, which will insure that a sufficient number of shares will be available under the DSPP for future purchase periods. A total of zero shares currently remain available for purchase under the DSPP; during 2012, a total of 4,290,058 shares were purchased under the DSPP. If the proposed amendment and restatement is approved, an aggregate of 22,000,000 shares will be available for purchase under the DSPP.
The DSPP is intended to constitute an “employee stock purchase plan” under Section 423 of the Internal Revenue Code of 1986 (the “Code”).
Administration
The DSPP is administered by a committee of at least three persons appointed by the Board (the “DSPP Committee”). The DSPP Committee has the full power and authority to:
employ and compensate agents for the purpose of administering the accounts of participating employees;
construe and interpret the DSPP;
determine all questions of eligibility; and
compute the amount and determine the manner and time of payment of all benefits.
Key Terms
The following is a summary of the key provisions of the DSPP Plan.
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employees who would, immediately upon enrollment in the DSPP, own, directly or indirectly, or hold options or rights to acquire, an aggregate of 5% or more of the total combined voting power or value of all outstanding shares of all classes of our stock or our subsidiaries’ stock;
employees who are customarily employed by us less than twenty hours per week or less than five months in any calendar year; and
employees who are prohibited by the laws and regulations of the nation of their residence or employment from participating in the DSPP as determined by the DSPP Committee.
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the fair market value of a share of our common stock on the grant date (the first trading day of a purchase period or such other trading day determined by the DSPP Committee); and
the fair market value of a share of our common stock on the purchase date (the last trading day of a purchase period or such other trading day determined by the DSPP Committee).
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U.S. Federal Income Tax Consequences to Schlumberger and to Participants
The following discussion of tax consequences relates only to U.S. federal income tax matters. The tax consequences of participating in the DSPP may vary according to country of participation. Also, the tax consequences of participating in the DSPP may vary with respect to individual situations and it should be noted that income tax laws, regulations and interpretations thereof change frequently. Participants should rely upon their own tax advisors for advice concerning the specific tax consequences applicable to them, including the applicability and effect of state, local and foreign tax laws.
The DSPP is intended to qualify as an “employee stock purchase plan” under Section 423 of the Code. Amounts withheld from pay under the DSPP are taxable income to participants in the year in which the amounts otherwise would have been received, but the participants will not be required to recognize additional income for federal income tax purposes either at the time the employee is deemed to have been granted a right to purchase common stock (on the first day of a purchase period) or when the right to purchase common stock is exercised (on the last day of the purchase period).
If the participant holds the common stock purchased under the DSPP for at least two years after the first day of the purchase period in which the common stock was acquired (the “Enrollment Date”) and for at least one year after the date that the common stock is purchased (the “Exercise Date”), when the participant disposes of the common stock he or she will recognize as ordinary income an amount equal to the lesser of:
the excess of the fair market value of the common stock on the date of disposition over the price paid for the common stock; or
the fair market value of the common stock on the Enrollment Date multiplied by the original 7.5% discount.
If the participant disposes of the common stock within two years after the Enrollment Date or within one year after the Exercise Date, he or she will recognize ordinary income equal to the fair market value of the
Common Stock on the Exercise Date in which the common stock was acquired less the amount paid for the common stock. The ordinary income recognition pertains to any disposition of common stock acquired under the DSPP (such as by sale, exchange or gift).
Upon disposition of the common stock acquired under the DSPP, any gain realized in excess of the amount reported as ordinary income will be reportable by the participant as a capital gain, and any loss will be reportable as a capital loss. Capital gain or loss will be long-term if the employee has satisfied the holding periods requirement described above or, in any event, if the employee has held the common stock for at least one year. Otherwise, the capital gain or loss will be short-term. If the participant satisfies the statutory holding periods, described above, for common stock purchased under the DSPP, we will not receive any deduction for federal income tax purposes. If the participant does not satisfy the holding periods, we will be entitled to a deduction in an amount equal to the amount that is considered ordinary income taxable to the participant. We are entitled to a compensation expense deduction under Section 162 of the Code only to the extent that ordinary income is realized by the participant as a result of a disqualifying disposition.
Plan Benefits
Since participation in the plan is voluntary and we are unable to predict the future value of our common stock, we cannot currently determine the benefits or amounts that will be received in the future by any person or group under the DSPP. The following table sets forth the number of shares purchased under the DSPP during 2012 by our Chief Executive Officer, the other named executive officers, executive officers as a group and all employees as a group, other than executive officers.
Name and Position | Dollar Value ($) | Number of Shares | ||||||
P. Kibsgaard | 0 | 0 | ||||||
S. Ayat | 19,473 | 324 | ||||||
S. Pai | 15,791 | 263 | ||||||
K.-E. Oestdahl | 22,129 | 368 | ||||||
A. Belani | 0 | 0 | ||||||
All executive officers as a group | 245,504 | 4,083 | ||||||
All employees as a group, excluding executive officers | 257,600,971 | 4,284,834 |
Recommendation of the Board
The Board of Directors recommends that you vote “FOR” Item 6.
Security Ownership by Certain Beneficial Owners
The following table sets forth information as of December 31, 20122015 (except as otherwise noted) with respect to persons known by the Company to be the beneficial owners of more than 5% of the Company’s common stock. Thisstock, based on the information is reported by such persons in their Schedule 13D and 13G filings with the SEC. For each entity included in the table below, percentage ownership is calculated by dividing the number of shares reported as beneficially owned by such entity by the 1,328,255,7731,254,842,578 shares of common stock outstanding on DecemberJanuary 31, 2012.2016.
Beneficial Ownership of Common Stock | Beneficial Ownership of Common Stock | |||||||||||
Name and Address | Number of Shares | Percentage of Class | Number of Shares | Percentage of Class | ||||||||
BlackRock Inc.(1) 40 East 52nd Street New York, NY 10022 | 78,893,584 | 5.9 | % | |||||||||
BlackRock, Inc.(1) | 76,026,271 | 5.9% | ||||||||||
40 East 52nd Street | ||||||||||||
New York, NY 10022 | ||||||||||||
The Vanguard Group(2) | 71,589,843 | 5.7% | ||||||||||
100 Vanguard Blvd. | ||||||||||||
Malvern, PA 19355 |
(1) | Based solely on a Statement on Schedule 13G/A filed on February |
(2) | Based solely on a Statement on Schedule 13G/A filed on February 10, 2016. Such filing indicates that The Vanguard Group has sole voting power with respect to 2,233,448 shares, sole investment power with respect to 69,475,911 shares, and shared investment power with respect to 2,113,923 shares. |
Security Ownership by Management
The following table sets forth information known to Schlumberger with respect to beneficial ownership of Schlumbergerthe Company’s common stock as of January 31, 20132016 by (i) each director and director nominee, (ii) each of the named executive officers and (iii) all directors and executive officers as a group.
Beneficial ownership is determined under the rules of the SEC and generally includes voting or investment power with respect to securities. Except as indicated in the footnotes to the following table below and subject to applicable community property laws, to Schlumberger’s knowledge the persons named in the table below have sole voting and investment power with respect to allthe securities listed. None of the shares of Schlumberger common stock beneficially owned. are subject to any pledge.
The number of shares beneficially owned by each person or group as of January 31, 20132016 includes shares of common stock that such person or group has the right to acquire within 60 days of January 31, 2013,2016, including upon the exercise of options to purchase common stock or the vesting of restricted stock units.units or PSUs. References to options in the footnotes to the table below include only options outstanding as of January 31, 20132016 that are currently exercisable or that become exercisable within 60 days of January 31, 2013,2016, and references to any restricted stock, restricted stock units or PSUs (collectively, “restricted stock”) in the footnotes to the table below include only restricted stock units outstanding as of January 31, 20132016 and that are currently vested or that vest within 60 days of January 31, 2013.2016.
For each individual and group included in the table below, percentage ownership is calculated by dividing the number of shares beneficially owned by such person or group by the sum of the 1,328,255,7731,254,842,578 shares of common stock outstanding on DecemberJanuary 31, 2012,2016, plus the number of shares of common stock that such person or group had the right to acquire on or within 60 days after January 31, 2013.2016.
As of January 31, 2013,2016, no director, director nominee or named executive officer owned more than 1% of the outstanding shares of Schlumberger’s common stock. All directors and executive officers as a group owned less than 1% of the outstanding shares of our common stock at January 31, 2013.2016.
Name | Shares | |||||
Simon Ayat | 875,354 | (1) | ||||
Ashok Belani | 523,476 | (2) | ||||
Peter L.S. Currie | | 33,800 | ||||
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Paal Kibsgaard | 919,257 | (3) | ||||
Nikolay Kudryavtsev | | |||||
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Michael E. Marks | 56,350 | (4) | ||||
| 76,534 | (5) | ||||
Indra K. Nooyi | | |||||
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Lubna S. Olayan | | |||||
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Leo Rafael Reif | | 19,750 | ||||
Tore I. Sandvold | | 18,000 | ||||
Patrick Schorn | 246,128 | (6) | ||||
Henri Seydoux | | 15,750 | ||||
All directors and executive officers as a group | 4,536,560 | (7) |
(1) | Includes options to purchase |
(2) | Includes options to purchase |
(3) |
Includes options to purchase |
(4) |
(5) | Includes options to purchase 49,520 shares. |
(6) | Includes options to purchase 197,000 shares. |
(7) | Includes options to purchase |
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), requires the Company’s executive officers and directors, among others, to file an initial report of ownership of Schlumberger common stock on Form 3 and reports of changes in ownership on Form 4 or Form 5. Persons subject to Section 16 are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms that they file. The Company believes, based solely on a review of the copies of such forms in ourits possession and on written representations from reporting persons, that with respect to the fiscal year ended December 31, 2012,2015, all of its executive officers and directors filed on a timely basis the reports required to be filed under Section 16(a) of the Exchange Act.
Stockholder Proposals for 20142017 Annual General Meeting
In order for a stockholder proposal to be considered for inclusion in the proxy statement for the 20142017 annual general meeting of stockholders pursuant to Exchange Act Rule 14a-8, written proposals must be received by the Secretary of the Company, 5599 San Felipe, 17th Floor, Houston, Texas 77056, no later than November [ ], 2013.2016.
Pursuant to the rules under the Exchange Act, the Company may use discretionary authority to vote with respect to any proposal not included in the Company’s proxy materials that is presented by a stockholder proposals presented in person at the 20142017 annual general meeting of stockholders if the stockholder making the proposal has not given notice to the Company by January [ ] 2013.], 2017.
Stockholders may obtain a copy of Schlumberger’s most recent Form 10-K filed with the SEC, including financial statements and schedules thereto, without charge by writing to the Secretary of the Company at 5599 San Felipe, 17th Floor, Houston, Texas 77056.
The Company will pay 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 $15,000$15,500 plus reasonable expenses. Directors, officers and employees of the Company may also solicit proxies for no additional compensation. The Company will reimburse brokerage firms, fiduciaries and custodians for their reasonable expenses in forwarding the solicitation material to beneficial owners.
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,
Alexander C. Juden
Secretary
Houston, Texas
March [ ], 20132016
AppendixAPPENDIX A
Reconciliation of Non-GAAP Financial Measures
(Stated in millions, except per share amounts) Six Months Ended June 30, 2015 | ||||||||||||
Pretax | Net | Diluted EPS | ||||||||||
Schlumberger income from continuing operations, excluding charges & credits | $ | 3,169 | $ | 2,482 | $ | 1.94 | ||||||
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Workforce reduction | (390 | ) | (334 | ) | ||||||||
Currency Devaluations in Venezuela | (49 | ) | (49 | ) | ||||||||
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Schlumberger income from continuing operations, as reported | $ | 2,730 | $ | 2,099 | $ | 1.64 | ||||||
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Six Months Ended December 31, 2015 | ||||||||||||
Pretax | Net | Diluted EPS | ||||||||||
Schlumberger income from continuing operations, excluding charges & credits | $ | 2,287 | $ | 1,808 | $ | 1.43 | ||||||
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Fixed asset impairments | (776 | ) | (635 | ) | ||||||||
Workforce reduction | (530 | ) | (479 | ) | ||||||||
Inventory write-downs | (269 | ) | (242 | ) | ||||||||
Impairment of SPM project | (182 | ) | (146 | ) | ||||||||
Facility closures | (177 | ) | (140 | ) | ||||||||
Geopolitical events | (77 | ) | (77 | ) | ||||||||
Contract terminations | (41 | ) | (39 | ) | ||||||||
Other | (84 | ) | (77 | ) | ||||||||
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Schlumberger income/loss from continuing operations, as reported | $ | 151 | $ | (27 | ) | $ | (0.02 | ) | ||||
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Twelve Months Ended December 31, 2015 | ||||||||||||
Pretax | Net | Diluted EPS | ||||||||||
Schlumberger income from continuing operations, excluding charges & credits | $ | 5,456 | $ | 4,290 | $ | 3.37 | ||||||
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Workforce reduction | (920 | ) | (813 | ) | ||||||||
Fixed asset impairments | (776 | ) | (635 | ) | ||||||||
Inventory write-downs | (269 | ) | (242 | ) | ||||||||
Impairment of SPM project in Colombia | (182 | ) | (146 | ) | ||||||||
Facility closures | (177 | ) | (140 | ) | ||||||||
Geopolitical events | (77 | ) | (77 | ) | ||||||||
Currency devaluation loss in Venezuela | (49 | ) | (49 | ) | ||||||||
Contract terminations | (41 | ) | (39 | ) | ||||||||
Other | (84 | ) | (77 | ) | ||||||||
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Schlumberger income from continuing operations, as reported | $ | 2,881 | $ | 2,072 | $ | 1.63 | ||||||
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Schlumberger income from continuing operations, excluding charges & credits WesternGeco restructuring Currency devaluation loss in Venezuela Workforce reduction Impairment of SPM project Schlumberger income from continuing operations, as reported Twelve Months Ended December 31, 2015 Pretax Net Diluted
EPS $ 9,412 $ 7,282 $ 5.57 (806 ) (781 ) (472 ) (472 ) (296 ) (259 ) (199 ) (127 ) $ 7,639 $ 5,643 $ 4.31
APPENDIX B
[As proposed to be amended April 6, 2016. Deletions are marked as stricken text and additions are marked with an underline]
ARTICLES OF INCORPORATION OF THE
CORPORATION WITH LIMITED LIABILITY
SCHLUMBERGER 2013 OMNIBUS STOCK INCENTIVE PLANN.V.
1.(as amended April6,20112016)
NAME AND DOMICILE
Article 1
1.1. | The name of the Company is: SCHLUMBERGER N.V. |
1.2. | Abroad and in transactions with foreign entities, persons or organizations, the name SCHLUMBERGER LIMITED may be used. |
1.3. | The Company has its corporate seat inWillemstad, Curaçao. |
1.4. | The Board of Directors has the authority to move the corporate seat of the Company to, or to convert the Company into a legal entity under the laws of, another jurisdiction, as, when, and in the manner permitted by Curacao law. In particular, the Company may change its place of domicile in accordance with the Curacao Ordinance on Transfer of Domicile to Third Countries pursuant to a resolution of the Board of Directors. |
OBJECTS
Article 2
2.1. | The objects of the Company are: |
(a) | to design, develop, produce and supply technology, services, products and systems and to, throughout the world, engage in any business or activity related thereto; |
(b) | to enter into and carry on any mercantile business in any country and to receive by assignment or purchase or to otherwise acquire any accounts receivable, bank accounts, securities, bills of exchange, notes, bonds, letters of credit, stocks or other instruments of value or documents of title in any country and to collect and hold the proceeds thereof; |
(c) | to invest its assets in securities, including shares and other certificates of participation and bonds, debentures or notes, as well as other claims for interest bearing or non-interest bearing debts, however denominated, and in certificates, receipts, options, warrants or other instruments representing rights to |
receive, purchase or subscribe for securities or evidencing or representing any other rights or interest therein in any and all forms, as well as derivatives and commodities; |
(d) | to borrow money and to issue evidences of indebtedness therefor, as well as to lend money; |
(e) | to undertake, conduct, assist, promote or engage in any scientific, technical or business research and development; |
(f) | to organize and to own, directly or indirectly, and to operate, under the laws of any state or other government, domestic or foreign, corporations and other organizations, companies, undertakings, entities, trusts, other arrangements or persons; to subscribe for any such corporation, organization, company, undertaking, entity, trust, other arrangement or person; and to dissolve, liquidate, wind up, reorganize, merge or consolidate any such corporation, organization, company, undertaking, entity, trust, other arrangement or person; |
(g) | 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; |
(h) | to establish, participate in and manage limited liability and other corporations, organizations, companies, undertakings, entities, trusts, other arrangements or persons of every kind or nature whatsoever, and to engage in industry and trade; |
(i) | to guarantee or otherwise secure, and to transfer ownership, to mortgage, to pledge or otherwise to encumber assets as security for, and otherwise take action to support, the obligations of the Company and the obligations of other corporations, organizations, companies, undertakings entities, trusts, other arrangements or persons, with or without consideration; |
(j) | to place in trust all or any of its properties, including securities. |
2.2. | The Company is entitled to do all that in any way may be useful or necessary for the attainment of the above objects or that is connected therewith in the widest sense. |
DURATION
Article 3
The Company shall have perpetual existence.
CAPITAL AND SHARES
Article 4
4.1. | The nominal capital of the Company (nominal capital being defined in the law and in these Articles of Incorporation as the sum of the par values of all of the issued and outstanding shares in the Company’s capital stock at any time) shall not exceed FORTY-SEVEN MILLION UNITED STATES DOLLARS (US$47,000,000), divided into (a) four billion five-hundred million (4,500,000,000) shares of common stock of the par value of One United States Cent (US$0.01) per share (the “Authorized Common Share Capital”) and (b) two hundred million (200,000,000) shares of preferred stock of the par value of One United States Cent (US$0.01) per share, which may be issued in different series (the “Authorized Preferred Share Capital” and, together with the Authorized Common Share Capital, the “Authorized Capital”). Shares of common stock may be referred to as “common shares” and shares of preferred stock may be referred to as “preferred shares.” The common shares and the preferred shares, if any, may sometimes be referred to herein as the “shares.” Holders of common shares and preferred shares may sometimes be referred to as the “stockholders.” |
4.2. | The actual issue of shares shall be effected by way of written instrument signed by the Company and the acquirer or as otherwise permitted by applicable law. The Company cannot issue shares to itself. |
4.3. | Subject to the provisions of paragraph 1 of this Article, common shares, options to purchase or subscribe for common shares and warrants or rights to subscribe for common shares, shall be issued at such times, under such conditions and for such consideration, not less than the par value per share in the case of the issuance of such share, as may be determined from time to time by the Board of Directors. |
4.4. | With respect to the issuance of shares, options, warrants or rights to purchase or subscribe for shares, the Board of Directors may enter into and conclude agreements without necessity of any action by the general meeting of stockholders: |
a. | imposing special obligations upon the Company in connection with the purchase of or 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 Curacao. |
4.5. | Subject to the provisions of paragraphs 1 and 6 of this Article, preferred shares may be issued from time to time in one or more series on such terms and conditions as may be determined by the Board of Directors by the affirmative vote of at least three-fourths of the members of the Board of Directors, after considering the interests of the holders of common shares, 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 preferred shares. |
4.6. | Prior to the issuance of any series of preferred shares, the Board of Directors shall specify: |
a. | the distinctive designation of such series and the number of preferred 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 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 shares or for common shares,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 these Articles of Incorporation or Curacao law. |
4.7. | Certificates for preferred shares may be issued bearing a legend describing the terms and conditions thereof specified by the Board of Directors. |
4.8. | Preferred shares of all series shall rank prior to the common shares with respect to dividend and liquidation preferences as determined by the Board of Directors at the time of issuance of any series of preferred shares. Any series of preferred shares 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 pari passu with any one or more other series as the Board of Directors may so determine. |
4.9. | Upon liquidation of the Company, the holders of any series of preferred shares shall be entitled to receive, before any distribution is made to the holders of any other series of preferred shares ranking junior to such series as to liquidation preference, and before any distribution to the holders of common shares, 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 5
No holder of shares of the Company shall in that capacity have any preferential or preemptive right to purchase or subscribe for any shares or any options, warrants or rights to purchase shares or any securities convertible into or exchangeable for shares which the Company may issue or sell, except those rights of conversion, if any, of preferred shares specified in or determined in accordance with Article 4 and any contract rights granted by the Company.
Article 6
6.1. | The Company may, for its own account and for valuable consideration, from time to time acquire fully paid shares of its stock, on such terms and conditions as the Board of Directors may determine,provided that at least one (1) common share remains outstanding with others than the Company, andprovided further that to the extent required by applicable law (x) the equity (as referred to in article 2:114.2 in conjunction with articles 2:118.7 and 2:118.5 of the Curacao Civil Code (“CC”)) of the Company at the time of acquisition at least equals the nominal capital and (y) as a result of the acquisition, the equity will not fall below the nominal capital. The authority to make any such acquisition is vested in the Board of Directors. Any shares so acquired may be canceled by the Board of Directors without the prior approval of the general meeting of stockholders. |
6.2. | 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 stockholders, 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, other than determining the nominal capital. |
6.3. | Shares of its stock owned by the Company may be sold at such times, under such conditions and for such consideration as may be determined from time to time by the Board of Directors. |
Article 7
7.1. | The shares shall be in registered form. |
7.2. | Share certificates for common shares may be issued at the request of the stockholder. |
7.3. | The shares shall be entered into a register, which, provided a printed record can be produced therefrom, may be in computerized form (the “Register”) which is kept by the Board of Directors or by a registrar |
designated thereto by the Board of Directors (the “Registrar”). Each entry shall mention the name of the stockholder, hisor her address, the number of shares held and the numbers of the share certificates, if any, representing such shares and such other information required to be included under Article 2:109 CC or other applicable law. The Register shall not be open for inspection by third parties or stockholders with respect to shares other than those registered in their name, except with respect to shares that have not been paid in full and except further, with respect to the Registrar, if said Registrar has been requested, or if demand of said Registrar has been made, to disclose any piece of information in the Register and failure to disclose such information would lead to liability of the Registrar. Each stockholder is under the obligation to provide hisor her address to the Company in writing. |
7.4. | Every transfer and devolution of a share shall be entered in the Register and every such entry shall be signed or otherwise acknowledged by or on behalf of the Board of Directors or by the Registrar. |
7.5. | The transfer of shares shall be effected by way of a written instrument of transfer (“deed of transfer”) signed by the transferor and the transferee and either serving that deed of transfer upon the Company or by written acknowledgment of the transfer by the Company. Acknowledgement occurs by means of a signed annotation on the deed of transfer or a written statement from the Company addressed to the transferee for which purpose a (new) share certificate may serve. If it concerns shares on which an amount still has to be paid up, acknowledgement can only occur on a deed of transfer that has a formally fixed date as required by applicable law (Article 2:110.2 CC). The transfer of shares listed on a stock exchange may also be effected in accordance with the trading system applied by such exchange. |
7.6. | Shares may be pledged by the holder thereof and a usufruct on shares can be granted,provided that, regardless of the terms of such pledge or usufruct, the Company will not be under the obligation to honor voting rights or rights of distribution of the usufructee or pledgee, andprovided further that the Company for the purposes of recognizing ownership, the right to vote, the right to receive dividends or other distributions and notices or for any other matter relating to a “stockholder” as set out in these Articles of Incorporation, shall only recognize the registered owner of the shares. |
7.7. | The provisions of the preceding paragraphs shall also apply in the event of a division of joint ownership. |
7.8. | If any stockholder shall establish to the satisfaction of the Board of Directors or the Registrar that hisor her share certificate has been lost or destroyed, then, at hisor her request, a duplicate may be issued under such conditions and guarantees (which, if required by the Registrar or the Board of Directors, may include the provision of an indemnity bond issued by an insurance company or other type of financial institution or entity) as the Board of Directors or the Registrar shall determine. By the issuance of the new share certificates on which shall be recorded that it is a duplicate, the old certificate in place of which the new one has been issued shall become null and void. The Board of Directors or the Registrar may authorize the exchange of new share certificates for mutilated share certificates. In such case the mutilated share certificates shall be delivered to the Company and shall be canceled immediately. The cost of a duplicate or new certificate and any proper expenses incurred by the Company in connection with the issuance thereof may, at the option of the Board of Directors or the Registrar, be charged to the stockholder. |
MANAGEMENT
Article 8
8.1. | 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 stockholders by law or by these Articles of Incorporation. |
8.2. | The Board of Directors may adopt and amend By-laws setting forth the functions and authority of each of the directors, the division of tasks, the designation and authority of one or more committees of the Board of Directors and the way of taking action. Irrespective of the foregoing, the Board of Directors can also limit the management authority of one or more directors. Individual directors shall exercise their powers in accordance with any applicable resolutions of the Board of Directors. |
8.3. | The number of persons constituting the whole Board of Directors shall be not fewer than five (5) nor more than twenty-four (24), as fixed from time to time by the Board of Directors, subject to approval by stockholders of the Company at a general meeting of stockholders. The authorized maximum number of persons constituting the whole Board of Directors shall, until changed at the occasion of any succeeding general meeting of stockholders, be the number so fixed. The directors shall be elected at a general meeting of stockholders by a majority of votes cast, in person or by proxy, by the stockholders entitled to vote;provided, thatdirectors shall be elected by a plurality of the votes cast if, as of a date that is five (5) business days in advance of the date the Company files its definitive proxy statement (regardless of whether thereafter revised or supplemented) with the United States Securities and Exchange Commission, the number of nominees exceeds the number of directors to be |
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8.4. | Each director shall be elected to serve until the next |
8.5. | Directors need not be residents of Curacao or stockholders of the Company. |
8.6. | 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 stockholders,provided that if at any time the number of directors then in office |
8.7. | 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. |
8.8. | Meetings of the Board of Directors may be held in or outside Curaçao. |
8.9. | Meetings may be held through telephone conference, video conference or other real time communication 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. |
8.10. | Directors may in writing, by telegram, telefax, electronic mail or other communication device 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 Directors a director may not act as proxy for more than one director. |
8.11. | When action by the Board of Directors is required or permitted to be taken, action at a meeting may be dispensed with if all commercially reasonable efforts have been taken to notify all the directors and if three-fourths of the directors shall consent in writing, by |
communication device to such action taken or being taken, andprovided further that all directors are promptly notified of such action being taken or having been taken. |
Article 9
9.1. | The Board of Directors shall at least annually elect or appoint the following officers: a Chairman, a Chief Executive Officer, a Secretary and a Treasurer, each to serve until hisor her successor is elected and qualified or until hisor her earlier death, resignation or removal. The Board of Directors from time to time also may elect or appoint a Chief Financial Officer, a President, a Vice Chairman of the Board of Directors, one or more Executive Vice Presidents, one or more Vice Presidents (who may have such additional descriptive designations as the Board of Directors may determine), and any such other officers and agents as it determines proper, all of whom shall hold office at the pleasure of the Board of Directors. The same person may hold any two or more of the aforesaid offices but no officer shall execute, acknowledge or verify an instrument in more than one capacity if such instrument is required by law or by these Articles of Incorporation to be executed, acknowledged or verified by two or more officers. The Chairman and the Vice Chairman, if any, shall be chosen from among the Board of Directors, but the other officers of the Company need not be members of the Board of Directors. |
9.2. | The Company shall be represented at law and otherwise, and shall be bound with respect to third parties, by the Board of Directors and by: |
(a) | any of those directors authorized by the Board of Directors to represent the Company, acting alone, who shall have the following titles and occupy the following offices: |
(i) | Chairman; or |
(ii) | Vice-Chairman; |
(b) | any of the persons, who may, but are not required to, be directors, authorized by the Board of Directors to represent the Company, acting alone, who shall have the following titles and occupy the following offices: |
(i) | Chief Executive Officer; |
(ii) | President; |
(iii) | Chief Financial Officer; |
(iv) | one or more Executive Vice Presidents; |
(v) | one or more Vice Presidents; |
(vi) | Chief Operating Officer; |
(vii) | Controller; |
(viii) | Treasurer; or |
(ix) | Secretary. |
9.3. | The Board of Directors may also from time to time authorize other persons, who may or may not be directors or officers, to represent the Company, who shall have such titles and occupy such additional offices as the Board of Directors may determine. |
9.4. | The general meeting of stockholders may grant specific authority to the Chief Executive Officer, 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 of stockholders. |
9.5. | 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. |
9.6. | 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. |
9.7. | In the event of a conflict of interest between the Company and one or more directors, the Company shall be represented as determined from time to time by the Board of Directors. |
9.8. | The Board of Directors may adopt and may amend and repeal such rules, regulations and resolutions, including By-laws, 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 rules and regulations and resolutions must be consistent with these Articles of Incorporation. |
9.9. | 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. |
Article 10
10.1. | The Company shall have the power, to the extent not prohibited by applicable law, 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 such person 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 such person in connection with such action, suit or proceeding if such person acted in good faith and in a manner such person 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 that such person’s 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 such person 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 such person’s conduct was unlawful. The Company shall indemnify any present or former officer or director of the Company to |
the fullest extent allowed by the preceding provisions of this paragraph 1 of this Article in the event of a “Change of Control.” “Change of Control” means a change in control of the Company which shall be deemed to have occurred if at any time (i) any entity, person or organization is or becomes the legal or beneficial owner, directly or indirectly, of securities of the Company representing 30% or more of the combined voting power of the Company’s then outstanding shares without the prior approval of at least two-thirds of the members of the Board of Directors in office immediately prior to such entity, person or organization attaining such percentage interest; (ii) the Company is a party to a merger, consolidation, share exchange, sale of assets or other reorganization, or a proxy contest, as a consequence of which members of the Board of Directors in office immediately prior to such transaction or event constitute less than a majority of the Board of Directors thereafter; or (iii) during any 15-month period, individuals who at the beginning of such period constituted the Board of Directors (including for this purpose any new director whose election or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of such period) cease for any reason to constitute at least a majority of the Board of Directors. |
10.2. | The Company shall have the power, to the extent not prohibited by applicable law, 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 such person 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 such person in connection with the defense or settlement of such action or suit if such person acted in good faith and in a manner such person 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. The Company shall indemnify any present or former officer or director of the Company to the fullest extent allowed by the preceding provisions of this paragraph 2 of this Article in the event of a Change of Control, as defined in paragraph 1 of this Article. |
10.3. | To the extent that a present or former director or officer of the Company has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in paragraphs 1 and 2 of this Article, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection therewith. |
10.4. | Any indemnification under paragraphs 1 and 2 of this Article (unless ordered by a court) shall be made by the Company only as authorized by contract approved, or by-laws, resolution or other action adopted or taken, by the Board of Directors or by the stockholders or as required by the last sentences of paragraphs 1 prior to the definition of Change of Control and 2 of this Article. |
10.5. | Expenses (including attorneys’ fees) incurred by a present or former director or a present officer in defending any civil or criminal, administrative or investigative action, suit or proceeding shall 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 such person to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the Company as authorized by this Article. Such expenses (including attorneys’ fees) incurred by former officers or other employees and agents may be so paid upon such terms and conditions, if any, as the Company deems appropriate. |
10.6. | The indemnification and advancement of expenses provided by or granted pursuant to the other paragraphs of this Article 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 such person’s official capacity and as to action in another capacity while holding such office, and shall, unless otherwise provided when authorized or ratified, 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. |
10.7. | 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 or entity against any liability asserted against such person and incurred by such person in any such capacity, or arising out of hisor herstatus as such, whether or not the Company would have the power to indemnify such person against such liability under the provisions of this Article. |
10.8. | For purposes of this Article, 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, 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 or entity, shall stand in the same position under the provisions of this Article with respect to the resulting or surviving corporation as such person would have had with respect to such constituent corporation if its separate existence had continued. |
10.9. | For purposes of this Article, references to “other enterprises” shall include employee benefit plans; references to “fines” shall include any excise taxes assessed on a person with respect to any employee benefit plan; and references to “serving at the request of the Company” shall include any service as a director, officer, employee or agent of the Company |
MEETINGS OF STOCKHOLDERS
Article 11
11.1. | All general meetings of stockholders shall be held in Curaçao. |
11.2. | The annual general meeting of stockholders shall be held within the maximum period allowed under applicable law, on a date determined from year to year by the Board of Directors, for the purpose of electing directors, reporting on the course of business during the preceding fiscal year, approving of the balance sheet and the profit and loss account for 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. |
11.3. | Special general meetings of stockholders may be called at any time upon the direction of the Chairman, the Vice Chairman, the Chief Executive Officer, the President or the Board of Directors or by one or more stockholders representing at least ten percent (10%) of the votes that can be cast on the topics they wish to be addressed at such meeting and that have a reasonable interest in having such a meeting convened, in accordance with Article |
11.4. | Notice of meetings of stockholders, whether annual general meetings or special general meetings, stating the time and place of the meeting, shall be given to the stockholders, directors and any other person having meeting rights as referred to in Article 2:129.2 CC, not |
11.5. | All notices of general meetings of stockholders shall state the matters to be considered at the meeting. |
11.6. | Without limiting the manner by which notice otherwise may be given effectively to stockholders |
11.7. | Notice given pursuant to paragraph 6 of this Article shall be deemed given: (1) if by facsimile telecommunication, when directed to a number at which the recipient has consented to receive notice; (2) if by electronic mail, when directed to an electronic mail address at which the recipient has consented to receive notice; (3) if by a posting on an electronic network together with separate notice to the recipient of such specific posting, upon the later of (A) such posting and (B) the giving of such separate notice; and (4) if by any other form of electronic transmission, when directed to the recipient. An affidavit that the notice has been given by a form of electronic transmission shall, in the absence of fraud or bad faith, be prima facie evidence of the facts stated therein. |
11.8. | For purposes of these Articles of Incorporation, “electronic transmission” means any form of communication, not directly involving the physical transmission of paper, that creates a record that may be retained, retrieved, and reviewed by a recipient thereof. |
Article 12
12.1. | Every stockholder, director and any other person having meeting rights as referred to in Article 2:129.2 CC has the right to attend any general meeting in person or by proxy, which proxy to the extent permitted by applicable law may be given by electronic transmission, and to address the meeting. Records and other data carriers used in relation to attendance of and voting at general meetings shall be kept during a period of ten (10) years or for the period required by applicable law. |
12.2. | Each holder of common shares and each holder of preferred shares shall be entitled to one vote for each common share or preferred share held. |
12.3. | For the purpose of determining stockholders entitled to notice of and to vote at any general meeting of stockholders, or entitled to receive payment of any dividend, or other distribution or allotment of any rights, or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of shares, or in order to make a determination of stockholders 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 or that a record date be fixed. If the stock transfer books shall be closed for the purpose of determining stockholders entitled to notice of or to vote at a general meeting of stockholders, such books shall be closed for at least ten (10) days but not to exceed, in any case, sixty (60) 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 stockholders, such date in any case to be not more than sixty (60) days and, in case of a general meeting of stockholders, not less than ten (10) days prior to the date on which the particular action requiring such determination of stockholders is to be taken. If the stock transfer books are not closed and no record date is fixed for the determination of stockholders entitled to notice of or to vote at a general meeting of stockholders, or stockholders entitled to receive payment of a dividend or other distribution or allotment, 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 or other distribution or allotment is adopted, as the case may be, shall be the record date for such determination of stockholders. When a determination of stockholders 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. |
Article 13
13.1. | Except as otherwise provided herein, no action may be taken at any general meeting of stockholders unless a quorum consisting of the holders of at least one-half of the outstanding shares entitling the holders thereof to vote at such meeting are present at such meeting in person or by proxy. |
13.2. | If a quorum is not present in person or by proxy at any general meeting of stockholders, a second general meeting shall be called in the same manner as such original meeting of stockholders, to be held within two (2) months, at which second meeting, regardless of the number of shares represented (but subject to the provisions of Articles 18, 19 and 21), 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 stockholders despite the absence of a quorum. |
13.3. | Subject to the provisions of Articles 18, 19 and 21, the vote in favor by a majority of the votes cast (excluding any abstentions) shall be necessary to adopt any resolution at any general meeting of stockholders. |
13.4. | The Board of Directors from time to time shall appoint a person to preside at general meetings of stockholders. |
13.5. | At any general meeting of stockholders, a stockholder 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 stockholder, any right against the Company or would in such other capacity relieve him of any obligation to the Company. |
13.6. | Shares belonging to a legal entity, if a majority of the shares entitled to vote in the election of directors of such entity are held, directly or indirectly, by the Company, shall neither be entitled to vote nor be counted for quorum purposes, except in the event that such shares are held by such legal entity in a fiduciary capacity for others than for the Company itself. |
SEPARATE MEETINGS
Article 14
14.1. | Separate meetings of holders of each series of preferred shares (each a “Series Meeting”) can be held and may be convened by any two or more members of the Board of Directors. |
14.2. | Notice of a Series Meeting shall be given not less than ten (10) days prior to the date of the Series Meeting to the address of each holder of preferred shares of the relevant series appearing in the Register. |
14.3. | The notice shall contain the agenda of the Series Meeting or shall mention that it is deposited for inspection by the holder of the relevant shares at the offices of the Company. |
14.4. | The Series Meetings do not have to be held in Curacao but may be held in conjunction with any general meeting of stockholders. |
14.5. | To a Series Meeting all the provisions of these Articles of Incorporation and Curacao law as to General Meetings of Stockholders shall, mutatis mutandis, apply, if not otherwise provided in this Article. |
FISCAL YEAR
Article 15
The fiscal year of the Company shall be the calendar year.
BALANCE SHEET AND PROFIT AND LOSS ACCOUNT
Article 16
16.1. | Within the period allowed under applicable law the Board of Directors shall prepare the annual accounts and the annual report with respect to the preceding fiscal year. Subsequently, the annual accounts together with the auditors’ report shall be submitted to the stockholders for inspection and approval at the annual general meeting of stockholders in accordance with paragraph 2 of Article 11, together with the annual report. From the date at which the notice of the annual general meeting of stockholders is sent until the |
close of the annual general meeting of stockholders, the annual accounts together with the auditors’ report and the annual report shall be available for inspection by the stockholders at the office of the Company, and at any additional place, if specified in the notice of such meeting. |
16.2. | The Board of Directors, with due observance of dividend entitlements of the holders of preferred shares, is authorized to allocate such part of the profits to the retained earning reserves as it deems fit. |
DISTRIBUTION OF PROFITS
Article 17
17.1. | Dividends on the shares of the Company may be declared either in cash, property (including securities) or in shares of the Company, out of the profits of the preceding fiscal year or years then available for distribution. To the extent that profits of any fiscal 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. |
17.2. | The Board of Directors has the authority to declare and make distributions out of retained earnings reserves or out of the contributed surplus capital reserves either in cash, property (including securities) or in shares of the Company without the prior approval of the general meeting of stockholders. |
17.3. | 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. |
17.4. | The Board of Directors may resolve at any time to distribute one or more interim dividends as an advance payment of the dividend expected to be determined by the stockholders at the annual general meeting. |
17.5. | Any distribution as provided for in the preceding paragraphs can only occur if, at the moment of distribution, the equity of the Company at least equals the nominal capital and as a result of the distribution will not fall below the nominal capital. |
DISPOSITION OF THE COMPANY’S ASSETS
Article 18
Notwithstanding any provision of Article 13, 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 stockholders by the holder or holders of at least the 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;Objectivesprovided, however. This 2013, 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 stockholders of the Company in such assets.
LIQUIDATION
Article 19
Notwithstanding any provision of Article 13, 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 stockholders by the holder or holders of at least a majority of the shares 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.
BUY OUT
Article 20
Any one person, or any two or more legal entities belonging to the same group, holding shares representing at least ninety percent (90%) of the equity of the Company can require the remaining stockholders to transfer their shares as provided by and in accordance with the provisions of Article 2:250 CC.
AMENDMENTS
Article 21
21.1. | Notwithstanding any provision of Article 13, these Articles of Incorporation may be amended only pursuant to a resolution duly adopted at a general meeting of stockholders by the holder or holders of at least the 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 Curaçao for inspection by the stockholders of the Company, and shall remain available for inspection until the conclusion of said meeting. |
21.2. | Any amendment to these Articles of Incorporation that would increase or decrease the authorized number of preferred shares or par value thereof, or the number of shares of any series thereof, or that would alter or change the powers, preferences or any special rights of the preferred shares, or of any series thereof, so as to affect them adversely, shall require the approval of the holders of a majority of all preferred shares, or of the preferred shares of the series adversely affected (voting together as a single class), as the case may be. |
OFFICIAL LANGUAGE
Article 22
The official language of these Articles of Incorporation shall be the English language.
APPENDIX C
2016
Rules of the Schlumberger 2010 Omnibus Stock Incentive Plan
French Sub-Plan for Restricted Units
The Board of Directors (the “Board”) of Schlumberger Limited (the “Company”) has established the Schlumberger Omnibus Stock Incentive Plan (this(the “Plan”) was adopted by Schlumberger Limited (the “Company”) in order to retain employees with a high degree of training, experience and ability, to attract new employees whose services are considered particularly valuable, to encourage the sense of proprietorship of such persons and to promote the active interest of such persons in the development and financial success of the Company and its Subsidiaries. These objectives are to be accomplished by making Awards under this PlanThis includes the Company’s branch in France and thereby providing Participants with a proprietary interestthe Company’s subsidiaries in France of which the growth and performanceCompany holds directly or indirectly at least 10% of the Company and its Subsidiaries.share capital (the “French Subsidiary”).
2.Definitions. As used herein,Section 21 of the terms set forth below shall havePlan specifically authorizes the following respective meanings:
“Award” means the grant of any Option, Stock Appreciation Right, Stock Award, Cash Award or Performance Award, whether granted singly, in combination or in tandem,Committee to a Participant pursuant to such applicable terms, conditions and limitationsestablish sub-plans as the Committee deems appropriate or advisable to implement the Plan.
The Committee, therefore, intends with this document to establish a sub-plan of the Plan for the purpose of granting awards that qualify for the specific treatment applicable to French Qualified Restricted Share Units awards to employees who are resident of France and who are or may establishbecome subject to French tax (i.e. income tax and/or social security tax) as a result of awards granted under the Plan (the “French Grantees”). The terms of the Plan, as set out in this Appendix, shall, subject to the modifications in the following rules, constitute the Rules of the Schlumberger Omnibus Stock Incentive Plan for Employees in France (the “French Plan”).
The adoption of this French Plan shall not confer upon the French Grantees, or any employees of the French Subsidiary, any employment rights and shall not be construed as part of the French Grantees’ employment contracts, if any. Subject to the terms of the Plan, the Committee reserves the right to amend or terminate the French Plan at any time. Such amendments would only apply to future grants and would not be retroactive.
This amendment and restatement of the French Plan is effective as of January 1, 2016 and is adopted as April 6, 2016.
Appendix 1 :French Qualified Restricted Stock Units
It is intended that Restricted Share Units granted under the French Plan shall qualify for the specific tax and social security charges treatment applicable to French Qualified Restricted Share Units Options granted under Articles L.225-197-1 to L.225-197-6 of the French Commercial Code, as subsequently amended, and in accordance with the objectivesrelevant provisions set forth by French tax law and the French tax administration. The terms of this Plan.
“Award Agreement” means the document (in written or electronic form) communicating the terms, conditions and limitations applicable of an Award. The Committee may, in its discretion, require that the Participant execute such Award Agreement, or may provide for procedures through which Award Agreements are made available but not executed. Any Participant who is granted an Award and who does not affirmatively reject the applicable Award AgreementFrench Plan shall be deemed to have accepted the terms of Award as embodiedinterpreted accordingly and in the Award Agreement.
“Board” means the board of directors of the Company.
“Cash Award” means an Award denominated in cash.
“Code” means the Internal Revenue Code of 1986, as amended.
“Committee” means the Compensation Committee of the Board, and any successor committee thereto or such other committee of the Board as may be designated by the Board to administer this Plan in whole or in part including any subcommittee of the Board as designated by the Board.
“Common Stock” means the Common Stock, par value $0.01 per share, of the Company.
“Dividend Equivalents” means, with respect to shares of Restricted Stock or Restricted Stock Units, with respect to which shares are to be issued at the end of the Restriction Period, an amount equal to all dividends and other distributions (or the economic equivalent thereof) that are payable to shareholders of record during the Restriction Period on a like number of shares of Common Stock.
“Employee” means an employee of the Company or any of its Subsidiaries and an individual who has agreed to become an employee of the Company or any of its Subsidiaries and actually becomes such an employee within the following six months.
“Executive Officer” means a “covered employee” within the meaning of Section 162(m)(3) or any other executive officer designated by the Committee for purposes of exempting compensation payable under this Plan from the deduction limitations of Section 162(m).
“Fair Market Value” means, with respect to a share of Common Stock on a particular date, the mean between the highest and lowest composite sales price per share of the Common Stock, as reported on the consolidated transaction reporting system for the New York Stock Exchange for that date, or, if there shall have been no such reported prices for that date, the reported mean price on the last preceding date on which a composite sale or sales were effected on one or more of the exchanges on which the shares of Common Stock were traded shall be the Fair Market Value.
“Incentive Option” means an Option that is intended to complyaccordance with the requirementsrelevant provisions set forth in Section 422 of the Code.
“Non-Qualified Option” means an Option that is not intended to comply with the requirements set forth in Section 422 of the Code.
“Option” means a right to purchase a specified number of shares of Common Stock at a specified price.
“Participant” means an Employee to whom an Award has been made under this Plan.
“Performance Award” means an award made pursuant to this Plan to a Participant, which Award isby French tax and social security laws, and relevant Guidelines published by French tax and social security administrations and subject to the attainmentfulfillment of onelegal, tax and reporting obligations. The Restricted Share Units granted under this Appendix 1 will be deemed French Qualified Restricted Share Units.
1. | Eligibility |
French Qualified Restricted Share Units may not be granted under this Addendum to an individual:
(a) unless he is employed Schlumberger Limited or more Performance Goals.
“Performance Goal” means one or more standards established by the Committee to determinea company which is a subsidiary of Schlumberger Limited , as defined in whole or in part whether a Performance Award shall be earned.
“Restricted Stock” means any Common Stock that is restricted or subject to forfeiture provisions.
“Restricted Stock Unit” means a unit evidencing the right to receive one share of Common Stock or equivalent value (as determined by the Committee) that is restricted or subject to forfeiture provisions.
“Restriction Period” means a period of time beginning asArticle 225-197-2 of the date upon which an Award of Restricted StockFrench “Code de Commerce” in France; or Restricted Stock Units
(b) unless he is made pursuant to this Plan and endinga director with a management function as defined in Article 225-197-1 of the date uponFrench “Code de Commerce” in France of a company which the Common Stock subject to such Award is issued (if not previously issued) no longer restricted or subject to forfeiture provisions.
“Section 162(m)” means Section 162(m)a subsidiary of Schlumberger Limited as defined in Article 225-197-2 of the Code and any Treasury Regulations and guidance promulgated thereunder.French “Code de Commerce” in France; or
“Section 409A” means Section 409A(c)who owns more than 10% of the Code and any Treasury Regulations and guidance promulgated thereunder.share capital of Schlumberger Limited
“Stock Appreciation Right” or “SAR” means a right to receive a payment, in cash or Common Stock, equal to the excess of the Fair Market Value or other specified valuation of a specified number of shares of Common Stock on the date the right is exercised over a specified strike price, in each case,
2. | Vesting, Settlement and Delivery of French Qualified Restricted Share Units |
(a)Vesting. French Qualified Restricted Share Units shall vest as determined by the Committee.
“Stock Award” means an awardprovided for in the formShare Unit Agreement.
(b)Settlement. Payment of shares of Common Stock or units denominatedvested Restricted Share Units shall only be made in shares of Common Stock.
“Subsidiary” means (i)(c)Delivery. Notwithstanding the vesting date of the Restricted Share Units, under no circumstances, except in case of employee’s death as provided for in section 2 (d) below, shall the delivery of the shares related to a French Qualified Restricted Share Unit occur prior to the third anniversary of the Grant Date.
(d)Acceleration on Death. Upon Termination of Employment from the Company by reason of employee’s death, all French Qualified Restricted Share Units that are not vested at that time immediately will become vested in full. The Company shall issue the underlying shares to the employee’s heirs, at their request, within six months following the death of the employee. Notwithstanding the foregoing, the employee’s heirs must comply with the restriction on the sale of shares set forth in Section 4 below, to the extent and as long as applicable under French law.
3. | No Sales Restrictions |
The sale of shares issued pursuant to the conversion of the French Qualified Restricted Share Units may occur as soon as the shares are delivered to the employee provided the closed periods in section 4 below are respected.
4. | Closed periods |
Shares underlying French Qualified Restricted Share Units may not be sold during the following period (“Closed Periods”):
(a)within the 10 days before or after the publication of the annual accounts;
(b)within a period beginning with the date at which executives of Schlumberger Limited become aware of any information which, were it to be public knowledge, could have a significant impact on the price of shares in and ending 10 trading days after the information becomes public knowledge.
These Closed Periods will apply to grant of French Qualified Restricted Share Units as long as and to the extent such Closed Periods are applicable under French law.
5. | Non-transferability of French Qualified Restricted Share Units |
Except in the case of a corporation, a “subsidiary corporation” of the Company as defined in Section 424(f) of the Code and (ii) in the case of a partnership or other business entity not organized as a corporation, any such business entity of which the Company directly or indirectly owns 50% or more of the voting, capital or profits interests (whether in the form of partnership interests, membership interests or otherwise).
3.Eligibility. All Employees of the Company or a Subsidiary are eligible for Awards under this Plan in the sole discretion of the Committee. No director of the Company who is not also an employee is eligible to participate in the Plan, nor is any employee who owns directly or indirectly stock possessing more than five percent (5%) of the total combined voting power or value of all classes of stock of the Company or any Subsidiary.
4.Common Stock Available for Awards. Subject to the provisions of paragraph 13 hereof, there shall be available for Awards under this Plan granted wholly or partly in Common Stock (including rights or options thatdeath, French Qualified Restricted Share Units may be exercised for or settled in Common Stock) an aggregate of 35 million shares of Common Stock. No more than 7.5 million shares of Common Stock may be the subject of Awards that are not Options or Stock Appreciation Rights. In the sole discretion of the Committee, 35 million shares of Common Stock may be granted as Incentive Options.
(a) In connection with the granting of an Option or other Award, the number of shares of Common Stock available for issuance under this Plan shall be reduced by the number of shares of Common Stock in respect of which the Option or Award is granted or denominated. For example, upon the grant of stock-settled SARs, the number of shares of Common Stock available for issuance under this Plan shall be reduced by the full number of SARs granted, and the number of shares of Common Stock available for issuance under this Plan shall not
thereafter be increased upon the exercise of the SARs and settlement in shares of Common Stock, even if the actual number of shares of Common Stock delivered in settlement of the SARs is less than the full number of SARs exercised. However, Awards that by their terms do not permit settlement in shares of Common Stock shall not reduce the number of shares of Common Stock available for issuance under this Plan.
(b) Any shares of Common Stock that are tendered by a Participant or withheld as full or partial payment of withholding or other taxes or as payment for the exercise or conversion price of an Option or SAR under this Plan shall not be added back to the number of shares of Common Stock available for issuance under this Plan.
(c) Whenever any outstanding Option or other Award (or portion thereof) expires, is cancelled or forfeited or is otherwise terminated for any reason without having been exercised or payment having been made in the form of shares of Common Stock, the number of shares of Common Stock available for issuance under this Plan shall be increased by the number of shares of Common Stock allocable to the expired, forfeited, cancelled or otherwise terminated Option or other Award (or portion thereof). To the extent that any Award is forfeited, or any Option or SAR terminates, expires or lapses without being exercised, the shares of Common Stock subject to such Awards will not be counted as shares delivered under this Plan.
(d) Shares of Common Stock delivered under the Plan in settlement of an Award issued or made (i) upon the assumption, substitution, conversion or replacement of outstanding awards under a plan or arrangement of an acquired entity or (ii) as a post-transaction grant under such a plan or arrangement of an acquired entity shall not reduce or be counted against the maximum number of shares of Common Stock available for delivery under the Plan, to the extent that the exemption for transactions in connection with mergers and acquisitions from the shareholder approval requirements of the New York Stock Exchange for equity compensation plans applies.
(e) Awards valued by reference to Common Stock that may be settled in equivalent cash value will count as shares of Common Stock delivered to the same extent as if the Award were settled in shares of Common Stock.
Consistent with the requirements specified above in this paragraph 4, the Committee may from time to time adopt and observe such procedures concerning the counting of shares against this Plan maximum as it may deem appropriate, including rules more restrictive than those set forth above to the extent necessary to satisfy the requirements of any national securities exchange on which the Common Stock is listed or any applicable regulatory requirement. The Committee and the appropriate officers of the Company shall be authorized to, from time to time, take all such actions as any of them may determine are necessary or appropriate to file any documents with governmental authorities, stock exchanges and transaction reporting systems as may be required to ensure that shares of Common Stock are available for issuance pursuant to Awards.
5.Administration.
(a)Authority of the Committee. This Plan shall be administered by the Committee, which shall have the powers vested in it by the terms of this Plan, such powers to include the authority (within the limitations described in this Plan):
to select the Employees to be granted Awards under this Plan;
to determine the terms of Awards to be made to each Participant;
to determine the time when Awards are to be granted and any conditions that must be satisfied before an Award is granted;
to establish objectives and conditions for earning Awards;
to determine the terms and conditions of Award Agreements (which shall not be inconsistent with this Plan) and which parties must sign each Award Agreement;
to determine whether the conditions for earning an Award have been met and whether a Performance Award will be paid at the end of an applicable performance period;
except as otherwise provided in paragraphs 7(a) and 11, to modify the terms of Awards made under this Plan;
to determine if, when and under what conditions payment of all or any part of an Award may be deferred;
to determine whether the amount or payment of an Award should be reduced or eliminated;
to determine the guidelines and/or procedures for the payment or exercise of Awards; and
to determine whether a Performance Award should qualify, regardless of its amount, as deductible in its entirety for federal income tax purposes, including whether a Performance Award granted to an Executive Officer should qualify as performance-based compensation.
The Committee may correct any defect or supply any omission or reconcile any inconsistency in this Plan or in any Award in the manner and to the extent the Committee deems necessary or desirable to further Plan purposes or so as to avoid unanticipated consequences or address unanticipated events (including any temporary closure of a stock exchange on which the Common Stock is traded, disruption of communications or natural catastrophe) deemed by the Committee to be inconsistent with the purposes of the Plan or any Award Agreement, provided that no such action shall be taken absent shareholder approval to the extent required under Section 11. Any decision of the Committee in the interpretation and administration of this Plan shall lie within its sole discretion and shall be final, conclusive and binding on all parties concerned. All decisions and selections made by the Committee pursuant to the provisions of the Plan shall be made by a majority of its members unless subject to the Committee’s delegation of authority pursuant to paragraph 6 herein.
(b)Limitation of Liability. No member of the Committee or officer of the Company to whom the Committee has delegated authority in accordance with the provisions of paragraph 6 of this Plan shall be liable for anything done or omitted to be done by him or her, by any member of the Committee or by any officer of the Company in connection with the performance of any duties under this Plan, except for his or her own willful misconduct or as expressly provided by statute.
(c)Prohibition on Repricing of Awards. Other than in connection with a change in the Company’s capitalization (as described in Section 13), at any time when the exercise price of an Option or SAR is above the Fair Market Value of a share of Common Stock, the Company shall not, without shareholder approval, reduce the exercise price of such Option or SAR and shall not exchange such Option or SAR for a new Award with a lower (or no) exercise price or for cash.
6.Delegation of Authority. Except with respect to matters related to Awards to Executive Officers or other Awards intended to qualify as qualified performance-based compensation under Section 162(m), the Committee may delegate to the Chief Executive Officer and to other senior officers of the Company or to such other committee of the Board its duties under this Plan pursuant to such conditions or limitations as the Committee may establish.
7.Awards.
(a) The Committee shall determine the type or types of Awards to be made under this Plan and shall designate from time to time the Participants who are to be the recipients of such Awards. Each Award shall be embodied in an Award Agreement, which shall contain such terms, conditions and limitations as shall be determined by the Committee in its sole discretion. Awards may consist of those listed in this paragraph 7(a) and may be granted singly, in combination or in tandem. Awards may also be made in combination or in tandem with, in replacement of, or as alternatives to, grants or rights under this Plan or any other plan of the Company or any of its Subsidiaries, including the plan of any acquired entity; provided that, except as contemplated in paragraph 13 hereof, no Option may be issued in exchange for the cancellation of an Option with a higher exercise price nor may the exercise price of any Option be reduced. No Option may include provisions that “reload” the option upon exercise or that extend the term of an Option beyond what is the maximum period is specified in the Plan and/or Award Agreement. All or part of an Award may be subject to conditions established by the Committee, which may include, but are not limited to, continuous service with the Company and its Subsidiaries, achievement of specific Performance Goals. Upon the termination of employment by a Participant, any unexercised, deferred, unvested or unpaid Awards shall be treated as set forth in the applicable Award Agreement. Subject to the provisions below applicable to each type of Award, the terms, conditions and limitations applicabletransferred to any Awards shall be determined by the Committee.
(i)Option. An Award may be in the form of an Option. An Option awarded pursuant to this Plan may consist of an Incentive Option or a Non-Qualified Option and will be designated accordingly at the time of grant.third party.
The price at which shares of Common Stock may be purchased upon the exercise of an Option shall be not less than the Fair Market Value of the Common Stock on the date of grant. The term of an Option shall not exceed ten years from the date of grant.
(ii)Stock Appreciation Right. An Award may be in the form of a Stock Appreciation Right. The strike price for a Stock Appreciation Right shall not be less than the Fair Market Value of the Common Stock on the date on which the Stock Appreciation Right is granted. The term of a Stock Appreciation Right shall not exceed ten years from the date of grant.
(iii)Stock Award. An Award may be in the form of a Stock Award. Any Stock Award which is not a Performance Award shall have a minimum Restriction Period of three years from the date of grant, provided that (i) the Committee may provide for earlier vesting following a change of control or other specified events involving the Company or upon an Employee’s termination of employment by reason of death, disability or retirement, and (ii) vesting of a Stock Award may occur incrementally over the three-year minimum Restricted Period; provided, that up to 1.75 million shares of Common Stock shall be available for issuance as Stock Awards having a time-based Restriction Period of up to three years but not less than one year.
(iv)Cash Awards. An Award may be in the form of a Cash Award.
(v)Performance Award. Without limiting the type or number of Awards that may be made under the other provisions of this Plan, an Award may be in the form of a Performance Award. Any Stock Award which is a Performance Award shall have a minimum Restriction Period of one year from the date of grant, provided that the Committee may provide for earlier vesting following a change of control or other specified events involving the Company, or upon a termination of employment by reason of death, disability or retirement, or termination of service subject to the limitations specified below. The Committee shall set Performance Goals in its sole discretion which, depending on the extent to which they are met, will determine the value and/or amount of Performance Awards that will be paid out to the Participant and/or the portion of an Award that may be exercised.
(A)Non-Qualified Performance Awards. Performance Awards granted to Employees that are not intended to qualify as qualified performance-based compensation under Section 162(m) shall be based on achievement of such Performance Goals and be subject to such terms, conditions and restrictions as the Committee or its delegate shall determine.
(B)Qualified Performance Awards. Performance Awards that are intended to qualify as qualified performance-based compensation under Section 162(m) shall be paid, vested or otherwise deliverable solely on account of the attainment of one or more pre-established, objective Performance Goals established and administered by the Committee in accordance with Section 162(m) prior to the earlier to occur of (x) 90 days after the commencement of the period of service to which the Performance Goal relates and (y) the lapse of 25% of the period of service (as scheduled in good faith at the time the goal is established), and in any event while the outcome is substantially uncertain. A Performance Goal is objective if a third party having knowledge of the relevant facts could determine whether the goal is met. Such a Performance Goal may be based on one or more business criteria that apply to a Participant, one or more business units, divisions or sectors of the Company, or the Company as a whole, and if so desired by the Committee, by comparison with a peer group of companies. A Performance Goal may include one or more of the following and need not be the same for each Participant.
revenue and income measures (which include revenue, gross margin, income from operations, net income, net sales, earnings per share, earnings before interest, taxes, depreciation and amortization (“EBITDA”), and economic value added (“EVA”);
expense measures (which include costs of goods sold, selling, finding and development costs, general and administrative expenses and overhead costs);
operating measures (which include productivity, operating income, funds from operations, cash from operations, after-tax operating income, market share, margin and sales volumes);
cash flow measures (which include net cash flow from operating activities and working capital);
liquidity measures (which include earnings before or after the effect of certain items such as interest, taxes, depreciation and amortization, and free cash flow);
leverage measures (which include debt-to-equity ratio and net debt);
market measures (which include market share, stock price, growth measure, total shareholder return and market capitalization measures);
return measures (which include return on equity, return on assets and return on invested capital);
measures relating to compliance, safety, environmental and diversity; and
measures relating to acquisitions, dispositions or customer satisfaction.
Unless otherwise stated, such a Performance Goal need not be based upon an increase or positive result under a particular business criterion and could include, for example, maintaining the status quo, performance relative to a peer group determined by the Committee or limiting economic losses (measured, in each case, by reference to specific business criteria). In interpreting Plan provisions applicable to Performance Goals and qualified Performance Awards, it is the intent of this Plan to conform with Section 162(m), including, without limitation, Treasury Regulation §1.162-27(e)(2)(i), as to grants pursuant to this subsection and the Committee in establishing such goals and interpreting the Plan shall be guided by such provisions. Prior to the payment of any compensation based on the achievement of Performance Goals applicable to qualified Performance Awards, the Committee must certify in writing that applicable Performance Goals and any of the material terms thereof were, in fact, satisfied. Subject to the foregoing provisions, the terms, conditions and limitations applicable to any qualified Performance Awards made pursuant to this Plan shall be determined by the Committee to the extent permitted by Section 162(m).
(b) The Committee shall adjust the Performance Goals (either up or down) and the level of the Performance Award that a Participant may earn under this Plan, but only to the extent permitted pursuant to Section 162(m), if it determines that the occurrence of external changes or other unanticipated business conditions have materially affected the fairness of the goals and have unduly influenced the Company’s ability to meet them, including without limitation, events such as material acquisitions, changes in the capital structure of the Company, and extraordinary accounting changes. In addition, Performance Goals and Performance Awards shall be calculated without regard to any changes in accounting standards that may be required by the Financial Accounting Standards Board after such Performance Goals are established.
(c) Notwithstanding anything to the contrary contained in this Plan, no Participant may be granted, during any one-year period, Awards collectively consisting of (i) Options or Stock Appreciation Rights that are exercisable for or (ii) Stock Awards covering or relating to more than 1,000,000 shares of Common Stock (the limitation referred to as the “Stock-based Awards Limitations”). No Plan Participant who is an employee may be granted Awards consisting of cash (including Cash Awards that are granted as Performance Awards) in respect of any calendar year having a value determined on the Grant Date in excess of $20,000,000.
8.Award Payment; Dividends; Substitution; Fractional Shares.
(a)General. Payment of Awards may be made in the form of cash or Common Stock, or a combination thereof, and may include such restrictions as the Committee shall determine, including, in the case of Common Stock, restrictions on transfer and forfeiture provisions. If payment of an Award is made in the form of Restricted Stock, the applicable Award Agreement relating to such shares shall specify whether they are to be issued at the beginning or end of the Restriction Period. In the event that shares of Restricted Stock are to be issued at the beginning of the Restriction Period, the certificates evidencing such shares (to the extent that such shares are so evidenced) shall contain appropriate legends and restrictions that describe the terms and conditions of the restrictions applicable thereto. In the event that shares of Restricted Stock are to be issued at the end of the Restricted Period, the right to receive such shares shall be evidenced by book entry registration or in such other manner as the Committee may determine.
(b)Dividends and Interest. Rights to dividends or Dividend Equivalents may be extended to and made part of any Stock Awards, subject to such terms, conditions and restrictions as the Committee may establish. The Committee may also establish rules and procedures for the crediting of interest on deferred cash payments and Dividend Equivalents for Stock Awards.
(c)Fractional Shares. No fractional shares shall be issued or delivered pursuant to any Award under this Plan. The Committee shall determine whether cash, Awards or other property shall be issued or paid in lieu of fractional shares, or whether fractional shares or any rights thereto shall be forfeited or otherwise eliminated.
9.Stock Option Exercise. The price at which shares of Common Stock may be purchased under an Option shall be paid in full at the time of exercise in cash or, if elected by the Participant, the Participant may purchase such shares by means of tendering Common Stock valued at Fair Market Value on the date of exercise, or any combination thereof. The Committee, in its sole discretion, shall determine acceptable methods for Participants to tender Common Stock or other Awards. In accordance with the rules and procedures established by the Committee for this purpose and subject to applicable law, Options may also be exercised through “cashless exercise” procedures approved by the Committee involving a broker or dealer approved by the Committee.
10.Taxes. The Company shall have the right to deduct applicable taxes from any Award payment and withhold, at the time of delivery or vesting of cash or shares of Common Stock under this Plan, an appropriate amount of cash or number of shares of Common Stock or a combination thereof for payment of taxes required by law or to take such other action as may be necessary in the opinion of the Company to satisfy all obligations for withholding of such taxes. The Committee may also permit withholding to be satisfied by the transfer to the Company of shares of Common Stock theretofore owned by the holder of the Award with respect to which withholding is required. If shares of Common Stock are used to satisfy tax withholding, such shares shall be valued based on the Fair Market Value when the tax withholding is required to be made.
11.Amendment, Modification, Suspension or Termination. The Board or the Committee may amend, modify, suspend or terminate this Plan for the purpose of meeting or addressing any changes in legal requirements or for any other purpose permitted by law, except that (i) no amendment or alteration that would materially adversely affect the rights of any Participant under any Award previously granted to such Participant shall be made without the consent of such Participant and (ii) no amendment or alteration shall be effective prior to its approval by the shareholders of the Company to the extent shareholder approval is otherwise required by applicable legal requirements or the requirements of any exchange on which the Common Stock is listed. Notwithstanding the foregoing, no amendment may cause an Option or SAR to be repriced, replaced, regranted through cancellation or modified without shareholder approval (except in connection with a change in the Company’s capitalization as provided in paragraph 13), if the effect of such amendment would be to reduce the exercise price for the shares underlying such Option or SAR.
12.Assignability. Unless otherwise determined by the Committee in the Award Agreement, no Award or any other benefit under this Plan shall be assignable or otherwise transferable. Any attempted assignment of an Award or any other benefit under this Plan in violation of this paragraph 12 shall be null and void.
13.Adjustments.
(a) The existence of this Plan and Awards granted hereunder shall not affect in any way the right or power of the Company or its shareholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in the Company’s capital structure or its business, or any merger or consolidation of the Company, or any issue of bonds, debentures, preferred or prior preference stocks ahead of or affecting the shares of Common Stock or the rights thereof, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise.
(b) Except as hereinafter provided, the issue by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, for cash or property, or for labor or services, either upon direct sale or upon exercise of rights or warrants to subscribe therefor, or upon conversion of shares or obligations of the Company convertible into such shares or other securities, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number of shares of Common Stock subject to Awards granted hereunder.
(c) The shares of Common Stock with respect to which Awards may be granted hereunder are shares of the Common Stock of the Company as presently constituted, but if, and whenever, prior to the delivery by the Company or a subsidiary of all of the shares of Common Stock which are subject to the Awards or rights granted hereunder, the Company shall effect a subdivision or consolidation of shares or other capital readjustments, the
payment of a stock dividend or other increase or reduction of the number of shares of the Common Stock outstanding without receiving compensation therefore in money, services or property, the number of shares of Common Stock subject to the Plan, as well as the Stock-based Awards Limitations described in paragraph 7(c) hereof, shall be proportionately adjusted and the number of shares of Common Stock with respect to which outstanding Awards or other property subject to an outstanding Award granted hereunder shall:
(i) in the event of an increase in the number of outstanding shares, be proportionately increased, and the cash consideration (if any) payable per share of Common Stock shall be proportionately reduced; and
(ii) in the event of a reduction in the number of outstanding shares, be proportionately reduced, and the cash consideration (if any) payable per share of Common Stock shall be proportionately increased.
(d) In the event of a corporate merger, consolidation, acquisition of property or stock, separation, spinoff, reorganization or liquidation, the Board may make such adjustments to Awards or other provisions for the disposition of Awards as it deems equitable, and shall be authorized, in its sole discretion, (i) to provide for the substitution of a new Award or other arrangement (which, if applicable, may be exercisable for such property or stock as the Board determines) for an Award or the assumption of the Award, regardless of whether in a transaction to which Section 424(a) of the Code applies, (ii) to provide, prior to the transaction, for the acceleration of the vesting and exercisability of, or lapse of restrictions with respect to, the Award, or (iii) to cancel any such Awards and to deliver to the Participants cash in an amount that the Board shall determine in its sole discretion is equal to the fair market value of such Awards on the date of such event, which in the case of Options or Stock Appreciation Rights shall be the excess of the Fair Market Value of a share of Common Stock on such date over the exercise price of such Award (for the avoidance of doubt, if such exercise price is greater than the Fair Market Value of a share of Common Stock on such date, the Option or Stock Appreciation Right may be canceled for no consideration).
(e) Notwithstanding the foregoing: (i) any adjustments made pursuant to paragraph 13 to Awards that are considered “deferred compensation” within the meaning of Section 409A shall be made in a manner which is intended to not result in accelerated or additional tax to a Participant pursuant to Section 409A; (ii) any adjustments made pursuant to paragraph 13 to Awards that are not considered “deferred compensation” subject to Section 409A of the Code shall be made in such a manner intended to ensure that after such adjustment, the Awards either (A) continue not to be subject to Section 409A of the Code or (B) do not result in accelerated or additional tax to a Participant pursuant to Section 409A of the Code; and (iii) in any event, neither the Committee nor the Board shall have the authority to make any adjustments pursuant to paragraph 13 to the extent the existence of such authority would cause an Award that is not intended to be subject to Section 409A of the Code at the date of grant to be subject thereto as of the date of grant.
14.Restrictions. No Common Stock or other form of payment shall be issued with respect to any Award unless the Company shall be satisfied based on the advice of its counsel that such issuance will be in compliance with including, but not limited to, applicable federal and state securities laws. The Participant shall not exercise or settle any Award granted hereunder, and the Company or any Subsidiary will not be obligated to issue any shares of Common Stock or make any payments under any such Award if the exercise thereof or if the issuance of such shares of Common Stock or if the payment made shall constitute a violation by the recipient or the Company or any subsidiary of any provision of any applicable law or regulation of any governmental authority or any securities exchange on which the Common Stock is listed. Certificates evidencing shares of Common Stock delivered under this Plan (to the extent that such shares are so evidenced) may be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the rules, regulations and other requirements of the Securities and Exchange Commission, any securities exchange or transaction reporting system upon which the Common Stock is then listed or to which it is admitted for quotation and any applicable federal or state securities law. The Committee may cause a legend or legends to be placed upon such certificates (if any) to make appropriate reference to such restrictions.
15.Unfunded Plan. Insofar as it provides for Awards of cash, Common Stock or rights thereto, this Plan shall be unfunded. Although bookkeeping accounts may be established with respect to Participants who are entitled to cash, Common Stock or rights thereto under this Plan, any such accounts shall be used merely as a bookkeeping convenience. The Company shall not be required to segregate any assets that may at any time be
represented by cash, Common Stock or rights thereto, nor shall this Plan be construed as providing for such segregation, nor shall the Company, the Board or the Committee be deemed to be a trustee of any cash, Common Stock or rights thereto to be granted under this Plan. Any liability or obligation of the Company to any Participant with respect to an Award of cash, Common Stock or rights thereto under this Plan shall be based solely upon any contractual obligations that may be created by this Plan and any Award Agreement, and no such liability or obligation of the Company shall be deemed to be secured by any pledge or other encumbrance on any property of the Company. Neither the Company nor the Board nor the Committee shall be required to give any security or bond for the performance of any obligation that may be created by this Plan.
16.Section 409A. This Plan is intended to provide compensation which is exempt from or which complies with Section 409A, and ambiguous provisions, if any, shall be construed in a manner that is compliant with or exempt from the application of Section 409A, as appropriate. This Plan shall not be amended in a manner that would cause the Plan or any amounts payable under the Plan to fail to comply with the requirements of Section 409A, to the extent applicable, and, further, the provisions of any purported amendment that may reasonably be expected to result in such non-compliance shall be of no force or effect with respect to the Plan. The Company shall neither cause nor permit any payment, benefit or consideration to be substituted for a benefit that is payable under this Plan if such action would result in the failure of any amount that is subject to Section 409A to comply with the applicable requirements of Section 409A. For purposes of Section 409A, each payment under this Plan shall be deemed to be a separate payment.
Notwithstanding any provision of this Plan to the contrary, if the Participant is a “specified employee” within the meaning of Section 409A as of the date of the Participant’s termination of employment and the Company determines, in good faith, that immediate payment of any amounts or benefits under this Plan would cause a violation of Section 409A, then any amounts or benefits which are payable under this Plan upon the Participant’s “separation from service” within the meaning of Section 409A which (i) are subject to the provisions of Section 409A; (ii) are not otherwise excluded under Section 409A; and (iii) would otherwise be payable during the first six-month period following such separation from service, shall be paid on the first business day next following the earlier of (1) the date that is six months and one day following the date of termination or (2) the date of the Participant’s death.
17.Governing Law. This Plan and all determinations made and actions taken pursuant hereto, to the extent not otherwise governed by mandatory provisions of the Code or the securities laws of the United States, shall be governed by and construed in accordance with the laws of the State of Texas.
18.No Right to Employment. Nothing in this Plan or an Award Agreement shall interfere with or limit in any way the right of the Company or a Subsidiary to terminate any Participant’s employment or other service relationship at any time, nor confer upon any Participant any right to continue in the capacity in which he or she is employed or otherwise serves the Company or any Subsidiary.
19.Successors. All obligations of the Company under this Plan with respect to Awards granted hereunder shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company.
20.Tax Consequences. Nothing in this Plan or an Award Agreement shall constitute a representation by the Company to a Participant regarding the tax consequences of any Award received by a Participant under this Plan. Although the Company may endeavor to (i) qualify a Performance Award for favorable U.S. or foreign tax treatment or (ii) avoid adverse tax treatment (e.g. under Section 409A), the Company makes no representation to that effect and expressly disavows any covenant to maintain favorable or unavoidable tax treatment. The Company shall be unconstrained in its corporate activities without regard to the potential negative tax impact on holders of Performance Awards under this Plan.
21.Non-United States Participants. The Committee may grant awards to persons outside the United States under such terms and conditions as may, in the judgment of the Committee, be necessary or advisable to comply with the laws of the applicable foreign jurisdictions and, to that end, may establish sub-plans, modified vesting, exercise or settlement procedures and other terms and procedures. Notwithstanding the above, the Committee
may not take any actions hereunder, and no Awards shall be granted, that would violate the Securities Exchange Act of 1934, the Code, any securities law, any governing statute, or any other applicable law.
22.Effectiveness. This Plan is effective January 17, 2013, subject to its approval by the stockholders of the Company at the next annual meeting of stockholders. This Plan shall continue in effect for a term of ten years after the date on which the stockholders of the Company approve this Plan, unless sooner terminated by action of the Board.
IN WITNESS WHEREOF, the Company has caused this Plan to be executed by its duly authorized officer on the date first written above.
6. | ||
Adjustments to certain corporate events | ||
Appendix B
SCHLUMBERGER DISCOUNTED STOCK PURCHASE PLAN
(As Amended and Restated Effective as of January 1, 2013)
1. Purpose
The Schlumberger Discounted Stock Purchase Plan (the “Plan”) is designed to encourage and assist all employees of Schlumberger Limited, a Curacao corporation, and Subsidiaries (hereinafter collectively referred to as the “Company”), where permitted by applicable laws and regulations, to acquire an equity interest in Schlumberger Limited through the purchase of shares of Common Stock, par value $0.01 per share, of Schlumberger Limited (“Common Stock”). It is intended that this Plan shall constitute an “employee stock purchase plan” within the meaning of Section 423 of the Internal Revenue Code of 1986, as amended (the “Code”).
2. Administration of the Plan
The Plan shall be administered by the Stock Purchase Plan Committee (the “Committee”) appointed by the Board of Directors of Schlumberger Limited (the “Board”), which Committee shall consist of at least three (3) persons. The Committee shall supervise the administration and enforcement of the Plan according to its terms and provisions and shall have all powers necessary to accomplish these purposes and discharge its duties hereunder including, but not by way of limitation, the power to (i) employ and compensate agents of the Committee for the purpose of administering the accounts of participating employees; (ii) construe or interpret the Plan; (iii) determine all questions of eligibility; and (iv) compute the amount and determine the manner and time of payment of all benefits according to the Plan hereunder.
The Committee may act by unanimous decision of its members at a regular or special meeting of the Committee or by decision reduced to writing and signed by all members of the Committee without holding a formal meeting. Vacancies in the membership of the Committee arising from death, resignation or other inability to serve shall be filled by appointment of the Board.
3. Nature and Number of Shares
The Common Stock subject to issuance under the terms of the Plan shall be shares of Schlumberger Limited’s authorized but unissued shares or previously issued shares reacquired and held by Schlumberger Limited. Except as provided in Section 20 hereof, effective from and after January 17, 2013, the aggregate number of shares which may be issued under the Plan and authorized by this Plan shall not exceed 22,000,000, the sum of (i) the zero shares of Common Stock available for issuance under this Plan on January 1, 2013 after the issuance of any such shares attributable to the Purchase Period ending December 31, 2012 and (ii) the 22,000,000 shares of Common Stock authorized as of January 17, 2013. All shares purchased under the Plan, regardless of source, shall be counted against this share limitation.
4. Eligibility Requirements
Each “Employee” (as hereinafter defined), except as described in the next following paragraph, shall become eligible to participate in the Plan in accordance with Section 5 on the first “Enrollment Date” (as hereinafter defined) coincident with or next following employment with the Company. Participation in the Plan is voluntary.
The following Employees are not eligible to participate in the Plan:
(i) Employees who would, immediately upon enrollment in the Plan, own directly or indirectly, or hold options or rights to acquire, an aggregate of 5% or more of the total combined voting power or value of all outstanding shares of all classes of the Company or any subsidiary;
(ii) Employees who are customarily employed by the Company less than twenty (20) hours per week or less than five (5) months in any calendar year; and
(iii) Employees who are prohibited by the laws and regulations of the nation of their residence or employment from participating in the Plan as determined by the Committee.
Notwithstanding the provisions of subparagraph (ii) above, where required by applicable law (as determined by the Committee), Employees employed in the countries specified from time to time by the Committee who are customarily employed by the Company less than twenty (20) hours per week may participate in the Plan where required by law, subject to any restrictions established by the Committee.
“Employee” shall mean any individual employed by Schlumberger Limited or any Subsidiary (as hereinafter defined). “Subsidiary” shall mean any corporation in existence as of the “Restatement Date” (as hereinafter defined) of this Plan in an unbroken chain of corporations beginning with Schlumberger Limited if, as of the Restatement Date, each of the corporations other than the last corporation in the chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in the chain. Any corporation which may become a Subsidiary (as defined herein) after the Restatement Date shall automatically be deemed to be a participating Subsidiary under this Plan effective as of the following Enrollment Date unless the Committee takes action to exclude such corporation and its employees from participation herein.
5. Enrollment
Each eligible Employee of Schlumberger Limited or any Subsidiary as of January 1, 2013 (the “Restatement Date” herein) who is already enrolled in the Plan may enroll in the Plan as of July 1, 2013. Each other eligible Employee of Schlumberger Limited or a participating Subsidiary who thereafter becomes eligible to participate may enroll in the Plan on the first July 1 or January 1 following the date he or she first meets the eligibility requirements of Section 4. Any eligible employee not enrolling in the Plan when first eligible may enroll in the Plan on the first day of July or January of any subsequent calendar year. Any eligible Employee may enroll or re-enroll in the Plan on the dates hereinabove prescribed or such other specific dates established by the Committee from time to time (“Enrollment Dates”).
In order to enroll, an eligible Employee must complete, sign and submit the appropriate form to the Personnel Department of the Company.
6. Method of Payment
Payment for shares is to be made as of the applicable “Purchase Date” (as defined in Section 9) through payroll deductions (with no right of prepayment) over the Plan’s designated purchase period (the “Purchase Period”) with the first such deduction commencing with the payroll period ending after the Enrollment Date. Each Purchase Period under the Plan shall be a period of six (6) calendar months beginning on July 1 and ending on December 31 of the same calendar year, and beginning on January 1 and ending on June 30 of the same calendar year, or such other period as the Committee may prescribe. Each participating Employee (hereinafter referred to as a “Participant”) will authorize such deductions from his or her pay for each month during the Purchase Period and such amounts will be deducted in conformity with his or her employer’s payroll deduction schedule.
Each Participant may elect to make contributions each pay period in amounts not less than one percent (1%) and not more than ten percent (10%), or such other percentages as the Committee may establish from time to time before an Enrollment Date for all purchases to occur during the relevant Purchase Period, of his or her base earnings or salary, geographical coefficient, overtime pay, shift premiums and commissions from the Company (excluding long-term disability or workers compensation payments and similar amounts, but including elective qualified contributions by the Participant to employee benefit plans maintained by the Company) during such pay period. The rate of contribution shall be designated by the Participant in the enrollment form. Bonuses will be included in determining the amount of the Participant’s contribution unless the Participant gives written notice to the Personnel Department at the time and in the manner directed by the Committee.
A Participant may elect to increase or decrease the rate of contribution effective as of the first day of any calendar month by giving timely written notice to the Personnel Department of the Company on the appropriate form, as determined by the Committee from time to time. A Participant may suspend payroll deductions at any time during the Purchase Period, by giving thirty (30) days’ written notice to the Personnel Department on the appropriate form. In such case, the Participant’s account will continue to accrue interest and will be used to purchase stock at the end of the Purchase Period. A Participant may also elect to withdraw contributions at any time by giving thirty (30) days’ prior written notice to the Personnel Department of the Company on the appropriate form. Any Participant who withdraws his or her contributions will receive his or her entire account balance, including interest and dividends, if any, plus a stock certificate for the number of shares held by the Participant under the Plan as soon as administratively feasible. Any Participant who suspends payroll deductions or withdraws contributions during any Purchase Period cannot resume payroll deductions during such Purchase Period and must re-enroll in the Plan in order to participate in the next Purchase Period.
No more than the maximum contribution permitted any Participant under Section 9 can be accumulated over the Purchase Period, including interest and dividends, if applicable. Except in case of cancellation of election to purchase, death, resignation or other terminating event, the amount in a Participant’s account the end of the Purchase Period will be applied to the purchase of the shares.
7. Crediting of Contributions, Interest and Dividends
Contributions shall be credited to a Participant’s account as soon as administratively feasible after payroll withholding. Unless otherwise prohibited by laws or regulations, Participant contributions will receive interest at a rate realized for the investment vehicle or vehicles designated by the Committee for purposes of the Plan. Interest will be credited to a Participant’s account from the first date on which Participant contributions are deposited with the investment vehicle until the earlier of (i) the end of the Purchase Period or (ii) in the event of cancellation, death, resignation or other terminating event, the last day of the month next preceding the date on which such contributions are returned to the Participant. Dividends on shares held in a Participant’s account in the Plan will also be credited to such Participant’s account. Any such contributions, interest and dividends shall he deposited in or held by a bank or financial institution designated by the Committee for this purpose (“Custodian”).
8. Grant of Right to Purchase Shares on Enrollment
Enrollment in the Plan by an Employee on an Enrollment Date will constitute the grant by the Company to the Participant of the right to purchase shares of Common Stock under the Plan. Re-enrollment by a Participant in the Plan (but not merely an increase or decrease in the rate of contributions) will constitute a grant by the Company to the Participant of a new opportunity to purchase shares on the Enrollment Date on which such re-enrollment occurs. A Participant who has not terminated employment and has not withdrawn his or her contributions from the Plan will have shares of Common Stock purchased for him or her on the applicable Purchase Date, and he or she will automatically be re-enrolled in the Plan on the Enrollment Date immediately following the Purchase Date on which such purchase has occurred, unless such participant notifies the Personnel Department on the appropriate form that he or she elects not to re-enroll. A Participant who has suspended payroll deductions or withdrawn contributions during any Purchase Period must re-enroll on the appropriate form to participate in the Plan in the next Purchase Period.
Each right to purchase shares of Common Stock under the Plan during a Purchase Period shall have the following terms:
(i) the right to purchase shares of Common Stock during a particular Purchase Period shall expire on the earlier of (A) the completion of the purchase of shares on the Purchase Date occurring on the last trading day of the Purchase Period; or (B) the date on which participation of such Participant in the Plan terminates for any reason;
(ii) in no event shall the right to purchase shares of Common Stock during a Purchase Period extend beyond twenty-seven (27) months from the Enrollment Date;
(iii) payment for shares purchased will be made only through payroll withholding and the crediting of interest and dividends, if applicable, in accordance with Sections 6 and 7;
(iv) purchase of shares will be accomplished only in accordance with Section 9;
(v) the price per share will be determined as provided in Section 9;
(vi) the right to purchase shares (taken together with all other such rights then outstanding under this Plan and under all other similar stock purchase plans of Schlumberger Limited or any Subsidiary) will in no event give the Participant the right to purchase a number of shares during any calendar year having a fair market value in excess of $25,000 (the “Maximum Share Limitation”) as determined in accordance with the Section 423 of the Code and the regulations thereunder; and
(vii) the Maximum Share Limitation for a Purchase Period shall be determined as of the Grant Date (as defined in Section 9) of a Purchase Period by dividing $12,500 by the fair market value of a share of Common Stock on such Grant Date; and
(viii) the right to purchase shares will in all respects be subjectAdjustments to the terms and conditions of the Plan, as interpreted byFrench Qualified Restricted Share Units or underlying shares may be made only pursuant to applicable French legal and tax rules. Nevertheless, the Board or the Compensation Committee, from time to time.
9. Purchase of Shares
The right to purchase shares of Common Stock granted by the Company under the Plan is for the term of a Purchase Period. The fair market value of the Common Stuck to be purchased during such Purchase Period will be determined by averaging the highest and lowest composite sale prices per share of the Common Stock on the New York Stock Exchange (“Fair Market Value”) on the first trading day of each Purchase Period or such other trading date designated by the Committee (the “Grant Date”). The Fair Market Value of the Common Stock will again be determined in the same manner on the last trading day of the Purchase Period or such other trading date designated by the Committee (the “Purchase Date”). These dates constitute the date of grant and the date of exercise for valuation purposes of Section 423 of the Code.
As of the Purchase Date, the Committee shall apply the funds then credited to each Participant’s account to the purchase of whole shares of Common Stock. The cost to the Participant for the shares purchased during a Purchase Period shall be 92.5% of the lower of:
(i) the Fair Market Value of the Common Stock on the Grant Date; or
(ii) the Fair Market Value of the Common Stock on the Purchase Date.
Certificates evidencing shares purchased shall be delivered to the Custodian or to any other bank or financial institution designated by the Committee for this purpose or shall be delivered to the Participant (if the Participant has elected to receive the certificate) as soon as administratively feasible after the Purchase Date, but Participants shall be treated as the record owners of their shares effective as of the Purchase Date. Shares that are held by the Custodian or any other designated bank or financial institution shall be held in book entry form. Any cash equal to less than the price of a whole share of Common Stock shall be credited to a Participant’s account on the Purchase Date and carried forward in his or her account for application during the next Purchase Period. Any Participant who purchases stock at the end of a Purchase Period and is not re-enrolled in the Plan for the next Purchase Period will receive a certificate for the number of shares held in his or her account as of the most recent Purchase Date and any cash, dividends or interest remaining in his or her account. Any Participant who terminates employment or withdraws his or her contributions from the Plan prior to the next Purchase Date, will receive a certificate for the number of shares held in his or her account and a cash refund attributable to amounts equal to less than the price of a whole share, and any accumulated contributions, dividends and interest. If for any reason a Participant’s allocations to the Plan exceed $11,562.50 during a Purchase Period or if the purchase of shares with such allocations would exceed the Maximum Share Limitation, such excess amounts shall be refunded to the Participant as soon as administratively feasible after such excess has been determined to exist.
If as of any Purchase Date the shares authorized for purchase under the Plan are exceeded, enrollments shall be reduced proportionately to eliminate the excess. Any funds that cannot be applied to the purchase of shares
due to excess enrollment shall be refunded as soon as administratively feasible, including interest determined in accordance with Section 7. The Committee in its discretion, may also provide that amounts representing a fractional share of Common Stock that were withheld but not applied toward the purchase of shares in a Purchase Period may be carried overdetermine to the next Purchase Period under this Plan or any successor plan according to the regulations as set forth under Section 423 of the Code.
10. Withdrawal of Shares
A Participant may elect to withdraw shares held in his or her account at any time (without withdrawing from the Plan) by giving notice to the Personnel Department on the appropriate form. Upon receipt of such notice from the Personnel Department, the Custodian, bank or other financial institution designated by the Committee for this purpose will arrange for the issuance and delivery of all shares heldmake adjustments in the Participant’s account as soon as administratively feasible.
11. Terminationcase of Participation
The right to participate in the Plan terminates immediately when a Participant ceases to be employed by the Companytransaction for any reason whatsoever (including death, unpaid disability or when the Participant’s employer ceases to be a Subsidiary) or the Participant otherwise becomes ineligible. Participation also terminates immediately when the Participant voluntarily withdraws his or her contributions from the Plan. Participation terminates immediately after the Purchase Date if the Participant iswhich adjustments are not re-enrolled in the Plan for the next Purchase Period or if the Participant has suspended payroll deductions during any Purchase Period and has not re-enrolled in the Plan for the next Purchase Period. As soon as administratively feasible after termination of participation, the Committee shall pay to the Participant or his or her beneficiary or legal representative all amounts credited to his or her account, including interest and dividends, if applicable, determined in accordance with Section 7, and shall cause a certificate for the number of shares held in his or her account to be delivered to the Participant or to his or her beneficiary or legal representative.
12. Unpaid Leave of Absence
Unless the Participant has voluntarily withdrawn his or her contributions from the Plan, shares will be purchased for his or her account on the Purchase Date next following commencement of an unpaid leave of absence by such Participant provided such leave does not constitute a termination of employment. The number of shares to be purchased will be determined by applying to the purchase the amount of the Participant’s contributions made up to the commencement of such unpaid leave of absence plus interest on such contributions and dividends, if applicable, both determined in accordance with Section 7. Participation in the Plan will terminate immediately after the purchase of shares on such Purchase Date, unless the Participant has resumed eligible employment prior to the Purchase Date,authorized under French law, in which case the ParticipantRestricted Share Units may resume payroll deductions immediately.no longer qualify as French Qualified Restricted Share Units.
13. Designation of BeneficiaryAppendix 2: French Terms applicable to three year Performance Share Units
Each Participant may designate one or more beneficiaries inIt is intended that Performance Share Units granted under the event of deathFrench Plan shall qualify for the specific tax and may, in his or her sole discretion, change such designation at any time. Any such designation shall be effective upon receipt by the local Personnel Department and shall control over any disposition by will or otherwise.
As soon as administratively feasible after the death of a Participant, amounts creditedsocial security charges treatment applicable to his or her account, including interest and dividends, if applicable, determined in accordance with Section 7, shall be paid in cash and a certificate for any shares shall be deliveredFrench Qualified Performance Share Units Options granted under Articles L.225-197-1 to the Participant’s designated beneficiaries or, in the absence of such designation, to the executor, administrator or other legal representativeL.225-197-6 of the Participant’s estate. Such payment shall relieve the Company of further liability to the deceased Participant with respect to the Plan. If more than one beneficiary is designated, each beneficiary shall receive an equal portion of the account unless the Participant has given express contrary instructions.
14. Assignment
The rights of a Participant under the Plan will not be assignable or otherwise transferable by the Participant except by will or the laws of descentFrench Commercial Code, as subsequently amended, and distribution. No purported assignment or transfer of such rights of a Participant under the Plan, whether voluntary or involuntary, by operation of law or otherwise, shall vest in the purported assignee or transferee any interest or right therein whatsoever but immediately upon such assignment or transfer, or any attempt to make the same, such rights shall terminate and become of no further effect. If this provision is violated, the Participant’s election to purchase Common Stock shall terminate and the only obligation of the Company remaining under the Plan will be to pay to the person entitled thereto the amount then credited to the Participant’s account.
No Participant may create a lien on any funds, securities, rights or other property held for the account of the Participant under the Plan, except to the extent that there has been a designation of beneficiaries in accordance with the Plan,relevant provisions set forth by French tax law and except to the extent permitted by will orFrench tax administration. The terms of the laws of descent and distribution if beneficiaries have not been designated. A Participant’s right to purchase shares under theFrench Plan shall be exercisable only duringinterpreted accordingly and in accordance with the Participant’s lifetimerelevant provisions set forth by French tax and onlysocial security laws, and relevant Guidelines published by him or her.French tax and social security administrations and subject to the fulfillment of legal, tax and reporting obligations. The Performance Share Units granted under this Appendix 2 will be deemed French Qualified Performance Share Units.
15. Treatment of Non-U. S. Participants
1. | Eligibility |
French Qualified Performance Share Units may not be granted under this Addendum to an individual:
Participants who are(a) unless he is employed by non-U.S. Companies, Schlumberger Limited or by a company which is a corporation subsidiary of Schlumberger Limited; or
(b) unless he is a director with a management function as defined in Article 225-197-1 of the French “Code de Commerce” in France of a company which is a corporation subsidiary of Schlumberger Limited; or
(c)who are paidowns more than 10% of the share capital of Schlumberger Limited
2. | Vesting, Settlement and Delivery of French Qualified Performance Share Units |
(a)Vesting. French Qualified Performance Share Units shall vest as provided for in foreign currency and who contribute foreign currencythe Share Unit Agreement.
(b)Settlement. Payment of vested Performance Share Units shall only be made in shares of Common Stock.
(c)Delivery. Notwithstanding the vesting date of the Performance Share Units, under no circumstances, except in case of employee’s death as provided for in section 2 (d) below, shall the delivery of the shares related to a French Qualified Performance Share Unit occur prior to the Plan through payroll deductions,third anniversary of the Grant Date.
(d)Acceleration on Death. Upon Termination of Employment from the Company by reason of employee’s death, all French Qualified Performance Share Units that are not vested at that time immediately will have such contributions convertedbecome vested in full. The Company shall issue the underlying shares to U.S. dollarsthe employee’s heirs, at their request, within six months following the death of the employee. Notwithstanding the foregoing, the employee’s heirs must comply with the restriction on a monthly basis. The exchange rate for such conversion will be the rate quoted by a major financial institution selected by the Committee in its sole discretion. If the exchange rate for certain countries cannot be quoted in this manner, the conversion rate shall be determined as prescribed by the Committee. In no event will any procedure implemented for dealing with exchange rate fluctuations that may occur during the Purchase Period result in a purchase price below the price determined pursuant to Section 9.
16. Costs
All costs and expenses incurred in administering this Plan shall be paid by the Company. Any brokerage fees for the sale of shares purchasedset forth in Section 4 below, to the extent and as long as applicable under French law.
3. | No Sales Restrictions |
The sale of shares issued pursuant to the Plan shallconversion of the French Qualified Performance Share Units may occur as soon as the shares are delivered to the employee provided the closed periods in section 4 below are respected.
4. | Closed periods |
Shares underlying French Qualified Performance Share Units may not be paid bysold during the Participant.following period (“Closed Periods”):
17. Reports(a)within the 10 days before or after the publication of the annual accounts;
Annually,(b)within a period beginning with the Company shall provide or causedate at which executives of Schlumberger Limited become aware of any information which, were it to be provided to each Participantpublic knowledge, could have a report of his or her contributions and the shares of Common Stock purchased with such contributions by that Participant on each Purchase Date.
18. Equal Rights and Privileges
All eligible Employees shall have equal rights and privileges with respect to the Plan so that the Plan qualifies as an “employee stock purchase plan” within the meaning of Section 423 or any successor provision of the Code and related regulations. Any provision of the Plan which is inconsistent with Section 423 or any successor provision of the Code shall without further act or amendment by the Company be reformed to comply with the requirements of Section 423. This Section 18 shall take precedence over all other provisions in the Plan.
19. Rights as Stockholder
A Participant will have no rights as a stockholder under the election to purchase until he or she becomes a stockholder as herein provided. A Participant will become a stockholder with respect to shares for which payment has been completed as provided in Section 9 at the close of businesssignificant impact on the last business day of the Purchase Period.
20. Adjustments Upon Changes in Capitalization, Dissolution, Liquidation, Merger or Asset Sale.
(a) Changes in Capitalization. Subject to any required action by the stockholders of the Company, the right to purchase shares of Common Stock covered by a current Purchase Period and the number of shares which have been authorized for issuance under the Plan for any future Purchase Period, the maximum number of shares each Participant may purchase each Purchase Period (pursuant to Section 9), as well as the price per share and the number of shares of Common Stock covered by each right under the Plan which have not yet been purchased shall be proportionately adjusted for any increase or decrease in the number of issued shares of Common Stock resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Common Stock, or any other increase or decrease in the number of shares of Common Stock effected without receipt of consideration by the Company. Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares in and ending 10 trading days after the information becomes public knowledge.
These Closed Periods will apply to grant of Common Stock.French Qualified Performance Share Units as long as and to the extent such Closed Periods are applicable under French law.
(b) Dissolution or Liquidation. In
5. | Non-transferability of French Qualified Performance Share Units |
Except in the eventcase of death, French Qualified Performance Share Units may not be transferred to any third party.
6. | Adjustments to certain corporate events |
Adjustments to the terms and conditions of the proposed dissolutionFrench Qualified Performance Share Units or liquidation ofunderlying shares may be made only pursuant to applicable French legal and tax rules. Nevertheless, the Company,Board or the Purchase Period thenCompensation Committee, at its discretion, may determine to make adjustments in progress shall be shortened by setting a new Purchase Date (the “New Purchase Date”), and shall terminate immediately prior to the consummation of such proposed dissolution or liquidation, unless provided otherwise by the Board. The New Purchase Date shall be before the date of the Company’s proposed dissolution or liquidation. Each Participant will be notified in writing, at least thirty (30) business days prior to the New Purchase Date, that the Purchase Date for the Participant’s right to purchase shares has been changed to the New Purchase Date and that the applicable number of shares will automatically be purchased on the New Purchase Date, unless prior to such date the Participant has withdrawn from the Plan as provided in Section 10 hereof.
(c) Merger or Asset Sale. In the eventcase of a proposed sale of all or substantially all oftransaction for which adjustments are not authorized under French law, in which case the assets of the Company, or the merger of the Company with or into another corporation, each outstanding right to purchase shares shall be assumed or an equivalent right to purchase shares substituted by the successor corporation or a parent or subsidiary of the successor corporation. In the event that the successor corporation refuses to assume or substitute the right to purchase shares, any Purchase Period then in progress shall be shortened by setting a new Purchase Date (the “New Purchase Date”) and any Purchase Period then in progress shall end on the New Purchase Date. The New Purchase Date shall be before the date of the Company’s proposed sale or merger. Each Participant will be notified in writing, at least thirty (30) business days prior to the New Purchase Date, that the Purchase Date has been changed to the New Purchase Date and that the applicable number of shares will be purchased automatically on the New Purchase Date, unless prior to such date the Participant has withdrawn from the PlanPerformance Share Units may no longer qualify as provided in Section 10 hereof.
21. Modification and Termination
Except as provided in Section 20 hereof, the Board may amend or terminate the Plan at any time. No amendment shall be effective unless within one year after it is adopted by the Board it is approved by the holders of a majority of the votes cast at a meeting if such amendment would otherwise cause the rights granted under the Plan to purchase shares of Common Stock to fail to meet the requirements of Section 423 of the Code (or any successor provision).
In the event the Plan is terminated, the Committee may elect to terminate all outstanding rights to purchase shares under the Plan either immediately or upon completion of the purchase of shares on the next Purchase Date, unless the Committee has designated that the right to make all such purchases shall expire on some other designated date occurring prior to the next Purchase Date. If the rights to purchase shares under the Plan are terminated prior to expiration, all funds contributed to the Plan that have not been used to purchase shares shall be returned to the Participants as soon as administratively feasible, including interest and dividends, if applicable, determined in accordance with Section 7.
22. Board and Stockholder Approval; Effective Date
This Plan was originally approved by the Board on January 28, 1988, amended and restated by the Board on January 21, 1992, 1998 and 2010. This Plan was approved by the holders of a majority of the shares of
outstanding Common Stock of Schlumberger Limited on April 15, 1992, and the January 21, 2010 amendment and restatement of the Plan was similarly approved on April 7, 2010. This amendment and restatement approved by the Board on January 17, 2013 shall become effective as of January 1, 2013; provided, however, that the changes contained in Section 3 herein related to the increase in the number of shares which may be issued under the Plan shall not be effective unless approved by the holders of a majority of the votes cast at a meeting within the period ending January 17, 2014 (12 months after the date such increase in the number of shares which may be issued under the Plan is approved by the Board).
23. Governmental Approvals or Consents
This Plan and any offering or sale made to Employees under it are subject to any governmental approvals or consents that may be or become applicable in connection therewith. Subject to the provisions of Section 21, the Board may make such changes in the Plan and include such terms in any offering under the Plan as may be desirable to comply with the rules or regulations of any governmental authority.
24. Other Provisions
The agreements to purchase shares of Common Stock under the Plan shall contain such other provisions as the Committee and the Board shall deem advisable, provided that no such provision shall in any way be in conflict with the terms of the Plan.French Qualified Performance Share Units.
SCHLUMBERGER LIMITED (SCHLUMBERGER N.V.) 5599 SAN FELIPE, 17TH FLOOR HOUSTON, TX 77056 |
VOTE BY INTERNET -www.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. | |||||
ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. | ||||||
VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions. | ||||||
VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. |
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: |
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M99269-TBD | KEEP THIS PORTION FOR YOUR RECORDS |
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DETACH AND RETURN THIS PORTION ONLY
DETACH AND RETURN THIS PORTION ONLY |
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
SCHLUMBERGER LIMITED (SCHLUMBERGER N.V.) | ||||||||
The Board of Directors recommends you vote FOR the following: | ||||||||
1. Election of Directors | ||||||||
For | Against | Abstain | ||||||
Nominees: | ||||||||
1a. Peter L.S. Currie | ¨ | ¨ | ¨ | |||||
1b. V. Maureen Kempston Darkes | ¨ | ¨ | ¨ | |||||
1c. Paal Kibsgaard | ¨ | ¨ | ¨ | |||||
1d. Nikolay Kudryavtsev | ¨ | ¨ | ¨ | |||||
1e. Michael E. Marks | ¨ | ¨ | ¨ | |||||
1f. Indra K. Nooyi | ¨ | ¨ | ¨ | |||||
1g. Lubna S. Olayan | ¨ | ¨ | ¨ | |||||
1h. Leo Rafael Reif | ¨ | ¨ | ¨ | |||||
1i. Tore I. Sandvold | ¨ | ¨ | ¨ | |||||
1j. Henri Seydoux | ¨ | ¨ | ¨ |
The Board of Directors recommends you vote FOR the following proposals: | For | Against | Abstain | |||||
2. | To approve, on an advisory basis, the Company’s executive compensation. | ¨ | ¨ | ¨ | ||||
3. | To approve the Company’s 2015 financial statements and the Board’s 2015 declarations of dividends. | ¨ | ¨ | ¨ | ||||
4. | To approve the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for 2016. | ¨ | ¨ | ¨ | ||||
5. | To approve amendments to the Company’s Articles of Incorporation to allow the Board to fix the authorized number of directors at a meeting subject to stockholder approval and to reflect changes to the Curaçao Civil Code. | ¨ | ¨ | ¨ | ||||
6. | To approve a resolution to fix the number of directors constituting the Board of Directors at not more than 12, subject to approval of Item 5. | ¨ | ¨ | ¨ | ||||
7. | To approve our Amended and Restated French Sub-Plan for purposes of qualification under French law, to provide recipients of equity grants thereunder with preferential tax treatment under French law. | ¨ | ¨ | ¨ |
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Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners |
Signature [PLEASE SIGN WITHIN BOX] | Date | Signature (Joint Owners) | Date |
Important Notice Regarding the Availability of Proxy Materials for the Annual General Meeting:
The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com.
M40768-P20448
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M99270-TBD |
SCHLUMBERGER LIMITED (SCHLUMBERGER N.V.)
Proxy Solicitation on Behalf of the Board of Directors
Annual General Meeting of Stockholders April
The undersigned hereby appoints Aede Gerbranda, Robin van Bokhorst and Margo Troll-Weusten, and each of them, as proxies, each with the power of substitution, and hereby authorizes them to represent and to vote, as designated on the reverse side of this ballot and in their discretion upon any other matters that may properly come before the Annual General Meeting of Stockholders, all of the shares of Common Stock of Schlumberger Limited (SCHLUMBERGER N.V.) that the undersigned is entitled to vote at the Annual General Meeting of Stockholders to be held at the Avila Beach Hotel, Penstraat 130, Willemstad,
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