SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SCHEDULE 14A
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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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 ANNUAL GENERAL MEETING OF STOCKHOLDERS
To Be Held April 6, 2011
March [ ], 2011
The 20112012 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 6, 201111, 2012 at 10:30 a.m., Curaçao time, for the following purposes:
| 1. | To elect the |
| 2. | To approve an advisory resolution on executive compensation. |
| 3. | |
| To report on the course of business during the year ended December 31, |
| To approve the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm to audit the accounts of the Company for |
| 5. | To approve amendments to Schlumberger’s 2004 Stock and Deferral Plan for Non-Employee Directors to increase the number of shares of Schlumberger common stock available for issuance thereunder and to make certain technical changes to such plan. |
Action will also be taken on such other matters as may properly be brought before the meeting.
The close of business on February 16, 201122, 2012 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 C. Juden
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 3, 4 or 5 without your instructions.
Important Notice Regarding the Availability of Proxy Materials for the Annual General Meeting of
Stockholders to Be Held on April 6, 2011:11, 2012:
This proxy statement, along with the Company’s Annual Report onForm 10-K for the fiscal year ended December 31, 20102011 and the 20102011 Annual Report to Stockholders, are available free of charge on the Company’s website athttp://investorcenter.slb.com.
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March [ ], 2011
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 The approximate mailing date of this proxy statement is March [ ], General20112012 annual general meeting of stockholders. stockholders, which will be held at the Avila Beach Hotel, Penstraat 130, Willemstad, Curaçao, on Wednesday, April 11, 2012 beginning at 10:30 a.m., Curaçao time.2011.2012. 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 statement, and stockholders should refer to its contents in considering agenda Item 3.20102011 Annual Report to Stockholders is included in this package as a separate document. The Company’s Consolidated Balance Sheet as at December 31, 2010, its Consolidated Statement of Income for the year ended December 31, 2010 and the supplemental financial informationprovided concurrently with respect to dividends included in the Annual Report are incorporated by reference as part of this proxy soliciting material.
The agenda for the Items to be Voted on at the Annual MeetingAt20112012 annual general meeting the agenda includes the following items:
Agenda Item | Board Recommendation | |
• Item 1: Election of 12 directors | FOR | |
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| FOR | ||
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| FOR | ||
•Item 4: Appointment of PricewaterhouseCoopers LLP as the Company’s independent auditor | FOR | |
• Item 5: Approval of amendments to the Schlumberger 2004 Stock and Deferral Plan for Non-Employee Directors to increase the number of shares available for issuance and make certain technical changes | FOR |
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 provided 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 22, 2012, there were [ ] shares of common stock of Schlumberger outstanding and entitled to vote. Holders of at least one-half of the outstanding shares Votes Required to Adopt Proposals To be elected, director nominees must receive a majority of votes cast (the number of shares voted “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. 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 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.Record Date; ProxiesProxiesEach stockholder of record at the close of business on the record date, February 16, 2011,22, 2012, 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 consideredbeneficialowners. On February 16, 2011, there were [ ] shares of common stock of Schlumberger outstanding and entitled to vote, excluding [ ] shares held in treasury.Fifty percentexclusive of shares held in treasury,entitling the holders thereof to vote at such meeting must be present in person or by proxy to constitute a quorum for the taking of any action at the meeting.1
Discretionary Items. Under NYSE rules, without instructions from thebeneficialowners, brokers will have discretion to vote only on Items 63 and 7.4.
Nondiscretionary Items. Brokers cannot vote on ItemItems 1, (the election of directors), Item 2 (advisory resolution on executive compensation), Item 3 (advisory vote on the frequency of future advisory votes on executive compensation), Item 4 (amendment to the Articles of Incorporation to increase the authorized common share capital) or Item 5 (amendments to the Articles of Incorporation to clarify the voting standard in contested director elections and to make certain other changes) without instructions from thebeneficialowners. IfTherefore, if you do not instruct your broker how to vote on the election of directors, the two advisory votesvote on executive compensation, or the two proposalsproposal to amend the Articles of Incorporation,2004 Stock and Deferral Plan for Non-Employee Directors, your broker willnotbe able to vote for you on those matters.
Abstentions and broker non-votes will not affect the outcome of the vote on the election of directors or on any of the proposals except for Items 4 andother than Item 5, (the proposals to amend the Articles of Incorporation), with respect to which an abstention or broker non-vote haswill have the same effect as 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 The internet and telephone voting facilities for stockholders of record will close at 11:59 p.m. Eastern time on April 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 shares are held in an account at a bank or brokerage firm that participates in such a program, beneficial stockholders may direct the vote of these 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 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.Voting Proceduresby:card.• the internet at the following internet address:http://www.proxyvote.com;• telephonically by calling1-800-690-6903; or• completing and mailing their proxy card.5, 2011.10, 2012. 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.You can revoke your proxy at any time before it is exercised by timely delivery of a properly executed, later-dated proxy (including an internet or telephone vote) or by voting by ballot at the meeting.2
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. The stockholders are requested to elect a Board of Directors of 1412 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 20102011 annual general meeting, except for (a) Ms. Moler, who was appointed by the Board in September 2010 to serve as a director upon the recommendation of the Nominating and Governance Committee, and (b) Mr. Kibsgaard and Ms. Olayan, who are not currently directors. Our former director, Jamie Gorelick, resigned from the Board in June 2010, and Ms. Moler was appointed to fill this vacancy.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. If the Board designates a substitute nominee, proxies may be voted for another person designated by the Board of Directors.that substitute nominee. The Board knows of no reason why any nominee will be unable or unwilling to serve if elected.
Andrew Gould, who retired as our Chief Executive Officer effective August 1, 2011, will step down as Chairman of the Board at the time of our 2012 annual general meeting of stockholders. Additionally, Philippe Camus, currently a director, will not be standing for re-election. As a result of the foregoing, the size of the Board will be reduced from 14 to 12 directors and it is expected that Tony Isaac, the Board’s current lead independent director, will be appointed Chairman of the Board.
Shares represented by executed proxies will be voted, if authority to do so is not withheld, for the election of each of the 1412 nominees named below. If you hold your shares in “street name,” you should know that your broker will not vote your shares for the 1412 nominees listed below without your specific voting instructions.
Required Vote
Each director nominee must receive a majority of the votes cast is required to elect each nominee for director.be elected.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 NomineesCurrent DirectorsPHILIPPE CAMUS, 62, has been a director of the Company since 2007. He has been a Co-Managing Partner of Société Lagardère, a French media and technology company, since March 1998, and a Senior Managing Director of Evercore Partners Inc., an advisory and investment firm, since January 2006. From July 2000 to July 2005, Mr. Camus was co-Chief Executive Officer of the European Aeronautic Defence & Space Company, an aerospace and defense contractor. Mr. Camus is Chairman of the Board of Alcatel-Lucent, a global communications solutions provider. From May 2005 to May 2009, he was a director of Credit Agricole, the second-largest retail banking group in Europe, where he was a member of the audit committee and chaired the compensation committee. From January 2006 to September 2008, he was a director of Accor S.A., a global hotel and tourism-related company, and a member of its audit and compensation committees. The Board selected Mr. Camus to serve as a director because it believes he possesses valuable financial expertise, including extensive experience with capital markets transactions and investments in both public and private companies. He has led and directed global industrial, technology-dependent businesses, which informs his3
TONY ISAAC, 69,70, retired, has been a director of the Company since 2003, and is currently the Board’s lead independent director. He was the former Chief Executive 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 2006.2006, when he retired. Since October 2000, Mr. Isaac has served on the board of International Power plc, an independent power producer, as its senior independent director, and currently serves onis chairman of its audit remuneration and appointments committees.committee. He is also the senior independentnon-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 audit committee. The Board selected Mr. Isaac brings to serve as a director because he hasthe Board extensive experience serving on boards of large, multinational companies. Mr. Isaac also has valuable experience in the operation of a worldwide business faced with a myriad of international business and political issues. Mr. Isaac’s even temperament and ability to communicate and encourage discussion, together with his experience as senior independentnon-executive director of all boards on which he serves makemakes him an effective lead independent director for the Board.
K. VAMAN KAMATH, 63,64, retired, has been a director of the Company since 2010. He has been thenon-executive 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 Governance, Remuneration and Nomination committees. Mr. Kamath has also been a directorthe non-executive Chairman of the Board of Infosys Technologies Limited, an information technology services company, since May 2009, where he servesAugust 2011, and has served on its board of directors since May 2009. Mr. Kamath also served on Infosys’ audit and nomination committees, and iswas chairman of its compensation committee.committee, in each case until October 2011. He haswas also been a director of Lupin Limited, a pharmaceutical company, sincefrom January 2010 to November 2011 and of Great Eastern Shipping Co. Limited, a shipping company, sincefrom May 2010. The Board selected2010 to November 2011. Mr. Kamath brings to serve as a director because it believes he possessesthe Board a deep understanding of India a(a large and critical market for Schlumberger,Schlumberger) and of Asia generally, both of which isare of immense value to the Board. As a banker with
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PAAL KIBSGAARD, 44, has been a director of the Company since 2011 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. He was Vice President of Personnel from April 2006 to November 2007, and President, Drilling & Measurements, from January 2003 to April 2006. 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 brings a valuable operational perspective to the Board. The Board believes that Mr. Kibsgaard’s service as Chief Executive Officer offers 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, 60,61, 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. The Board selected Mr. Kudryavtsev brings to serve as a director because it believes he bringsthe Board valuable management and finance experience, to the Board, 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, 67,68, has been a director of the Company since 2002. He has been aan outside consultant serving as Senior Energy Advisor atto McKinsey & Company, a consulting firm, and President of Petrométrica, an energy consulting company, in both cases since January 2001. 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. The Board selected Mr. Lajous brings to serve as a director because it believes he hasthe Board his extensive knowledge of and experience ofin 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.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, 60,61, 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 until and served in that role his retirement from the Boardboard of Flextronics in 2008, and he previously served as Chairman of the Board of Flextronics from 1993 to 2003. Mr. Marks ishas been a director atof SanDisk, (since 2003), a memory products company, since 2003 and became chairman of its board in January 2011. He is also a member of its compensation committee and is chairman of its nominating and governance committees.committee. Until Sun Microsystems’ merger with Oracle in January 2010, he was a director at Sun Microsystems (since 2007), a network computing infrastructure product and service company, and was a member of its audit committee. Until December 2010, Mr. Marks was a director of Calix (since 2009), a provider of broadband communications access systems and software. The Board selected Mr. Marks brings to serve as a director because it believes he is familiarthe 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 CEO 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 been a director have been involved in some form of technology business, and this experience is especially relevant givento Schlumberger’s technology-oriented business and the fact that many of its acquisition targets are technology companies.
ELIZABETH A. MOLER, 62,63, has been a director of the Company since her appointment by the Board in September 2010, upon the recommendation of the Nominating and Governance Committee.2010. She is retired from Exelon Corporation (formerly Unicom), one of the nation’s largest electric utility companies, where she served as Executive Vice President, Government Affairs and Policy from January 2000 to July 2010. In January 2012, Ms. Moler became a director of GenOn Energy, Inc., a large competitive generator of wholesale electricity in the United States. During 1999 she
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LUBNA S. OLAYAN, 56, has been a director of the Company since 2007. He has been Provost, Chief Academic Officer and Chief Budget Officer of the Massachusetts Institute of Technology (MIT) since August 2005. 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. The Board selected Mr. Reif to serve as a director because it believes he brings valuable management and finance expertise to the Board. 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 development of the Company’s strategy.
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Ms. Olayan has been a Principal of The Olayan Group, a private multinational enterprise engaged 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, distribution and services, often in partnership with leading multinationals. Prior to joining The Olayan Group, Ms. Olayan worked for Morgan Guaranty in New York as a financial analyst from 1979 to 1981. Ms. Olayan also serves as a non-executive director and member of various corporate and advisory boards. Since December 2004, Ms. Olayan has been a Director of Saudi Hollandi Bank, becoming the first woman to join the board of a Saudi publicly-listed company, and is a member of its executive committee and its nomination and remuneration committee. Ms. Olayan has been a member of the Board at Chelsfield Partners LLP, a UK real estate investment firm, since 2005. Ms. Olayan also has been a non-executive director of WPP plc, a public company and one of the largest communication services businesses in the world, since March 2005, and is a member of its nomination committee. Since 2006, Ms. Olayan has beenis also a member of the International Advisory Boards of Rolls Royce Group plc (since 2006), Akbank (since 2008) and the National Bank of Kuwait.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 INSEAD, Cornell University and King Abdullah University of Science and Technology. TheMs. Olayan brings to the Board believes that Ms. Olayan’s proven leadership abilities and experience in Saudi Arabia and the Middle East, willwhich enable her to make a meaningful contributionvaluable contributions to the Board. The Board selected Ms. Olayan to serve as a director because of herhas extensive business experience in Saudi Arabia and the Middle East and hera deep understanding of those areas, which are critical to the Company. The Board will benefitbenefits from her extensive CEO experience and expertise in corporate finance, international banking, distribution and manufacturing. Ms. Olayan as a member of the Board of Directors of INSEAD, one of the world’s leading graduate business schools, will also bringbrings a critical international perspective on business and global best practices. Ms. Olayan’s service on the Boards of Trustees 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, will also beare of great value to Schlumberger and its efforts in technology leadership and employee recruiting and retention.
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TORE I. SANDVOLD, 64, has been a director of the Company since 2004. He has been executive Chairman of Sandvold Energy AS, an advisory company in the energy business, since September 2002. Mr. Sandvold is a director of Teekay Corporation (since 2003), a leading provider of international crude oil and petroleum product transportation services, where he is a member of its nominating and governance committee. From 2001 to 2002, Mr. Sandvold served as executive Chairman of Petoro AS, the Norwegian state-owned oil company. Mr. Sandvold brings to the Board experience working in the area of energy policy for more than 35 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, 51, 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 provider of wireless mobile telephone accessories. 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. Mr. Seydoux brings to the Board entrepreneurial 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 CORPORATE GOVERNANCEprinciplesguidelines that the Board believes promote the effective functioning of the Board, its committees and the Company. These guidelines are available on our website athttp://www.slb.com/about/guiding _principles/guiding_principles/corpgovernance/corpgov_guidelines.aspx.
The following are some highlights of Board Independence; Committees Structure All of our director nominees Following our 2012 annual general meeting of stockholders, Mr. Isaac currently serves as the Board’s lead independent director. His role is described below under “—Board Leadership Structure.” 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 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. Stock Ownership Guidelines In 2011, our Board of Directors adopted new executive stock ownership guidelines in light of current practice and to further strengthen corporate governance. For a description of the new 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 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 Policy Our directors and executive officers are prohibited from hedging their ownership of 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. 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. In addition, 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 that each 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 its independence determinations, the Board considered all material relationships with each director and each new director nominee, and all transactions since the start of 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 The Board’s independence determinations included a review of business dealings at companies where the directors serve as directors, trustees, outside consultants or advisory board members, all of which were ordinary course business transactions involving significantly less than 1% of either companies’ annual revenues, and charitable contributions by Schlumberger to The Massachusetts Institute of Technology, of which Mr. Reif is the Provost, and to The Moscow Institute of Physics and Technology, of which Mr. Kudryavtsev is the 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. 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 holders 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, 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 Andrew Gould, who retired as our CEO in August 2011, currently serves as both our Chairman of the Board and In connection with Paal Kibsgaard succeeding Mr. Gould as our CEO, the Board examined the advantages and disadvantages of The independent members of the Board also determined that, effective with Mr. Gould’s retirement as a member of our Board in April 2012, the appointment of an independent, non-executive Chairman of the Board would be an appropriate Board leadership structure at that time Following Mr. Isaac’s appointment as the independent, non-executive Chairman of the Board, The role that the Company’s Board of Directors fulfills in risk oversight is set out in the Company’s Corporate Governance Guidelines. The Board of Directors assesses major risks facing the Company and options for their mitigation, in order to promote the Company’s stockholders’ and other stakeholders’ interest in the long-term health and the overall success of the Company and its financial strength. The full Board of Directors 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 supervisesday-to-day risk management throughout the Company. The ERC is not a committee of the Board of Directors. 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 In addition, each of our Board committees considers the risks within its areas of responsibilities. For example, the Finance Committee considers finance-related risks on a quarterly basis and recommends guidelines to control cash, pension investments 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 reviews and discusses the Company’s Compliance and Ethics program’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 During Members of the Committees of the Board of Directors Audit Committee Compensation Committee Nominating and Governance Committee Finance Committee Science Committee Philippe Camus Peter L.S. Currie Andrew Gould Tony Isaac K. Vaman Kamath Paal Kibsgaard Nikolay Kudryavtsev Adrian Lajous Michael E. Marks Elizabeth A. Moler Lubna S. Olayan Leo Rafael Reif Tore I. Sandvold Henri Seydoux Audit Committee The Audit Committee consists of five 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 with management and the independent registered public accounting firm Schlumberger’s earnings press releases; 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 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, Camus, Kamath and Lajous each Compensation Committee The Compensation Committee consists of four directors, each of whom meets the independence requirements of the NYSE’s listing standards. The purpose of the Compensation Committee is 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: review and approve the objectives, evaluate the performance, and review and recommend the compensation of the Company’s Chief Executive Officer to the full Board 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 salary, annual cash incentive and long-term equity incentives; select appropriate peer companies against which the Company’s executive compensation practices are 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 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 guidelines 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 confirm continued competitiveness and consistency with established Company compensation philosophy, corporate strategy and objectives, and alignment with stockholder interests; review and make recommendations to the Board regarding people-related strategies and initiatives, such as recruitment, retention and diversity management; establish stock ownership guidelines for executive officers and other key position holders; review and discuss with the Company’s management the Compensation Discussion and Analysis (“CD&A”) to be included in the Company’s annual proxy statement;��and The Compensation Committee may delegate specific responsibilities to one or more individual committee members to the extent permitted by law, NYSE listing standards and Schlumberger’s governing documents. The design andday-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. The Compensation Committee has retained Pay Governance LLC (“Pay Governance”) as 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 Event Timing The Compensation Committee has also retained Pay Governance as an independent consulting firm with respect to director compensation matters. The Compensation Committee operates pursuant to a written charter, which is available on the Company’s website athttp://www.slb.com/about/guiding_principles/corpgovernance/compensation_committee.aspx. Nominating and Governance Committee The Nominating and Governance Committee lead the search for individuals qualified to become members of the Board; evaluate the suitability of potential nominees for membership on the Board; periodically review the qualifications and criteria taken into consideration in the evaluation of potential nominees for membership 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 and best practices in corporate governance, 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 functions of the Committee under the Company’s Policy with respect to Related Person Transactions; 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 assessment of Board effectiveness and report to the Board; periodically 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 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 athttp://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 athttp://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 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 athttp://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 Schlumberger Limited c/o the 5599 San Felipe, 17th Floor Houston, Texas 77056 All such communications will be forwarded to the Board member or members specified. 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. 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 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 Copies of Schlumberger’s Corporate Governance Guidelines and Schlumberger’s Code of Ethics are available at the Company’s corporate governance website located athttp://www.slb.com/about/guiding_principles.aspx. We are asking stockholders to approve an advisory resolution on the Company’s executive compensation as reported in this proxy statement. As described 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 In accordance with 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 This advisory resolution, commonly referred to as a The Board of Directors has adopted a policy providing for an annual “say-on-pay” advisory votes. 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 2013. Required Vote A majority of the votes cast is required to approve this Item 2.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 The following Compensation Discussion and Analysis (“CD&A”) describes Schlumberger’s compensation policies and practices as they relate to Schlumberger delivered strong results in 2011, with all three Product Groups contributing to our growth. Similar to recent years, however, Schlumberger, like the rest of the oil and gas industry, continued to face an uncertain and challenging economic we had record full-year revenue North America revenue grew by 82% over 2010, a result of significantly improved activity, stronger pricing and improved asset efficiency in North America; we increased the we achieved Smith revenue synergies sooner than anticipated, exceeding even our revised synergy targets, so that the transaction was Schlumberger management also took several other key operational, strategic and economic measures in continuing Schlumberger’s technology leadership by investing more than $1 billion in research and engineering; retaining valuable technical employees; continuing to implement mechanisms necessary to keep costs in line with activity; and continuing to improve execution through the refinement of Schlumberger’s “Excellence in Execution” initiative and its Engineering, Manufacturing and Sustaining organization. Executive Compensation Program Overview Schlumberger’s success in delivering strong stockholder returns is a Our executive compensation program is multi-faceted and The primary elements of our compensation program are base salary; performance-based annual cash incentive; and long-term equity incentives. A significant portion of executive pay is in the form of variable compensation that is at risk, in order to align executive compensation with the Company’s business strategy and create long-term shareholder value. We maintain no employment, severance or change-in-control agreements for our named executive officers. In 2011, our Board of Directors, upon recommendation of the Nominating and Governance Committee, approved amendments to our executive stock ownership guidelines. Our revised guidelines provide that our CEO must own shares of our common stock equal to at least 6 times his annual base salary; our executive vice presidents, including our CFO, must own at least 3 times their annual base salary; and all other executive officers (non-EVP) must own at least 2 times their annual base salary. In addition, our revised stock ownership guidelines require each executive to hold 50% of the net shares acquired upon the exercise of stock options until the executive satisfies his or her ownership requirement, and now impose a five-year deadline on compliance. 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. We have a compensation Our directors and executive officers are prohibited from hedging their ownership of Schlumberger stock, including trading in options, puts, calls, or other derivative instruments related to our securities. Overview of The main elements and goals of Schlumberger’s executive compensation program did not change from fiscal year The Compensation Committee took the following actions for In connection with Andrew Gould’s retirement as our CEO in August 2011 and for continued service as an executive until April 2012 and as Chairman of the Board until the 2012 annual general stockholders meeting, the Compensation Committee decided to keep Mr. Gould’s base salary at $2,500,000. Effective with his retirement as our CEO, Mr. Gould ceased to be eligible to participate in the Company’s annual performance-based cash incentive program or its long-term equity incentive program. In January 2011, the annual base salary of Paal Kibsgaard, then our Chief Operating Officer, was increased from 750,000 Euros to 900,000 Euros. In connection with Mr. Kibsgaard’s appointment as CEO in August 2011, his base salary was increased to $1,700,000 (then equivalent to approximately 1,181,500 Euros) and his performance-based Effective January 2011, Satish Pai and Kjell-Erik Oestdahl became joint Executive Vice Presidents of Operations. As a result of these appointments, Mr. Pai’s base salary was increased from 600,000 Euros to 700,000 Euros, and Mr. Oestdahl’s base salary was increased from 3,675,300 Norwegian Kronors (then equivalent to approximately 469,800 Euros) to 640,000 Euros, and the performance-based annual cash incentive range for each of them was increased from 0-75% to 0-100%. Also effective January 2011, Ashok Belani was appointed Executive Vice President Technology. As a result of this appointment and for retention purposes, his base salary was increased from 550,000 Euros to $900,000 (then equivalent to approximately 640,000 Euros), and his performance-based annual cash incentive range was increased from 0-75% to 0-100%. The base salary for Simon Ayat, our Chief Financial Officer, was increased in July 2011 from $900,000 to $1,000,000 for retention purposes. Payout of the financial incentive in February 2012 for performance in 2011 was 100% of target, well below the maximum 200% potential payout. In light of 2010 equity grants that were subsequently determined to be below competitive levels, the Compensation Committee approved grants of stock options to the NEOs in January 2011 at levels in the range of the 75th percentiles of the Company’s two peer groups. Additionally, in January 2011, the Compensation Committee approved grants of approximately $6,000,000 in stock options to Mr. Ayat and approximately $4,100,000 in stock to Mr. Belani, in both cases for retention purposes and to recognize their performance and contributions in 2010 to the Company in a period of significant senior management change. Executive Compensation Philosophy In keeping with the Company’s Schlumberger’s compensation Schlumberger’s executive compensation program consists of three primary elements, comprising the 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 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-wide financial and personal objectives; stock option awards should reward the creation of long-term stockholder value; and the Company’s policies should encourage executives to hold stock through stock option awards and stock ownership guidelines that align their interests with those of our other stockholders. Schlumberger’s executive officer compensation program is overseen by the Compensation Committee. The specific duties and responsibilities of the Compensation Committee are described in the section of this proxy statement 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. Relative Size of Direct Compensation Elements The Compensation Committee While the external market data provide important guidance in making decisions on executive compensation, the size and complexity of the executive’s scope of responsibilities; leadership; management and technical expertise; performance 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. The Compensation Committee may at its discretion modify the mix of base pay, annual cash incentive and As part of the Compensation Pay Governance’s analysis demonstrated that Schlumberger’s 2010 TSR was at approximately the 70th percentile of the oil industry peer group. The analysis also showed that, The data showed further that the actual cash incentive paid to Mr. Gould, our then-CEO, and Pay Mix and Internal Pay Equity Review In January 2011, the Compensation Committee carried out an analysis of pay mix and internal pay equity. In carrying out its reviewed the elements of compensation for The Compensation Committee Peer Group Companies and Benchmarking The Compensation The surveys indicate the compensation levels and practices of our two groups of peer companies: the oil industry peer group, which includes companies in the oil services, exploration and production, refining and pipeline industries, and the general industry peer group, which includes large companies with significant international operations. The Compensation competition for executive talent; revenue and market global presence and scope of international operations; and companies viewed as leaders in The Committee, Oil Industry Peer Group The The Compensation Committee includes oil exploration and production (E&P) companies in this peer group complete comparator group. The Compensation Committee selected the following companies for the oil industry peer group effective for 2011 compensation decisions: Oil Industry Peer Group • Anadarko Petroleum • Baker Hughes • BG Group • BHP Billiton • BJ Services† • BP • Cameron International • Canadian Natural Limited • Chevron • CITGO • ConocoPhillips • Devon • Eni SpA • Exxon Mobil • Halliburton • Hess • Marathon Oil • McDermott International • Murphy Oil • Nabors Industries • Noble • Occidental Petroleum • Parker Drilling • Royal Dutch Shell • Smith International† • Sunoco • TOTAL • Transocean • Valero • Weatherford General Industry Peer Group The general industry In Schlumberger’s recent acquisitions of Smith and Geoservices and its significant growth in recent years, Schlumberger’s relatively high market capitalization-to-revenue multiple, rendering it difficult to place the Company in the median of a comparator group on both metrics; and intensified competition for Schlumberger’s executive talent. At the time of the Compensation Committee’s review, Schlumberger’s 2011 revenue was forecast to be more than $35 billion. However, the revenue range for companies In connection with the changes described above, the Compensation Committee selected the following companies for the general industry peer group effective for 2011: General Industry Peer Group Revenue of $25B to • Abbott Laboratories • Amazon.com* • AstraZeneca PLC • Bayer AG* • Best Buy* • Bunge Ltd.* • Caterpillar Inc.* • Cisco • Coca-Cola* • Delta Air Lines* • Dow Chemical* • E.I. Dupont de Nemours • Express Scripts* • FedEx* • General Dynamics* • GlaxoSmithKline* • Hess* • Honeywell • Intel • Johnson Controls* • Merck & Co. • Novartis AG* • PepsiCo, Inc. * • Pfizer* • Raytheon • Rio Tinto* • Sanofi-Aventis* • Sprint Nextel • UPS* • Walt Disney* * Denotes a company that was added to the group for 2011. 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 peer groups and takes into account other factors Base salaries for each executive officer position are compared annually with similar positions in both 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 in the two 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 to the independent members of the Board of Directors for approval, based on the same criteria as above. The Compensation Committee carried out a review of the compensation of executive officers in January With respect to other executives, base salary Also, in January 2011, the Compensation Committee approved an increase to Mr. Belani’s base salary from 550,000 Euros to 640,000 Euros, in connection with his promotion to Executive Vice President Technology as well as for retention purposes. (Mr. Belani’s base salary is now denominated in U.S. dollars ($900,000) following his transfer to Houston.) The Compensation Committee also approved an increase in the base salary of Mr. Ayat in July 2011, from $900,000 to Retirement of CEO and Appointment of Successor CEO. As discussed above in the section “2011 Executive Summary,” effective August 1, 2011, Mr. Gould retired as Chief Executive Officer and Mr. Kibsgaard was appointed by the Schlumberger Board of Directors as the Company’s new CEO, on the recommendation of the Nominating and Governance Committee. In connection with Mr. Kibsgaard’s promotion, the Annual Cash Incentive The Company pays annual performance-based cash incentives to Half of Schlumberger’s potential cash incentive The Compensation Committee reviews and recommends to the full Board the financial objectives for both the CEO and the other executive officers. The Committee approves the personal objectives 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 Annual Cash Incentive Decisions for 2011 Annual Cash Incentive Ranges The data showed that executives at more than 75% of the companies comprising Schlumberger’s two peer groups had a maximum annual incentive opportunity of at least 200% of target compensation as compared to Schlumberger’s maximum annual incentive opportunity of approximately 150% as a percentage of target. The data also showed that Schlumberger’s actual annual cash incentive payments to its executive officers were below market. As a result of its review of the comparative data of the two peer groups and in consideration of the increased levels of responsibility of each of the persons named below, the Compensation Committee approved the following increases to the annual cash incentive ranges, effective August 2011: for Mr. Kibsgaard, from 0-100% to 0-150% of base salary, and for each of Messrs. Pai, Oestdahl and Belani, from 0-75% to 0-100% of base salary. As stated previously, only the financial half of the annual cash incentive payment has a maximum incentive payout opportunity of up to 200% of target, while the personal half has no positive incremental As in previous years, the financial half of the annual cash incentive for all executive officers in 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 harmed by, or would unfairly benefit from, these items. The process used to set these annual EPS targets starts with a review of plans and projections followingbottom-up planning from the field, which considers factors such as: activity growth potential; pricing; anticipated exploration and production (E&P) spending; and introduction As with 2010, the Compensation Committee decided that the maximum incentive opportunity for the financial-based portion of the annual incentive would be 200% instead of the 300% available in some previous years. The Committee also believed it was important to set EPS targets which, while very difficult to achieve in The performance targets and corresponding payouts for the financial half of the an EPS of at least $3.40 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 target of $3.40 represented a 19% increase against EPS of $2.86 actually earned for 2010; in order for 100% of the financial half of the incentive to be paid, 2011 EPS achieved had to be at least $3.75, which represented a 31% increase against EPS actually earned in 2010; and an EPS of at least $4.10 was needed to achieve 200% of the financial half of the incentive, which represented a 43% increase against EPS actually earned for 2010. If the EPS result achieved was between two targets, then the financial incentive payment would be prorated. As in prior years, no cash incentive would be paid if the minimum Schlumberger’s Individual Objectives The second half of the annual cash incentive is related to personal objectives that are specific to each executive officer position and may relate to: technology 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 cash incentive 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 Messrs. Gould Messrs. Gould, Kibsgaard, Pai and Messrs. Gould Messrs Gould, Kibsgaard, Ayat, Pai and Oestdahl had objectives relating to the Messrs. Gould and Kibsgaard had objectives on research and product development, which were mainly achieved. Mr. Mr. Kibsgaard had objectives regarding corporate initiatives on communication, which were achieved. Mr. Ayat had objectives regarding capital structure and cash flow, which were achieved. Messrs. Pai and Oestdahl had objectives on quality and safety, which were mainly achieved. Messrs Pai and Oestdahl also had objectives on sales and marketing, which were mainly achieved. Mr. Pai also had objectives regarding technology, which were mainly achieved. Mr. Oestdahl also had objectives on cost management and efficiency, Mr. Belani had objectives on research, engineering, manufacturing and Name P. Kibsgaard A. Gould S. Ayat S. Pai K.-E. Oestdahl A. Belani Long-Term Equity Compensation—Stock Options Stock options are designed to give high-value employees, including named executive officers, a longer-term stake in the Company, provide incentives for future performance, act as a long-term retention tool and align employee and stockholder interests over the longer term. Schlumberger currently uses stock options as its The Compensation Committee grants stock options to reward past performance but also to retain executive officers and to provide incentives for future exceptional performance. The value of a stock option grant increases with the level of position, and for the CEO and other named executive officers is typically the largest element of the total compensation package. In determining the value of grants of stock options to be made to executive officers, the Compensation Committee (in the case of the CEO’s grant) and the CEO (in the case of recommendations for grants for the other NEOs), consider numerous factors, including: 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 an 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 options granted to an executive over the course of his or her career, together with the retentive effect of additional stock option grants; 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 officer has been determined based on the above factors, it is converted into a number of stock options on The values given to equity compensation awards by the Compensation Committee are only estimates, and the actual value that may be realized by Stock Option Grants in 2011 January 2011 Stock Option Grants. January Name A. Gould P. Kibsgaard S. Ayat S. Pai A. Belani K. E. Oestdahl As stated in our 2011 proxy statement, the Schlumberger’s two peer In light of 2010 equity grants being lower than intended for competitive positioning, the Compensation Committee in January 2011 approved the following awards, following review of peer market data presented to the Committee: to Mr. Gould, $12,752,000 in stock options, which was slightly below the 75th percentile of the to to Mr. Ayat, $6,000,000 in stock options, of which approximately $3,500,000 represented an annual grant based on peer group data and approximately $2,500,000 of which was for retention purposes and in recognition of Mr. Ayat’s experience and perspective during the CEO transition period, resulting in the grant being above the 75th percentile of both groups; to Mr. Belani, $4,100,000 in stock options, of which approximately $1,600,000 represented an annual grant based on peer group data and approximately $2,500,000 of which was for retention purposes and in recognition of Mr. Belani’s contributions during the period of CEO transition, resulting in the grant being above the 75th percentile of both groups; to Mr. Pai, $2,800,000 in stock options, which was between the 50th and 75th percentile of both peer groups; and to Mr. K.E. Oestdahl, $1,100,000 in stock options, based on competitive positioning with respect to his April and In April 2011, the Compensation Committee In July 2011, the Compensation Committee approved a stock option grant to Mr. The Compensation Committee is responsible for granting options under Schlumberger’s stock option and incentive plans. The Committee approves a preliminary budget for stock option 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 option 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 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 option 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 of grants to reflect possible market reaction. Generally, annual stock option grants are made at the January meeting of the Compensation Committee, although specific grants may be made at other regular meetings to recognize the promotion of an employee, a change in responsibility or a specific achievement. It is Schlumberger’s policy to make awards to executive officers and other employees at the same time. 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), and those granted to Andrew Gould in January 2010 and January 2011, which have three-year ratable vesting. The Board and the Compensation Committee have the discretion to grant stock options with different vesting schedules as they deem necessary. The Company’s stock option 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 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, the Board of Directors, upon recommendation of the Nominating and Governance Committee, The newly-adopted guidelines require the CEO to hold stock valued at six times base salary (increase from 5x), and Executive Vice Presidents to hold stock valued at three times base salary (remained same) and Executive Officers (non-EVPs) to hold stock valued at two times base salary (increase from 1.5x). Additionally all executives subject to the revised guidelines must retain 50% (as opposed to 30%) of net shares acquired upon the exercise of stock options, after payment of applicable taxes, until they achieve the required ownership level. Additionally, the revised guidelines provide that executives have five years to comply with the ownership requirements. There was no specified timeline under the prior guidelines. Senior executives are required to hold the numbers of shares equal to the multiple of base salary set forth below. Title Chief Executive Officer Executive Vice Presidents Executive Officers (non-EVP) Key Staff Positions Schlumberger’s 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 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. 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) who are approaching Schlumberger seeks to provide benefit plans, such as medical coverage and life and disability insurance, on acountry-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 executive officers. Schlumberger does not have employment, severance orchange-in-control agreements for any of its executive officers, except for those 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. 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. 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. Schlumberger grants both incentive stock options and non-qualified stock options according to US 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 option plans are intended to provide qualified performance-based compensation for purposes of Section 162(m) and are not expected to be subject to the $1 million limitation. The Compensation Committee 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 The following table shows the compensation paid by the Company and its subsidiaries for the fiscal year ended December 31, Name and Principal Position P. Kibsgaard(1),(2) Chief Executive Officer A. Gould(3) Chairman and Former Chief Executive Officer S. Ayat Executive Vice President S. Pai(4) Executive Vice President, 2009 785,945 N/A N/A 2,051,485 403,814 363,433 126,423 3,731,100 K.-E. Oestdahl(5) Executive Vice President, Operations A. Belani(6) Executive Vice President, Technology Dividend yield Expected volatility Risk-free interest rate Expected option life Item Unfunded credits to the Schlumberger Supplementary Benefit Plan Contributions to Schlumberger Profit Sharing Plans Perquisites: Vacation payout in connection with transfer Tax preparation in connection with transfer Total Item Unfunded credits to the Schlumberger Supplementary Benefit Plan Unfunded matching credits to the Schlumberger Restoration Savings Plan Contributions to Schlumberger Profit Sharing Plans Contributions to Schlumberger 401(k) Plan Perquisites: Reimbursement for loss on home sale Vacation payout in connection with transfer Total Item Unfunded credits to the Schlumberger Supplementary Benefit Plan Contributions to Schlumberger Profit Sharing Plans Contributions to Schlumberger 401(k) Plan Perquisites: Allowance in lieu of hotel expenses Vacation travel allowance Total Item Contributions to Schlumberger Non-U.S. Profit Sharing Plans Perquisites: Child education expenses Medical coverage for child Total Item Contributions to Schlumberger Non-U.S. Profit Sharing Plans Perquisites: Mobility payment Relocation allowance Temporary living Child education expenses Relocation expenses—movement household goods Vacation payout in connection with transfer Total Item Unfunded credits to the Schlumberger Supplementary Benefit Plan Unfunded matching credits to the Schlumberger Restoration Savings Plan Contributions to Schlumberger Profit Sharing Plans Contributions to Schlumberger 401(k) Plan Perquisites: Relocation expenses—movement household goods Vacation travel allowance Vacation payout in connection with transfer Total The following Grants of Plan-Based Awards table provides additional information about stock and option awards and equity incentive plan awards granted to Schlumberger’s named executive officers during the year ended December 31, Name P. Kibsgaard A. Gould S. Ayat S. Pai K.-E. Oestdahl A. Belani The cash incentive amounts actually earned for 2011 and payable in 2012 are reflected in the “Non-Equity Incentive Plan” column of the Summary Compensation Table. For information regarding the annual cash incentive paid to Schlumberger’s named executive officers with respect to 2011 performance, please read “Compensation Discussion and Analysis—Elements of Compensation—2011 Annual Incentive.” The stock options granted in January The following table provides information regarding unexercised stock options outstanding for each of our named executive officers as of December 31, Name P. Kibsgaard A. Gould(2) S. Ayat S. Pai K.-E. Oestdahl A. Belani The following table sets forth certain information with respect to stock options exercised by the named executive officers during Name P. Kibsgaard A. Gould S. Ayat S. Pai K.-E. Oestdahl A. Belani Pension Benefits for Fiscal Year Schlumberger maintains the following pension plans for 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 Limited Supplementary Benefit Plan (“SLB Supplementary 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”). Name Plan Name P. Kibsgaard A. Gould S. Ayat S. Pai K.-E. Oestdahl A. Belani Tax-Qualified Pension Plans Both the SLB Pension Plan and the STC Pension Plan are U.S. tax-qualified pension plans. These plans have substantially identical terms. Employees may participate in 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 plan based upon the benefits accrued during the years of service related to each plan. These plans are funded through cash contributions made by the Company and its subsidiaries based on actuarial valuations and regulatory In 2004, the above plans 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 the employee’s 401(k) contribution and the profitability of the Company in any year. None of the named executive officers were affected by this change. Schlumberger Supplementary Benefit Plans—Nonqualified Pension Both the SLB Supplementary Plan and the STC Supplementary Plan contain non-tax-qualified pension benefits. These plans have substantially identical terms and each plan 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 (“U.S. IRC”) 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 before the age of 50, is terminated for cause or has violated a confidentiality arrangement involving the Company or its affiliates. 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 at age 60 when the employee retires from Schlumberger and is eligible for a French state pension. The benefit is equivalent to 1.5% of admissible compensation above the earnings cap for less than fifteen years service and 2% of admissible compensation (generally base salary and cash incentive) for more than fifteen years service. No employee contributions are required or permitted. The benefit is paid as a life-time annuity. If an eligible employee leaves the Company before age 60 or is otherwise not entitled to a French pension, then the employee would not receive a benefit under the plan. If the eligible employee is terminated before age 60, 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-qualified pension plans to executive officers. International Staff Pension Plan Recognizing the need to maintain a high degree of mobility for certain of the Company’s employees and that otherwise the employees 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 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. Benefits under this plan are based on a participant’s admissible compensation (generally, base salary, cash incentive and geographical coefficient) for each year in which the employee participates in the plan and the employee’s length of service. The benefit earned from January 1, 1993 to January 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 beyond 20 years of service had the first 15 years of service upgraded 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. 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 The following table and narrative disclosure set forth certain information with respect to nonqualified deferred compensation payable to the named executive officers. Name Plan Name P. Kibsgaard A. Gould S. Ayat S. Pai K.-E. Oestdahl A. Belani SLB Supplementary Benefit Plan—Non-Qualified Profit Sharing The SLB Supplementary Plan provides certain The SLB Supplementary Plan provides an eligible employee with discretionary Company profit sharing contributions that is not permissible under the applicable tax-qualified plan due to U.S. IRC 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 Plan if the employee is terminated for cause or has violated a confidentiality arrangement involving the Company or the Company’s 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. 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. SLB Restoration Plan The SLB Restoration Plan, a non-qualified deferred compensation plan, provides certain defined contribution benefits for eligible employees, including executive officers. Schlumberger Technology Corporation maintains a plan with substantially identical terms. The SLB Restoration 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 U.S. IRC 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%) of his or her compensation (generally base salary and cash incentive) over the U.S. IRC 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% on the first 6% deferred by the employee. The Company does not make a matching contribution in non-profitable years. Employees’ accounts are credited with interest, calculated to mirror the interest earnings of the Short-Term 2 years 3 years 4 years 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. 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. SLB International Staff Plan Schlumberger maintains the SLB International Staff Plan, which provides for an annual employer contribution based on admissible compensation (generally base salary and cash incentive). Amounts allocated to the participants’ accounts share in investment gainsand/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 Plan shall be forfeited upon a determination by the SLB International Staff 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 No Additional Payments Upon Termination or Change in Control Schlumberger’s 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 in connection with phased retirement. Phased Retirement The Company 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 read “Compensation Discussion and Analysis—Benefits—Retirement Practices” for a more detailed discussion. 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 This section summarizes the consequences for named executive officers and other employees under the Company’s 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 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. In January 2012, the Compensation Committee approved the acceleration of the vesting of all unvested stock options held by Andrew Gould that were awarded to him in January 2011. As a result, all such options will vest upon Mr. Gould’s retirement as an executive officer of the Company on April 30, 2012, and be exercisable pursuant to the original terms of the award. All of Mr. Gould’s other unvested stock options at his retirement will be forfeited pursuant to the terms of the plans under which they were issued. See the Outstanding Equity Awards at Fiscal Year-End 2011 table on page 45 for information on Mr. Gould’s stock options. Change in Control Pursuant to Schlumberger’s stock options plans and standard form of stock option award agreement (other than awards issued under the 2010 Omnibus Stock Incentive Plan), in the event of any reorganization, merger or consolidation where 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. Name P. Kibsgaard A. Gould S. Ayat S. Pai K.-E. Oestdahl A. Belani 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. 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, please read “Executive Compensation—Pension Benefits” and “—Nonqualified Deferred Compensation.” The following table sets forth the amounts as of December 31, 2011 of benefit payments that would be accelerated under the Schlumberger Restoration Savings Plan upon a change in control. Name P. Kibsgaard A. Gould S. Ayat S. Pai K.-E. Oestdahl A. Belani Retiree Medical Subject to satisfying certain age, service and contribution requirements, all 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, at which time Medicare becomes primary and the Schlumberger plan becomes secondary, paying eligible charges after Medicare has paid. Non-employee directors receive an annual cash retainer of $100,000 plus an additional annual fee of $10,000 for membership on each 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 The following table provides information on Schlumberger’s compensation for non-employee directors Name Philippe Camus Peter L.S. Currie Tony Isaac K.Vaman Kamath Nikolay Kudryavtsev Adrian Lajous Michael Marks Elizabeth Moler Lubna S. Olayan(4) Leo Rafael Reif Tore I. Sandvold Henri Seydoux The fees disclosed in this column are subject to adjustment in cases where a director has served less than one full year or has changed committee memberships or chairmanships during the year. A non-employee director may elect to defer the receipt of all or part of a stock award. For information on the number of shares of Schlumberger common stock deferred by our directors, please read the footnotes to the table under “Security Ownership by Management.” 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 after joining the Board, own at least 10,000 shares or restricted stock units. As of December 31, The table below sets forth the following information as of the end of December 31, Plan category Equity compensation plans approved by security holders Equity compensation plans not approved by security holders Total Equity compensation plans approved by Following completion of the audit procedures the Company’s Consolidated Balance Sheet as at December 31, 2011; its Consolidated Statement of Income for the year ended December 31, 2011, as audited by PricewaterhouseCoopers LLP; and the amount of dividends declared by the Board of Directors during 2011. These items are included in the Schlumberger 2011 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 Recommendation of the Board The Board of Directors Recommends a Vote FOR Item PricewaterhouseCoopers LLP has been selected by the A representative of PricewaterhouseCoopers LLP is expected to attend the PricewaterhouseCoopers LLP has billed the Company and its subsidiaries the fees set forth in the table below for: the audit of the Company’s 2011 and 2010 annual financial statements and reviews of quarterly financial statements and other audit services, and the other services described below that were billed in 2011 and 2010. Audit Fees(1) Audit-Related Fees(2) Tax Fees(3) All Other Fees(4) Total 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 Required Vote A majority of the votes cast is required to approve Recommendation of the Board The Board of Directors Recommends a Vote FOR Item During The Company’s independent registered public accounting firm provided the Audit Committee with written disclosures required by Public Company Oversight Board Rule 3526 (Communication with 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 SUBMITTED BY THE AUDIT COMMITTEE OF THE SCHLUMBERGER BOARD OF DIRECTORS ITEM 5. APPROVAL OF THE AMENDMENT AND RESTATEMENT OF THE 2004 STOCK AND DEFERRAL PLAN FOR NON-EMPLOYEE DIRECTORS Proposed Amendment and Restatement We are requesting that our stockholders vote in favor of approving an amendment and restatement of the Schlumberger Limited 2004 Stock and Deferral Plan for Non-Employee Directors (the “Plan”), which would: increase the number of shares available for stock awards under the Plan by 150,000 shares, and increase the limit on annual awards that may be granted to an individual director to 6,000 shares. Our Board approved the proposed amendment and restatement of the Plan on January 19, 2012; however, the increase in shares available under the Plan is subject to stockholder approval. No other substantive changes are being made to the Plan. Purpose of the Plan The Plan is intended to: enhance our ability to maintain a competitive position in attracting and retaining qualified non-employee directors of outstanding competence and ability; stimulate the interest of the non-employee directors in our continued success and progress by further aligning each non-employee director’s interests with those of our stockholders; and reward non-employee directors for outstanding performance. Administration The Plan is administered by the Compensation Committee (the “Committee”), as designated by our Board. The Committee has full and exclusive power and authority to: administer, interpret and waive provisions of the Plan; adopt rules, regulations and guidelines for carrying out the Plan, including to accommodate specific requirements of local laws and procedures in foreign jurisdictions; and determine the eligibility of participants and the amount and form of any stock award or cash compensation eligible for deferral. The Committee may delegate duties under the Plan to the Chief Executive Officer and other senior officers of Schlumberger, other than its granting authority. Key Terms The following is a summary of the key provisions of the Plan. Eligible Participants: Shares Available for Issuance Under the Plan: Annual Awards: Deferrals: Establishment of Bookkeeping Account for Stock Deferrals: Deemed Investment of Bookkeeping Account for Cash Deferrals: Period of Deferral: Modification and Termination of the Plan: Unfunded Plan: Material U.S. Income Tax Consequences The following discussion describes the material U.S. federal income tax consequences to non-employee directors with respect to awards granted under the Plan. This summary is based on statutory provisions, Treasury regulations, judicial decisions and rulings of the Internal Revenue Service in effect on the date hereof. This summary does not describe any state, local or non-U.S. tax consequences. In general, a non-employee director will recognize ordinary compensation income as a result of the receipt of common stock pursuant to a stock award in an amount equal to the fair market value of the common stock when such stock is received. Upon the disposition of the common stock acquired pursuant to a stock award, the non-employee director will recognize a capital gain or loss in an amount equal to the difference between the sale price of the common stock and the non-employee director’s tax basis in the common stock. This capital gain or loss will be a long-term capital gain or loss if the shares are held for more than one year. For this purpose, the holding period begins on the day after the shares of common stock are received by the non-employee director. A non-employee director will not have U.S. taxable income upon the grant of a stock award in the form of units denominated in common stock but rather will generally recognize ordinary compensation income at the time the non-employee director receives shares of common stock or cash in satisfaction of such stock unit award in an amount equal to the fair market value of the common stock or cash received. Code Section 457A applies to deferred compensation received from “nonqualified entities,” which includes any foreign corporation unless substantially all of its income is effectively connected with the United States or subject to a comprehensive income tax. Based on the guidance issued to date, we are likely included within the definition of a “nonqualified entity” under Code Section 457A. For compensation attributable to services performed after December 31, 2008, Code Section 457A requires that any compensation paid under a deferred compensation plan of a nonqualified entity must be included in the service provider’s income at the time such amounts are no longer subject to a substantial risk of forfeiture. Accordingly, because non-employee directors are always vested in the amounts deferred under the Plan, if Schlumberger is a nonqualified entity and the compensation is not otherwise excludible from Section 457A, stock or cash compensation deferred by non-employee directors who are U.S. citizens or residents in accordance with the procedures established under the Plan will be included in U.S. income by the non-employee director in the year for which the compensation is earned despite a timely election to defer receipt of such compensation. Dividends paid on shares of outstanding common stock held by a non-employee director will be taxed as dividend income. Cash payments of dividend equivalents with respect to stock units under the Plan will be subject to taxation as ordinary compensation income when received by the non-employee director. To the extent allowable by relevant laws and regulations, we may 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. No deduction will be available on any dividends which are paid on outstanding shares of stock and taxable as dividend income to the recipient. Unless otherwise required by applicable laws or regulations, Schlumberger will not withhold or otherwise pay on behalf of any non-employee director any taxes arising in connection with an award under this Plan. The payment of any such taxes will be the sole responsibility of each non-employee director. We, however, have the authority to satisfy any withholding obligations from funds or shares of common stock deliverable pursuant to the Plan or other cash compensation due a participant, if applicable. Required Vote Pursuant to our Articles of Incorporation, a majority of the votes cast (excluding abstentions) is required to approve this Item 5. In addition, NYSE rules require that Item 5 receive a majority of the votes cast (with abstentions counting the same as votes against) and that the total votes cast on this proposal (including abstentions) represent a majority of all shares entitled to vote.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 could prevent the total votes cast on the proposal from representing over 50% of the outstanding shares. In addition, abstentions will have the same effect as votes against the proposal under NYSE rules. Recommendation of the Board The Board of Directors Recommends a Vote FOR Item 5. The following table sets forth information as of December 31, Name and Address BlackRock Inc.(1) 40 East 52nd Street New York, NY 10022 The following table sets forth information known to Schlumberger with respect to beneficial ownership of Schlumberger common stock as of January 31, Beneficial ownership is determined under the rules of the 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 Name Simon Ayat Ashok Belani Philippe Camus Peter L.S. Currie Andrew Gould Tony Isaac K. Vaman Kamath Paal Kibsgaard Nikolay Kudryavtsev Adrian Lajous Michael E. Marks Elizabeth A. Moler Kjell-Erik Oestdahl Lubna S. Olayan Satish Pai Leo Rafael Reif Tore I. Sandvold Henri Seydoux All directors and executive officers as a group 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 our possession and on written representations from reporting persons, that with respect to the fiscal year ended December 31, In order for a stockholder proposal to be considered for inclusion in the proxy statement for the Pursuant to the rules under the Exchange Act, the Company may use discretionary authority to vote with respect to stockholder proposals presented in person at the Stockholders may obtain a copy of Schlumberger’s most recentForm 10-K filed with the SEC 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 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 [ ], [ 2004 STOCK AND DEFERRAL PLAN FOR NON-EMPLOYEE DIRECTORS (As Amended and Restated Effective ARTICLE I PURPOSES OF PLAN AND DEFINITIONS 1.1Purpose. 1.2Definitions. “Annual Director Award Date” means the “Board of “Cash Compensation” means the “Committee” means such “Common Stock” means the Common Stock, par value $.01 per share, of “Company” means Schlumberger Limited, acorporation incorporated under the laws of the formerNetherlands Antillesand now existing as a Curaçao corporation. “Deferred Compensation Account” means the bookkeeping account maintained for each Participant to record certain amounts deferred by the Participant in “Director” means an individual who is serving as a member of the “Eligible Director” means each Director who is “Money Market Equivalents” means a phantom investment benchmark that is used to measure the return credited to a Participant’s Deferred Compensation Account. To the extent Money Market Equivalents are elected, interest equivalents will be credited to the Participant’s Deferred Compensation Account as of the last day of each calendar month based upon the average daily balance in the account for the month and the IMONEY NET First Tier Institutional Index benchmark return for the month as determined from Northern Trust or a similar or equivalent index of “Participant” means an Eligible Director who is granted Stock Awards pursuant to Article III. “Stock Award” means an award of “Stock Unit” means a unit which represents the right to receive one share of Common Stock under such terms and conditions as may be prescribed by the Committee and this Plan. “S&P 500 Index” means a phantom investment benchmark that is used to measure the return credited to a Participant’s Deferred Compensation Account. To the extent S&P 500 Equivalents are elected, the earnings (or loss) equivalents will be credited (or debited) to the Participant’s Deferred Compensation Account as of the last day of each calendar quarter based upon the balance in ARTICLE II ADMINISTRATION OF THE PLAN 2.1Committee. This Plan shall be 2.2Committee’s Powers. Subject to the provisions hereof, the Committee shall have full and exclusive power and authority to administer this Plan and to take all actions which are specifically contemplated hereby or are necessary or appropriate in connection with the administration hereof. The Committee shall also have full and exclusive power to interpret this Plan and to adopt such rules, regulations, and guidelines for carrying out this Plan as it may deem necessary or proper, all of which powers shall be exercised in the 2.3Committee Determinations Conclusive. Any decision of the Committee in the interpretation and administration of this Plan shall lie within its sole and absolute discretion and shall be final, conclusive and binding on all parties concerned. 2.4Committee Liability. No member of the Committee or officer of the Company 2.5Delegation of Authority. The Committee may delegate to the Chief Executive Officer and to other senior officers of the Company its duties under this Plan (other than its granting authority described in Article III) pursuant to such conditions or limitations as the Committee may establish. ARTICLE III STOCK AWARDS 3.1Shares Available. There shall be available for Stock Awards during the term of this Plan an aggregate of 3.2Annual Grants. On each Annual Director Award Date all Eligible Directorsas of such Annual Director Award Date shall be granted a Stock Awardas compensation for services to be performed thereafter through the next succeeding Annual Director Award Date. Such Stock Award shall be granted with respect to a number of shares of Common Stock in the form of a number of shares of Common Stock, restricted Common Stock or restricted Stock Units, with the form and amount of such Stock Awards to be determined by the Committee; provided however that ARTICLE IV DEFERRAL ELECTION AND ACCOUNTS 4.1Deferral Election. A Director, at the discretion of the Committee, may irrevocably elect to defer the receipt of all or part of a Stock Award and/or Cash Compensation by submitting a Deferral Election in the manner specified by the Committee. The Deferral Election (i) shall specify the number of shares of Common Stock the receipt of which the Participant elects to defer and/or the amount or percentage of Cash Compensation, (ii) shall designate the period of deferral among the choices provided in Section 5.1, and (iii) may not be revoked or modified. 4.2Timing of Elections. For annual grants of Stock Awards pursuant to Section 3.2, Deferral Elections must be made (i) for Stock Awards, no later than 4.3Establishment of Accounts. The Company shall also set up an appropriate record (hereinafter called the “Deferred Compensation Account”) which will from time to time reflect the name of each Participant and (i) the number of restricted Stock Units and, if applicable, dividend equivalents credited to such Participant pursuant to Section 4.4 and (ii) the Cash Compensation deferred pursuant to Section 4.1 plus earnings or losses credited thereon monthly. 4.4Crediting of Deferred Stock Awards or Restricted Stock Unit Awards. Any Stock Awards deferred pursuant to a Deferral Election as described in Section 4.1 shall be credited to the Participant’s Deferred Compensation Account as of the date the shares would otherwise have been delivered pursuant to Article III in the form of a number of restricted Stock Units equal to the number of shares of Common Stock deferred, and any restricted Stock Units awarded pursuant to Section 3.2 shall also be credited to a Participant’s Deferred Compensation Account as of such date. No interest will be credited to a Participant’s Deferred Compensation Account with respect to any restricted Stock Units. In the event that a cash dividend is paid on Common Stock during the period that restricted Stock Units are credited to the Participant’s Deferred Compensation Account, an amount equivalent to the amount of the cash dividend will be credited to the Participant’s Deferred Compensation Account and the accumulated amount will be paid out without interest at the end of the period of deferral. 4.5Adjustments. (a)Exercise of Corporate Powers. The existence of this Plan and any outstanding restricted Stock Units credited hereunder shall not affect in any manner the right or power of the Company or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in the capital stock of the Company or its business or any merger or consolidation of the Company, or any issue of bonds, debentures, preferred or prior preference stock (whether or not such issue is prior to, on a parity with or junior to the existing Common Stock) 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 of any kind, whether or not of a character similar to that of the acts or proceedings enumerated above. (b)Recapitalizations, Reorganizations and Other Activities. In the event of any subdivision or consolidation of outstanding shares of Common Stock, declaration of a dividend payable in shares of Common Stock or other stock split, then (i) the number of restricted Stock Units relating to such class of Common Stock; (ii) the appropriate fair market value and other price determinations for such restricted Stock Units; (iii) the number of shares reserved for issuance under this Plan in Section 3.1 and (iv) the 4.6Deferred Cash Compensation. Each Participant shall be entitled to direct the manner in which his or her deferred Cash Compensation will be deemed to be invested for the period of deferral and in accordance with such rules, regulations and procedures as the Committee may establish from time to time. Notwithstanding anything to the contrary herein, earnings and losses based on a Participant’s investment elections shall begin to accrue as of the date such Participant’s deferred Cash Compensation amounts are credited to his or her Deferred Compensation Account and shall end on the Determination Date (as defined in Section 5.1 below). Each Participant may choose to have his or her deferred Cash Compensation deemed to be invested in the Common Stock, Money Market Equivalents or S&P 500 Equivalents. Any amounts deemed to be invested in the Company’s Common Stock shall (1) have a purchase price equal to the fair market value (as defined below) of each share of Common Stock on the date the investment is deemed to have occurred, and (2) be credited with dividend equivalents representing cash dividends payable with respect to the Common Stock, if any. For purposes of the Plan, the “fair market value “of Common Stock shall be deemed to equal the closing sales price per share of the Common Stock in the New York Stock Exchange Composite Transactions Quotations, as reported for that date, or if there shall have been no such reported prices for that date, the reported closing sales 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. ARTICLE V DELIVERY OF DEFERRED SHARES OR CASH 5.1Period of Deferral. With respect to (a) Stock Awards and/or Cash Compensation deferred pursuant to Section 4.1, a Participant may elect that delivery of deferred Stock Awards and/or Cash Compensation credited to the Participant under the Plan be made or commence at (i) a date that is one year following the date of the termination of the Participant’s status as a Director of the Company, or (ii) the date of the termination of the Participant’s status as a Director of the Company, and (b) restricted Stock Units granted pursuant to Section 3.2, the Committee shall determine the date or conditions as of which shares represented by such restricted Stock Units will be delivered (the date elected or selected by the Participant or the Committee, as applicable, to be known as the “Determination Date”). Delivery of shares will be made within 60 days after the Determination Date. 5.2Delivery of Deferred Stock Awards and Deferred Cash Compensation. As of the Determination Date, the aggregate number of restricted Stock Units and, if applicable, dividend equivalents credited to a Participant’s Deferred Compensation Account as of such Determination Date shall be calculated. A Participant shall receive delivery of a number of shares of Common Stock equal to the aggregate number of restricted Stock Units and a cash 5.3Death Prior to Payment. In the event that a Participant dies prior to delivery of all shares and funds deliverable pursuant to the Plan, any remaining shares and funds credited to Participant’s Deferred Compensation Account shall be delivered to the Participant’s estate within 60 days following the Company’s notification of the Participant’s death. 5.4Delivery to Incompetents. To the extent allowed under applicable law, should the Participant become incompetent, the Company shall be authorized to deliver shares and funds credited to Participant’s Deferred Compensation Account and deliverable pursuant to the Plan to a guardian or legal representative of such incompetent, or directly to such incompetent, whichever manner the Committee shall determine in its sole discretion. ARTICLE VI MISCELLANEOUS 6.1Unfunded Plan. Nothing contained herein shall be deemed to create a trust of any kind or create any fiduciary relationship. This Plan shall be unfunded. To the extent that a Participant acquires a right to receive delivery of shares from the Company under the Plan, such right shall not be greater than the right of any unsecured general creditor of the Company and such right shall be an unsecured claim against the general assets of the Company. Although bookkeeping accounts may be established with respect to Participants, 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 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 stock or rights thereto to be granted under this Plan. Any liability or obligation of the Company to any Participant with respect to stock or rights thereto under this Plan shall be based solely upon any contractual obligations that may be created by this Plan, 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. 6.2Title to Funds Remains with Company. Amounts credited to each Participant’s Deferred Compensation Account shall not be specifically set aside or otherwise segregated, but will be combined with corporate assets. Title to such amounts will remain with the Company and the Company’s only obligation will be to make timely delivery to Participants in accordance with the Plan. 6.3Statement of Account. A statement will be furnished to each Participant annually on such date as may be determined by the Committee stating the balance of Deferred Compensation Account as of a recent date designated by the Committee. 6.4Assignability. Except as provided in Section 5.3, no right to receive delivery of shares hereunder shall be transferable or assignable by a Participant except by will or the laws of descent and distribution or pursuant to a qualified domestic relations order as defined by the U.S. Internal Revenue Code of 1986, as amended (the “Code”) or Title I of the Employee Retirement Income Security Act of 1974, as amended, or the rules thereunder. Any attempted assignment of any benefit under this Plan in violation of this Section 6.4 shall be null and void. 6.5Amendment, Modification, Suspension or Termination. The Board 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, modification or termination shall, without the consent of the Participant, impair the rights of any Participant to the number of restricted Stock Units credited to such Participant’s Deferred Compensation Account as of the date of such amendment, modification or termination and (ii) no amendment or modification shall be effective prior to its approval by the stockholders of the Company to the extent such approval is required by applicable legal requirements or the requirements of the securities exchange on which the Company’s Common Stock is listed. The Board may at any time and from time to time delegate to the Committee any or all of this authority under this Section 6.5. 6.6Governing 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. 6.7Tax and Social Insurance. Participants are responsible for any and all tax or social insurance due on Stock Awards or restricted Stock Units under this Plan. Participants shall pay or make arrangements to satisfy all withholding obligations of the Company related to this Plan. The Company has the authority to satisfy any withholding obligations from funds or shares of Common Stock deliverable pursuant to this Plan or other cash compensation due a Participant, if applicable. 6.8Code Section 409A. To the extent applicable, this Plan is intended to comply with the provisions of Code Section 409A and related regulations and United States Department of the Treasury pronouncements (“Section 409A”) with respect to amounts deferred or vested on or after January 1, 2005, and shall SCHLUMBERGER LIMITED 5599 SAN FELIPE, 17TH FLOOR HOUSTON, TX 77056 VOTE BY INTERNET 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. Have your proxy card in hand when you access the web site and 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 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: M40767-P20448 KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. 1. Election of Directors Nominees: 1a. Peter L.S. Currie 1b. 1c. 2. To approve 1d. 3. 1e. 4. To approve the appointment of the independent registered 1f. Adrian Lajous 5. To approve amendments to the Company’s 2004 Stock and Deferral Plan for Non-Employee Directors to increase the number of shares available for issuance and make certain technical changes. 1g. Michael E. Marks 1h. Elizabeth A. Moler 1i. Lubna S. Olayan 1j. L. Rafael Reif 1k. Tore I. Sandvold 1l. Henri Seydoux 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 Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: M40768-P20448 SCHLUMBERGER LIMITED (SCHLUMBERGER N.V.) Proxy Solicitation on Behalf of the Board of Directors Annual General Meeting of Stockholders April The undersigned hereby appoints Robin van Bokhorst, Aede Gerbranda, Martijn Moerdijk 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, Curacao on April THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED BY THE UNDERSIGNED. IF NO SUCH DIRECTIONS ARE MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF EACH OF THE NOMINEES LISTED IN ITEM 1 Majority Voting for DirectorsGovernance Framework—HighlightsSchlumberger’s ArticlesIncorporation provide thatour corporate governance practices and policies:mustare independent of the Company and management, except for our CEO. This is substantially above the NYSE requirement that a majority of directors be elected at aindependent.byan independent member of the Board will serve as Chairman of the Board.votes cast.our directors are elected annually. We do not have a classified board.DirectorBoard Independencecurrent director and each director nominee listed above under “Election of Directors,” as well as our former directors Linda Stuntz (who did not stand for re-election at our 2010 annual general meeting) and Jamie Gorelick (who resigned from the Board of Directors in June 2010),Directors” is independent“independent” under the NYSE’spublished listing standards except Mr. Gould, who is Chairman and Chief Executive Officer of Schlumberger, andthe NYSE, except Mr. Kibsgaard, who is Chief Operating Officerour CEO and therefore does not qualify as independent. Mr. Gould, our former CEO who will step down as Chairman of Schlumberger. the Board at the 2012 annual meeting, was not considered to be independent.20082009 between Schlumberger and each current director and director nominee and members of their immediate families or entities associated with them.• 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 SECRegulation 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.and discussed additional information provided by the directors and the Company with regard to each director’sany business andor 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 all 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 entityand/or the8amount involved, no relationships exist that, in the opinion of the Board, would impair the director’s independence.any of the past three years, and from which the directors received no personal benefit.Rector. Aggregate contributions to each of these educational institutions did not exceedRector, which likewise were significantly less than the greater of $1 million or 1% of that organization’s consolidated gross revenues for 2008, 2009 or 2010.Director Nominations Our CEO suggested Ms. Olayan and an independent director suggested Ms. Moler as prospective Board candidates.approximately 108,000more than 113,000 employees worldwide, representing more than 140 countries,nationalities, and values gender, cultural and geographical diversity in its directors as well. OneTwo of the Company’s current directors is a woman, as is one of the two new director nominees.are women. Of the 14 current12 director nominees, four are citizens of the United States of America; two are French citizens; two9Board’s choice of leadership structure.its consideration of director nominees.are citizens of Great Britain; 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 when assessingin the compositioncontext of the Board.Board Leadership Structure; Independent Lead DirectorCEO.an executive officer of the Company. The Board also currently has a lead independent director, whose specific role is described below. The Board recognizes that one of its key responsibilities is to evaluate and determine an appropriate 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, the independent oversightDirectors consider the Board’s leadership structure at least annually.management is an important componentvarious Board leadership structures in light of an effective board of directors.the Company’s executive and Board leadership and its governance priorities. The independent Board members haveof the Board determined that having Mr. Gould continue to serve as Chairman of the Board until the Company’s 2012 annual general meeting of stockholders is the most effective Board leadership structure for Schlumberger at this time, as it provides for Board leadership continuity while our new CEO focuses on his primary responsibility of operational leadership and strategic direction of the presentCompany.is for thebecause it will allow our new CEO to also servefocus on leading the Company’s complex international business operations while providing the Board experienced and independent leadership. The Board expects to appoint Tony Isaac as the independent, non-executive Chairman of the Board at the time of our 2012 annual general meeting of stockholders. Mr. Isaac, Chair of the Nominating and Governance Committee, currently serves as the Board’s lead independent director. Upon his appointment as Chairman of the Board, a structure that has served SchlumbergerMr. Isaac will continue to fulfill the responsibilities he performed as lead independent director, including presiding over executive sessions of non-management directors, as well for many years. The independent Board members believe that because the CEO is ultimately responsible for theday-to-day operation of the Company and for executing the Company’s strategy, and because the performance of the Company is an integral part of Board deliberations, the CEO is the director best qualified to act as Chairman of the Board.serving as Chairman. The Board retains the authority to modify this structure from time to time to best address the Company’s unique circumstances, and soto advance the best interests of all stockholders, as and when appropriate.Thealso believes,he will no longer serve as lead independent director, and the Board will not have a designated lead independent director. Currently, the Chairman of the Board and the lead independent director together set the agenda for all Board meetings, and the reasons set forth below, that its existing corporate governance practices achievelead independent oversight or management accountability, which isdirector sets the goal that many seekagenda for, and leads, all executive meetings of the independent directors, providing consolidated feedback, as appropriate, from those meetings to achieve by separating the roles of Chairman and CEO. The lead independent director also has authority to call meetings of the Board of Directors in executive session; facilitates discussions, outside of scheduled Board meetings, among the independent directors on key issues as appropriate; and serves as a non-exclusive liaison with the Chairman and CEO, in consultation with the other independent directors. Schlumberger’s current governance practices provide for strong independent leadership, active participation by independent directors and for independent evaluation of, and communication with, many members of senior management.management, and the Board expects this to continue following the appointment of an independent, non-executive Chairman of the Board. These governance practices are reflected in Schlumberger’sour Corporate Governance Guidelines and the various Committee Charters, which are available on our website. SomeThe Board believes that its risk oversight programs, discussed immediately below, would be effective under a variety of Board leadership frameworks and therefore do not materially affect the relevant processes and other corporate governance practices include:• The Board has an independent lead director with leadership authority and responsibilities. Tony Isaac, Chair of the Nominating and Governance Committee, was selected by the independent Board members to be the lead independent director. The Chairman of the Board and the lead independent director together set the agenda for all Board meetings, and the lead independent director sets the agenda for, and leads, all executive meetings of the independent directors, providing consolidated feedback, as appropriate, from those meetings to the Chairman and CEO. The lead independent director also has the authority to call meetings of the Board of Directors in executive session; facilitates discussions, outside of scheduled Board meetings, among the independent directors on key issues as appropriate; and serves as a non-exclusive liaison with the Chairman and CEO, in consultation with the other independent directors.• At each regularly scheduled Board meeting, all independent directors meet in an executive session without management present. In these executive sessions, the independent directors deliberate on such matters as CEO succession planning and the performance of the CEO.• All of our director nominees, except the Chairman and CEO and the Chief Operating Officer, are independent directors, which is substantially above the NYSE requirement that a majority of directors be independent. Each director is an active and equal participant in decisions made by the full Board. In addition, each of the Audit, Finance and Nominating and Governance Committees are comprised solely of independent directors.• Each of our directors is elected annually by majority vote of our stockholders.• Schlumberger’s Corporate Governance Guidelines also facilitate the involvement of the independent members of the Board in key aspects of governance. For example, any director may request that the lead director call an executive meeting of the Board. Additionally, the Chairman and CEO regularly solicits suggestions from the directors for presentations by management at Board and Committee10meetings. Furthermore, each Board member has full and free access to the Company’s management and employees.The Board’s Role in Risk Oversighttheto 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 periodically presents to the full Board a comprehensive report as to its risk mapping efforts for that year.on an ad hoc basis,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 violations of the Company’s Code of Ethics and related corporate policies are reported to the Nominating and Governance Committee and, as appropriate, are reported to the full Board. Once a year, the Director ofDeputy General Counsel, Compliance delivers to the full Board a comprehensive Annual Compliance Report. The risks identified within the Compliance and Ethics program are incorporated into the ERC’s enterprise risk management program described above. The Chair of each of the Board’s key committees also discusses, reviews and makes decisions on serious matters outside of quarterly Board meetings, as needed.Meetings of the Board of Directors and its Committees2010,2011, the Board of Directors held eightseven meetings. Schlumberger has an Audit, a Compensation, a Nominating and Governance, a Finance, and a Science and Technology Committee. During 2010,2011, the Audit Committee met five times; the Compensation Committee met sevenfour times; the Finance Committee met fivefour times; the Nominating and Governance Committee met fivefour times; and the Science and Technology Committee met two times. All incumbent director nomineesEach of our directors as of the date of this proxy statement attended 88% or more100% of the aggregate of the meetings of the Board and of the committees of the Board on which such directors served.served, except for one director, who attended 81%. From time to time between meetings, Board and committee members may confer with each other and with management and independent consultants regarding11relevant issues, and representatives of management may meet with the independent consultants on behalf of the relevant committee.Board CommitteesName of Director
and
TechnologyX Chair Chair X NominatingChair andAuditCompensationGovernanceFinanceTechnologyName of DirectorCommitteeCommitteeCommitteeCommitteeCommitteePhilippe Camus X ChairX Peter L.S. Currie ChairX X X X X Chair X X Andrew GouldTony IsaacXChairK. Vaman KamathX X Nikolay KudryavtsevXXAdrian LajousXXXMichael E. MarksChairXElizabeth A. Moler X Chair X X Leo Rafael Reif X ChairTore I. SandvoldXXHenri SeydouxXX • 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 with management and the independent registered public accounting firm Schlumberger’s earnings press releases;12• 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;• set policies for the hiring of employees or former employees of the Company’s independent registered public accounting firm;• 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.and other services provided byof the Company’s independent registered public accounting firm.consolidated financial statements.member of the Audit Committee, other than Mr. Kudryavtsev, qualifiesqualify 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 athttp://www.slb.com/about/guiding_principles/corpgovernance/audit_committee.aspx.• review and approve the objectives, evaluate the performance, and review and recommend the compensation of the Company’s Chief Executive Officer to the full Board 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 salary, annual cash incentive andlong-term equity incentives;• select appropriate peer companies against which the Company’s executive compensation practices are 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 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 guidelines and recommend changes to the Board as it deems appropriate in accordance with Schlumberger’s Corporate Governance Guidelines;13submit a Compensation Committee Report recommending to the Board that the CD&A be included in the Company’s annual proxy statement.• monitor and review the Company’s overall compensation and benefits program design to confirm continued competitiveness and consistency with established Company compensation philosophy, corporate strategy and objectives, and alignment with stockholder interests;• review and make recommendations to the Board regarding people-related strategies and initiatives, such as recruitment, retention and diversity management;• establish stock ownership guidelines for executive officers and other key position holders;• review and discuss with the Company’s management the Compensation Discussion and Analysis (“CD&A”) to be included in the Company’s annual proxy statement; and• submit a Compensation Committee Report recommending to the Board that the CD&A be included in the Company’s annual proxy statement.anits independent consultant with respect to executive compensation matters. Pay Governance, which focuses on advising boards on executive compensation, was formed by former practitioners at the consulting firm Towers Watson (our former (our compensation consultant), which previously provided executive compensation advisory services to Schlumberger’s Compensation Committee. 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 each October meetings. One of the purposes of the July meeting is to assess compensation decisions made in advanceJanuary of that year in light of comparative data to date; one of the purposes 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.2010—2011—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.14The following table summarizes the approximate timing of significant compensation events: EventEstablish executive officerCompany financial objective(s) January of each fiscal year for current year Establish executive officer personal objectives Early in the first quarter of the fiscal year for current year Perform competitive assessment to determine how Schlumberger’s compensation decisions compared to decisions made by companies included in the compensation surveys July of each fiscal year for current year 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 executive performance (achievement of objectives established in previous fiscal year) and recommend 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 stock option grants January of each fiscal year for base salary for that year and for stock options to be granted As stated above, Pay Governance reports exclusively to and acts solely at the direction of the Compensation Committee. The consultant 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.is comprisedconsists of five 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;• periodically review the qualifications and criteria taken into consideration in the evaluation of potential nominees for membership 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 and best practices in corporate governance, 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;• • quarterly review the Company’s Ethics and Compliance Program;15• annually review and make recommendations to the Board regarding its process for evaluating the effectiveness of the Board and its committees;• oversee the annual assessment of Board effectiveness and report to the Board;• periodically 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 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.• 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.various matters includinginvolving the Company’s research and development programs. The authority and responsibilities of the Science and Technology Committee include the following:• research and development strategies and priorities; and• the quality and relevance of programs dealing with scientific research, development, information and manufacturing technology, systems integration and university relationships.16review, 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;Communication with the Boardmembers.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 and, if applicable, the lead independent director) by writing to them at the following address:Director Attendance at Annual General Meeting2011, which was held in Curaçao as required by Curaçao law.One directorNone of the directors attended the annual general meeting of stockholders in 2010.Policies and Procedures for Approval of Related Person Transactions• 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 SECRegulation S-K.2010,2011, there were no related person transactions under the relevant standards.Corporate Governance Guidelines and Code of Ethics17abovebelow 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.2022 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 3841 through 50,53, 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. recently adopted 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 20112012 annual general meeting of stockholders:20112012 annual general meeting of stockholders.“say-on-pay” “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.recommends that you vote “FOR” approval of the advisory vote on executive compensation.Recommends a Vote FOR Item 2.ITEM 3. ADVISORY VOTE ON THE FREQUENCY OF FUTURE ADVISORY VOTES ON EXECUTIVE COMPENSATIONPursuant to recently adopted Section 14A of the Exchange Act, we are asking the Company’s stockholders to vote on whether future advisory votes on executive compensation of the nature reflected in Item 2 above should occur every year, every two years or every three years.After careful consideration, the Board of Directors recommends that future advisory votes on executive compensation occur every two years (biennially). We believe that a biennial advisory vote on executive18compensation reflects the appropriate time frame to enable the Compensation Committee and the Board of Directors to evaluate the results of the most recent advisory vote on executive compensation, to discuss the implications of that vote with stockholders to the extent needed, to develop and implement any adjustments to our executive compensation programs that may be appropriate in light of a past advisory vote on executive compensation, and for stockholders to see and evaluate any such adjustments to our executive compensation programs. In this regard, because the advisory vote on executive compensation occurs after we already have implemented our executive compensation programs for the current year, and because the different elements of compensation are designed to operate in an integrated manner and to complement one another, we expect that in many cases it may not be appropriate or feasible to fully address and respond to any one year’s advisory vote on executive compensation by the time of the following year’s annual general meeting of stockholders. In addition, a biennial vote is consistent with the long-term performance focus of our executive compensation programs as it allows stockholders to evaluate our executive compensation programs over a multi-year horizon in a business that is cyclical.The Board of Directors is aware of and took into account views that some have expressed in support of conducting an annual advisory vote on executive compensation. We are aware that some stockholders believe that annual advisory votes will enhance or reinforce accountability. However, we have in the past and will in the future continue to be proactively engaged with our stockholders on a number of topics and in a number of forums. Thus, we view the advisory vote on executive compensation as an additional, but not exclusive, means for our stockholders to communicate with us regarding their views on the Company’s executive compensation programs.We believe that the many avenues that have and will continue to exist for stockholder engagement differentiate the Company from the situation that exists in certain countries where an annual advisory vote on executive compensation is prevalent. In addition, the fact that all of our directors stand for election annually in our view provides appropriate assurances of Board accountability. Also, because our executive compensation programs have typically not changed materially fromyear-to-year and are designed to operate over the long-term and to enhance long-term performance, we are concerned that an annual advisory vote on executive compensation could lead to a short-term perspective inappropriately bearing on our executive compensation programs. Finally, although we currently believe that holding an advisory vote on executive compensation every two years will reflect the right balance of considerations in the normal course, we will periodically reassess that view and can provide for an advisory vote on executive compensation on a more frequent basis if changes in our compensation programs or other circumstances suggest that such a vote would be appropriate.We understand that our stockholders may have different views as to what is an appropriate frequency for advisory votes on executive compensation, and we will carefully review the voting results on this proposal. Stockholders will be able to specify one of four choices for this proposal on the proxy card: one year, two years, three years or abstain. Stockholders are not voting to approve or disapprove the Board’s recommendation. This advisory vote on the frequency of future advisory votes on executive compensation is not binding on the Board of Directors or Schlumberger in any way. Notwithstanding the Board’s recommendation and the outcome of the stockholder vote, the Board may in the future decide to conduct advisory votes on a more or less frequent basis and may vary its practice based on factors such as discussions with stockholders and the adoption of material changes to compensation programs.Required VoteA majority of the votes cast is required to approve this Item 3.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 BoardThe Board of Directors recommends that you vote to conduct future advisory votes on executive compensation every two years.19COMPENSATION DISCUSSION AND ANALYSIStheour 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 theour 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 20102011 affecting 20102011 base salaries and long-term equity incentives (“LTIs”), as well as annual cash incentive awards earned in 20102011 but paid in February 2011.2012.20102011 Executive Summary20102011 Overviewour performance include:In 2010,climate, evidenced by depressed exploration and production activity, particularly in the US, andenvironment, including pricing pressure in many markets. In response, Schlumberger’s management undertook significant cost control measuresmarkets, civil unrest in 2010 and took other actions to maintain profitability during this difficult period. The oil and gas industry was also affected by the Macondo well catastrophe in April 2010North Africa and the ensuing moratorium on explorationMiddle East, the European financial crisis and lower growth in emerging economies. Despite these challenges, Schlumberger delivered strong financial results amid a year of transformational events such as the Gulfsuccessful integration of Mexico. Schlumberger responded by taking swift actionSmith International, the retirement of Andrew Gould as our CEO and the successful transition to redeploy field personnel outour new CEO. Highlights of the Gulf area where possible and to reduce headcount when other solutions were not possible.Despite the economic challenges the Company faced in 2010,reached $27.45of $39.5 billion, representing organic growthan increase of approximately 5%,44% over full-year 2010, reflecting full-year operations of Smith International, Inc. and Geoservices, both of which we acquired in 2010;Companyquarterly dividend per share by 19% in 2011, from $0.21 to $0.25 and returned approximately $2.75$4.3 billion to itsour stockholders in 2011 through dividends and stock repurchases. 2010repurchases; andalso a year of tremendous positive changeaccretive on an earnings-per-share basis for the Company, highlighted by such significant events as the acquisitions of Smith International an $11 billion transaction, and Geoservices, a $1 billion transaction. The acquisitions complement the Company’s operations, product development and expertise, and enhance the Company’s overall breadth and global competitiveness. Furthermore, full year.20102011 to continue to better position the Company for the long-term, in addition to the acquisitions of Smith and Geoservices and the cost-control measures described above.long-term. Schlumberger’s executives also achieved the following goals, among others, many of which were also aligned with their individual objectives:• retaining valuable technical employees;• continuing Schlumberger’s technology leadership by investing approximately $919 million in research and engineering;• implementing mechanisms necessary to keep costs in line with activity;• continuing to improve execution through the refinement of the Company’s Engineering, Manufacturing and Sustaining organization and its “Excellence in Execution” initiative; and• beginning to integrate the Smith and Geoservices businesses and realizing expected Smith-related synergies sooner than expected.Schlumberger hasvery strongpay-for-performance culture that runs through the whole Company and starts at the top with the named executive officers. The Company believes thatresult of attracting, developing and retaining the best talent is key to delivering superior stockholder returns, and that aglobally. A competitive compensation package is critical to achieving this. As the world’s leading oilfield services company, the Company places critical importance on recruiting, developing, motivatingthis objective and retaining top talent, both in the short-term and long-term. Toto this end, the Compensation Committee seeks to offer a competitive compensation package and generally seeks to provide compensation to thecompensate our named executive officers that is between the 50th and 75th percentiles of the Company’s two comparatorexecutive compensation peer groups. This range is only a guideline,guide, and the Compensation Committee retains the flexibility to set20elements of target compensation at higher percentiles for strong business performance, for retention, for key skills in critical demand, and for positions that are of high internal value. In exceptional circumstances, the Company paysThe Committee also may pay above the 75th percentile for performance that significantly exceeds the Company’s and thean individual’s goals, or for purposes of retention, motivation rewardor reward.retention.is designed to achieve a number of goals, as detailed in this CD&A. The following is a summary of some of compensation practices and policies that demonstrate important aspects of Schlumberger’s culture and values.program discussed laterrecovery, or “clawback,” policy that allows our Board to recoup performance-based cash awards in this CD&A.the event of specified restatements of financial results.• The key elementsthe program are base salary; performance-based annual cash incentive; and long-term equity incentives.• A significant portion of executive pay is in the form of variable compensation that is at risk, in order to align executive compensation with the Company’s business strategy and create long-term stockholder value.• Schlumberger executives have no employment, severance orchange-in-control agreements (other than employment agreements for some executives who are transitioning into retirement).• 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 plan limits.• Schlumberger has a compensation recovery, or “clawback,” policy that allows the Board to recoup performance-based cash awards in the event of specified restatements of financial results.• Schlumberger’s executives are subject to stock ownership guidelines and are prohibited from hedging against the economic risk of such ownership.Compensation Decisions in 2010for 20112009 to fiscal year 2010. However, theThe Compensation Committee continued to focus on achieving the right mix and level of compensation to retain and motivate our top executives through a transition year that included several key management changes, including the difficultretirement of our CEO, and was marked by uncertain business conditions that prevailed through 2010.conditions.2010:2011:• As the result of a management reorganization to prepare for the future succession of the CEO, Paal Kibsgaard was appointed Chief Operating Officer effective February 8, 2010. As a consequence, Mr. Kibsgaard’s salary was increased from 600,000 Euros to 750,000 Euros and his Also effective February 8, Mr. Belani was appointed President, Reservoir Characterization Group, replacing Mr. Kibsgaard, and his salary was increased from 500,000 Euros to 550,000 Euros. At the same time, Mr. Sbiti, previously Executive Vice President, Schlumberger Limited, became Executive Advisor to the Chairman and CEO.• Other than salary adjustments made in connection with the foregoing appointments, the only named executive officer who received a base salary increase in January 2010 was Mr. Ayat, the Company’s Chief Financial Officer.• Payout of the financial incentive that was made in February 2011 for performance in 2010 was 129% of target, largely due to 2010 growth in earnings per share, well short of the maximum 200% potential payout;• The Compensation Committee granted stock options in January 2010 with a grant date dollar fair value estimated to be generally between the 50th and 75th percentiles, or higher, of the Company’s oil industry and general industry peer groups. However, grants of long-term equity incentives (“LTI’s”) within the two peer groups were higher than preliminary estimates in January 2010 had indicated due to the uncertainty in early 2010 following the global economic crisis that began in late 2008. As a result, when the Compensation Committee conducted another review of executive officer21compensation in October 2010, the named executive officer LTI values for January 2010 were ultimately found to be generally at or below the 50th percentile of both peer groups. The Compensation Committee agreed to review LTI awards at the January 2011 Compensation Committee in light of the foregoing to better ensure that the 2011 LTI’s of the named executive officers were more competitive with respect to the 2011 peer groups.• Effective February 4, 2010, the Compensation Committee approved additional stock option grants to Messrs. Kibsgaard and Pai in connection with the management reorganization and succession planning changes discussed above. Mr. Kibsgaard received a grant of $1,500,000 in stock options representing 64,000 shares and Mr. Pai received a grant of $1,600,000 in stock options representing 68,000 shares. On October 21, 2010, the Compensation Committee approved a further stock option grant to Mr. Pai of $2,000,000, representing 83,334 stock options, for retention purposes and to recognize his outstanding performance and his continued contributions to the Company during the management reorganization after the appointment of Mr. Kibsgaard as COO.strongpay-for-performance culture, Schlumberger’s longstanding compensation philosophy is to pay senior executives and professional-level employees for demonstrable performance that is evaluated against personal and Company financial goals that have been pre-establishedare established at the beginning of the calendar year and carefully reviewed.reviewed at the end of the year against actual performance. 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 are competitive and to promote 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. A diverse workforce isSchlumberger sees diversity of its work force as both a very important part of Schlumberger’sits cultural philosophy.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 is a strong factor in achieving a diverse workforce comprising top global talent. While the amount of compensation may be different, each of the components of a professional-level employee’s compensation package isare the same and isare applied using broadly the same methodology, which is described below.methodology. Exceptions to this principle are generally due to local (i.e., country-specific) requirements.programs have beenprogram is designed so that the higher an executive’s position in the Company, the larger the proportion of compensation that is contingent on positive stock price performance, the Company’s financial performanceand/or individual performance, described as “at-risk” compensation. The Company believes that having a substantialsignificant portion of executive compensation be at-risk more closely aligns the interests of its executives with the long-term interests of Schlumberger and its stockholders. Accordingly, theour named executive officers receive a greater percentage of their compensation through at-risk pay tied to Company performance than other executives.• base salary;• performance-based annual cash incentive; and• long-term equity incentives.in attracting and retainingretain and motivate top executive talent and to motivate executives with current and potential future financial rewards. At the same time, this relatively simple compensation plan can beprogram is applied and communicated consistently to exempt employees of more than 140 nationalities working in approximately 80 countries globally. Schlumberger sees diversity of its work force as a business imperative enabling the Company to serve clients anywhere in the world.Named executive officers generally receive the same benefits as other employees. As is the case with compensation, any differences are generally due to local requirements. In the event of a change in control, the only compensation and benefits changes for all employees would be full vesting of any unexercised stock22options and restricted stock units and full vesting in any account balance under the Company’s supplemental retirement savings plan. Change in control benefits with regard to stock options are described more fully in the section “Change in Control” following the Nonqualified Deferred Compensation table.Employees globally (including named executive officers) are subject to an annual objectives-setting process and review, and their performance against these objectives affects the compensation they receive.Framework for Setting Executive Compensation in 20102011• compensation and benefits should be competitive with peer companies that compete with the Company for business opportunitiesand/or executive talent;• annual cash incentive and stock option awards should reflect progress toward Company-wide financial and personal objectives and should balance rewards for short-term and long-term performance; and• the Company’s policies should encourage executives to hold stock through stock option awards and stock ownership guidelines that align their interests with those of our other stockholders.Management of Executive Compensationunderentitled “Corporate Governance—Board Committees—Compensation Committee” above. Pay Governance, which focuses on advising boards of directors on executive compensation, was formed by former practitioners at the consulting firm Towers Watson, which previously provided executive compensation advisory services to Schlumberger’s Compensation Committee. For more information on this engagement, see “Corporate Governance—Board Committees—Compensation Committee” above.In setting executive compensation, theconsidersreviews the totalelements of direct compensation for the NEOs throughout the year, to evaluate whether each element of direct compensation remains at levels that it believes is appropriate to pay an executive officer, basedare competitive with companies in Schlumberger’s two 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 thedirect compensation elements for executive officers againstexecutives in those of companies in the two comparator groups, as well as the other factors described in this CD&A.companies. The Committee thus seeks to achieve an appropriate balance between immediateannual cash rewards that encourage achievement of annual financial and non-financial objectives, andlong-term equity incentivesincentive awards that promoteencourage positive long-term stock price performance.As stated above, the Compensation Committee believes that delivering a significant portion of an executive officer’s compensation through equity-based compensationperformance, with a multi-year vesting schedulegreater emphasis on long-term equity incentives for more closely aligns an executive officer’s interests to the long-term interests of the Company and the stockholders, and encourages the named executive officers to act as owners.senior executives. However, the Compensation Committee does not aim to achieve a specific target of cash versus equity-based compensation.or annual versus long-term incentive 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:23The charts below show the average percentage of 20102011 base salary, target cash incentive and 2010 long-term equity incentive (LTI) award2011 LTI compensation established by the Compensation Committee in January 2011 for the named executive officersNEOs, in comparison to the two external peer groups, asbased on information presented to the Compensation Committee by Pay Governance in September 2009,2010, and indicatedemonstrate that Schlumberger’s current pay mix is close to that of both peer groups. These charts areThis data is based on target opportunity levels and will differ from the total compensation data from Towers Watson’s September 2009 report.
The Compensation Committee relies on its own judgment in making compensation decisions for the named executive officers after reviewing the size and mix of the compensation elements for its executive officers against those of companiesfigures shown in the two comparator groups. The size and mix of each element of total direct compensation is based on:• external market practice of companies in the two comparator groups;• leadership, management and technical expertise, performance history, complexity of the position and responsibilities, growth potential, reporting structure and internal pay equity;• overall Company and individual performance; and• the recommendations of the CEO (except for his own compensation).The percentage of at-risk compensation increases in relation to an executive officer’s increased responsibilities. This is because the more senior the job, the more the executive officer can affect Company results either positively or negatively, with a corresponding effect on his or her own compensation package. TheSummary Compensation Committee believes that making a significant portion of an executive officer’s compensation contingent on positive annual results and positive stock price performance, described as “at risk” compensation, more closely aligns an executive officer’s interests with those of the stockholder. If the stockholder gains, the executive officer also gains, and vice-versa.Table.
LTI’s,LTIs, or otherwise adjust an NEO’s total compensation to best fit an executive officer’shis or her specific circumstances. For example, the Committee may award more cash and not award a stock option grant to an executive officer who is approaching retirement. This provides more flexibility to the Committee to rewardcompensate executive officers appropriately as they near retirement, when they may only be able to partially fulfill the five-year vesting required for stock options. 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 of companies in the two comparator groups and the other factors described immediately above.Pay Mix and Internal Pay Equity ReviewPay-for-Performance Relative to Oil Industry Peer GroupIn October 2010, the Compensation Committee reviewed an analysis of pay mix and internal pay equity carried out by Pay Governance at the directionCommittee. Regarding pay mix,Committee’s review of our executive compensation program, the Committee reviewed the elements of pay for the Company’s executive officers, including the named executive officers,directed Pay Governance to prepare a comparative pay-for-performance assessment in relation to each other andJuly 2011 against companies in comparison with the average pay mix of the Company’s other executive officers. The Committee concluded that the mix of base salary, incentive cash bonus and LTI was appropriate for each named executive officer and for the rest of the Company’s officers, based on its evaluation of the relative size of direct compensation elements of the two external peer groups.Regarding internal pay equity, the Committee reviewed the CEO position in relation to the other NEO positions, and the NEO positions both in relation to one another and in comparison with the average of the24other executive officer positions. The Committee noted that the ratio between the CEO and the second-highest paid officer (Mr. Kibsgaard) had increased in comparison with the 2008 ratio when Mr. Sbiti was thesecond-highest paid officer. This was due to the fact that Mr. Kibsgaard was newly appointed to his position and his total direct compensation was below the 50th percentile of the COO position in both peer groups. The Committee also noted that total direct compensation amounts of the second, third and fourth highest paid officers were very close, whereas these had previously been more graduated from the highest to lowest. The Committee concluded that internal pay equity was appropriate for the time being and expected that it would evolve in line with organizational changes.Pay for PerformanceIn July 2010, the Compensation Committee reviewed apay-for-performance analysis that had been completed by Towers Watson at the direction of the Committee. The analysis was against the oil industry peer group as provided by Towers Watson, and provided data ongroup. The assessment compared the actual 2009 annual cash incentive paid infor 2010 to named executive officers of these companies in the oil industry peer group as a percentage of their target annual incentive.cash incentive, against the actual annual cash incentive paid for Schlumberger’s NEOs, as a percentage of their target. This was compared with net income growth, revenue growth, earnings per share (EPS) growth and total shareholder return (TSR) of the, for Schlumberger and such other companies, in the peer group for 2010.each case over one- and three-year periods. In making this comparison,its analysis, the Compensation Committee reviewed the position2010 actual cash incentive of Schlumberger’s CEO against other CEOs in the oil industry peer group. It then separately reviewed theSchlumberger’s other named executive officers against other named executive officers in the oil industry peer group.This reviewwhilefor the years 2008-2010, Schlumberger had performed atabove the 75th percentilemedian in termsall categories of TSR, net income growth, revenue growth and EPS growth,growth.had performed betweenour other NEOs for 2010 performance was at approximately the 60th percentile of the oil industry peer group. Moreover, the actual cash incentive paid for 2010 performance was roughly 125% of the target cash bonus opportunities for our NEOs, being at approximately the market median for the CEO and 75th percentile on TSR, it had paidCFO, but below the market median bonuses. for our other NEOs.The Compensation Committee concluded that Schlumberger’s cash incentive paycompensation practices were appropriately aligned with the Company’s performance.pay-for-performance philosophy, although it appeared that Schlumberger had set more aggressive financial targets analysis, the Committee considered the relative size of direct compensation elements of companies in Schlumberger’s two peer groups, as well as internal factors. Regarding pay mix, the Committeeits namedthe Company’s executive officers, than many companiesincluding the NEOs, in relation to each other and in comparison with the oil industry peer group did,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 had therefore paid its NEOs below median bonusesLTI was appropriate for above median performance.Selectioneach of Comparator CompaniesSchlumberger’s executive officers, including the NEOs.annually approvesalso reviewed internal pay equity against the companies usedbackdrop of a year of significant management change wherein Mr. Gould retired as CEO and Mr. Kibsgaard succeeded him in that position. 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 between the CEO and the second-highest paid executive officer (Mr. Ayat) had decreased from 2010, when the comparison was between Mr. Gould and Mr. Kibsgaard, who was then serving as Chief Operating Officer. The Committee also noted that the levels of total direct compensation analysis based on surveys conducted byfor the third-, fourth- and fifth-highest paid officers were very closely clustered together. As a result of the foregoing, the Committee concluded that internal pay equity was appropriate.Committee’s independentCommittee refers to formal executive compensation consultant. The peer groups are based on criteria establishedsurveys prepared by Pay Governance when it reviews and provided by the Committee, which include:• competition in the oilfield services industry;• global presence and scope of international operations;• competition for executive talent;• leadership position of the Company; and• comparable revenues.determines executive compensation. To prepare for theits 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.Committee attempts to set the compensation of our executive officers at levels that are competitive withCommittee’s selection criteria for companies comprising the two peer groups described below. While the comparatorinclude:data provide important guidancecapitalization;making decisions on executive compensation, the Compensation Committee does not set compensation based on market data alone. their industry.also considerswith the valueassistance of an executive officer’s positionPay Governance, twice annually reviews specific criteria and recommendations regarding companies to the Company, the market demand for those skills and the other factors described in this CD&A.25Two peer groups are used for the compensation analysis. The two peer groups were first reviewed in July 2009 and were then further reviewed in October 2009 in preparation for the January 2010 compensation review. There were no changes in the composition ofadd to or remove from the two comparator groups. The Compensation Committee modifies the peer groups during these reviews.group criteria as appropriate while seeking to ensure a satisfactory degree of stability, to provide a consistent basis for comparison.firstoil industry peer group comprises 2730 companies in the oil services, exploration and production, refining and pipeline industries, including 9 direct competitorssix companies in the oilfield services industry, allindustry. Because of which, withSchlumberger’s international operations, the exceptionCompensation Committee approved the inclusion of Parker Drilling, were part of the 2009 S&P 500 and the Philadelphia Oil Service Index (OSX). Sevenseven non-US energy and energy-related companies that also met the established criteria were includedset forth above. In September 2010, the Compensation Committee also approved the addition of Devon Energy Corporation and McDermott International to the oil industry peer group in order to ensure that the data remained robust and that Schlumberger was positioned in the median of the peer group in terms of revenue. reflecting the Company’s international operations. Although Schlumberger is an oilfield services company, the Compensation Committee decided that it is important to include oil exploration and production companies in the survey as they compete with Schlumberger for executive talent. Also, sincebecause 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 believed that the addition of the exploration and productionE&P companies provides a more appropriate and The Committee believes that the inclusion of E&P companies is also appropriate because recent market consolidation has reduced the number of direct competitors in the oilfield services industry, increasing the prominence of E&P companies as competitors for talent.OIL INDUSTRY PEER GROUP: Oil services, E&P, refining and pipeline companies OIL INDUSTRY PEER GROUP: Oil services, E&P, refining and pipeline companies with median sales and assets similar to SLBAnadarko Petroleum Baker Hughes BG Group BHP Billiton BJ Services
Energy BP Cameron International Canadian Natural Resources Chevron ConocoPhillips ENI, SPA Exxon Mobil Halliburton Hess Marathon OilMurphy OilNabors IndustriesNobleOccidental PetroleumParker DrillingRoyal Dutch ShellSmith InternationalSunocoTotalTransoceanValeroSchlumberger uses a second, “general† Although Baker Hughes acquired BJ Services in April 2010 and we acquired Smith in August 2010, the two companies remained part of the oil industry peer group because the Compensation Committee considered compensation data from March 2010 for the two companies. ” peer group (shown below) to provideprovides data fromsimilarly-sized large companies with significant international operations, and supplementsupplements the compensation data from the oil industry peer group, whose companies are closestcloser to Schlumberger in industry type but have widely varying revenue sizes. Excluded from thisThe general industry peer group areexcludes companies from industry sectors that do not have a global presence andsignificant international scope, as well as those in industries that are least comparable to Schlumberger’s areas of focus,industry, such as companies inthe retail and the financial services.services industries. Like the first comparator group, this second group also includes non-US companies. The Compensation Committee also considers data from the second peer group as it deems necessary or advisable insofar as 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 staffnon-operations positions, where the skills and experience may be easily transferable to other industries outside the oil and gas industry.2008,September 2010, the Compensation Committee reviewed the companies in the general industry peer group included 38and the selection criteria in light of the following primary factors, with the resulting changes to the peer group described below:with revenues fromin the general industry peer group was $15 billion to $40 billion, and medianwhich would have placed Schlumberger in approximately the 90th percentile in terms of revenue. In order to position Schlumberger nearer the revenue of $22.6 billion. Schlumberger’s total revenue for 2008 grew to $27 billion. Since the median of the same general industry peer was $23.8 billion in 2009 and because Schlumberger’s 2009 revenue decreased to $23 billion due to difficult business conditions,group, for purposes of 2011 compensation decisions, the Compensation Committee decided that it was appropriate to leaveapproved an increase in the revenue range for the same as for 2009 and to continue to includecomparator companies with revenues from a range of $15 billion to $40 billion, forto a range of $25 billion to $50 billion. This modification resulted in Schlumberger being in the January 2010 analysis. The Compensation Committee prefers to alter45th percentile of the general industry peer group, based on projected 2011 full-year revenue, and above the 90th percentile of the peer group criteria as infrequently as possiblebased on projected 2011 market capitalization.provide a stable basis for comparison.26GENERAL INDUSTRY PEER GROUP: $15B to $40B sales$50B with technical and global focus GENERAL INDUSTRY PEER GROUP: Companies with $15B to $40B sales and technical and global focus3M Abbott Laboratories Accenture Alcoa Amgen lnc. Apple Arrow Electronics Astrazeneca BAE Systems Bristol-Myers Squibb Cisco SystemsColgate-PalmoliveDeere & CoE. I. du Pont de NemoursEaton Corp.Eli LillyEmerson ElectricFreeport-McMoran Copper & GoldGoodyear Tire & RubberHenkelHoneywellIntelInternational PaperKimberly-ClarkLafarge SAMerckMotorolaNIKEPPG IndustriesRaytheonSchering-PloughSchneider ElectricSprint NextelUS SteelWhirlpoolWyethXeroxsuch asdescribed below. Generally, the performance, experience and long-term potential of the individual, as well as internal pay equity and Company performance. Generally,Compensation Committee targets base salaries for executive officers are targeted to be between the median50th and the 75th75th percentile of both peer groups.• market movement of comparable salaries in the two peer groups;• comparison to internal peer positions;• the Company’s performance during the year relative to the previous year and to its market peers; and• overall individual performance.Base salary for an executive officer position is generally fixed for several years, which means that increases are usually more significant when they occur. If business or individual performance is below target, In addition to periodic reviews based on the factors described above, the Compensation Committee has the discretion not to award any increase in base salary. The Compensation Committee may on occasion, 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 two peer groups.27Base Salary Decisions in 201020112010.2011. The Committee reviewed Mr. Gould’s annual base salary of $2,500,000, which had not been increased since January 2006, and decided thatdetermined not to increase his salary since it was above the 75th percentile of both peer groups, it would not be increased. Messrs. Kibsgaard, Pai, Belani and Sbiti receivedgroups.increasesdecisions for 2011 generally positioned our NEOs at or slightly above or below the 75th percentile of both peer groups, reflecting promotions and the recent growth in May 2009the size and their base salaries were not reviewedscope of the Company’s operations that resulted in increased responsibilities during the year. Specifically, in January, 2010. The only named executive officer who received aMr. Kibsgaard’s annual base salary increase in January 2010 was Mr. Ayat, the Company’s Chief Financial Officer, whose salary was increased by 20%from 750,000 Euros to 900,000 Euros in his capacity as Chief Operating Officer. Additionally, Messrs. Pai and Oestdahl became joint Executive Vice Presidents of Operations, and in consideration of their respective promotions and increased responsibilities, the Compensation Committee approved an increase to Mr. Pai’s base salary in January 2011 from 600,000 Euros to 700,000 Euros, and to Mr. Oestdahl’s base salary effective February 2011 from 3,675,300 Norwegian Kronors (equivalent to approximately 469,800 Euros) to 640,000 Euros.bring him more$1,000,000, for retention purposes and to recognize his experience and perspective in linea year of significant management change.general industry peer group. ThisCompensation Committee approved an increase to his base salary from 900,000 Euros to $1,700,000 (then equivalent to approximately 1,181,500 Euros), which placed him above the 75th percentile of the oil industry peer group and betweenslightly below the 50th and 75th percentile of the general industry peer group. The salaries for the other named executive officers generally were between the 50th and 75th percentile of both peer groups.Appointment of Chief Operating Officer (COO). As discussed above in the section “2010 Executive Summary,” effective February 8, 2010, the Schlumberger Board of Directors approved the appointment of Mr. Kibsgaard as COO reporting to the CEO, Mr. Gould, on recommendation from the Nominating and Governance Committee. This appointment was made to prepare for the future succession of the CEO. In connection with Mr. Kibsgaard’s promotion,Gould’s retirement as CEO and in light of his continued service as an executive until April 2012 and as the Chairman of the Board until the 2012 annual general stockholders meeting, the Compensation Committee determineddecided to increase his salary from 600,000 Euros to 750,000 Euros, which placed him above the 50th percentile for the oil industry peer group and between the 50th and 75th percentile of the general industry peer group.Effective the same date,keep Mr. Sbiti was appointed Executive Advisor, reporting to the CEO. There was no change to Mr. Sbiti’sGould’s base salary and incentive for the remainder of 2010,at $2,500,000; however, effective January 1, 2011, Mr. Sbiti began a term of phasedwith his retirement as generally described underCEO, Mr. Gould ceased to be eligible to participate in the section “Retirement Practices” below, and his compensation was reduced accordingly. Also, effective February 8, 2010, Mr. Belani was appointed President, Reservoir Characterization Group to replace Mr. Kibsgaard. Mr. Belani’s base salary was increased from 500,000 Euros to 550,000 Euros, which placed him above the 75th percentile of both peer groups. The Compensation Committee decided that Mr. Belani’s base salary increase was appropriate due to the size and complexity of his new role.Company’s annual performance-based incentive program or its long-term incentive program.named executive officersits 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 whichthat it believes will motivate an executive to increase operating results in the short-termnear-term as well as drive profitable long-term Company growth and value for stockholders. Incentive cash payments are made ineach February according to the achievement of both personal and financial (Company) objectives during the previous fiscal year. The annual for the named executive officers ranges from 0% to 75% to 0% to 100% of base salary, depending on the position. Half of the potential range is based on the satisfactory completion of personal objectives andestablished at the beginning of the year, while the other half of the potential range is based on the achievement of Company financial objectives, which is described in the section below entitled “2010 Annual Cash Incentive.”The Committee increased Mr. Kibsgaard’s incentive compensation range from 0-75% to 0-100%, in recognition of his significantly increased responsibilities as COO and based on comparative data from the two peer groups. Otherwise, the incentive ranges of the named executive officers did not change for 2010.objectives. The financial half of the incentive cash payment for NEOs has an incremental financial element, which means that the maximum incentive opportunity can be up to 200% of target with respect to the financial part based on achievement of superior financial results. This enhanced incentive is only appliedapplies to the CEO and our other executive officers, and otheras well as to specified positions that have a significant impact on the Company’s success. The personal half has no positive incremental element, meaning the maximum payout with respect to this half of the annual incentive is 100% of target.28 NEOs, and assesses each such officer’s performance against their pre-determined objectives.named executive officers, andIn April 2011, the Compensation Committee, reviews and approveswith assistance from Pay Governance, compared the results. Themaximum annual cash incentive payout opportunities in 2010 for Schlumberger’s executives as a percentage of their target annual cash incentive levels, with that of companies in Schlumberger’s two peer groups. At the time of the analysis, the target annual cash incentive payout opportunities for Schlumberger’s executives ranged from 0% to 75% to 0% to 100% of base salary, depending on the position. For purposes of this comparative analysis, Schlumberger’s “target” assumed achievement of 100% of the financial half of the incentive (which increases for incrementally improved performance) and achievement of 75% of the half based on personal objectivesobjectives.element, meaning the maximum payout with respect to this half of the annual incentive is 100%.element.2010 Annual Cash IncentiveFinancial Objective20102011 was based on diluted earnings per share from continuing operations (“EPS”).• activity growth potential as measured by the number of rigs;• pricing;• anticipated exploration and production (E&P) spending; and• of new technology.In 2008, the EPS objective had provided the opportunity to increase the financial half of the annual cash incentive from 100% to 300% of the incentive potential for those eligible, due to the significant potential for growth. However, due to the difficult business outlook at the beginning of 2009,new technology.the context of thean uncertain global recession,economy, were realistic. Since the prospects for 2010 continued to look challenging, with the EPS earnings forecast to be just 7% higher than 2009, the Committee decided that it was still appropriate to retain the maximum financial incentive at 200%.20102011 annual cash incentive were as follows:• An EPS of at least $2.50 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 target of $2.50 represented an 11% reduction against EPS of $2.78 actually earned for 2009.• In order for 100% of the financial half of the incentive to be paid, 2010 EPS achieved had to be at least $2.78, which was the same as EPS earned for 2009.• An EPS of at least $3.20 was needed to achieve 200% of the financial half of the incentive, which represented a 15% increase against EPS earned for 2009.20102011 EPS target was not met.20102011 EPS was $2.86, excluding $0.46$3.51, which included charges relating to the write-off of unusual chargescertain assets in Libya that are no longer recoverable as a result of the political unrest in the country; the continued integration of Smith; and a $0.98 gain relating to our previously-held investment in MI-SWACO but including the dilutive impact of the Smith transaction, which was approximately $0.04 on full-year EPS. A significant portion of these unusual charges relatedcontribution to the acquisition of Smith, which had not been factored into 2010 EPS targets since atSchlumberger Foundation to support the timeFoundation’s Faculty for the goals were set, a transaction with Smith had not been confirmed. In addition to charges related to the Smith acquisition, the29unusual charges included charges related to overhead reductions and the restructuring of North America and Mexico operations.Future program. The Compensation Committee decided that for purposes of calculating the financial half of the cash incentive payment, it would exclude all of these charges in arriving at target EPS. The Committee decided to exclude these charges because it believedas they either resulted from actions that the actions taken were in the Company’sSchlumberger’s best interest or did not relate to Schlumberger’s ongoing operations. Schlumberger’s EPS, excluding these charges was $3.66. In addition, the Compensation Committee considered the fact that, because of the civil war in Libya, Schlumberger suspended operations in the country for most of 2011 and evacuated employees for their safety. As a result of this suspension of operations, there was a difference of more than $0.09 between the initial 2011 EPS target established in January 2011 and actual 2011 results. However, the Compensation Committee believed that it was not appropriatewould be unfair to adjust the financial halfreduce EPS for purposes of the cash incentive payment because of the effects of these unusual chargesextraordinary events in Libya and credits on the Company’s 2010 earnings. Similarly,decisions taken by management, which were in the Committee believed that it was not appropriate to include either the $1 billion gain arising from our investment in M-I SWACO or the $0.04 dilutive effectbest interests of the Smith transaction, as those were not relatedCompany and its employees. The Compensation Committee therefore decided to Schlumberger’s ordinary operations. Therefore,exclude a $0.09 difference between projected and actual 2011 results caused by the Committeeextraordinary events in Libya, and approved an EPS achievement of $2.90, which excluded the dilutive impact of the Smith transaction and all of the 2010 charges and credits described above, and$3.75, which resulted in a payout of 129%100% of the financial half of the annual cash incentive.• technology or geographical profitability or revenue growth;• new technology introduction and market penetration;• acquisitions or divestitures;• 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; and• any other business priority.year and do not have a formal weighting.year. At the end of the fiscal year, the CEO uses his judgment to evaluate the performance of the other named executive officersNEOs 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 the full Board.Kibsgaard and PaiKibsgaard had objectives on safety, and security, which were mostly achieved.BelaniOestdahl had objectives on people, including diversity and retention, of key talent, which were mainly achieved.Ayat and PaiKibsgaard had objectives on M&A,mergers and acquisitions, which were mostly achieved.All ofnamed executive officers, with the exception of Smith integration, which were achieved.Sbiti,Gould had objectives regarding mentoring Mr. Kibsgaard, which were achieved.including the restructuring of North Americawhich were mainly achieved.the functions,sustaining, substantially all of which were achieved.Messrs. Gould, Kibsgaard, Pai, and Belani had objectives on marketing and technology development, which were largely achieved.Messrs. Gould and Ayat had objectives on capital structure, which was mostly achieved. Mr. Ayat also achieved an objective on debt management.Messrs. Kibsgaard and Pai had objectives on quality, which were achieved.Mr. Kibsgaard had objectives on Engineering, Manufacturing and Sustaining, which were partly achieved.30Mr. Gould also achieved his objectives regarding the CEO succession process and Company-wide compliance programs.Mr. Sbiti had objectives relating to Schlumberger’s activities in Kuwait and Iraq as well as Research and Development in the Middle East, all of which were achieved.20102011 Annual Incentive as a Percentage of Base Salary Total Incentive Financial Half Financial Half Personal Half Personal Half Total 2010 Range Range Incentive Range Incentive Incentive Paid Eligibility Eligibility Achieved Eligibility Achieved as a % of Name (%) (%) (%) (%) (%) Base Salary A. Gould 0-100 50 64.5 50 47.5 112 S. Ayat 0-100 50 64.5 50 48 112.5 P. Kibsgaard 0-100 50 64.5 50 45 109.5 S. Pai 0-75 37.5 48.4 37.5 32.5 80.9 A. Belani 0-75 37.5 48.4 37.5 32.5 80.9 C. Sbiti 0-100 50 64.5 50 20 84.5 Total Incentive
Range
Eligibility
(%) Financial Half
Range
Eligibility
(%) Financial Half
Incentive
Achieved
(%) Personal Half
Range
Eligibility
(%) Personal Half
Incentive
Achieved
(%) Total 2011
Incentive Paid
as a % of
Base Salary(1) 0-100 50 50 50 45 95 0-150 75 75 75 67.5 142.5 0-100 50 50 50 47.5 97.5 0-100 50 50 50 47.5 97.5 0-75 37.5 37.5 37.5 30.75 68.25 0-100 50 50 50 41.0 91.0 0-75 37.5 37.5 37.5 30.75 68.25 0-100 50 50 50 41.0 91.0 0-75 37.5 37.5 37.5 35.0 72.5 0-100 50 50 50 47.5 97.5 (1) Equals the sum of both the financial half and the personal half of the cash incentive achieved, expressed as a percentage of the total possible incentive. For each NEO who received an annual cash incentive range increase during the year, each separate percentage of total 2011 cash incentive paid is a function of the applicable cash incentive range for that portion of 2011 during which such range was in effect. Thus, for any such NEO, the different percentages in the “Personal Half Incentive Achieved” column generally are ratably equivalent to the different percentages achieved with respect to the total incentive ranges in the year. soleprimary 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 of the common stock has increased, the Company believes that grants of stock options motivate executives and other employees toward behavior that benefits all stockholders.• 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 an 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 options granted to an executive over the course of his or her career, together with the retentive effect of additional stock option grants; and• a review of the internal equity of peer position career grants.aan estimated fair value basis on the date of the Compensation Committee meeting using theBlack-Scholes formula.31Stock Options Granted to Executive Officers in 2010January 2010 Stock Option Grants.The tabletables below detailsdetail the approximate dollargrant date fair value and number of stock options granted in January 20102011 to the named executive officers. The approximate dollargrant date fair value of each grant was used by the Compensation Committee to determine the number of options granted. 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 For Fiscal Year 20102011 table below.the NEOsan NEO depends on the NEOs’NEO’s continued service and Schlumberger’s future stock price performance.20102011 Stock Option Grants Approximate Dollar Name Value of Grant Number of Options Granted A. Gould $ 9,000,000 355,000 S. Ayat $ 2,400,000 95,000 P. Kibsgaard $ 1,200,000 47,000 S. Pai $ 1,200,000 47,000 A. Belani $ 1,500,000 59,000 C. Sbiti $ 3,000,000 118,000 With respect to Approximate Fair
Value of Grant Number of Options Granted $ 12,752,000 400,000 $ 4,400,000 138,000 $ 6,000,000 188,000 $ 2,800,000 88,000 $ 4,100,000 129,000 $ 1,100,000 40,000 January 2010 grants, theCompensation Committee took into account that even though 2009 was an extremely difficult year, during which global economic conditions deteriorated and Schlumberger revenue declined by 16% due to lower customer spending and lower commodity prices, Schlumberger delivered net income of over $3 billion and EPS, excluding charges and credits, of $2.61.The Compensation Committeegranted stock options in January 2010 approvedwith a grant date dollar fair value estimated to be generally between the following awards, based on50th and 75th percentiles, or higher, ofmarket data then availablegroups. However, grants of LTIs within the two peer groups were higher than preliminary estimates in January 2010 had indicated due to the Committee:• an award of $9,000,000 in stock options to Mr. Gould, which was at the 75th percentile of the oil industry and between the 50th and 75th percentiles of the general industry. This grant was recommended by the Compensation Committee and approved by the Board.• Mr. Ayat was awarded $2,400,000 in stock options, which was between the 50th and 75th percentiles of both peer groups.• Messrs. Kibsgaard and Pai were each awarded $1,200,000 in stock options, to place them between the 50th and 75th percentiles of the oil industry and at the 50th percentile of the general industry.• Mr. Belani received $1,500,000 in stock options, placing him at the 50th percentile of the general industry. There was insufficient data for Mr. Belani’s position for the oil industry.• Mr. Sbiti received $3,000,000 in stock options, which was above the 75th percentile of the oil industry and between the 50th and 75th percentiles of the general industry.uncertainty in early 2010. As explained in the 2010 Executive Summary above,a result, when the Compensation Committee later reviewed market data from both peer groupsconducted another review of executive officer compensation in October 2010, it was obvious that peer groupthe LTI amounts awarded duringvalues for the 2010 named executive officers were higher than had been estimated in January 2010, dueultimately found to the improved economic outlook during 2010 following the global economic crisis that began in late 2008. This resulted in the Company’s LTI awards beingbe generally at or nearbelow the 50th percentile of both peer groups. Additionally, followingThe Compensation Committee’s review of LTI awards at its January 2011 meeting was conducted with this background in mind, with the acquisitiongoal to ensure that the 2011 LTIs of Smith, the scope of theour named executive officer positions had increased in sizeofficers were brought more in line with the increased revenuepeer groups for 2011.Company. Whenoil industry peer group and at the amount75th percentile of the January 2010 LTI’s had been determined, Schlumberger had annual revenues of $23 billion and its 2010 general industry peer group included companies with revenues from $15 billion to $40 billion. Aftergroup. This stock option grant was recommended by the acquisition of Smith, Schlumberger’s 2011 revenue was forecast to be more than $35 billion and the 2011 general industry peer group was modified to include companies with32revenues from $25 billion to $50 billion to better reflect the increased size of the Company. The Compensation Committee agreed and approved by the Board;focus on LTI awards at the January 2011 Compensation Committee to better ensure that the 2011 LTI’s of the named executive officers are competitive with LTI’s of companiesMr. Kibsgaard in the new 2011 peer groups.February and October 2010 Stock Option Grants. The Compensation Committee approved an additional award of $1,500,000his position as COO, $4,400,000 in stock options, representing 64,000 shares for Mr. Kibsgaard effective February 8, in recognition of his appointment as COO. This placed Mr. Kibsgaard’s total direct compensationwhich was above the 50th percentile of the oil industry peer group and abovebetween the 50th and 75th percentile of the general industry taking into accountpeer group;• • • new base salary, new target incentiveresponsibilities prior to becoming Executive Vice President Operations, which was below the median for both peer groups.both 2010 LTI grants.TheJuly 2011 Stock Option Grants.also awardedapproved an additional award to Mr. Oestdahl of $1,000,000 in stock options, which together with the January grant, was slightly below the median of both peer groups, based on peer market data and after further review of his position and increased responsibilities in connection with his promotion to Executive Vice President Operations.PaiKibsgaard of $1,600,000$4,200,000 in stock options representing 68,000 shares for retention purposes. In October 2010, the Compensation Committee approved a further stock option grant to Mr. Pai of $2,000,000 in stock options representing 83,334 shares for retention purposes and in recognitionanticipation of his outstanding performance with the Company’s restructuring efforts and continued contributions to the Company during the management reorganization after the appointment of Mr. Kibsgaard as COO.CEO.February 2010 Stock Option Grants Approximate Dollar Name Value of Grant Number of Options Granted P. Kibsgaard $ 1,500,000 64,000 S. Pai $ 1,600,000 68,000 October 2010April 2011 Stock Option Grant Approximate Dollar Name Value of Grant Number of Options Granted S. Pai $ 2,000,000 83,334 33The 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.• 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.has established the followingadopted revised executive stock ownership guidelines applicable to executive officers and other key position holders.Stock Ownership Multiple 6x base salary Title Stock Ownership Guidelines3x base salary CEO 5 times2x base salary COO 3 times1x base salary Other Officers 1.5 times base salaryKey Staff Positions1 times base salaryEach executive covered by the guidelines must hold in shares at least 30% of their entire gain on every stock option exercise for a period of six months. Those who do not meet the guidelines after the six-month holding period must continue to hold the shares until the guidelines are met. There is no specified timeline to achieve the guidelines, as many of the executives do not exercise their stock options until the later part of their option term.The stock ownership guidelines also specify that any individual covered by this policy may not purchase, sell or enter into any other market transactions with respect to Schlumberger stock during any “blackout” period. A blackout period usually applies from the beginning of the first day following the last month of each fiscal quarter (January, April, July and October 1 of each year) up to and including two full trading days after the public release of Schlumberger’s quarterly or annual financial results. In addition to the regularly scheduled blackout periods, Schlumberger may impose additional blackout periods during which there may be material non-public information about Schlumberger, such as major acquisitions and divestitures.stock ownership guidelines prohibitinsider trading policy prohibits executives from speculating in the Company’s stock, which includes, but is not limited to, short selling (profiting if the market price of the common stock decreases);selling; buying or selling publicly tradedpublicly-traded options, including writing covered calls; and hedging or any other type of derivative arrangement that has a similar economic effect.34
Benefitson:• annual compensation that can be taken into account under qualified plans, or• annual benefits that can be provided under qualified plans.on annual compensation that can be taken into account or annual benefits that can be provided under qualified plans.retirement, at the discretion of the Company.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. 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 options or, once his or her work time is reduced, for an annual cash incentive.35
PerquisitesSchlumberger provides only minimum perquisites to its executive officers, which (as to the named executive officers) 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 employees based on a Company-wide basis.The Companycontinues to believebelieves that the lost deduction on cash compensation payable in excess of this amountthe $1 million limitation for the named executive officers willis not result in any material loss of tax deduction relative to the flexibility gained.benefit of being able to adjust incentives as determined appropriate under a plan that is not subject to the conditions of Section 162(m). Section 409A of the Internal Revenue Code requires that “deferred compensation” either comply with certain deferral election and payment rules or be subject to a 20% additional tax. The Company’s compensation programs and awards are designed to make them exempt from or compliant with Section 409A.36COMPENSATION COMMITTEE REPORTTony Isaac Adrian Lajous Michael E. Marks, Chair Elizabeth Anne Moler 3720102011 to theeach individual who served as our Chief Executive Officer during 2011, the Chief Financial Officer and the next fourthree most highly compensated executive officers as of December 31, 20102011 (collectively, the “named executive officers”). Change in Pension Value & Non-Equity Nonqualified Stock Option Incentive Plan Deferred All Other Name and Bonus Awards Awards Compensation Compensation Compensation Principal Position Year Salary ($) ($)(7) ($) ($)(8) ($)(7) Earnings ($)(9) ($)(10) Total ($) A. Gould 2010 2,500,000 N/A N/A 8,938,900 2,800,000 1,104,721 214,375 (11) 15,557,996 Chairman and Chief 2009 2,500,000 N/A N/A 8,650,280 1,787,500 944,323 181,250 14,063,353 Executive Officer 2008 2,500,000 N/A N/A 9,636,575 1,125,000 1,168,399 437,500 14,867,474 P. Kibsgaard(1),(2) 2010 979,416 N/A N/A 2,670,820 1,072,510 203,730 27,006 (12) 4,953,482 Chief Operating Officer 2009 746,451 N/A N/A 2,889,100 362,136 128,129 202,964 4,328,780 S. Ayat 2010 900,000 N/A N/A 2,392,100 1,012,500 513,898 113,320 (13) 4,931,818 Executive Vice 2009 750,000 N/A N/A 1,590,125 536,250 400,685 116,559 3,393,619 President and Chief 2008 750,000 N/A N/A 1,779,060 315,000 374,420 161,064 3,379,544 Financial Officer S. Pai(3) 2010 796,813 N/A N/A 4,491,811 644,489 598,600 101,303 (14) 6,633,016 Vice President, 2009 785,945 N/A N/A 2,051,485 403,814 363,433 126,423 3,731,100 Operations 2008 717,844 N/A N/A 1,186,040 229,794 275,071 207,566 2,616,315 A. Belani(4) 2010 724,879 N/A N/A 1,485,620 586,321 425,995 116,987 (15) 3,339,802 President Reservoir
Characterization Group C. Sbiti(5),(6) 2010 1,287,654 N/A N/A 2,823,740 1,088,100 1,350,545 251,794 (16) 6,801,833 Senior Executive 2009 1,178,927 N/A N/A 5,025,000 783,981 275,832 82,569 7,346,309 Advisor 2008 1,032,478 N/A N/A 3,263,400 443,953 547,786 173,436 5,461,053 Year Salary ($) Bonus
($)(7) Stock
Awards
($) Option
Awards
($)(8) Non-Equity
Incentive Plan
Compensation
($)(7) Change in
Pension Value &
Nonqualified
Deferred
Compensation
Earnings ($)(9) All Other
Compensation
($)(10) Total ($) 2011 1,425,117 N/A N/A 8,488,590 1,690,300 381,835 251,992 (11) 12,237,834 2010 979,416 N/A N/A 2,670,820 1,072,510 203,730 27,006 4,953,482 2009 746,451 N/A N/A 2,889,100 362,136 128,129 202,964 4,328,780 2011 2,500,000 N/A N/A 12,268,000 1,421,900 1,108,176 580,018 (12) 17,878,094 2010 2,500,000 N/A N/A 8,938,900 2,800,000 1,104,721 214,375 15,557,996 2009 2,500,000 N/A N/A 8,650,280 1,787,500 944,323 181,250 14,063,353 2011 941,667 N/A N/A 5,908,840 918,100 628,901 100,535 (13) 8,498,043 2010 900,000 N/A N/A 2,392,100 1,012,500 513,898 113,320 4,931,818
and Chief Financial Officer 2009 750,000 N/A N/A 1,590,125 536,250 400,685 116,559 3,393,619 2011 967,382 N/A N/A 2,698,960 753,007 680,742 133,850 (14) 5,233,941
Operations 2010 796,813 N/A N/A 4,491,811 644,489 598,600 101,303 6,633,016 2011 875,411 N/A N/A 2,256,800 682,378 409,173 376,285 (15) 4,600,047 2011 886,661 N/A N/A 4,054,470 736,600 606,705 287,557 (16) 6,571,993 2010 724,879 N/A N/A 1,485,620 586,321 425,995 116,987 3,339,802 (1) Mr. Kibsgaard iswas paid in Euros.Euros (i) for part of 2011, (ii) for all of 2010 and (iii) for part of 2009. For purposes of this Summary Compensation Table, compensation has been determined using 2011, 2010, and 2009 average exchange rates of 1 U.S. Dollar = .715 Euros, 1 U.S. Dollar = 0.753 Euros and 1 U.S. Dollar = 0.721 Euros, respectively. (2) Effective February 8, 2010,August 1, 2011, Mr. Kibsgaard was appointed Chief OperatingExecutive Officer of Schlumberger Limited. (3) Mr. Gould retired as our Chief Executive Officer in July 2011 and will step down as Chairman of the Board at the time of the 2012 annual general meeting of stockholders. The amount reported as Non-equity Incentive Plan Compensation represents a pro-rated payout for the seven months during which he served as Chief Executive Officer. (4) Mr. Pai is paid in Euros. For purposes of this Summary Compensation Table, compensation has been determined using 2011, 2010 2009 and 20082009 average exchange rates of 1 U.S. Dollar = .715 Euros, 1 U.S. Dollar = 0.753 Euros, 1 U.S. Dollar = 0.721 Euros, and 1 U.S. Dollar = 0.678 Euros, respectively. (4)(5) Mr. Belani isOestdahl was paid in Euros.Euros for 11 months in 2011, and in Norwegian Kronor for one month. For purposes of this Summary Compensation Table, compensation has been determined using the 20102011 average exchange rate of 1 U.S. Dollar = 0.753 Euros..715 Euros, and the average exchange rate of 1 U.S. Dollar = 5.579 Kronor. (5)(6) Mr. SbitiBelani was paid in Euros (i) for part of 2010.2011, (ii) for all of 2010 and (iii) for part of 2009. For purposes of this Summary Compensation Table, compensation has been determined using 2011, 2010 2009 and 20082009 average exchange rates of 1 U.S. Dollar = .715 Euros, 1 U.S. Dollar = 0.753 Euros, 1 U.S. Dollar = 0.721 Euros, and 1 U.S. Dollar = 0.678 Euros, respectively. (6)Effective February 8, 2010, Mr. Sbiti became Senior Executive Advisor to the Chairman and Chief Executive Officer.(7) The annual cash incentive paid to Schlumberger’s named executive officers is included in the column “Non-Equity Incentive Plan Compensation.” (8) The amount reflected in this column is the aggregate grant date fair value for option grants during the fiscal years shown,in 2011, computed in accordance with applicable accounting standards. The fair value of each grant38is estimatedestablished on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions for the yearsgrant dates indicated. 2010 2009 2008 Dividend yield 1.2% 1.2% 1.0% Expected volatility 35% 34% 31% Risk free interest rate 2.8% 2.1% 3.2% Expected option life 6.6 years 6.9 years 7.0 years Weighted-average fair
value per share $ 24.35 $ 13.05 $ 29.21 Stock Option Grant Date 1/20/2011
(5-year
vest options) 1/20/2011
(4-year
vest options) 4/21/11 7/21/11 1.2% 1.2% 1.1% 1.1% 36.4% 37.1% 36.4% 37.5% 2.9% 2.7% 2.8% 2.4% 7.0 years 6.5 years 6.5 years 7.0 years (9) The amounts in this column reflect the change in actuarial present value of the named executive officer’s accumulated benefit under all defined benefit and actuarial pension plans. There are no nonqualified deferred compensation earnings reflected in this column because no named executive officer received above-market or preferential earnings on such compensation during 2008, 20092011, 2010 or 2010.2009. (10) All of the perquisites included and described in the column “All Other Compensation” are generally available to all of the Company’s exempt employees. Relocation assistance is provided to all employees on a Company-wide basis. (11) The amount disclosed for Mr. Kibsgaard consists of the following: $ 69,017 $ 7,350 $ 174,376 $ 1,249 $ 251,992 (12) The amount disclosed for Mr. Gould includesconsists of the following: Item Unfunded credits to the Schlumberger Supplementary Benefit Plan $ 80,850 Unfunded matching credits to the Schlumberger Restoration Savings Plan $ 121,275 Contributions to Schlumberger Profit Sharing Plans $ 4,900 Contributions to Schlumberger 401(k) Plan $ 7,350 Total $ 214,375 $ 119,919 $ 119,919 $ 7,350 $ 7,350 $ 25,000 $ 300,480 $ 580,018 (12)The amount disclosed for Mr. Kibsgaard includes the following: Item Unfunded credits to the Schlumberger Supplementary Benefit Plan $ 22,106 Contributions to Schlumberger Profit Sharing Plans $ 4,900 Total $ 27,006 (13) The amount disclosed for Mr. Ayat includesconsists of the following: Item Unfunded credits to the Schlumberger Supplementary Benefit Plan $ 23,825 Unfunded matching credits to the Schlumberger Restoration Savings Plan $ 35,738 Contributions to Schlumberger Profit Sharing Plans $ 4,900 Contributions to Schlumberger 401(k) Plan $ 7,350 Perquisites: Allowance in lieu of hotel expenses $ 37,342 Cost of annual trip home $ 4,165 Total $ 113,320 $ 51,294 $ 7,350 $ 7,350 $ 28,769 $ 5,772 $ 100,535 (14) The amount disclosed for Mr. Pai includesconsists of the following: Item Contributions to SchlumbergerNon-U.S. Profit Sharing Plans $ 59,047 Perquisites: Child education expenses $ 38,912 Relocation expenses—miscellaneous $ 1,397 Medical coverage for child $ 1,947 Total $ 101,303 39 $ 91,713 $ 41,720 $ 417 $ 133,850 (15) The amount disclosed for Mr. Oestdahl consists of the following: $ 40,415 $ 41,399 $ 31,469 $ 657 $ 79,441 $ 1,572 $ 181,332 $ 376,285 (16) The amount disclosed for Mr. Belani includesconsists of the following: Item Unfunded credits to the Schlumberger Supplementary Benefit Plan $ 16,542 Unfunded matching credits to the Schlumberger Restoration Savings Plan $ 24,812 Contributions to Schlumberger Profit Sharing Plans $ 4,900 Contributions to Schlumberger 401(k) Plan $ 7,350 Perquisites: Relocation expenses—miscellaneous $ 5,967 Child education expenses $ 37,915 Cost of annual trip home $ 19,501 Total $ 116,987 (16)The amount disclosed for Mr. Sbiti includes the following: Item Contributions to SchlumbergerNon-U.S. Profit Sharing Plans $ 110,000 Perquisites: Vacation payout due to transfer $ 141,794 Total $ 251,794 40 $ 37,613 $ 37,613 $ 7,350 $ 7,350 $ 59,130 $ 14,499 $ 124,002 $ 287,557 Grants of Plan-Based Awards for Fiscal Year 201020112010. All Other Option Full Awards: Exercise Closing Grant Date Estimated Possible Payouts Under Number of or Base Market Fair Value Non-Equity Incentive Plan Awards(1) Securities Price of Price on of Stock Underlying Option Grant and Grant Options Awards Date Option Name Date Threshold ($) Target ($) Maximum ($) (#)(2) ($/Sh)(3) ($/Sh) Awards ($) A. Gould 1/21/10 637,500 2,187,500 3,750,000 355,000 68.505 68.31 8,938,900 P. Kibsgaard 1/21/10 249,751 856,989 1,469,124 47,000 68.505 68.31 1,183,460 P. Kibsgaard 2/4/10 64,000 63.760 62.50 1,487,360 S. Ayat 1/21/10 229,500 787,500 1,350,000 95,000 68.505 68.31 2,392,100 S. Pai 1/21/10 152,390 522,909 896,415 47,000 68.505 68.31 1,124,710 S. Pai 2/4/10 68,000 63.760 62.50 1,542,920 S. Pai 10/21/10 83,334 64.225 64.31 1,824,181 A. Belani 1/21/10 138,633 475,702 815,489 59,000 68.505 68.31 1,485,620 C. Sbiti 1/21/10 328,352 1,126,697 1,931,481 118,000 68.505 68.31 2,823,740 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 ($) Threshold ($) Target ($) Maximum ($) 453,717 1,556,872 2,668,924 1/20/11 138,000 83.89 85.28 4,337,340 7/21/11 125,000 90.00 90.96 4,151,250 371,875 1,276,042 2,187,500 1/20/11 400,000 83.89 85.28 12,268,000 240,125 823,959 1,412,501 1/20/11 188,000 83.89 85.28 5,908,840 211,017 724,079 1,241,279 1/20/11 88,000 83.89 85.28 2,698,960 191,198 656,073 1,124,696 1/20/11 40,000 83.89 85.28 1,257,200 4/21/11 30,000 90.10 89.78 999,600 193,480 663,903 1,138,119 1/20/11 129,000 83.89 85.28 4,054,470 (1) These columns show the possible payouts for each named executive officer for fiscal year 20102011 based on performance goals set in January 2010. The possible2011. Possible payouts are performance-drivenperformance-driven. Except as discussed below for Mr. Gould, threshold, target and completely at risk. The cash incentive amounts actually earned for 2010 and payable in 2011maximum potential payouts are reflected in the “Non-Equity Incentive Plan” column of the Summary Compensation Table. For information regardingbased on the annual cash incentive paidrange established for each NEO, which is expressed as a percentage of base salary for the year. For those NEOs who received base salary increases or annual cash incentive range increases, or both, during the year, potential payouts are determined by pro-rating the potential payout based upon the number of months a cash incentive range or base salary rate was in effect. Mr. Gould’s potential payout amounts reflect only seven months of eligibility to Schlumberger’s named executive officers with respect to 2010 performance, please read “Compensation Discussion and Analysis—Elementsparticipate in the Company’s annual performance-based cash incentive program, as a result of Compensation—2010 Annual Incentive.”his retirement in August 2011 as our CEO. (2) The amounts disclosed in this column include option grants made pursuant to the following stock option plans: Schlumberger 2008 Schlumberger 2010 Name Stock Option Plan Stock Incentive Plan A. Gould 355,000 — P. Kibsgaard 111,000 — S. Ayat 95,000 — S. Pai 115,000 83,334 A. Belani 59,000 — C. Sbiti 118,000 — (3)The exercise price is equal to the average of the high and low per share prices of Schlumberger common stock on the dates of grant, and may be paid in cash or by tendering shares of Schlumberger common stock. Applicable tax obligations may be paid in cash or by withholding of shares of Schlumberger common stock. 2010, February 20102011, April 2011 and October 2010July 2011 vest in five equal annual installments, except for (i) options granted to employees in France, including Messrs. Pai and Oestdahl, which are subject to four-year cliff vesting, and (ii) options granted to Mr. Gould in January 2010, which vest in three equal annual installments.41Outstanding Equity Awards at Fiscal Year-End 201020112010. Number of Securities Number of Securities Underlying Underlying Option Option Option Grant Unexercised Options Unexercised Options Exercise Expiration Name Date (#) Exercisable(1) (#) Unexercisable(1) Price ($) Date A. Gould 1/18/2006 800,000 0 54.235 1/18/2016 1/17/2007 240,000 160,000 58.455 1/17/2017 1/17/2008 130,000 195,000 84.930 1/17/2018 1/22/2009 136,000 544,000 37.845 1/22/2019 1/21/2010 0 355,000 68.505 1/21/2020 P. Kibsgaard 1/18/2006 80,000 0 54.235 1/18/2016 7/19/2006 24,000 6,000 63.545 7/19/2016 1/17/2008 18,800 28,200 84.930 1/17/2018 1/22/2009 20,000 80,000 37.845 1/22/2019 4/23/2009 20,000 80,000 45.880 4/23/2019 1/21/2010 0 47,000 68.505 1/21/2020 2/4/2010 0 64,000 63.760 2/4/2020 S. Ayat 4/17/2002 60,000 0 27.873 4/17/2012 1/15/2003 60,000 0 20.648 1/15/2013 1/18/2006 60,000 0 54.235 1/18/2016 1/17/2007 60,000 40,000 58.455 1/17/2017 1/17/2008 24,000 36,000 84.930 1/17/2018 1/22/2009 25,000 100,000 37.845 1/22/2019 1/21/2010 0 95,000 68.505 1/21/2020 S. Pai 4/17/2002 160,000 0 27.873 4/17/2012 1/18/2006 80,000 0 54.235 1/18/2016 7/19/2006 24,000 6,000 63.545 7/19/2016 1/17/2008 16,000 24,000 84.930 1/17/2018 1/22/2009 17,000 68,000 37.845 1/22/2019 4/23/2009 12,000 48,000 45.880 4/23/2019 1/21/2010 0 47,000 68.505 1/21/2020 2/4/2010 0 68,000 63.760 2/4/2020 10/21/2010 0 83,334 64.225 10/21/2020 A. Belani 1/18/2006 100,000 0 54.235 1/18/2016 1/17/2007 30,000 20,000 58.455 1/17/2017 1/17/2008 24,000 36,000 84.930 1/17/2018 1/22/2009 25,000 100,000 37.845 1/22/2019 1/21/2010 0 59,000 68.505 1/21/2020 C. Sbiti 4/17/2002 100,000 0 27.873 4/17/2012 1/15/2003 200,000 0 20.648 1/15/2013 1/18/2006 260,000 0 54.235 1/18/2016 1/17/2007 0 130,000 58.455 1/17/2017 1/17/2008 0 120,000 84.930 1/17/2018 1/22/2009 0 250,000 37.845 1/22/2019 4/23/2009 0 125,000 45.880 4/23/2019 1/21/2010 0 118,000 68.505 1/21/2020 Option Grant
Date Number of Securities
Underlying
Unexercised Options
(#) Exercisable(1) Number of Securities
Underlying
Unexercised Options
(#) Unexercisable(1) Option
Exercise
Price ($) Option
Expiration
Date 7/19/2006 6,000 0 63.545 7/19/2016 1/17/2008 28,200 18,800 84.930 1/17/2018 1/22/2009 0 60,000 37.845 1/22/2019 4/23/2009 40,000 60,000 45.880 4/23/2019 1/21/2010 9,400 37,600 68.505 1/21/2020 2/4/2010 12,800 51,200 63.760 2/4/2020 1/20/2011 0 138,000 83.885 1/20/2021 7/21/2011 0 125,000 89.995 7/21/2021 1/18/2006 800,000 0 54.235 1/18/2016 1/17/2007 320,000 80,000 58.455 1/17/2017 1/17/2008 195,000 130,000 84.930 1/17/2018 1/22/2009 272,000 408,000 37.845 1/22/2019 1/21/2010 118,333 236,667 68.505 1/21/2020 1/20/2011 0 400,000 83.885 1/20/2021 1/18/2006 60,000 0 54.235 1/18/2016 1/17/2007 80,000 20,000 58.455 1/17/2017 1/17/2008 36,000 24,000 84.930 1/17/2018 1/22/2009 50,000 75,000 37.845 1/22/2019 1/21/2010 19,000 76,000 68.505 1/21/2020 1/20/2011 0 188,000 83.885 1/20/2021 4/17/2002 100,000 0 27.873 4/17/2012 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 24,000 16,000 84.930 1/17/2018 1/22/2009 34,000 51,000 37.845 1/22/2019 4/23/2009 24,000 36,000 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 1/17/2008 12,000 8,000 84.930 1/17/2018 1/22/2009 4,800 7,200 37.845 1/22/2019 4/23/2009 6,000 9,000 45.880 4/23/2019 1/21/2010 3,000 12,000 68.505 1/20/2021 1/20/2011 0 40,000 83.885 1/20/2021 4/21/2011 0 30,000 90.065 4/21/2021 1/18/2006 100,000 0 54.235 1/18/2016 1/17/2007 40,000 10,000 58.455 1/17/2017 1/17/2008 36,000 24,000 84.930 1/17/2018 1/22/2009 50,000 75,000 37.845 1/22/2019 1/21/2010 11,800 47,200 68.505 1/21/2020 1/20/2011 0 129,000 83.885 1/20/2021 (1) Options granted from July 2003 to January 2006 have four-year ratable vesting and stock price appreciation is capped at 125% of the exercise price on the date of grant. The grants listed above that were made before and after these dates have five-year ratable vesting and no profit cap, except for (i) options granted to employees in France, including Messrs. Pai and Oestdahl, which have four-year cliff vesting, and (ii) options granted to Mr. Gould in January 2010, which vest in three equal annual installments. 42(2) In January 2012, the Compensation Committee approved the acceleration of the vesting of all unvested stock options held by Andrew Gould that were awarded to him in January 2011. As a result, all such options will vest upon Mr. Gould’s retirement as an executive officer of the Company on April 30, 2012, and be exercisable pursuant to the original terms of the award. All of Mr. Gould’s other unvested stock options at his retirement will be forfeited pursuant to the terms of the plans under which they were issued. Option Exercises and Stock Vested for Fiscal Year 201020112010. Option Awards Number of Shares Value Realized Name Acquired on Exercise(#) on Exercise($) A. Gould 211,430 6,521,558 P. Kibsgaard 14,390 619,116 S. Ayat 65,000 1,566,205 S. Pai 120,000 4,027,620 A. Belani — — C. Sbiti 360,000 13,953,060 2011. Option award value realized is calculated by subtracting the aggregate exercise price of the options exercised from the aggregate market value of the shares of Schlumberger common stock. Option Awards Number of Shares
Acquired on Exercise(#) Value Realized
on Exercise($) 144,000 6,018,847 — — 120,000 1,244,006 60,000 3,412,375 — — — — 20102011• Schlumberger Limited Pension Plan (“SLB Pension Plan”);• Schlumberger Technology Corporation Pension Plan (“STC Pension Plan”);• Schlumberger Limited Supplementary Benefit Plan (“SLB Supplementary Plan”);• Schlumberger Technology Corporation Supplementary Benefit Plan (“STC Supplementary Plan”);• Schlumberger French Supplementary Pension Plan (“SLB French Supplementary Plan”); and• 43The following table and narrative disclosure set forth certain information with respect to pension benefits payable to the named executive officers. Number of Years of Present Value Credited of Accumulated Payments During Name Plan Name Service (#)(1) Benefits ($)(2) Last Fiscal Year A. Gould SLB Pension Plan 13.50 666,650 — SLB Supplementary Plan 11.00 7,886,580 — SLB International Staff Pension Plan 13.00 1,701,237 — P. Kibsgaard SLB Pension Plan 2.75 41,716 — STC Pension Plan 5.00 114,467 — SLB Supplementary Plan 2.75 218,229 — STC Supplementary Plan 4.25 162,295 — SLB International Staff Pension Plan 3.20 120,764 — S. Ayat SLB Pension Plan 4.25 270,623 — STC Pension Plan 0.75 65,055 — SLB Supplementary Plan 4.25 1,082,932 — STC Supplementary Plan 0.50 4,706 — SLB French Supplementary Plan 0.75 143,822 — SLB International Staff Pension Plan 10.60 731,988 — S. Pai SLB Pension Plan 5.00 223,310 — STC Pension Plan 7.25 203,990 — SLB Supplementary Plan 5.00 937,956 — STC Supplementary Plan 3.75 290,946 — SLB French Supplementary Plan 1.25 380,368 — SLB International Staff Pension Plan 9.60 285,665 — A. Belani SLB Pension Plan 5.75 351,223 — STC Pension Plan 2.58 38,897 — SLB Supplementary Plan 5.75 856,290 — STC Supplementary Plan 2.58 94,957 — SLB International Staff Pension Plan 10.00 454,474 — C. Sbiti STC Pension Plan 0.92 66,800 — SLB French Supplementary Plan 4.13 2,417,621 — SLB International Staff Pension Plan 16.88 2,154,520 — Number of
Years of
Credited
Service (#)(1) Present Value
of Accumulated
Benefits ($)(2) Payments During
Last Fiscal Year SLB Pension Plan 3.75 74,682 0 STC Pension Plan 5.00 134,723 0 SLB Supplementary Plan 3.75 497,145 0 STC Supplementary Plan 4.25 191,016 0 SLB International Staff Pension Plan 3.20 141,738 0 SLB Pension Plan 14.08 730,603 0 SLB Supplementary Plan 11.58 8,888,295 0 STC Supplementary Plan 0.58 19,961 0 SLB International Staff Pension Plan 13.00 1,743,471 0 SLB Pension Plan 5.25 351,941 0 STC Pension Plan 0.75 68,707 0 SLB Supplementary Plan 5.25 1,605,195 0 STC Supplementary Plan 0.50 4,970 0 SLB French Supplementary Plan 0.75 135,594 0 SLB International Staff Pension Plan 10.60 761,620 0 SLB Pension Plan 5.00 254,311 0 STC Pension Plan 7.25 232,309 0 SLB Supplementary Plan 5.00 1,068,167 0 STC Supplementary Plan 3.75 331,336 0 SLB French Supplementary Plan 2.25 789,644 0 SLB International Staff Pension Plan 9.60 327,209 0 SLB International Staff Pension Plan 19.00 1,761,581 0 SLB Pension Plan 6.75 456,933 0 STC Pension Plan 2.58 43,639 0 SLB Supplementary Plan 6.75 1,282,601 0 STC Supplementary Plan 2.58 106,533 0 SLB International Staff Pension Plan 10.00 512,841 0 (1) The Company does not grant and does not expect to grant extra years of credited service to named executive officers under the pension plans. The number of years of credited service reflect 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 1994 Group Annuity Mortality Table and a discount rate of 5.50% at December 31, 2010.2011. Retirement in each case is assumed to be the earlier of normal retirement age or December 31, 20102011 if the named executive officer is employed after normal retirement age, or, as to Schlumberger’s U.S. plans, the date that the sum of the named executive officer’s age plus years of service has reached, or is expected to reach, age 85, but not before the named executive officer reaches age 55.44requirements. 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 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. 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 after age 55 and whose combined age and service is 85 or more, is eligible for retirement with an unreduced pension. Messrs. Gould and SbitiAyat are each eligible for retirement with an unreduced pension under the rule of 85. The benefits are usually paid as a life-time annuity.Mr.Messrs. Gould isand Ayat are each eligible for retirement with an unreduced pension under the rule of 85. 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 ERISA.45for such employees. All of the Company’s named executive officers have either been in the SLB International Staff Plan20102011 Executive Company Aggregate Aggregate Aggregate Contributions Contributions Earnings Withdrawals/ Balance at in Last FY in Last FY in Last FY Distributions Last FYE Name Plan Name ($)(1) ($)(2) ($) ($) ($)(3) A. Gould SLB Supplementary Plan — 80,850 286,301 — 1,834,693 SLB Restoration Plan 242,550 121,275 235,824 — 3,990,021 International Staff Plan — — 247,794 — 1,942,133 P. Kibsgaard SLB Supplementary Plan — 22,106 34,324 — 182,912 SLB Restoration Plan — — 2,906 — 80,311 International Staff Plan — — 9,197 — 85,748 S. Ayat SLB Supplementary Plan — 23,825 35,078 — 171,395 SLB Restoration Plan 71,475 35,738 32,769 — 319,784 International Staff Plan — — 104,353 — 994,056 S. Pai SLB Supplementary Plan — — 43,410 — 290,622 SLB Restoration Plan — — 62,085 — 1,282,808 International Staff Plan — 59,047 26,908 — 309,939 A. Belani SLB Supplementary Plan — 16,542 30,800 — 163,279 SLB Restoration Plan 124,062 24,812 37,010 — 609,896 International Staff Plan — — 114,116 — 821,426 C. Sbiti International Staff Plan — 110,000 210,109 — 1,941,529 Executive
Contributions
in Last FY
($)(1) Company
Contributions
in Last FY
($)(2) Aggregate
Earnings
in Last FY
($) Aggregate
Withdrawals/
Distributions
($) Aggregate
Balance at
Last FYE
($) SLB Supplementary Plan — 69,017 22,926 — 252,749 SLB Restoration Plan — — 2,446 — 82,757 International Staff Plan — — (73 ) — 85,675 SLB Supplementary Plan — 119,919 92,598 — 1,966,360 SLB Restoration Plan 239,838 119,919 255,016 — 4,483,519 International Staff Plan — — (105,514 ) — 1,836,620 SLB Supplementary Plan — 51,294 24,515 — 223,379 SLB Restoration Plan — — 47,706 — 331,752 International Staff Plan — — 503 — 994,559 SLB Supplementary Plan — — 3,354 — 293,976 SLB Restoration Plan — — 39,064 — 1,321,873 International Staff Plan — 91,713 (264 ) — 401,309 International Staff Plan — 40,415 (145 ) 210,407 SLB Supplementary Plan — 37,613 17,353 — 201,702 SLB Restoration Plan 177,678 37,613 50,597 — 850,971 International Staff Plan — — (57,271 ) — 764,155 (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 Schlumberger Limited Restoration Savings Plan (which amounts are also included in theas 2011 “Salary” and 2011 “Non-Equity Incentive Plan Compensation” columns ofin the Summary Compensation Table). (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 Plan and International Staff Plan accounts, (whichas applicable, which amounts are also included in thereported as 2011 “All Other Compensation” column ofin the Summary Compensation Table).Table.46(3) The amounts reported in the “Aggregate Balance at Last FYE” column represent balances from the Schlumberger Limited Restoration Savings Plan, the SLB Supplementary Plan and the International Staff Plan and include various amounts previously reported in the Summary Compensation Table as Salary, Non-Equity Incentive Plan Compensation or All Other Compensation.Schlumberger maintains the following nonqualified deferred compensation plans for its employees, including executive officers:• SLB Supplementary Plan;• STC Supplementary Plan;• Schlumberger Limited Restoration Savings Plan (the “SLB Restoration Plan”);• Schlumberger Technology Corporation Restoration Savings Plan (the “STC Restoration Plan”); and• Schlumberger International Staff Profit Sharing Plan (the “SLB International Staff Plan”).Except for the International Staff Plan, all nonqualified deferred compensation plan benefits are payable in cash from the Company’s general assets. All of these nonqualified plans are intended to qualify as “supplementary plans” or “foreign plans” exempt from certain requirements of Title I of ERISA.non-qualifiednon-tax-qualified defined contribution benefits for eligible employees, including executive officers. Schlumberger Technology Corporation maintains a plan with substantially identical terms.47Fixed Income Fund under the Schlumberger Master Profit Sharing Trust, which was 3.73%3.02% in 2010.2011. Matching contributions and related interest vest based on the employee’s years of service, as follows: 33 1/3% vested 2 33661/3% vested3 years662/3 vested 100% vested 20102011theany named executive officers)officer).48 Under the 2010 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.Termination of employment 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 the60-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) No additional vesting Exercisable (to the extent exercisable at termination) at any time during the60-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 the60-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 additional60-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 3 months following termination of employment. 49The following table sets forth the intrinsic value of the unvested stock options held by each named executive officer as of December 31, 20102011 that would become vested upon the occurrence of any of the events described in the preceding 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 time during the year of any such event and the price of Schlumberger common stock. NameAmount ($)(1)A. Gould 34,166,7453,406,660 P. Kibsgaard 8,746,85513,218,120 6,991,8252,481,975 8,686,3783,011,014 A. Belani 5,951,105831,078 C. Sbiti 21,141,5102,383,425 (1) Calculated based on the difference between the closing price of Schlumberger common stock on December 31, 20102011 ($83.50)68.31) and the exercise price of the stock option as of such date. Amount ($)(1) $ 82,757 4,363,600 331,752 1,321,873 0 813,359 50DIRECTOR COMPENSATION IN FISCAL YEAR 20102011BoardBoard. Additionally, Schlumberger’s current practice is to grant each non-employee director shares of Schlumberger common stock each April. Effective April 30, 2011, Schlumberger granted each 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 committees. non-employee directors. Schlumberger directors have never received restricted common stock or restricted stock units as director compensation.for 2010. Change in Pension Value Fees & Nonqualified Earned or Non-Equity Deferred Paid in Stock Option Incentive Plan Compensation All Other Cash Awards(2) Awards Compensation Earnings Compensation Total(3) Name ($)(1) ($) ($) ($) ($) ($) ($) Philippe Camus 125,000 160,695 — — — — 285,695 Peter L.S. Currie 87,525 160,695 — — — — 248,220 Jamie S. Gorelick(4) 65,000 160,695 — — — — 225,695 Tony Isaac 139,950 160,695 — — — — 300,645 K.V. Kamath 90,000 160,695 — — — — 250,695 N. Kudryavtsev 127,500 160,695 — — — — 288,195 Adrian Lajous 130,000 160,695 — — — 15,368 (7) 306,063 Michael Marks 127,500 160,695 — — — — 288,195 Elizabeth Moler(5) 25,000 92,133 — — — — 117,133 Leo Rafael Reif 120,000 160,695 — — — — 280,695 Tore I. Sandvold 120,000 160,695 — — — — 280,695 Henri Seydoux 120,000 160,695 — — — — 280,695 Linda Stuntz(6) 32,500 — — — — — 32,500 Fees
Earned or
Paid in
Cash
($)(1) Stock
Awards(2)
($) Option
Awards
($) Non-Equity
Incentive Plan
Compensation
($) Change in
Pension Value
& Nonqualified
Deferred
Compensation
Earnings
($) All Other
Compensation
($) Total(3)
($) 130,000 197,528 — — — — 119,175 197,528 — — — 18,588 (5) 131,650 197,528 — — — — 120,000 197,528 — — — — 112,500 197,528 — — — — 130,000 197,528 — — — 12,523 (5) 130,000 197,528 — — — — 110,000 197,528 — — — — 82,500 197,528 — 127,500 197,528 — — — — 120,000 197,528 — — — — 120,000 197,528 — — — — (1) This column includesReflects cash fees earned, without taking into account any election to defer receipt of such fees. Directors receive an annual cash retainer of $100,000 plus an additional annual fee of $10,000 for membership on each 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. The fees disclosed in this column are subject to adjustment in cases where a director has served less than one full year or has changed committee memberships or chairmanships. Ordinarily, the annual cash retainer is paid in cash, but directors can elect to have their retainer paid in stock or deferred under the Schlumberger 2004 Stock and Deferral Plan for Non-Employee Directors. (2) This column includesThe amounts reported reflect the aggregate grant date fair value of the stock awards granted in 2011 computed in accordance with applicable accounting standards, of shares of Schlumberger commonbased on the closing stock issued,price on the grant date, without taking into account any election to defer receipt of such shares. Schlumberger’s current practice isstock award. Amounts rounded up to grant each non-employee director shares of Schlumberger common stock each April. On April 30, 2010, Schlumberger granted each non-employee director (except Ms. Stuntz, who did not stand for re-election in 2010, and Ms. Moler, who was not yet a director) 2,250 shares of Schlumberger common stock. Except as provided in the next sentence, each amount set forth in the “Stock Awards” column in the Director Compensation table is equal to the number of shares of common stock issued, multiplied by $71.42, which was the closing price of Schlumberger’s common stock on April 30, 2010, the date of grant. Ms. Moler was appointed to serve as a director in September 2010, and the amount set forth in the “Stock Awards” column is equal to 1,313, being the number of shares issued to Ms. Moler in 2010, multiplied by $70.17, which was the closing price of Schlumberger’s common stock on November 1, 2010, the date of grant. 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. Schlumberger directors have never received restricted common stock or restricted stock units as director compensation.nearest dollar. A non-employee director may elect to defer the receipt of all or part of a stock award. For information on the number of shares of Schlumberger common stock deferred by our directors, please read the footnotes to the table under “Security Ownership by Management.”51(3) Schlumberger reimburses non-management directors for travel and other business expenses incurred in the performance of their services for Schlumberger. (4) Ms. Gorelick resigned from the Board effective June 3, 2010.(5)Ms. MolerOlayan became a director in September 2010.April 2011. (6)Ms. Stuntz was a director for part of 2010. She did not stand for re-election at the Company’s 2010 annual general meeting of stockholders.(7)(5) Represents amounts paid for spousal airfare and hotel accommodations in connection with a Board meeting. TheseSome of these amounts were paid in Euros. For purposes of this column, such compensation has beenwas determined using the exchange rate of 1 U.S. Dollar = 0.7530.715 Euros, being the average exchange rate over 2010.2011.Director Stock Ownership Guidelines2010,2011, each of our current non-employee directors waswho have been Board members for at least five years is in compliance with these stock ownership guidelines.EQUITY COMPENSATION PLAN INFORMATION20102011 for (1) all compensation plans previously approved by our stockholders and (2) all compensation plans not previously approved by our stockholders. (a) (b) (c) Number of securities remaining Number of securities to be available for future issuance issued upon exercise of Weighted-average exercise under equity compensation outstanding options, warrants price of such outstanding plans (excluding securities Plan category and rights options, warrants and rights reflected in column (a)) Equity compensation plans approved by security holders 39,721,715 $ 52.236 31,458,983 Equity compensation plans not approved by security holders N/A N/A N/A Total 39,721,715 $ 52.236 31,458,983 (a) (b) (c) Number of securities to be
issued upon exercise of
outstanding options, warrants
and rightsWeighted-average exercise
price of such outstanding
options, warrants and rightsNumber of securities remaining
available for future issuance
under equity compensation
plans (excluding securities
reflected in column (a))42,463,194 (1) $64.336 21,646,896(2) N/A N/A N/A 42,463,194 (1) $64.336 21,646,896(2) (1) Includes 404,495 shares issuable upon the exercise of outstanding stock options assumed in the acquisition of Smith. (2) Includes 54,437 shares of common stock issuable under Schlumberger’s 2004 Stock and Deferral Plan for Non-Employee Directors. ourSchlumberger stockholders include the 2010 Schlumberger 2010Omnibus 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;Plan, as amended; and the Schlumberger 2005 Stock Incentive Plan, as amended; the Schlumberger 19942001 Stock Option Plan, as amended; the Schlumberger 1998 Stock Option Plan, as amended; and the Schlumberger 20011994 Stock Option Plan, as amended; the Schlumberger Discounted Stock Purchase Plan, as amended and restated, and the Schlumberger 2004 Stock and Deferral Plan for Non-Employee Directors.52amended.ITEM 4. ADOPTION OF AMENDMENT TO SCHLUMBERGER’S ARTICLES OFINCORPORATION TO INCREASE AUTHORIZED COMMON SHARE CAPITALThe Board of Directors has proposed for stockholder approval an amendment to Schlumberger’s Articles of Incorporation to increase the number of authorized shares of common stock from 3,000,000,000 shares to 4,500,000,000 shares.The proposed amendment was adopted, subject to stockholder approval, by the unanimous vote of the Board on January 20, 2011. Separate from the proposed amendment described in this Item 4, the Board also has proposed for stockholder approval other amendments to Schlumberger’s Articles of Incorporation, as described in Item 5 below.Last amended in 2006, Schlumberger’s Articles of Incorporation currently authorize up to 3,000,000,000 shares of common stock for issuance. As of January 31, 2011:• 1,434,212,164 shares of Schlumberger common stock were issued (including 73,218,263 shares of Schlumberger common stock held in treasury);• 47,263,499 shares have been reserved for issuance upon the exercise of stock options and the vesting of restricted stock units granted by Schlumberger;• 22,801,141 shares have been reserved for issuance under Schlumberger’s equity incentive plans pursuant to options and restricted stock units that could be granted in the future;• 7,672,101 shares have been reserved for issuance under Schlumberger’s discount stock purchase plan; and• 98,187 shares have been reserved for issuance under Schlumberger’s Stock and Deferral Plan for Non-Employee Directors.Schlumberger’s Articles of Incorporation also authorize Schlumberger to issue 200,000,000 shares of preferred stock. There are no outstanding shares of preferred stock, and this amendment would not change the number of authorized shares of preferred stock.Reasons for Increasing Schlumberger’s Authorized Shares of Common StockThe Board of Directors believes that it is advisable and in the best interests of Schlumberger’s stockholders to have available additional authorized but unissued shares of common stock in order to maintain Schlumberger’s flexibility to use capital stock for business and financing purposes in the future. The newly authorized shares of common stock will constitute additional shares of the existing class of common stock and, if and when issued, will have the same rights and privileges as the shares of common stock currently authorized. Schlumberger currently has no specific plans to issue the additional shares of common stock that would be authorized by this proposal. However, the additional shares would provide flexibility to use capital stock for business and financial purposes in the future. The additional shares may be used for various purposes, including:• expanding Schlumberger’s business through acquisitions and other strategic transactions;• paying stock dividends or effecting stock splits;• providing equity incentives to employees, officers and directors;• raising capital; and• other general corporate purposes.Currently, only 1,487,952,908 shares of Schlumberger’s common stock remain unissued and unreserved. If stockholders do not approve the proposed amendment to Schlumberger’s Articles of Incorporation, Schlumberger may not be able to complete strategic transactions, effect stock splits, retain employees and pursue other business opportunities integral to its growth and success. Schlumberger’s Board of Directors53believes that the proposed increase in authorized common stock will make sufficient shares available to maintain the flexibility necessary to pursue its strategic objectives.Over the past several years, flexibility has allowed Schlumberger to pursue important acquisitions and other business opportunities. Most recently, in 2010, Schlumberger financed the acquisition of Smith entirely with shares of Schlumberger common stock. In connection with this acquisition, Schlumberger issued approximately 176 million shares of common stock, representing approximately 12.9% of Schlumberger’s outstanding common stock at the time after giving effect to the issuance. Schlumberger also reserved for issuance 0.7 million shares of common stock in connection with the exercise or conversion of Smith’s outstanding equity awards, which became exercisable for or convertible into Schlumberger common stock pursuant to the merger. Additionally, in 2006, in order to increase the liquidity and marketability of Schlumberger’s common stock, Schlumberger declared a2-for-1 stock split, in which each stockholder of record as of the close of business on March 1, 2006, received one additional share of Schlumberger’s common stock and the number of shares of Schlumberger common stock held in treasury doubled. Unless Schlumberger’s stockholders approve the proposed amendment to its Articles of Incorporation, Schlumberger may not have sufficient unissued and unreserved authorized shares to engage in similar transactions in the future.Like the currently authorized but unissued shares of Schlumberger’s common stock, the additional shares of common stock authorized by this proposal would be available for issuance without further action by Schlumberger’s stockholders, unless further action is required by law, the rules of the New York Stock Exchange or any other stock exchange on which Schlumberger’s common stock may be listed. The authorization of additional shares of Schlumberger’s common stock will enable Schlumberger, as the need may arise, to take advantage of market conditions and favorable opportunities without the delay and expense associated with the holding of a special meeting of Schlumberger’s stockholders.Effects of Increasing Schlumberger’s Authorized Common StockThis proposal to increase the authorized number of shares of common stock has been prompted by business and financial considerations. While this proposal is not intended by management or the Board of Directors to prevent or discourage any actual or threatened takeover of Schlumberger, under certain circumstances, it could have an anti-takeover effect. For example, in the event of a hostile attempt to acquire control of Schlumberger, it may be possible for the company to endeavor to impede the attempt by issuing shares of common stock, thereby diluting the voting power of the other outstanding shares and increasing the potential cost to acquire control of the company. The proposed amendment may also have the effect of permitting Schlumberger’s current management, including the current Board of Directors, to retain its position, and place it in a better position to resist changes that stockholders may wish to make if they are dissatisfied with the conduct of the company’s business. Any such additional shares could be issued in private placements and without stockholder approval or further action by Schlumberger’s stockholders, subject to applicable law or rules. Accordingly, if the proposal is adopted, the increase in the number of authorized shares of common stock may render more difficult or discourage a merger, tender offer or proxy contest (and thereby potentially limit the opportunity for Schlumberger’s stockholder to dispose of their shares at the higher price generally available in takeover attempts or that may be available under a merger proposal), the assumption of control by a holder of a large block of Schlumberger’s common stock, or the replacement or removal of management or the Board of Directors. Any such anti-takeover effect may be beneficial to management and the Board of Directors and could have an adverse impact on stockholders.The Board currently is not aware of any specific third-party effort to accumulate shares of common stock or to obtain control of Schlumberger by means of a merger, tender offer or solicitation in opposition to management or the Board. Moreover, Schlumberger currently has no plans to issue newly authorized shares of common stock to discourage third parties from attempting to take over Schlumberger. Although the Board is motivated by business and financial considerations in proposing the increase in the number of authorized shares of common stock, stockholders nevertheless should be aware that any issuance of newly authorized shares of common stock, regardless of the intent, could have an anti-takeover effect. In addition, because54stockholders do not have preemptive rights with respect to Schlumberger’s common stock, to the extent that additional authorized shares are issued in the future, they may decrease existing stockholders’ percentage equity ownership, and depending on the price at which they are issued, be dilutive to existing stockholders.Resolutions Adopting the Proposed AmendmentThe following resolutions, which will be presented to the Annual General Meeting of Stockholders, will adopt the proposed amendment to Schlumberger’s Articles of Incorporation to increase its authorized shares of common stock:RESOLVED, Section 4.1 of Article 4 of Schlumberger’s Articles of Incorporation is hereby amended and restated to read in its entirety as follows: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”.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 effectuating such amendment.Required VoteThe affirmative vote of the holders of a majority of Schlumberger’s shares outstanding and entitled to vote at the Annual General Meeting of Stockholders is required for the adoption of the foregoing resolutions.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.Effectiveness of AmendmentIf stockholders approve the proposed amendment, it will become effective when the notarial deed is executed, which Schlumberger anticipates having executed as soon as practicable following stockholder approval.Recommendation of the BoardThe Board recommends that you vote “FOR” the approval of the amendment to the Articles of Incorporation to increase the authorized common share capital.55ITEM 5. ADOPTION OF AMENDMENTS TO SCHLUMBERGER’S ARTICLES OFINCORPORATION TO CLARIFY THE VOTING STANDARD IN CONTESTED DIRECTORELECTIONS AND TO MAKE CERTAIN OTHER CHANGESIn addition to the proposed amendment to increase the authorized common stock described in Item 4 above, the Board of Directors has proposed for stockholder approval amendments to Schlumberger’s Articles of Incorporation to clarify that in contested elections directors will be elected by a plurality vote and to make other technical changes to reflect the constitutional restructuring and dissolution of the Netherlands Antilles that occurred in October 2010.The proposed amendments were adopted, subject to stockholder approval, by the unanimous vote of the Board on January 20, 2011.The proposed amendments would:• clarify that in a contested election directors will be elected by a plurality vote, and• make other technical changes to reflect the constitutional restructuring and dissolution of the Netherlands Antilles.Currently, as provided in the Articles of Incorporation, Schlumberger directors are elected by a majority of votes cast, regardless of whether the election is contested or uncontested. The Board of Directors believes that it is advisable and in the best interests of Schlumberger’s stockholders for a plurality voting standard to apply in contested elections. If a majority voting standard is used in a contested election, fewer candidates or more candidates could be elected to the Board than the number of Board seats. Because our majority voting standard only compares the number of “for” votes with the number of “against” votes for each director nominee without regard to voting for other candidates, it does not ensure that all Board seats are filled when there are more candidates than available Board seats. In addition, a majority voting standard in contested elections could be viewed as favoring incumbents because if majority voting applies in a contested election and all the nominees fail to receive a majority vote, then no directors are elected and the incumbents continue to serve as “hold over” directors. In contrast, under a plurality voting standard the number of available Board seats will be filled by those nominees receiving the greatest number of “for” votes. Accordingly, the proposed amendments would clarify that plurality voting applies in contested elections to avoid such results.The other proposed amendments to the Articles of Incorporation are technical changes to reflect the constitutional restructuring and dissolution of the Netherlands Antilles. Prior to October 10, 2010, the Netherlands Antilles, together with Aruba and the Netherlands, formed the Kingdom of the Netherlands, with Curaçao being an island territory of the Netherlands Antilles. Under a constitutional restructuring of the Kingdom of the Netherlands agreed upon among the Netherlands Antilles, Aruba and the Netherlands, the Netherlands Antilles was dissolved effective October 10, 2010. Also effective October 10, 2010, Curaçao became an individual constitutional entity within the Kingdom of the Netherlands, having its own government and laws. As a result of the constitutional restructuring and the dissolution of the Netherlands Antilles, Netherlands Antilles law ceased to exist and Schlumberger became a Curaçao legal entity subject to Curaçao law. In connection with this restructuring, stockholders are being asked to approve amendments to the Articles of Incorporation to replace all references to “Netherlands Antilles” to instead refer to “Curaçao” and to make other technical changes. The amendments described in this Item 5 as well as the amendments described above in Item 4 to increase Schlumberger’s authorized common stock are set forth in Appendix A to this proxy statement.Resolutions Adopting the Proposed AmendmentsThe following resolutions, which will be presented to the Annual General Meeting of Stockholders, will adopt the proposed amendments to Schlumberger’s Articles of Incorporation to clarify that in a contested56election directors will be elected by a plurality vote and to make other technical changes to reflect the constitutional restructuring and dissolution of the Netherlands Antilles: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: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 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 elected, a number of directors not exceeding the authorized number of directors as fixed in accordance with these Articles of Incorporation, shall be elected by a plurality of the voting power of the shares represented in person or by proxy at any such meeting and entitled to vote on the election of directors. For purposes of this Section 8.3, a majority of the votes cast means that the number of votes cast “for” a director must exceed the number of votes cast “against” that director. The Board of Directors shall be authorized to appoint directors to fill any vacancies on the Board of Directors, any such appointment to be effective until the next general meeting of stockholders. The number of persons constituting the whole Board of Directors shall be not less than five (5) nor more than twenty-four (24), as fixed and elected by the general meeting of stockholders. The number of persons constituting the whole Board of Directors shall, until changed at any succeeding general meeting of stockholders, be the number so fixed and elected. 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 increase the number of the whole Board of Directors or to suspend or dismiss a director, or at any subsequent general meeting, the stockholders may fill any vacancy or vacancies created by such action.RESOLVED, that the amendments to the Articles of Incorporation of Schlumberger to reflect the constitutional restructuring and dissolution of the Netherlands Antilles be, and they hereby are, adopted to read in their entirety as set forth in Appendix A to Schlumberger’s Proxy Statement dated March [ ], 2011 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 effectuating such amendments.Required VoteThe affirmative vote of the holders of a majority of Schlumberger’s shares outstanding and entitled to vote at the Annual General Meeting of Stockholders is required for the adoption of the foregoing resolutions.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.Effectiveness of AmendmentsIf stockholders approve the proposed amendments, they will become effective when the notarial deed is executed, which Schlumberger anticipates having executed as soon as practicable following stockholder approval.Recommendation of the BoardThe Board recommends that you vote “FOR” the approval of the amendments to the Articles of Incorporation to clarify the voting standard in contested director elections and to make certain other changes.57Upon to be performed by PricewaterhouseCoopers LLP, 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, 2010,• its Consolidated Statement of Income for the year ended December 31, 2010, as audited by PricewaterhouseCoopers LLP, and• the amount of dividends declared by the Board of Directors during 2010.20102011 Annual Report to Stockholders.Brokers do 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.3.6.Board of DirectorsAudit Committee as the independent registered public accounting firm to audit the annual financial statements of the Company for the year 2011.2012. 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 BoardAudit Committee will consider whether it is appropriate to select another independent registered public accounting firm.20112012 annual general meeting of stockholders, will have the opportunity to make a statement if he or she desires to do so, and is expected to be available to respond to appropriate questions.Fees Paid to PricewaterhouseCoopers LLP Year Ended
December 31, 2011 2010 (in thousands) $ 12,312 $ 11,790 $ 669 $ 1,775 $ 1,862 $ 1,884 $ 1,649 $ 0 $ 16,492 $ 15,449 • the audit of the Company’s 2010 and 2009 annual financial statements and reviews of quarterly financial statements and other audit services, and• the other services described below that were billed in 2010 and 2009. Year Ended December 31, 2010 2009 (in thousands) Audit Fees(1) $ 11,790 $ 11,796 Audit-Related Fees(2) $ 1,775 $ 962 Tax Fees(3) $ 1,884 $ 1,134 All Other Fees $ 0 $ 0 Total $ 15,449 $ 13,892 (1) Includes fees for statutory audits. (2) Consists of fees for employee benefit plan audits and other audit-related items. (3) Consists primarily of fees for tax compliance and fees for tax advice and other permitted tax services. 58(4) Consists primarily 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 Procedures2010,2011, no matters were taken on without pre-approval under thede minimisprovisions of the Sarbanes-Oxley Act.the appointment of PricewaterhouseCoopers LLP.this Item 4.Brokers do 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.discretion.7.594.AUDIT COMMITTEE REPORT2010,2011, the Audit Committee periodically reviewed and discussed the Company’s financial statements with Company management and the 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 requirements. The Audit Committee discussed with the Company’s management and independent registered public accounting firm the review 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.reviewreviews and discussion, and relying on the representation of Company management and the independent registered public accounting firm’s report to the Audit Committee,discussions, the Audit Committee recommended that the Board include the financial statements in the Company’s Annual Report onForm 10-K for the year ended December 31, 20102011 filed with the SEC.Philippe Camus K. Vaman KamathNikolay Kudryavtsev Peter L.S. Currie, Chair Nikolay KudryavtsevTony Isaac Adrian Lajous K. Vaman Kamath 60
Our Board and our stockholders originally approved the Plan in 2004. In 2007, we amended and restated the Plan to allow non-employee directors to defer the receipt of cash compensation, and to make other administrative changes. The Plan was further amended on January 1, 2009 to make further administrative and compliance changes. The following summary of the material features of the Plan is subject to the specific provisions contained in the full text of the Plan set forth asAppendix A. The specific amendments proposed to be made to the Plan are marked withinAppendix A.All non-employee directors of Schlumberger are eligible to participate in the Plan. As of the date of the 2012 Annual Meeting, we expect to have 11 non-employee directors, all of whom will be eligible to participate in the Plan. 54,437 shares currently remain available for issuance under the Plan. If the proposed amendment and restatement is approved, an additional 150,000 shares would be newly approved for issuance, and an aggregate of 204,437 shares will be available for issuance under the Plan. The last reported sales price of a share of Schlumberger common stock on January 31, 2012 on the New York Stock Exchange was $75.17 per share. The number of shares available for issuance under the Plan is subject to adjustment to reflect stock splits, stock dividends, reorganizations, mergers and similar events. Under the Plan’s current terms, each non-employee director will be granted an annual award not to exceed 4,000 shares of our common stock, and the aggregate annual grants may not exceed 60,000 shares. If the proposed amendment and restatement is approved, the limit on annual awards that may be granted to an individual director will be increased to 6,000 shares, and the aggregate annual limit on grants will be removed. The annual stock award may be in the form of shares of common stock, shares of restricted common stock or restricted stock units, each of which will represent the right to receive one share of our common stock. At the discretion of the Committee, a non-employee director may irrevocably elect to defer the receipt of all or part of a stock award or cash compensation by submitting a deferral election in the manner specified by the Committee. Any deferred stock awards will be credited to a bookkeeping account, which we call a stock account, established for the non-employee director as of the date the shares of common stock, shares of restricted stock or restricted stock units would otherwise have been delivered under our Plan. In the event that a dividend is paid on our common stock during the period that restricted stock units are credited to the non-employee director’s stock account, an amount equivalent to the amount of the dividend will be credited to the non-employee director’s stock account and the accumulated amount will be paid out without interest at the end of the deferral period. Any deferred cash compensation will be credited to the bookkeeping account and will be deemed invested in one of the following three investments as elected by the non-employee director from the investment alternatives selected by the Committee: (1) shares of common stock, (2) money market equivalents and (3) S&P 500 equivalents. With respect to deferred stock awards consisting of shares of common stock or deferred cash compensation, the non-employee director may elect that delivery be made or commence on the date of termination of the non-employee director’s status as a director or one year after such termination. With respect to stock awards initially consisting of stock units, the Committee will determine the date of, and conditions to be satisfied prior to, delivery. Shares of common stock to be delivered at the end of the deferral period, together with a cash payment equal to the amount of any dividends, will be made within 60 days after the end of the deferral period. The Plan will continue until the available number of shares authorized under the Plan is exhausted unless it is terminated prior to that time by action of the Board. The Board may amend, modify, suspend or terminate the Plan for the purpose of meeting or addressing any changes in legal requirements or for any other purpose permitted by law, except that (1) no amendment, modification or termination will, without the consent of the affected non-employee director, impair the rights of any non-employee director to the number of restricted stock units credited to such non-employee director’s stock account as of the date of such amendment, modification or termination and (2) no amendment or modification will be effective prior to its approval by our stockholders to the extent such approval is required by applicable legal requirements or the requirements of any securities exchange on which the common stock is listed. The Board may at any time and from time to time delegate to the Committee any or all of this authority to amend, suspend or terminate the Plan. The Plan is an unfunded plan. The grant of shares of common stock, restricted common stock or restricted stock units pursuant to an award under the Plan and the deferral of cash compensation may be implemented by a credit to a bookkeeping account maintained by us evidencing the accrual in favor of the non-employee director of the unfunded and unsecured right to receive shares of common stock (or units representing such shares). Such accounts will be used merely as a bookkeeping convenience. We are not required to establish any special or separate fund or reserve or to make any other segregation of assets to assure the issuance of any shares of common stock (or units representing such shares) granted under the Plan. Neither the Company nor the Board nor the Committee is required to give any security or bond for the performance of any obligation that may be created by the Plan. Security Ownership by Certain Beneficial Owners20102011 with respect to persons known by the Company to be the beneficial owners of more than 5% or more of the Company’s common stock. This information is reported by such persons in their Schedule 13G filings with the SEC. For each entity included in the table below, percentage ownership is calculated by dividing the number of shares beneficially owned by such entity by the 1,360,993,9011,334,292,143 shares of common stock outstanding on January 31, 2011. Beneficial Ownership of Common Stock Number of Percentage Name and Address Shares of Class BlackRock Inc.(1)
40 East 52nd Street
New York, NY 10022 75,876,249 5.6 % Beneficial Ownership of
Common Stock Number of
Shares Percentage
of Class 75,876,249 5.7 % (1) Based on a Statement on Schedule 13G/A filed on February 8, 2011. Such filing indicates that BlackRock Inc. has sole voting power and sole investment power with respect to 75,876,249 shares. Security Ownership by Management20112012 by (i) each director and nominee, (ii) each of the named executive officers, and (iii) all directors and executive officers as a group.Securities and Exchange Commission (the “SEC”)SEC and generally includes voting or investment power with respect to securities. Except as indicated in the footnotes to this table, to Schlumberger’s knowledge the persons named in the table below have sole voting and investment power with respect to all shares of Schlumberger common stock beneficially owned. The number of shares beneficially owned by each person or group as of January 31, 20112012 includes shares of common stock that such person or group had the right to acquire on or within 60 days after January 31, 2011,2012, including, but not limited to, upon the exercise of options to purchase common stock or the vesting of restricted stock units. References to options in the footnotes of the table below include only options to purchase shares outstanding as of January 31, 20112012 that were exercisable on or within 60 days after January 31, 2011,2012, and references to any restricted stock units in the footnotes to the table below include only restricted stock units outstanding as of January 31, 2012012 that would vest and could settle on or within 60 days after January 31, 2011. 2012.1,360,993,9011,334,292,143 shares of common stock outstanding on January 31, 20112012, 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, 2011.612012.As of January 31, 2012.2011,2012, no director, nominee or named executive officer owned more than 1% of the outstanding shares of the Company’sSchlumberger’s common stock. All directors and executive officers as a group owned less than 1% of the outstanding shares of our common stock of the Company at January 31, 2011. Shares 490,903 (1) 343,492 (2) 9,250 (3) 19,800 4,294,683 (4) 18,750 (5) NameShares4,500 197,281 (6) Simon Ayat 497,011(1)10,750 Ashok Belani16,482 (7) 30,500 (8) 258,800(2)3,563 Philippe Camus 9,25047,450(3)(9) Peter L.S. Currie7,250Andrew Gould3,873,491(4)Tony Isaac16,500(5)K. Vaman Kamath 2,250 451,285 (10) Paal Kibsgaard 230,081(6)10,750 Nikolay Kudryavtsev 8,50022,750 Adrian Lajous16,482(7)6,750 Michael E. Marks25,550(8)Elizabeth A. Moler1,313Lubna S. Olayan0Satish Pai455,246(9)Leo Rafael Reif8,500Tore I. Sandvold20,500Chakib Sbiti769,233(10)Henri Seydoux4,500(27(29 persons) 7,243,1707,004,606(11) (1) Includes options to purchase 365,000358,600 shares. (2) Includes options to purchase 237,800322,400 shares. (3) Excludes 2,2504,500 shares the receipt of which Mr. Camus has deferred under Schlumberger’s 2004 Stock and Deferral Plan for Non-Employee Directors. (4) Includes (i) options to purchase 1,705,0332,237,999 shares and (ii) 428,908 pledged shares. (5) Excludes 5,000 shares the receipt of which Mr. Isaac has deferred under Schlumberger’s 2004 Stock and Deferral Plan for Non-Employee Directors. All shares held in the name of Mr. Isaac’s spouse. (6) Includes options to purchase 214,400175,600 shares. Effective February 8, 2010, Mr. Kibsgaard became Chief Operating Officer of Schlumberger Limited. (7) Held through a limited liability company in which Mr. Lajous has an indirect interest. Excludes 10,25012,500 shares the receipt of which Mr. Lajous has deferred under Schlumberger’s 2004 Stock and Deferral Plan for Non-Employee Directors. Includes 16,482 pledged shares. (8) Includes 17,550All shares held by a limited liability company controlled by Mr. Marks and 10,000 shares held in the name of a trust for the benefit of Mr. Marks and his spouse.Marks. Excludes 2,000 shares the receipt of which Mr. Marks has deferred under Schlumberger’s 2004 Stock and Deferral Plan for Non-Employee Directors. (9) Includes options to purchase 334,00043,200 shares.(10) Includes options to purchase 317,000 shares. Also includes 14,281 shares held by children of Mr. Pai. (10) (11)Includes options to purchase 390,000 shares. Effective February 8, 2010, Mr. Sbiti became Senior Executive Advisor to the CEO and relinquished his role as Executive Vice President, OFS.(11) Includes options to purchase 4,061,367 shares,4,210,161shares, and excludes 19,50024,000 shares the receipt of which directors have deferred under Schlumberger’s 2004 Stock and Deferral Plan for Non-Employee Directors.62Section 16(a) Beneficial Ownership Reporting Compliancesingle date.2010,2011, 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, except for a late Form 4 that was filed on January 10, 2011 on behalffiling by Ms. Stephanie Cox with respect to the acquisition of Elizabeth Moler to report the issuance950 shares of Schlumberger common stock, which was effected in connection with her appointment asfour transactions on a director.Stockholder Proposals for 20122013 Annual General Meeting20122013 annual general meeting of stockholders, written proposals must be received by the Secretary of the Company, 5599 San Felipe, 17th Floor, Houston, Texas 77056, no later than November [ ], 2011.2012.2013.20122013 annual general meeting of stockholders if the stockholder making the proposal has not given notice to the Company by January [ ], 2012.Other Matters$13,500$14,500 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.2011632012Appendix AAs proposed to be amended April 6, 2011. Deletions are marked as stricken text and additions are marked
with ana double underline.]ARTICLES OF INCORPORATION OF THECORPORATION WITH LIMITED LIABILITYSCHLUMBERGER N.V.NAME AND DOMICILEArticle 11.1. 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 is incorporated in the Netherlands Antilles April 19, 2007,and conformed to include amendments throughhas its corporate seat in 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 byJanuary the laws of the Netherlands Antilles1, 2009)Curacao law19, 2012)In particular, the Company may change its place of domicile in accordance with theNetherlands AntillesCuracao Ordinance on Transfer of Domicile to Third Countries pursuant to a resolution of the Board of Directors.OBJECTSArticle 22.1. The objects of the Company are:(a) to design, develop, produceSchlumberger Limited established this 2004 Stock 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 claimsDeferral Plan 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) forA-1the 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.DURATIONArticle 3The Company shall have perpetual existence.CAPITAL AND SHARESArticle 44.1. 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 exceedTHIRTY-TWOFORTY-SEVEN MILLION UNITED STATES DOLLARS (US$32,000,00047,000,000), divided into (a) threefour billion(3,000,000,000five-hundred million (4,500,000,000) shares of common stock of the par value of One United States Cent (US$0.01) per shareNon-Employee Directors (the “Authorized Common Share Capital”“Plan”) 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; orc. providing for the payment for shares by means other than by legal tender ofthe Netherlands AntillesCuracao.A-24.5. 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; andf. any other terms and conditions of such series which are not inconsistent with these Articles of Incorporation or Netherlands AntillesCuracao 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, plusA-3(2) all accumulated and unpaid dividends on such preferred shares to the date fixed for distribution.Article 5No 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 66.1. 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 and provided 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 theNetherlands AntillesCuracao Civil Code (“NACCCC”)) 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 77.1. 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, his 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 2:109NACCCC 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 his 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 byA-4applicable law (Article 2:110.2NACCCC). 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 and provided 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 his share certificate has been lost or destroyed, then, at his 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.MANAGEMENTArticle 88.1. The management of all the affairs, property and businessproviding non-employee directors of the Company shall be vested in a Boardwith regular grants 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 eachshares 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 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 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 elected, a number of directors not exceeding the authorized number of directors as fixed in accordance with these Articles of Incorporation, shall be elected by a plurality of the voting power of the shares represented in person or by proxy at any such meeting and entitled to vote on the election of directors. For purposes of this Section 8.3, a majority of the votes cast means that the number of votes cast “for” a director must exceed the number of votes cast “against” that director. The Board of Directors shall be authorized to appoint directors to fill any vacancies on the Board of Directors, any such appointment to be effective until the next general meeting of stockholders. The number of persons constituting the whole Board of Directors shall be not less than five (5) nor more than twenty-four (24), as fixed and elected by the general meeting of stockholders. The number of persons constituting the whole Board of Directors shall, until changed at any succeeding general meeting of stockholders, be the number so fixed and elected. 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 toA-5increase the number of the whole Board of Directors or to suspend or dismiss a director, or at any subsequent general meeting, the stockholders may fill any vacancy or vacancies created by such action.8.4. Each director shall be elected to serve until the next annual general meeting of stockholders and until his successor shall be elected and qualify, or until his death, resignation or removal.8.5. Directors need not beNetherlands Antilles citizens orresidents ofthe Netherlands AntillesCuracao 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 shall be reduced to less than a majority of the number constituting the whole Board of Directors, the remaining directors or director shall forthwith call a general meeting of stockholders for the purpose of filling the vacancies on the Board of Directors, and provided further that in the event that all of the directors are prevented from or are incapable of acting as directors, the Company shall be temporarily managed by any person or persons previously appointed by the Board of Directors so to act, who shall forthwith call a general meeting of stockholders for the purpose of electing a Board of Directors. Until such general meeting of stockholders is held the person so designated shall only take such acts of management that can not suffer any delay. If no such general meeting of stockholders shall be called, and if no such person shall have been appointed, any person or persons holding in the aggregate at least five percent (5%) of the outstanding shares of common stock of the Company may call a general meeting of stockholders for the purpose of electing a Board of Directors.8.7. A majority of the whole Board of Directors shall constitute a quorum for the conduct of any business(or units representing such shares) and the actionopportunity to defer a portion of their compensation, in order to provide greater incentives for those non-employee Directors to attain and maintain the majorityhighest standards of performance, to attract and retain non-employee Directors of outstanding competence and ability, to stimulate the directors present in person or by proxy as hereinafter provided, at a meeting at which a quorum is so present, shall constitute the actionactive interest of the Board of Directors.8.8. Meetings of the Board of Directors may be held in or outsidethe Netherlands AntillesCuracao.8.9. Meetings may be held through telephone conference, video conference or other real time communication allowing allsuch persons participating in the meeting to hear each other or through any other device permitted by then applicable law,development 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 telegram, telefax, electronic mail or other communication device to such action taken or being taken, and provided further that all directors are promptly notified of such action being taken or having been taken.Article 99.1. 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 his successor is elected and qualified or until his 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,A-6acknowledged 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.A-7Article 1010.1. 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 directorfinancial success of the Company, to further the fullest extent allowedidentity of interests of such non-employee Directors with those of the Company’s stockholders generally, and to reward such non-employee Directors for outstanding performance. The Plan was originally established effective April 14, 2004 and approved 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 controlstockholders of the Company which shall be deemedatthetheir April 2004 annualgeneral meeting. Effective April 19, 2007, the Plan was amended and restated to have occurred if at any time (i) any entity, personallowa non-employeeDirectorsDirector to defer the payment of part or organizationall of his or her Cash Compensation.The Plan is or becomeshereby amended and restated effective January 19, 2012.legal or beneficial owner, directly or indirectly, of securitieslast day 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 any15-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 courtcalendar month in which such action or suit was brought or any other court having appropriate jurisdiction shall determine upon application that, despiteoccurs the adjudication of liability but in view of allfirst Board meeting following 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 thisA-8Article, 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 his status 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 which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the Company” as referred to in this Article.MEETINGS OF STOCKHOLDERSArticle 1111.1. All general meetings of stockholders shall be held in Curaçao or anywhere else in the Netherlands Antilles.A-9accordance with Article IV hereof.11.2. Theregular annual general meeting of the stockholders shall be held withinof the maximum period allowed under applicable law, onCompany, or, if the last day of the calendar month is not a date determined from year to year bybusiness day, then the next business day.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 PresidentDirectors” 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 2:129NACCCC, or by one or more holders of shares representing in the aggregate a majority of the shares then outstanding, or as provided for in Article 8.6.11.4. 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 not less than twenty (20) or more than sixty (60) days prior to the date of the meeting in question by notice to each stockholder at the address thereof appearing in the Register.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 or directors, any notice given by the Company shall be effective if given by a form of electronic transmission consented to by the person to whom the notice is given. Any such consent shall be revocable by written notice received by the Company.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”“Board” 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 1212.1. Every stockholder 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 thatCompany.stock transfer books shall be closedtotal cash compensation which is paid to Eligible Directors for services rendered, including any annual retainer fees and any annual fees related to committee membership or services as 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,committee chair.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,committee as is designated by the Board to administer the Plan in accordance with Article II, or if no such committee is designated, the Board.Directors may fixthe Company.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 aA-10general meeting of stockholders, not less than ten (10) days prior to“Determination Date” means 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 paymentdelivery of a dividendParticipant’s deferred Stock Awards or other distributionCash Compensation is made 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,commences, 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 1313.1. 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 MEETINGSArticle 1414.1. 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 inthe Netherlands AntillesCuracao 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 andthe laws of the Netherlands AntillesCuracao law as to General Meetings of Stockholders shall, mutatis mutandis, apply, if not otherwise provided in this Article.A-11FISCAL YEARArticle 15The fiscal year of the Company shall be the calendar year.BALANCE SHEET AND PROFIT AND LOSS ACCOUNTArticle 1616.1. 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 stockholdersdetermined in accordance with paragraph 2 of Article 11, together with the annual report. From the date at which the noticeSection 5.1.annual general meeting of stockholdersBoard.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 PROFITSArticle 1717.1. 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 ASSETSArticle 18Notwithstanding 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; provided, however, the foregoing shall not apply to any reorganization or rearrangementemployee of the Company or of any of its subsidiariessubsidiaries.anymoney fund assets to be determined by the Committee to be in effect from time to time.its assetsshares of Common Stock, restricted Common Stock or restricted Stock Units pursuant to Article III.any transaction whereby therethe account as of the last day of the quarter and the returns realized by the Standard & Poor’s 500 Index for the quarter.no diminutionadministered by the Committee.beneficial interest of the stockholdersbest interests of the Company and in such assets.A-12LIQUIDATIONArticle 19Notwithstandingkeeping with the objectives of this Plan. The Committee shall also have the full and exclusive power to adopt rules, procedures, guidelines and sub-plans to this Plan relating to the operation and administration of the Plan to accommodate the specific requirements of local laws and procedures in foreign jurisdictions. The Committee may, in its discretion, determine the eligibility of individuals to participate herein, determine the amount of Stock Awards or Cash Compensation a Participant may elect to defer, or waive any restriction or other provision of Article 13,this Plan. The Committee may correct any resolution providing fordefect or supply any omission or reconcile any inconsistency in this Plan in the dissolution, liquidationmanner and to the extent the Committee deems necessary or winding updesirable to carry it into effect.shall be valid only if duly adopted at a general meeting of stockholders byto whom 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 OUTArticle 20Any 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 andCommittee has delegated authority in accordance with the provisions of Article 2:250NACCCC.AMENDMENTSArticle 2121.1. NotwithstandingSection 2.5 of this Plan shall be liable for anything done or omitted to be done by him or her, by 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 majoritymember 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 amendmentCommittee or amendments or shall have stated that a copy of such text has been deposited at the officeby an officer of the Company in Curaçaoconnection with the performance of any duties under this Plan, except for inspectionhis or her own willful misconduct or as expressly provided by statute.300,000450,000 shares of Common Stock(as adjusted to reflect the 2-for-1 stock split effected in 2007 (the “Stock Split”)). Shares of Common Stock will be made available from either(a) the Company’s authorized but unissued shares or(b) treasury shares that have been issued but reacquired by the Company.(1)each such annual Stock Award may not exceed4,0006,000 shares of Common Stock, restricted Common Stock or restricted Stock Units, and (2) no more than 60,000 shares of Common Stock (as adjusted for the Stock Split), restricted Common Stock or restricted Stock Units may be awarded in any calendar year. The Stock Award shall be subject to such terms, conditions and restrictions (including vesting) as the Committee may determine in its discretion in connection with such award.the last dayDecember 30 oftheeach calendar year preceding theapplicable Annual Director Award Date and (ii) for Cash Compensation, no later than the last day of the calendar year immediately preceding the calendar year in which such payments would have otherwise been paid.Effective beginning in 2008,Deferral Elections may be completed by newly appointed Eligible Directors no later than the date that is 30 days after the date such individual first becomes an Eligible Director; provided that such Deferral Election may apply solely to Stock Awards or Cash Compensation related to services to be performed subsequent to such Deferral Election. The Committee shall be authorized to adopt such other rules and limitations as it shall determine are necessary or appropriate with respect to the timing of elections to defer Stock Awards or Cash Compensation under the Plan.limitationlimitations designated in Section 3.2 of this Plan shall each be proportionately adjusted by the Board to reflect such transaction. In the event of any other recapitalization or capital reorganization of the Company, any consolidation or merger of the Company with another corporation or entity, the adoption by the Company of any plan of exchange affecting any class of Common Stock or any distribution to holders of any class of Common Stock of securities or property (other than normal cash dividends or dividends payable in Common Stock), the Board shall make appropriate adjustments to (i) the number of restricted Stock Units relating to such class of Common Stock; (ii) the appropriate fair market value and other price determinations for such restricted Stock Units; (iii) the number of shares reserved for issuance under this Plan in Section 3.1 and (iv) thelimitationlimitations designated in Section 3.2 of this Plan to give effect to such transaction; provided that such adjustments shall only be such as are necessary to preserve, without increasing, the value of such items. In the event of a corporate merger, consolidation, acquisition of property or stock, separation, reorganization or liquidation, the Board shall be authorized to issue or assume restricted Stock Units by means of substitution of new restricted Stock Units, as appropriate, for previously issued restricted Stock Units or an assumption of previously issued restricted Stock Units as part of such adjustment.paymentspayment equal to the amount of the aggregate dividend equivalents representing cash dividends payable with respect to the Company’s Common Stock, if any, over the period beginning on the Annual Director Award Date and ending on the Determination Date. As of the Determination Date, a Participant’s Cash Compensation deemed to be invested in Money Market Equivalents or S&P 500 Equivalents, plus any amounts credited to a Participant’s Deferred Compensation Account pursuant to Section 4.6 herein, shall be payable in the form of a cash lump sum. As of the Determination Date, a Participant’s Cash Compensation deemed to be invested in shares of the Company’s Common Stock shall be payable in the form of shares of the Company’s Common Stock plus a cashpaymentspayment equal to the amount of the aggregate dividend equivalents.remain available for inspection untilbe interpreted accordingly. To the conclusionextent it would not adversely impact the Company, the Company agrees to interpret, apply and administer this Plan in the least restrictive manner necessary to comply with such requirements and without resulting in any diminution in the value of said meeting.21.2. Any amendmentpayments or benefits 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 asParticipants. No action taken 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 LANGUAGEArticle 22Participant’s rights under this Plan.The official language of these Articles of Incorporationcomply with Section 409A shall be deemed to adversely affect the English language.A-13SCHLUMBERGER LIMITED 
— -www.proxyvote.comSCHLUMBERGER LIMITEDfollow the instructions to obtain your records and to create an electronic voting5599 SAN FELIPE, 17TH FLOORinstruction form.HOUSTON, TX 77O56—- 1-800-690-6903 M29712-P05197 THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.DETACH AND RETURN THIS PORTION ONLYSCHLUMBERGER LIMITED The Board of Directors recommends you vote
FOR the following:For Against Abstain P. CAMUS0 0 0¨ ¨ ¨ P. CURRIE0 0 0 For Against Abstain1c. A. GOULD0 0 01m. P. KIBSGAARD0 0 01d. T. ISAAC0 0 01n. L. S. OLAYAN0 0 0 Tony Isaac ¨ ¨ ¨ The Board of Directors recommends you vote FOR the following proposal:1e. proposals:For Against Abstain K. V. KAMATH0 0 0Vaman Kamath¨ ¨ ¨ thean advisory resolution on executive compensation.0 0 01f. N. KUDRYAVTSEV0 0 0 The Board of Directors recommends you vote 3 Years 2 Years 1 Year Abstain 2 years on the following proposal:1g. A. LAJOUS0 0 0¨ ¨ ¨ Paal Kibsgaard ¨ ¨ ¨ Advisory vote on the frequency of future advisory0 0 0 0votes on executive compensation. 1h. M. E. MARKS0 0 0 The Board of Directors recommends you vote FOR the For Against Abstain following proposals:1i. E. MOLER0 0 04. To approve the amendment to the Company’s Articles of0 0 0Incorporation to increase the authorized common share capital. 1j. L. R. REIF0 0 05. To approve the amendments to the Company’s Articles0 0 0of Incorporation to clarify the voting standard in contested director elections and to make certain other changes. 1k. T. I. SANDVOLD0 0 06. To approve the Company’s 2011 financial statements and0 0 0 declaration declarations of dividends. 7.¨ ¨ ¨ Nikolay Kudryavtsev ¨ ¨ ¨ 1l. H. SEYDOUX0 0 0public accounting firm.0 0 0¨ ¨ ¨ ¨ ¨ ¨ ¨ ¨ ¨ ¨ ¨ ¨ ¨ ¨ ¨ ¨ ¨ ¨ ¨ ¨ ¨ ¨ ¨ ¨ ¨ ¨ ¨
should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer.Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com. M29713-P051976, 201111, 20126, 2011,11, 2012, at 10:30 a.m. Curacao time and any adjournment or postponement thereof.2 YEARS WITH RESPECT TO ITEM 3 AND FOR ITEMS 2, 3, 4 5, 6 AND 7.5. IF ANY OTHER MATTERS PROPERLY COME BEFORE THE ANNUAL GENERAL MEETING OF STOCKHOLDERS, THE PERSONS NAMED IN THIS PROXY WILL VOTE ON SUCH MATTERS IN THEIR DISCRETION. Continued and to be signed on reverse side