EXHIBIT 8.2
[FULBRIGHT & JAWORSKI LETTERHEAD]
July 27, 1998
Camco International Inc.
7030 Ardmore
Houston, Texas 77054
Gentlemen:
You have requested our opinion concerning certain United States federal
income tax consequences of the proposed merger (the "Merger") of Schlumberger
OFS, Inc., a Delaware corporation ("Sub") and wholly-owned subsidiary of
Schlumberger Technology Corporation, a Texas corporation ("STC"), with and into
Camco International Inc., a Delaware corporation ("Camco"). Pursuant to the
Merger, STC will acquire all of the stock of Camco solely in exchange for voting
stock of Schlumberger Limited, a Netherlands Antilles corporation
("Schlumberger") and the owner of all of the issued and outstanding stock of
STC.
Descriptions of the parties and of the Merger and related transactions
are set forth in (i) the Agreement and Plan of Merger by and among Camco, Sub,
and STC, dated as of June 18, 1998 (the "Merger Agreement"), and (ii) the
Transaction Agreement by and between Schlumberger and Camco, dated as of June
18, 1998 (the "Transaction Agreement" and together with the Merger Agreement,
the "Agreements").
Camco, Schlumberger and STC have represented to us that the information
contained in the Agreements and in the Joint Proxy Statement/Prospectus included
as part of the Registration Statement on Form S-4 filed with the Securities and
Exchange Commission on July 27, 1998 (the "Registration Statement"), is accurate
and complete. Also, we assume such information (including all information
contained in amendments thereto) will be accurate and complete as of the
effective time of the Merger. In connection with this opinion we have reviewed
the Agreements, and Camco, Schlumberger and STC have represented to us that the
Merger and related transactions will be carried out in accordance with the terms
of the Agreements.
SUMMARY OF TRANSACTIONS
-----------------------
Pursuant to the Merger Agreement, at the effective time Sub will be
merged with and into Camco pursuant to the provisions of and with the effect
provided in the General Corporation Law of the State of Delaware. Camco will be
the surviving corporation resulting from the Merger. In the Merger, Camco will
succeed to all of the assets of Sub.
Camco International Inc.
July 27, 1998
Page 2
At the effective time of the Merger, the issued and outstanding capital
stock of Camco will consist solely of shares of common stock, $.01 par value
("Camco Stock"). In the Merger, each share of Camco Stock not owned by Camco,
Schlumberger, STC, Sub or any wholly-owned subsidiary of Camco, Schlumberger,
STC or Sub, will be converted into one and eighteen-hundredths (1.18) shares of
voting common stock, $.01 par value, of Schlumberger ("Schlumberger Stock") as
provided in the Merger Agreement.
Pursuant to the Merger Agreement, cash will be paid in lieu of any
fractional shares of Schlumberger Stock. Apart from the cash paid in lieu of
fractional shares, the consideration paid to Camco shareholders for their Camco
Stock will consist solely of Schlumberger Stock.
The Agreements provide that the parties intend the Merger to constitute a
reorganization, within the meaning of section 368(a) of the Internal Revenue
Code of 1986, as amended (the "Code"). Further, Camco, Schlumberger and STC
have made certain representations to us in certificates dated the same date as
this opinion. Copies of those certificates are attached hereto as Exhibit A.
OPINION
-------
Based upon the foregoing and such legal considerations as we deem
relevant, and provided Camco timely complies with all reporting requirements
contained in section 1.367(a)-3(c)(6) of the Treasury Regulations, it is our
opinion that for United States federal income tax purposes:
1. The Merger will qualify as a reorganization within the meaning of
section 368(a) of the Code;
2. Schlumberger, STC and Camco will each be a party to the
reorganization within the meaning of section 368(b) of the Code;
3. No gain or loss will be recognized by the shareholders of Camco as
a result of the Merger upon the conversion of shares of Camco
Stock solely into shares of Schlumberger Stock, except that gain
or loss will be recognized on the receipt of cash, if any,
received in lieu of fractional shares; and
4. No gain or loss will be recognized by Camco as a result of the
Merger.
Camco International Inc.
July 27, 1998
Page 3
LIMITATIONS AND QUALIFICATIONS
------------------------------
This opinion is based on statutes, regulations promulgated thereunder,
and governmental rulings and court decisions published to date, all of which are
subject to change by the Congress, governmental agencies, and the courts. Our
opinion does not address all tax consequences applicable to the Merger and is
limited to the conclusions set forth above, and no other opinions are expressed
or implied. Moreover, tax consequences which are different from or in addition
to those described herein may apply to Camco shareholders who are subject to
special treatment under the United States federal income tax laws, including,
without limitation, those referred to in the first paragraph under "The Merger
and Related Transactions -- Certain United States Federal Income Tax
Consequences" of the Joint Proxy Statement/Prospectus forming a part of the
Registration Statement. Further, our opinion is limited to the United States
federal income tax consequences of the transactions described herein. Thus, for
example, no opinion is expressed concerning any state, local, or foreign tax
consequences of such transactions.
The parties have not requested or received any advance ruling from the
Internal Revenue Service (the "Service") pertaining to the transactions
described herein. Our opinion is not binding upon the Service or any court.
Accordingly, the Service may challenge some or all of the conclusions set forth
above in an audit of a Camco shareholder or of one or more of the parties to the
Merger. If such challenge occurs, it may be necessary to resort to
administrative proceedings or litigation in an effort to sustain such
conclusions, and there can be no assurance that such conclusions ultimately will
be sustained.
In the event that the Merger were held not to qualify as a reorganization
under section 368(a) of the Code, a Camco shareholder would recognize gain or
loss in an amount equal to the difference between the shareholder's basis in his
or her shares and the fair market value, as of the effective date of the Merger,
of the Schlumberger Stock and cash in lieu of fractional shares received in
exchange therefor. In such event, the shareholder's basis in the Schlumberger
Stock so received would be equal to its fair market value as of the effective
date of the Merger, and the holding period for such stock would begin on the day
after the effective date of the Merger.
The opinions set forth above are based in part upon facts and
representations concerning the transactions contained in the Agreements and upon
the additional representations set forth in the certificates of Camco,
Schlumberger and STC, copies of which are attached hereto as Exhibit A. We have
informed the parties that any consideration paid for Camco Stock other than
Schlumberger Stock and cash in lieu of fractional shares could cause the
exchange of Camco Stock for Schlumberger Stock to be taxable and, in addition to
the other factual representations, have been assured by Camco, Schlumberger and
STC that no consideration other than Schlumberger Stock and cash in lieu of
fractional shares will be exchanged for shares of Camco Stock. We have not made
an independent investigation to determine the accuracy or completeness
Camco International Inc.
July 27, 1998
Page 4
of such facts and representations, and our opinion is conditioned on the
accuracy and completeness of such facts and representations and upon the
assumption that they will be accurate and complete as of the effective time of
the Merger.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement, and to the reference to us under the captions "The
Merger and Related Transactions -- Certain United States Federal Income Tax
Consequences" and "Legal Matters" in the Proxy Statement/Prospectus forming a
part of the Registration Statement. In giving this consent, however, we do not
hereby admit that we are within the category of persons whose consent is
required under section 7 of the Securities Act of 1933, as amended, or the rules
and regulations of the Securities and Exchange Commission thereunder.
Very truly yours,
Fulbright & Jaworski L.L.P.
Attachments
CAMCO INTERNATIONAL INC.
OFFICER'S CERTIFICATE
The undersigned, a duly authorized officer of Camco International Inc., a
Delaware corporation ("CAMCO"), and acting as such, in connection with the
opinions to be delivered by the law firms of Fulbright & Jaworski L.L.P. and
Baker & Botts, L.L.P. with respect to the proposed merger (the "MERGER") of
Schlumberger OFS, Inc., a Delaware corporation ("SUB") and a wholly-owned
subsidiary of Schlumberger Technology Corporation, a Texas corporation ("STC"),
with and into Camco pursuant to the Agreement and Plan of Merger, dated as of
June 18, 1998 (the "MERGER AGREEMENT"), among STC, Sub, and Camco, and the
Transaction Agreement, dated as of June 18, 1998 (the "TRANSACTION AGREEMENT"
and together with the Merger Agreement, the "AGREEMENTS"), between Schlumberger
Limited, a Netherlands Antilles corporation ("SCHLUMBERGER"), and Camco, and as
a result of which STC will acquire all of the stock of Camco solely in exchange
for voting stock of Schlumberger, the owner of all of the issued and outstanding
stock of STC, and recognizing that said law firms will rely on this Certificate
in delivering their opinions, hereby certifies that to the best of his knowledge
and belief, the facts and other information contained in the Joint Proxy
Statement/Prospectus included as part of the Registration Statement on Form S-4
filed with the Securities and Exchange Commission on July 27, 1998, are true,
correct and complete, and will be true, correct and complete at the effective
time of the Merger (the "EFFECTIVE TIME"), and the undersigned further certifies
to the best of his knowledge and belief as follows:
1. The undersigned is familiar with the transactions contemplated by, and
the terms and provisions of, the Agreements, has personal knowledge of the
matters
covered by the representations made herein, and is authorized to make these
representations on behalf of Camco.
2. The fair market value of the Schlumberger stock to be received by each
Camco shareholder will be approximately equal to the fair market value of the
Camco stock to be surrendered by such shareholder in exchange therefor.
3. Prior to the Merger, (i) Camco has not redeemed (and will not redeem)
any Camco stock and has not made (and will not make) any extraordinary
distributions within the meaning of Temporary Treasury Regulation section 1.368-
1T(e)(1)(ii)(A) with respect thereto; and (ii) no person that is related to
Camco within the meaning of Temporary Treasury Regulation section 1.368-
1T(e)(2)(ii) has acquired (or will acquire) Camco stock from any holder thereof.
4. Camco has no plan or intention to issue additional shares of its stock
that would result in STC's losing control of Camco within the meaning of section
368(c) of the Internal Revenue Code of 1986, as amended (the "Code").
5. STC will acquire Camco stock solely in exchange for Schlumberger
voting stock. For purposes of this representation, Camco stock redeemed for cash
or other property furnished by STC or Schlumberger will be considered as
acquired by STC. Further, no liabilities of Camco or the Camco shareholders will
be assumed by STC or Schlumberger, nor will any of the Camco stock be subject to
any liabilities.
6. Camco and the shareholders of Camco will each pay their respective
expenses, if any, incurred in connection with the Merger.
7. At the Effective Time, Camco will not have outstanding any warrants,
options, convertible securities, or any other type of right pursuant to which
any person could acquire stock in Camco that, if exercised or converted, would
affect STC's acquisition or retention of control of Camco, as defined in section
368(c) of the Code.
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8. Following the Merger, Camco will continue its "historic business" or
use a "significant portion" of its historic business assets in a business, as
such terms are used in Treasury Regulation section 1.368-1(d).
9. Camco is not an investment company as defined in section
368(a)(2)(F)(iii) and (iv) of the Code.
10. There will be no dissenters' rights available with respect to the
Merger.
11. At the Effective Time, the fair market value of the assets of Camco
will exceed the sum of its liabilities, plus the amount of liabilities, if any,
to which the assets are subject.
12. No fractional shares of Schlumberger stock will be issued with respect
to the Merger.
13. The payment of cash in lieu of fractional shares of Schlumberger stock
is solely for the purpose of avoiding the expense and inconvenience to
Schlumberger of issuing fractional shares and does not represent separately
bargained for consideration. The total cash consideration that will be paid in
the Merger to the Camco shareholders instead of issuing fractional shares of
Schlumberger stock will not exceed one percent of the total consideration that
will be issued pursuant to the Merger to Camco shareholders in exchange for
their Camco stock. The fractional share interests will be aggregated, and no
Camco shareholder will receive cash in an amount equal to or greater than the
value of one full share of Schlumberger stock.
14. None of the compensation to be received by any shareholder-employee of
Camco will be separate consideration for, or allocable to, any of his or her
shares of Camco stock; none of the shares of Schlumberger stock to be received
by any shareholder-employee will be separate consideration for, or allocable to,
any employment agreement; and the compensation paid to any shareholder-employee
will
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be for services actually rendered and will be commensurate with amounts paid to
third parties bargaining at arm's length for similar services.
15. Less than fifty percent of both the total voting power and the total
value of the total outstanding stock of Schlumberger will be received pursuant
to the Merger, in the aggregate, by shareholders of Camco who are U.S.
transferors, within the meaning of Treasury Regulation section 1.367(a)-
3(c)(5)(v).
16. Immediately after the Merger, less than fifty percent of both the
total voting power and the total value of the stock of Schlumberger will be
owned, in the aggregate, by United States persons that are either officers or
directors of Camco or that were at least five-percent shareholders of Camco
immediately prior to the Merger. For purposes of this representation, five-
percent shareholders of Camco shall be defined and identified as prescribed by
Treasury Regulation section 1.367(a)-3(c)(5)(iii).
17. To the best knowledge of the management of Camco, for the entire
thirty-six month period immediately before the Merger, Schlumberger or a
qualified subsidiary of Schlumberger, within the meaning of Treasury Regulation
section 1.367(a)-3(c)(5)(vii), will have been engaged in the active conduct of a
trade or business outside the United States, other than the making of
investments, within the meaning of Treasury Regulation section 1.367(a)-2T(b)(2)
and (3).
18. To the best knowledge of the management of Camco, at the Effective
Time, none of the Camco shareholders will have an intention to, or to cause
Schlumberger or its qualified subsidiary to, substantially dispose of or
discontinue the active trade or business conducted outside the United States by
Schlumberger or its qualified subsidiary, as described in paragraph 17 above.
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19. At the Effective Time, the fair market value of Schlumberger, computed
according to special rules contained in Treasury Regulation section 1.367(a)-
3(c)(3)(iii)(B), will be at least equal to the fair market value of Camco.
20. To the best knowledge of the management of Camco, Camco will not be,
at the Effective Time, and has not been at any time during the five-year period
ending at the Effective Time, a United States real property holding corporation
within the meaning of section 897(c)(2) of the Code.
21. Neither Camco nor any of its subsidiaries will take or omit to take
any action (whether before, on or after the date hereof) that would cause the
Merger to fail to qualify as a reorganization within the meaning of section
368(a)(1)(B) of the Code.
22. Camco will characterize the Merger as a reorganization within the
meaning of section 368(a)(1)(B) of the Code for purposes of all Returns (as
defined in section 3.1(k)(i) of the Merger Agreement) and other filings.
23. The Merger and related transactions will be carried out in accordance
with the terms of the Agreements, including attachments thereto, and there are
no other relevant agreements, arrangements or understandings relating to the
Merger other than those described or referenced in the Agreements.
24. Camco is authorized to make all of the representations made by it and
set forth herein.
25. The facts that relate to the Merger and related transactions as
described in the Joint Proxy Statement/Prospectus included as part of the
Registration Statement on Form S-4 filed with the Securities and Exchange
Commission in connection with the Agreements are true, accurate and complete.
I understand that (i) you will rely upon the above representations by me in
connection with issuing your opinion, (ii) the representations in this
Certificate are
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made as of the date hereof and as of the Effective Time, and (iii) you may
disclose these representations in connection with issuing your opinion.
Dated: July 27, 1998.
CAMCO INTERNATIONAL INC.
By: /s/ GILBERT H. TAUSCH
-------------------------------------
Gilbert H. Tausch
President and Chief Executive Officer
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SCHLUMBERGER LIMITED
AND
SCHLUMBERGER TECHNOLOGY CORPORATION
OFFICERS' CERTIFICATE
The undersigned, duly authorized officers of Schlumberger Limited, a
Netherlands Antilles corporation ("SCHLUMBERGER"), and Schlumberger Technology
Corporation, a Texas corporation and a wholly-owned subsidiary of Schlumberger
("STC"), and acting as such, in connection with the opinions to be delivered by
the law firms of Fulbright & Jaworski L.L.P. and Baker & Botts, L.L.P. with
respect to the proposed merger (the "MERGER") of Schlumberger OFS, Inc., a
Delaware corporation ("SUB") and a wholly-owned subsidiary of STC, with and into
Camco International Inc., a Delaware corporation ("CAMCO"), pursuant to the
Agreement and Plan of Merger, dated as of June 18, 1998 (the "MERGER
AGREEMENT"), among STC, Sub and Camco, and the Transaction Agreement, dated as
of June 18, 1998 (the "TRANSACTION AGREEMENT" and together with the Merger
Agreement, the "AGREEMENTS"), between Schlumberger and Camco, and as a result of
which STC will acquire all of the stock of Camco solely in exchange for voting
stock of Schlumberger, and recognizing that said law firms will rely on this
Certificate in delivering their opinions, hereby certify that to the best of
their knowledge and belief, the facts and other information contained in the
Joint Proxy Statement/Prospectus included as part of the Registration Statement
on Form S-4 filed with the Securities and Exchange Commission on July 27, 1998,
are true, correct and complete, and will be true, correct and complete at the
effective time of the Merger (the "EFFECTIVE TIME"), and the undersigned further
certify to the best of their knowledge and belief as follows:
1. The undersigned are familiar with the transactions contemplated by,
and the terms and provisions of, the Agreements, have personal knowledge of the
matters covered by the representations made herein, and are authorized to make
these representations on behalf of Schlumberger and STC.
2. Schlumberger is the direct owner of all of the issued and outstanding
stock of STC.
3. The fair market value of the Schlumberger stock to be received by each
Camco shareholder will be approximately equal to the fair market value of Camco
stock surrendered by such shareholder in exchange therefor.
4. There will be no dissenters' rights available with respect to the
Merger.
5. Neither Schlumberger nor STC has any plan or intention to (i)
liquidate Camco, (ii) merge Camco with and into another corporation, (iii) cause
or permit Camco to sell or otherwise dispose of any of its assets, except for
(A) dispositions made in the ordinary course of business, and (B) dispositions
as might be required by law or judicial decree and other dispositions of assets
which have an aggregate fair market value not to exceed 30 percent of the total
fair market value of Camco's assets at the Effective Time, (iv) sell or
otherwise dispose of any stock of Camco, except for transfers of stock to
corporations controlled (within the meaning of section 368(c) of the Internal
Revenue Code of 1986, as amended, hereinafter the "Code") by STC, (v) cause or
permit Camco to issue additional shares of its capital stock that would result
in STC's losing control (within the meaning of section 368(c) of the Code) of
Camco, or (vi) reacquire any of the Schlumberger stock issued to the holders of
Camco stock pursuant to the Merger.
6. Schlumberger, STC and Sub will each pay their respective expenses, if
any, incurred in connection with the Merger.
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7. Pursuant to the Merger, STC will acquire all of the issued and
outstanding stock of Camco solely in exchange for Schlumberger voting common
stock. For purposes of this representation, Camco stock redeemed for cash or
other property furnished by Schlumberger or STC will be considered as acquired
by STC. Further, no liabilities of Camco or the Camco shareholders will be
assumed by Schlumberger or STC, nor will any of the Camco stock be subject to
any liabilities.
8. None of Schlumberger, STC, Sub or any of their respective subsidiaries
(i) owns, directly or indirectly, any stock of Camco, (ii) has previously owned,
directly or indirectly, any stock of Camco, except for stock (if any) which was
subsequently disposed of to unrelated parties, (iii) has any plan or intention
to acquire any stock of Camco, other than as provided in the Merger Agreement,
or (iv) has agreed to pay, will pay or will cause to be paid any consideration
(whether material or immaterial) for shares of Camco stock other than the shares
of Schlumberger voting common stock issued pursuant to the Merger Agreement and
any payments in lieu of fractional shares described in section 2.2(e) of the
Merger Agreement, which consideration could cause the Merger to fail to qualify
as a reorganization under section 368(a)(1)(B) of the Code.
9. Schlumberger has no plan or intention to redeem or otherwise acquire
any Schlumberger stock issued to the Camco shareholders pursuant to the Merger.
10. No person related to Schlumberger, STC or Sub within the meaning of
Treasury Regulation section 1.368-1(e) has acquired (or has any plan or
intention to acquire) any Camco stock other than the acquisition of Camco stock
in exchange for Schlumberger stock pursuant to the Merger.
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11. Following the Merger, Camco will continue its "historic business" or
use a "significant portion" of its historic business assets in a business, as
such terms are used in Treasury Regulation section 1.368-1(d).
12. None of Schlumberger, STC or Sub is an investment company as defined
in section 368(a)(2)(F)(iii) and (iv) of the Code.
13. None of the compensation to be received by any shareholder-employee of
Camco will be separate consideration for, or allocable to, any of his or her
shares of Camco stock; none of the shares of Schlumberger stock to be received
by any shareholder-employee will be separate consideration for, or allocable to,
any employment agreement; and the compensation paid to any shareholder-employee
will be for services actually rendered and will be commensurate with amounts
paid to third parties bargaining at arm's length for similar services.
14. No fractional shares of Schlumberger stock will be issued with respect
to the Merger.
15. The payment of cash in lieu of fractional shares of Schlumberger stock
is solely for the purpose of avoiding the expense and inconvenience to
Schlumberger of issuing fractional shares and does not represent separately
bargained for consideration. The total cash consideration that will be paid in
the Merger to the Camco shareholders instead of issuing fractional shares of
Schlumberger stock will not exceed one percent of the total consideration that
will be issued pursuant to the Merger to Camco shareholders in exchange for
their Camco stock. The fractional share interests will be aggregated, and no
Camco shareholder will receive cash in an amount equal to or greater than the
value of one full share of Schlumberger stock.
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16. At the Effective Time, Schlumberger will be in control of STC within
the meaning of section 368(c) of the Code.
17. Sub is a newly created wholly-owned subsidiary of STC that was formed
solely for purposes of effectuating the Merger.
18. Less than fifty percent of both the total voting power and the total
value of the total outstanding stock of Schlumberger will be received pursuant
to the Merger, in the aggregate, by shareholders of Camco who are U.S.
transferors, within the meaning of Treasury Regulation section 1.367(a)-
3(c)(5)(v).
19. Immediately after the Merger, less than fifty percent of both the
total voting power and the total value of the stock of Schlumberger will be
owned, in the aggregate, by United States persons that are either officers or
directors of Camco or that were at least five-percent shareholders of Camco
immediately prior to the Merger. For purposes of this representation, five-
percent shareholders of Camco shall be defined and identified as prescribed by
Treasury Regulation section 1.367(a)-3(c)(5)(iii).
20. For the entire thirty-six month period immediately before the Merger,
Schlumberger or a qualified subsidiary of Schlumberger, within the meaning of
Treasury Regulation section 1.367(a)-3(c)(5)(vii), will have been engaged in the
active conduct of a trade or business outside the United States, other than the
making or managing of investments, within the meaning of Treasury Regulation
section 1.367(a)-2T(b)(2) and (3).
21. At the Effective Time, neither Schlumberger nor, if applicable, the
qualified subsidiary referred to in paragraph 20, will have an intention to
substantially dispose of or discontinue the active trade or business conducted
outside the United States by Schlumberger or its qualified subsidiary, as
described in paragraph 20 above.
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22. At the Effective Time, the fair market value of Schlumberger, computed
according to special rules contained in Treasury Regulation section 1.367(a)-
3(c)(3)(iii)(B), will be at least equal to the fair market value of Camco.
23. None of Schlumberger, STC, Sub or any of their respective subsidiaries
will take or omit to take any action (whether before, on or after the date
hereof) that would cause the Merger to fail to qualify as a reorganization
within the meaning of section 368(a)(1)(B) of the Code.
24. Schlumberger, STC and Sub will characterize the Merger as a
reorganization within the meaning of section 368(a)(1)(B) of the Code for
purposes of all Returns (as defined in section 3.1(k)(i) of the Merger
Agreement) and other filings.
25. The Merger and related transactions will be carried out in accordance
with the terms of the Agreements, including attachments thereto, and there are
no other relevant agreements, arrangements or understandings relating to the
Merger other than those described or referenced in the Agreements.
26. Schlumberger and STC are authorized to make all of the representations
made by them and set forth herein.
27. The facts that relate to the Merger and related transactions as
described in the Joint Proxy Statement/Prospectus included as part of the
Registration Statement on Form S-4 filed with the Securities and Exchange
Commission in connection with the Agreements are true, accurate and complete.
We understand that (i) you will rely upon the above representations by us
in connection with issuing your opinion, (ii) the representations in this
Certificate are made as of the date hereof and as of the Effective Time, and
(iii) you may disclose these representations in connection with issuing your
opinion.
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Dated: July 27, 1998.
SCHLUMBERGER LIMITED
By: /s/ Victor E. Grijalva
-------------------------------------
Victor E. Grijalva
Vice Chairman
SCHLUMBERGER TECHNOLOGY
CORPORATION
By: /s/ Arthur Lindenauer
-------------------------------------
Arthur Lindenauer
President
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