Exhibit 10.2

 

OPTION AGREEMENT

SCHLUMBERGER <<year>> STOCK OPTION PLAN

 

INCENTIVE STOCK OPTION

 

Optionee: «fn» «ln»

 

SCHLUMBERGER LIMITED, a Netherlands Antilles corporation (the “Company”), hereby
grants to you on <<date>> an incentive stock option to purchase a maximum amount
of «shgtd» shares (the “Maximum Option Shares”) of Common Stock of the Company,
par value $0.01 per share, at a price of $<<price>> (the “Exercise Price”) per
share (the ”ISO”), provided, however, that the number of shares purchasable
under this ISO may be less than the Maximum Option Shares, as more fully
described below. Your ISO is subject to all the terms and conditions of the
Schlumberger <<year>>Stock Option Plan as amended and in effect on the date
hereof (the “Plan”) and this Agreement. Your ISO is intended to constitute an
“incentive stock option” under Section 422 of the U.S. Internal Revenue Code of
1986 (the “Code”) and the Treasury Regulations promulgated thereunder.

 

The number of shares subject to this ISO is capped such that at any time, the
number of shares subject to this ISO is equal to the lesser of: (i) the Maximum
Option Shares with respect to which the ISO is exercisable less the number of
shares previously purchased pursuant to this ISO or (ii) the number of shares
determined such that the total spread (as defined below) which would be realized
upon an exercise with respect to such number of shares would equal the product
of (A) the number of shares determined in (i) above and (B) 125% of the Exercise
Price. The “spread” for this purpose is the difference between the aggregate
exercise price and aggregate fair market value of the shares as to which the ISO
is exercisable, with fair market value determined as of the trading day
preceding the applicable date. If, pursuant to this paragraph, the number of
shares subject to this ISO includes fractional shares, the number of shares
subject to the ISO will be rounded down to the nearest whole share.

 

This ISO expires on <<date>>

 

The shares subject to this ISO shall become purchasable in installments which
are cumulative. The date on which each installment will become exercisable and
the maximum number of shares comprising each installment are as follows:

 

DATE

--------------------------------------------------------------------------------

   MAXIMUM OPTION SHARES

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«vdp1»

   «sp1»

«vdp2»

   «sp2»

«vdp3»

   «sp3»

«vdp4»

   «sp4»

 

This ISO may be exercised only by delivering to the Company a written notice
specifying the number of shares you wish to purchase. The Compensation
Committee, authorized by the Company to administer the Plan (the “Committee”),
hereby notifies you that the ISO price may be paid, subject to such rules and
procedures as the Committee may prescribe from time to time, (1) in cash or
certified check, (2) by the delivery of shares of Common Stock of the Company
with a fair market value at the time of exercise equal to the total ISO price or
(3) by a combination of the methods described in (1) and (2).

 

To assist you in the acquisition of shares pursuant to the exercise of this ISO,
the Committee in its sole discretion has authorized the extension of an option
financing program coordinated with Fiserv Investor Services. The terms and
procedures of this program or any such program that the Committee may authorize
in the future will be communicated to you.

 

This ISO will expire earlier than the date set forth above if you terminate
employment with the Company or subsidiary (within the meaning of Code Section
424(f)). If you terminate employment with consent of the Company, any exercise
of this ISO must be made within three (3) months of termination of employment
(or expiration date, if earlier) and then only to the extent the ISO was
exercisable upon termination, unless you “retire” within the meaning of Section
5(c)(v) of the Plan or terminate employment due to death. Section 5 of the Plan
provides specific rules for exercise of this ISO on termination of employment
due to retirement or death and its terms are hereby incorporated in this
Agreement. If termination of your employment is because of breach of your
employment contract or your misconduct, this ISO will immediately expire and
terminate. Termination of your employment without consent of the Company will
cause your ISO to expire immediately.

 

This ISO may be forfeited, and any exercise you have made of this ISO may be
rescinded, as further described below, if you engage in certain ‘detrimental
activity’ as defined in the Plan. Specifically, if you engage in detrimental
activity within one year following termination of employment for any reason
other than retirement, this ISO will immediately expire and terminate and the
Committee may rescind any exercise that you made under this option within six
months preceding or three months following your termination. If you engage in
detrimental activity within five years following termination of employment by
reason of retirement, this ISO will immediately expire and terminate and the
Committee may rescind any exercise that you made under this option within six
months preceding or one year following

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your termination by retirement. In the event that any option exercise is
rescinded by the Committee as described above, you will be obligated to pay the
Company an amount equal to the spread on the shares with respect to which the
rescinded exercise applied. (The “spread” for this purpose is the difference
between the aggregate exercise price and aggregate fair market value of the
shares as to which you exercised your option, with fair market value determined
as of the exercise date.)

 

As contemplated by the Plan, you agree that you will not exercise your ISO or
any portion thereof and that no obligation exists to issue or release shares of
stock or accept an exercise of this ISO if the issuance or release of shares or
the acceptance of the ISO exercise by the Company or a subsidiary constitutes a
violation of any governmental law or regulation.

 

This ISO is not transferable or assignable except by will or laws of descent and
distribution and then only to the extent exercisable at death. Any exercise of
this ISO after your death must be made by the person or persons entitled to make
such exercise under your will or by the laws of descent and distribution before
expiration of the ISO.

 

By entering into this Agreement and accepting the grant of this ISO as evidenced
hereby, you acknowledge and agree that subject to the terms of the Plan and this
Agreement, (i) the Plan is discretionary in nature; (ii) the grant of this ISO
is a one-time benefit which does not create any contractual or other right to
receive future grants of options, or benefits in lieu of options; (iii) all
determinations with respect to any such future grants, including, but not
limited to, the times when options shall be granted, the number of shares
subject to each option, the option price, and the time or times when each option
shall be exercisable, will be at the sole discretion of the Committee; (iv) your
participation in the Plan is voluntary; (v) the value of this ISO is an
extraordinary item of compensation which is outside the scope of your oral,
written or implied employment contract, if any; (vi) this ISO is not part of
normal or expected compensation for purposes of calculating any severance,
resignation, redundancy, end of service payments, bonuses, long-service awards,
pension or retirement benefits or similar payments; (vii) the vesting of this
ISO ceases upon termination of employment for any reason except as may otherwise
be explicitly provided in the Plan document; and (viii) the future value of the
underlying shares is unknown and cannot be predicted with certainty.

 

By entering into this Agreement, you (i) authorize the Committee, the Company
and the employer entity, and any agent of the Committee administering the Plan
or providing Plan recordkeeping services, to disclose to the Committee, the
Company or any of its affiliates such information and data as the Committee or
the Company shall request in order to facilitate the grant of options and the
administration of the Plan; (ii) waive any data privacy rights you may have with
respect to such information; and (iii) authorize the Company and any such agent
to store and transmit such information in electronic form.

 

The Plan and prospectus are both available on-line at www.stock-options.slb.com.
A paper copy of the Plan and/or prospectus may be obtained by contacting the
Stock Option Department, Schlumberger Limited, 153 East 53rd Street, 57th Floor,
New York, New York 10022. By executing this Agreement, you acknowledge that you
have reviewed a copy of the Plan and are familiar with its terms.

 

Kindly indicate your acceptance by signing both copies of this Agreement and
returning one copy to the Stock Option Department, Schlumberger Limited, 153
East 53rd Street, 57th Floor, New York, New York 10022, no later than <<date>>.
If you do not return a signed copy of this Agreement to the above address by
<<date>>, you will be deemed to have rejected this ISO, this ISO will be
immediately forfeited and you shall have no rights under this Agreement.

 

SCHLUMBERGER LIMITED

By

 

 

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<<name of officer>>

   

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Optionee