Employee Share Scheme ( Employee Share Scheme ( Employee Share Scheme ( Employee Share Scheme ( ESS ESS ESS

S ESS ) ) ) ) Taxation in Australia Taxation in Australia Taxation in Australia Taxation in Australia

This memo provides a general overview on the Australian tax regulations applicable to Stock Options
(SO) and Restricted Stock Units (RSU) granted by Schlumberger Limited (SLB) to employees
who have worked in Australia (including its surrounding waters and JPDA). In particular, the
document highlights the new rules that are applicable from 1
st
July 2009.

This document serves as a guide to the ESS rules and should not be solely relied upon in
determining the impact of the ESS rules to your personal tax position. All impacted employees are
therefore encouraged to consult with their Accountant or Tax Advisor.

Stock Options Stock Options Stock Options Stock Options

For SOs, the tax and reporting obligations depend on whether the SO was granted pre or post 1
st

July 2009.

Stock Options Granted Pre-1
st
July 2009

For SOs granted pre 1
st
July 2009, the taxing point for Australian taxation purposes is the date
when the SO is exercised.

SOs (granted pre 1
st
July 2009) that vest after entry into Australia AND AND AND AND which are exercised during
your Australian assignment, are subject to taxation in Australia.

The taxable benefit, to be calculated per Australian Tax Office (ATO) rules, is the difference
between the SO exercise price and the market value of SLB stock when sold. Where part of the
vesting occurs prior to the employee commencing assignment in Australia, pro-rata rules may apply
when calculating the taxable benefit.

Stock Options Granted After 1
st
July 2009

For SOs granted after 1
st
July 2009, the taxing point for Australian taxation purposes is the date of
vesting*.

SOs (granted post 1
st
July 2009) that vest while an employee is on assignment in Australia, are
subject to taxation in Australia, in the financial year in which the vesting occurred*.

The taxable benefit, to be calculated per ATO rules, is the higher of the following:

a) Market value of SLB stock on vesting date, less the exercise price; or
b) Value calculated as per Tables 1 and 2 as contained in the Legislation.

Where part of the vesting occurs prior to the employee commencing assignment in Australia, pro-
rata rules may apply when calculating the taxable benefit.

The non-exercise or subsequent exercise of SOs outside Australia does not eliminate the taxability
of SOs vested in Australia.

The ATO rules, inclusive of the above mentioned Tables, can be found at the following URL address:

http://www.comlaw.gov.au/Details/F2010L00318

*) If SOs are exercised less than 30 days after vesting, the taxing point is the exercise date rather
than the vesting date (as per ATO guidelines).


Restricted Stock Units Restricted Stock Units Restricted Stock Units Restricted Stock Units

For RSUs, the taxing point for Australian taxation purposes is the date of vesting. RSUs that vest
while an employee is assigned in Australia, are subject to taxation in Australia, in the financial year
in which the vesting occurred.

The taxable benefit, to be calculated per ATO rules, is the difference between the price paid for the
RSUs (ie NIL) and the market value of SLB stock on vesting date. Where part of the vesting occurs
prior to the employee commencing assignment in Australia, pro-rata rules may apply when
calculating the taxable benefit.

Note, other than for use in the above pro-rata calculation, the RSU grant date does not impact the
Australian tax treatment.


Reporting Reporting Reporting Reporting

The calculated/reportable taxable benefit in respect of SOs and RSUs will be provided on the
annual ESS Statement sent to each employee participating in the ESS. Employees are required to
disclose this taxable benefit in their annual Australian personal income tax return.

With effect from the financial year ended 30
th
June 2010 onwards, Schlumberger is required (by
Law) to report this same taxable benefit data, for each employee, directly to the ATO, who may
match the data against that reported in personal income tax returns.