Transocean Proxy Statement and 2010 Annual Report

TRANSOCEAN LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — Continued
December 31, 2009 and 2008, respectively. The total grant-date fair value of deferred units that vested was $33 million and $3 million for
the years ended December 31, 2009 and 2008, respectively.
SARs—The following table summarizes share-settled SARs activity under our incentive plans during the year ended
December 31, 2010:
AR-112
Number
of
awards
Weighted-average
exercise price
per share
Weighted-average
remaining
contractual term
(years)
Aggregate
intrinsic value
(in millions)
Outstanding at January 1, 2010 189,139 $ 93.28 6.76 $ —
Outstanding at December 31, 2010 189,139 $ 93.28 5.76 $ —
Vested and exercisable at December 31, 2010 189,139 $ 93.28 5.76 $ —
At January 1 and December 31, 2010, we have presented the aggregate intrinsic value as zero since the weighted-average
exercise price per share exceeded the market price of our shares on those dates. We did not grant share-settled SARs during the years
ended December 31, 2010, 2009, and 2008. There were no performance-based options exercised during the year ended December 31,
2010. There were 224 and 315,408 share-settled SARs exercised, with a total pretax intrinsic value of zero, during the years ended
December 31, 2009 and 2008, respectively. There were no unvested share-settled SARs outstanding as of December 31, 2010, 2009 and
2008.
Performance-Based Awards
Stock options—We grant performance-based stock options (“performance-based options”) that can be earned depending on
the achievement of certain performance targets. The number of options earned is quantified upon completion of the performance period at
the determination date. The following table summarizes vested and unvested performance-based option activity under our incentive plans
during the year ended December 31, 2010:
Number
of shares
under option
Weighted-average
exercise price
per share
Weighted-average
remaining
contractual term
(years)
Aggregate
intrinsic value
(in millions)
Outstanding at January 1, 2010 179,262 $ 75.30 6.22 $ 1
Outstanding at December 31, 2010 179,262 $ 75.30 5.22 $ —
Vested and exercisable at December 31, 2010 179,262 $ 75.30 5.22 $ —
At December 31, 2010, we have presented the aggregate intrinsic value as zero since the weighted-average exercise price per
share exceeded the market price of our shares on that date. We did not grant performance-based options during the years ended
December 31, 2010, 2009 and 2008. There were no performance-based options exercised during the years ended December 31, 2010
and 2009. There were 212,840 performance-based options exercised, with a total pretax intrinsic value of $22 million, during the year
ended December 31, 2008. There were no unvested performance-based stock options outstanding as of December 31, 2010, 2009 and
2008.
Market-Based Awards
Deferred units—We grant market-based deferred units (“market-based units”) that can be earned depending on the
achievement of certain market conditions. The number of units earned is quantified upon completion of the specified period at the
determination date. The following table summarizes unvested activity for market-based units granted under our incentive plans during the
year ended December 31, 2010:
Number
of
units
Weighted-average
grant-date fair value
per share
Unvested at January 1, 2010 330,870 $ 93.70
Granted 122,934 82.55
Forfeited (30,898 ) 84.48
Unvested at December 31, 2010 422,906 $ 89.14
There were 285,012 and 99,464 market-based units granted with a weighted-average grant-date fair value of $75.98 and
$144.32 per share during the years ended December 31, 2009 and 2008, respectively. No market-based units vested in the years ended
December 31, 2009 and 2008.