Transocean Proxy Statement and 2010 Annual Report

AGENDA ITEM 5.
Rescission of the Distribution to Shareholders in the Form of a Par Value Reduction
as Approved at the 2010 Annual General Meeting
Proposal of the Board of Directors
The Board of Directors proposes that the resolution of the 2010 Annual General Meeting (the ‘‘2010
Distribution Resolution’’), by which the distribution to shareholders in the form of a par value reduction in
an amount in Swiss francs equal to USD 3.11 per issued share (including treasury shares) to be calculated
and paid in U.S. dollars in four quarterly installments (the ‘‘2010 Distribution’’), was approved, be
rescinded. The effect of this Agenda Item 5, if approved, is that the 2010 Distribution will not be made to
shareholders, and any steps initiated, or to be initiated, by the Board of Directors to implement the 2010
Distribution Resolution, including, but not limited to, the appeal to the Swiss Federal Supreme Court, to
achieve the registration of the initial quarterly installment of the 2010 Distribution, will no longer be
pursued.
Explanation
As previously disclosed, the commercial register rejected the registration of the initial installment of
the 2010 Distribution, and upon appeal by the Company the Administrative Court of the Canton of Zug
upheld the commercial register’s rejection. After a comprehensive review of all legal, procedural, financial
and other aspects relevant to the implementation of the 2010 Distribution, including the uncertainty of the
timing and outcome of the pending appeal with the Swiss Federal Supreme Court, the Board of Directors
believes it is in the best interest of the Company to discontinue with the disputed 2010 Distribution and ask
shareholders to rescind the 2010 Distribution Resolution. On March 7, 2011, the Swiss Federal Supreme
Court granted the Company’s request to stay the appeal proceedings until shareholders have voted on the
proposed rescission of the 2010 Distribution Resolution. Instead of the 2010 Distribution, the Board of
Directors is proposing to the 2011 Annual General Meeting the distribution of a dividend out of qualifying
additional paid-in capital in an amount of USD 3.16 per outstanding share, payable in four installments.
The proposed dividend under Agenda Item 6 is contingent upon shareholder approval of the proposal of
the Board of Directors under Agenda Item 3 (carry forward of the entire available earnings) and the
proposal of the Board of Directors under this Agenda Item 5. Accordingly, a vote against this Agenda
Item 5 will have the effect that no dividend out of qualifying additional paid-in capital will be paid to
shareholders. Under new Swiss tax laws effective January 1, 2011, like a distribution by way of a par value
reduction, shareholders will not incur Swiss withholding tax on the proposed dividend out of qualifying
additional paid-in capital. Unlike a distribution by way of a par value reduction, a dividend paid out of
qualifying additional paid-in capital will not require registration with the commercial register.
Voting Requirement to Approve Proposal
The affirmative ‘‘FOR’’ vote of a majority of the votes cast in person or by proxy at the annual general
meeting, not counting abstentions or blank or invalid ballots.
Recommendation
The Board of Directors recommends a vote ‘‘FOR’’ this proposal.
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