Transocean Proxy Statement and 2010 Annual Report

AGENDA ITEM 6.
Conditional Agenda Item: Release and Allocation of Legal Reserve, Reserve From Capital Contributions,
to Dividend Reserve From Capital Contributions; Dividend Distribution out of the
Dividend Reserve From Capital Contributions
Proposal of the Board of Directors
The Board of Directors proposes that (A) CHF 1,937,000,000 of legal reserve, reserve from capital
contributions, be released and such amount be allocated to ‘‘dividend reserve from capital contributions’’
(the ‘‘Dividend Reserve’’) and (B) a dividend in the amount of USD 3.16 per share of the Company be
distributed out of, and at a maximum limited to the amount of, such Dividend Reserve and paid in four
installments. Dividend payments shall be made with respect to the outstanding share capital of the
Company on the record date for the applicable installment, which amount will exclude any shares held by
the Company or any of its direct or indirect subsidiaries. The proposed shareholder resolution is included
in Annex A.
Explanation
On January 1, 2011, a new tax law regarding the distribution of additional paid-in capital came into
force. Under the new tax law, distributions of qualifying additional paid-in capital in the form of a dividend
are no longer subject to Swiss federal withholding tax. The Board of Directors is proposing that, in lieu of a
dividend out of available earnings, a dividend be made in the form of a dividend of qualifying additional
paid-in capital because such a dividend is not subject to Swiss federal withholding tax. The Board of
Directors believes that such a dividend distribution should only be made if the 2010 Distribution is
discontinued and shareholders approve the resolution proposed under Agenda Item 5, according to which
the 2010 Distribution Resolution would be rescinded. Accordingly, a vote by shareholders at the 2011
Annual General Meeting on this Agenda Item 6 is contingent on shareholder approval of the proposal by
the Board of Directors under Agenda Item 5. In addition, a vote on this Agenda Item 6 is contingent on
shareholder approval of the proposal of the Board of Directors under Agenda Item 3.
On this contingent basis, the Board of Directors is seeking shareholder approval of a dividend in the
amount of USD 3.16 per share of the Company. Subject to the Dividend Reserve not being exceeded, as
further explained below, the dividend would be distributed to shareholders in four installments at such
times and with such record dates as shall be determined by the Board of Directors. The Board of Directors
expects that the four payment dates will be set in June 2011, September 2011, December 2011, and March
2012. Dividend payments shall be made with respect to the outstanding share capital of the Company on
the record date for the applicable installment, which amount will exclude any shares held by the Company
or any of its direct or indirect subsidiaries.
The aggregate U.S. dollar dividend amount approved at the annual general meeting and paid out to
shareholders must at no time exceed the Swiss franc-denominated additional paid-in capital available to
shareholders for the aggregate 2011 dividend (including all four installments). The Board of Directors is
proposing that CHF 1,937,000,000 of the existing additional paid-in capital (which under Swiss law is
referred to as ‘‘legal reserve, reserve from capital contributions’’), or approximately USD 6.65 per share
based on a USD/CHF exchange rate of approximately CHF 0.912 per USD 1 in effect on March 16, 2011,
be made available for purposes of the aggregate 2011 dividend (including all four installments) by way of a
release and allocation to the account ‘‘Dividend Reserve.’’ Based on the number of shares outstanding as
of March 16, 2011 and an exchange rate of CHF 0.912 per USD effective as of the same date, the amount
of the proposed aggregate dividend (including all four installments) under this Agenda Item 6 would be
CHF 920,964,114. Accordingly, the Dividend Reserve exceeds the aggregate USD dividend amount by
approximately 110.3%. The Board of Directors is proposing this excess amount in order to increase the
likelihood that the issuance of new shares after the date hereof (which shares, to the extent then
outstanding, would generally share in the quarterly dividend installments) and a decrease in value of the
Swiss franc relative to the U.S. dollar will not reduce the per share amount of the dividend installments
paid. If, notwithstanding the allocation of this excess amount to the Dividend Reserve, the Dividend
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