Transocean Proxy Statement and 2010 Annual Report

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TRANSOCEAN LTD. NOTES TO STATUTORY FINANCIAL STATEMENTS - Continued economic damages, including damages resulting from the decline in our stock price after the Macondo well incident. The third action was filed by a former shareholder of a predecessor company, alleging that the proxy statement related to our shareholder meeting in connection with our merger with the predecessor company violated Section 14(a) of the Exchange Act, Rule 14a-9 promulgated thereunder and Section 20(a) of the Exchange Act. The plaintiff claims that the predecessor company’s shareholders received inadequate consideration for their shares as a result of the alleged violations and seeks rescission and compensatory damages. Shareholder derivative claims—In June 2010, two shareholder derivative suits were filed by our shareholders naming us as a nominal defendant and certain of our officers and directors as defendants in the District Courts of the U.S. State of Texas. The first case generally alleges breach of fiduciary duty, unjust enrichment, abuse of control, gross mismanagement and waste of corporate assets in connection with the Macondo well incident and the other generally alleges breach of fiduciary duty, unjust enrichment and waste of corporate assets in connection with the Macondo well incident. The plaintiffs are generally seeking, on behalf of Transocean, restitution and disgorgement of all profits, benefits and other compensation from the defendants. Note 14—Related Party Transactions We issued 16 million of our shares (treasury shares) to Transocean Inc., 13 million and 14 million of which remain available as of December 31, 2010 and 2009, respectively, for our future use to satisfy our obligation to deliver shares in connection with awards granted under our incentive plans, warrants or other right to acquire our shares. In 2010 and 2009, we received cash dividends amounting to CHF 292 million and CHF 65 million, respectively, from our 100 percent-owned subsidiary, Transocean Inc. On March 27, 2009, Transocean Ltd. entered into a credit agreement for a CHF 56 million revolving credit facility with Transocean Management Ltd., the borrower. The variable interest rate, linked to the London Interbank Offered Rate (“LIBOR”), was 3.5 percent and 4.5 percent on December 31, 2010 and 2009, respectively. The outstanding balance was zero and CHF 31 million for the years ended December 31, 2010 and 2009, respectively. Transocean Ltd. subsidiaries perform certain general and administrative services on our behalf, including executive administration, procurement and payables, treasury and cash management, personnel and payroll, accounting and other administrative functions. These expenses are included in costs and expenses from subsidiaries in the statement of operations and totaled CHF 15 million for both years ended December 31, 2010 and 2009, of which CHF 12 million and CHF 10 million related to personnel expenses for the year ended December 31, 2010 and 2009, respectively. Note 15—Subsequent Events On January 24, 2011, we filed an appeal with the Swiss Federal Supreme Court against the decision of the Administrative Court of the Canton of Zug (see Note 4 – Par Value Reduction). Pursuant to the Invitation and Proxy Statement for the 2011 annual general meeting, the Board of Directors has proposed that shareholders at the meeting approve the rescission of the cash distribution in the form of a par value reduction approved at the 2010 annual general meeting. In addition, the Board of Directors has proposed for approval by the shareholders at the 2011 annual general meeting a U.S. dollar-denominated dividend of USD 3.16 per outstanding share out of additional paid-in capital, which is payable in four quarterly installments. The proposed dividend is, among other things, contingent on shareholders approving the rescission of the cash distribution in the form of a par value reduction approved at the 2010 annual general meeting (see Proposed Appropriation of Available Earnings). On February 18, 2011, we filed with the Swiss Federal Supreme Court a request to stay the pending appeal against the decision of the Administrative Court of the Canton of Zug until shareholders have voted on the proposed rescission of the cash distribution in the form of a par value reduction approved at the 2010 annual general meeting. SR-18
Proposed Appropriation of Available Earnings TRANSOCEAN LTD. (in CHF thousands) December 31, December 31, 2010 2009 Balance brought forward from previous years 36,713 45 Net profit of the year 224,976 36,668 Total available earnings 261,689 36,713 Balance to be carried forward on this account 261,689 Release and Allocation of Legal Reserve, Reserve From Capital Contributions, to Dividend Reserve From Capital Contributions; Dividend Out of Reserve From Capital Contribution Note: A vote by shareholders at the 2011 Annual General Meeting on the proposed release and allocation of legal reserve, reserve from capital contributions, to dividend reserve from capital contributions; and the dividend distribution out of the dividend reserve from capital contributions is contingent on the approval by shareholders at the 2011 Annual General Meeting of the proposals of the Board of Directors to (1) carry-forward all available earnings and (2) rescind the distribution to shareholders in the form of a par value reduction as approved at the 2010 Annual General Meeting. If either of these proposals is not approved, then there will be no vote on the agenda item at the 2011 Annual General Meeting regarding the distribution of a dividend out of reserve from capital contribution and, as a result, no dividend out of reserve from capital contribution will be authorized by shareholders at the 2011 Annual General Meeting. The Board of Directors submits to the shareholders a resolution containing the following elements: (1) A dividend in the amount of USD 3.16 per share of the Company (the “Per Share USD Dividend Amount,” and the aggregate Per Share USD Dividend Amount, calculated on the basis of the total number of shares outstanding as of the 2011 Annual General Meeting, excluding any shares held by the Company or any of its direct or indirect subsidiaries, the “Aggregate USD Dividend Amount”), shall be distributed out of the dividend reserve from capital contributions (expressed in CHF and amounting to CHF 1,937,000,000) approved pursuant to the proposal of the Board of Directors under Agenda Item 6(A) [sc. of the proxy statement and the invitation to the annual general meeting of the Company] (the “Dividend Reserve”); the dividend shall be payable in four equal installments of USD 0.79 per share of the Company outstanding (excluding any shares held by the Company or any of its direct or indirect subsidiaries) on the record date for the applicable installment (each such installment hereinafter a “Per Share Quarterly USD Dividend Amount”; each date on which a Per Share Quarterly USD Dividend Amount is paid hereinafter an “Installment Date”; and the aggregate Per Share Quarterly USD Dividend Amount payable on an Installment Date, calculated on the basis of the total number of shares outstanding as of the record date for the relevant Per Share Quarterly USD Dividend Amount, the “Aggregate Quarterly USD Dividend Amount”); SR-19 36,713 (in CHF thousands) Legal reserve - Free Reserve general reserve - Dividend reserve reserve from Reserve from reserve from capital capital capital contribution contribution contribution Balance as of December 31, 2010 7,925,000 3,243,051 - Proposed reallocation of free reserve - reserve from capital contribution to general legal reserves - reserves from capital contribution 3,243,051 (3,243,051) - Proposed release of general legal reserves from capital contribution to dividend reserve from capital contribution (1,937,000) - 1,937,000 Balance to be carried forward on these accounts 9,231,051 - 1,937,000
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Transocean Proxy Statement and 2010
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2010 LETTER TO THE SHAREHOLDERS We
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In addition to a focus on meeting o
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Agenda Items INVITATION TO ANNUAL G
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(9) Election of Three New Directors
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We may accept a proxy by any form o
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PROXY STATEMENT FOR ANNUAL GENERAL
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of the dividend reserve from capita
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You may revoke your proxy card at a
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AGENDA ITEM 2. Discharge of the Mem
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AGENDA ITEM 4. Reallocation of Free
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AGENDA ITEM 6. Conditional Agenda I
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Proposal of the Board of Directors
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AGENDA ITEM 8. Reduction of the Max
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Nominees for Director—Class III
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November 2007. Since August 2008, M
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The Board of Directors has conclude
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e disclosed and not whether a parti
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Submit nominations to our Corporate
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The Executive Compensation Committe
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Committee is ‘‘financially lite
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AUDIT COMMITTEE REPORT The Audit Co
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SECURITY OWNERSHIP OF DIRECTORS AND
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As a direct consequence of the Maco
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Executive Compensation Program—Gu
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$100,000. Accordingly, neither Long
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Element Targeted Position Comments
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In February 2010, the Committee rev
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Safety Performance. Our business in
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Timing of the system roll out compr
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total target value for stock option
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Executive Compensation Program—He
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Perquisites and Other Personal Bene
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• a cash severance benefit equal
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Summary Compensation Table EXECUTIV
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(17) In 2010, Mr. Toma’s base pay
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Outstanding Equity Awards at Fiscal
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Option Exercises and Shares Vested
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offset to allow for the fact that h
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Contributions are based on a partic
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(3) The terms and conditions of the
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(1) Based on the target (100%) payo
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Mr. Newman Mr. Rosa Mr. Brown Mr. B
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AGENDA ITEM 10 Appointment of Ernst
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Proposal AGENDA ITEM 11. Advisory V
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OTHER MATTERS Compensation Committe
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Annexes P-81
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(2) Shareholders may, upon the term
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3 Der Verwaltungsrat ist ermächtig
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Annex C Amended Article 22 of the A
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TRANSOCEAN LTD. AND SUBSIDIARIES IN
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Item 1. Business PART I Overview Tr
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Jackup rigs are mobile self-elevati
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Midwater Floaters The following tab
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Markets Our operations are geograph
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Integrated Services From time to ti
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Item 1A. Risk Factors Risks related
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Our business depends on the level o
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events” above. Our inability to r
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The application of the Working Time
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We are subject to litigation that,
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these tests, “passive income” i
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Item 2. Properties The description
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LDEQ would not rescind the enforcem
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Patent litigation—In 2007, severa
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Executive Officers of the Registran
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PART II Item 5. Market for Registra
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the “virtual second trading line
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Item 6. Selected Financial Data The
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payment of $453 million. In connect
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Midwater Floaters—For our Midwate
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Fleet average daily revenue—The f
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services operations and (d) approxi
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Depreciation, depletion and amortiz
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AR-49 Years ended December 31, 2010
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During the year ended December 31,
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applicable margin, ranging from 3.1
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Contractual obligations—As of Dec
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Plan assets—We review our investm
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Ports and Waterways Safety Act, the
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such U.S. business. In November 200
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Related Party Transactions Pacific
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and the long-term impact of those u
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in partial exposure to foreign exch
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REPORT OF INDEPENDENT REGISTERED PU
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To the General Meeting of Transocea
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TRANSOCEAN LTD. AND SUBSIDIARIES CO
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TRANSOCEAN LTD. AND SUBSIDIARIES CO
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TRANSOCEAN LTD. AND SUBSIDIARIES NO
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Note 13—Postemployment Benefit Pl
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Page 229 and 230: 4.26 Third Supplemental Indenture,
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Page 235: TRANSOCEAN LTD. STATUTORY FINANCIAL
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Page 240 and 241: Note 1—General TRANSOCEAN LTD. NO
Page 242 and 243: TRANSOCEAN LTD. NOTES TO STATUTORY
Page 244 and 245: Note 7—Board of Directors Compens
Page 250 and 251: As of December 31, 2009 Name TRANSO
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Page 256 and 257: provided, however, that: TRANSOCEAN
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Page 270 and 271: Long-Term Incentive Plan The annual
Page 272 and 273: Pension Benefits for Fiscal Year 20
Page 274 and 275: Our Articles of Association further
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Page 278 and 279: Annex 1 Subsidiaries of Transocean
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Page 287 and 288: Board Of Directors Robert E. Rose C
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Transocean Proxy Statement and 2010 Annual Report

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