Appendix
A
To Award
Letter
Granted July
9, 2008 (the “Grant Date”)
Terms and
Conditions of
Nonqualified
Share Option Award
The nonqualified
option (the “Option”) granted to you on the Grant Date
by Transocean Inc. (the “Company”) to purchase ordinary
shares, par value $0.01 per share, of the Company (“Ordinary
Shares”) is subject to the terms and conditions set forth in
the Long-Term Incentive Plan of Transocean Inc. (the
“Plan”), the enclosed Prospectus for the Plan, any
rules and regulations adopted by the Executive Compensation
Committee of the Board of Directors (the “Committee”),
and any additional terms and conditions set forth in this Appendix
A which forms a part of the attached award letter to you
(“Award Letter”). Any terms used in the Award Letter
have the meanings set forth in the Plan. In the event there is an
inconsistency between the terms of the Plan and the Award Letter,
the terms of the Plan will control.
You may purchase
Ordinary Shares covered by the Option for the Option Price stated
in your Award Letter.
Your Option
expires on the Expiration Date stated in your Award Letter.
However, your Option will terminate prior to the Expiration Date as
provided in Section 6 of this Appendix A upon the occurrence of one
of the events described in that Section. Regardless of the
provisions of Section 6, in no event can your Option be exercised
after the Expiration Date, except that a vested Option which is
outstanding on the date of your death shall remain outstanding and
exercisable until the later of (i) one year after your death, or
(ii) the Expiration Date.
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(a)
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Unless it becomes exercisable on an
earlier date as provided in Sections 6 and 7 below, your Option
will become exercisable in installments as set forth in the Vesting
Schedule in your Award Letter.
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(b)
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The Ordinary Shares covered by each
installment will be in addition to the Ordinary Shares which
previously became exercisable.
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(c)
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To the extent your Option has become
exercisable, you may exercise the Option as to all or any part of
the Ordinary Shares covered by the Option, at any time on or before
the date the Option expires or terminates, subject to the
restrictions imposed by the Company’s policy on insider
trading and the provisions of the Securities Act of 1933 (the
“Securities Act”) and the rules and regulations of the
Securities and Exchange Commission (the
“SEC”).
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The Company
currently utilizes Charles Schwab (“Schwab”) as the
broker for outsourcing administration of the Plan, but reserves the
right to use another broker. If necessary, this new broker
selected by the Company will be substituted for Schwab.
It will be necessary for you to open an account with Schwab
and you should consult the information provided with this packet.
Subject to applicable security law restrictions, the Company may,
in its discretion, adopt procedures for the automatic cashless
exercise of any outstanding vested Option on the last trading date
on or immediately preceding the Expiration Date.
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5.
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Satisfaction of Option
Price
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(a)
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Payment of Cash or Ordinary
Shares . Your Option may
be exercised through a cashless exercise with Schwab or by payment
in cash (including check, bank draft, money order or wire transfer
to Schwab), in Ordinary Shares, or in a combination of cash and
Ordinary Shares.
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(b)
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Payment of Ordinary
Shares . The fair market
value of any Ordinary Shares tendered as all or part of the Option
Price shall be the average of the high and low prices of the
Ordinary Shares as reported on the New York Stock Exchange
Composite Tape for the date of exercise. The certificates
evidencing shares tendered must be duly endorsed or accompanied by
appropriate stock powers. Only share certificates issued solely in
your name may be tendered in exercise of your Option. Fractional
shares may not be tendered in satisfaction of the Option Price; any
portion of the Option Price which is in excess of the aggregate
fair market value of the number of whole shares tendered must be
paid in cash. If a certificate tendered in exercise of the Option
evidences more Ordinary Shares than are required pursuant to the
immediately preceding sentence for satisfaction of the portion of
the Option Price being paid in Ordinary Shares, an appropriate
replacement certificate will be issued to you for the number of
excess Ordinary Shares.
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6.
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Termination of
Employment
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(a)
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General . The following rules apply to your Option in
the event of your death, disability, retirement, or other
termination of employment.
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(i)
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Death or Disability
. If your employment is terminated
by reason of death or disability (as determined by the Committee),
your Option will become fully vested, and will remain exercisable
until the Expiration Date.
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(ii)
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Convenience of the
Company . If your
employment is terminated for the convenience of the Company (as
determined by the Committee), any vested portion of the Option will
remain exercisable until the Expiration Date. Following the
termination of your employment for the convenience of the Company,
no additional portions of your Option will become exercisable, and
your Option will be limited to the number of Ordinary Shares which
were vested and which you were entitled to purchase under the
Option on the date of the termination of your employment. The
portion of the Option that is not vested as of the date of your
termination
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for the
convenience of the Company shall be terminated as of the date of
termination.
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(iii)
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Early Retirement
. If your employment is terminated
by reason of Early Retirement (as defined below), any vested
portion of the Option will remain exercisable until the Expiration
Date. Following your Early Retirement, no additional portions of
your Option will become exercisable, and your Option will be
limited to the number of Ordinary Shares which were vested and
which you were entitled to purchase under the Option on the date of
your Early Retirement. The portion of the Option that is not vested
as of the date of your Early Retirement shall be terminated as of
that date.
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(iv)
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Normal Retirement
. If your employment is terminated
by reason of Normal Retirement (as defined below) on or after July
9, 2009, your Option will continue to vest as set forth in the
Vest
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