Transocean (RIG)

Capital Structure

Immediately after the Transaction, Transocean-Switzerland will only have one class of shares outstanding, registered shares with a par value per share equal to the lesser of (1) 30.00 Swiss francs and (2) 30 percent of the closing price of a Transocean-Cayman ordinary share on the New York Stock Exchange immediately prior to the effective time of the Transaction, converted into Swiss francs and rounded down to the nearest whole number. Accordingly, all references to “voting rights” in this “Description of Transocean-Switzerland Shares” will mean the voting rights of Transocean-Switzerland’s registered shares with a par value per share determined as described above, unless another class of shares is subsequently created. Likewise, a “majority of the par value of the registered shares” will mean a majority of the par value of Transocean-Switzerland’s registered shares with a par value per share determined as described above.

Issued Share Capital. Immediately prior to the Transaction, the registered share capital of Transocean-Switzerland will amount to 100,000 Swiss francs, comprised of 10,000,000 registered shares with a par value of 0.01 Swiss francs per share. In the Transaction, Transocean-Switzerland will issue one registered share for each Transocean-Cayman ordinary share. Prior to such issuance, the registered shares with a par value of 0.01 Swiss francs per share will be consolidated into registered shares with a par value per share determined as described above. In addition, Transocean-Switzerland will issue 16 million Treasury Shares to Transocean-Cayman for future use to satisfy Transocean-Switzerland’s obligations to deliver registered shares in connection with awards granted under incentive plans, warrants or other rights to acquire registered shares of Transocean-Switzerland. Transocean-Switzerland will assume Transocean-Cayman’s existing obligation to deliver shares under such incentive plans, warrants or other rights. Upon completion of the Transaction, the registered share capital of Transocean-Switzerland is expected to be approximately 7.4 billion Swiss francs (assuming a par value of 22.00 Swiss francs per share), comprised of approximately 335 million registered shares with a par value per share determined as described above, including 16 million Treasury Shares and the Formation Shares (4,545 shares, assuming a par value of 22.00 Swiss francs per share) held by Transocean-Cayman.

Authorized Share Capital. Immediately prior to the Transaction, Transocean-Switzerland will not have any share capital authorized for future issuance. Upon completion of the Transaction, the board of directors will be authorized to issue new registered shares at any time during a two-year period and thereby increase the share capital, without shareholder approval, by a maximum amount of 50% of the share capital registered in the commercial register, which is expected to be approximately 3.7 billion Swiss francs (assuming a par value of 22.00 Swiss francs per share), or approximately 168 million registered shares. After the expiration of the initial two-year period, and each subsequent two-year period, authorized share capital will be available to the board of directors for issuance of additional registered shares only if the authorization is reapproved by shareholders.

The board of directors determines the time of the issuance, the issuance price, the manner in which the new registered shares have to be paid in, the date from which the new registered shares carry the right to dividends and, subject to the provisions of Transocean-Switzerland’s articles of association, the conditions for the exercise of the preemptive rights with respect to the issuance and the allotment of preemptive rights that are not exercised. The board of directors may allow preemptive rights that are not exercised to expire, or it may place such rights or registered shares, the preemptive rights of which have not been exercised, at market conditions or use them otherwise in the interest of Transocean-Switzerland.

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In an authorized capital increase, Transocean-Switzerland shareholders would have preemptive rights to obtain newly issued registered shares in an amount proportional to the par value of the registered shares they already hold. However, the board of directors may withdraw or limit these preemptive rights in certain circumstances as set forth in Transocean-Switzerland’s articles of association. For further details on these circumstances, see “—Preemptive Rights and Advance Subscription Rights.”

Conditional Share Capital. Immediately prior to the Transaction, Transocean-Switzerland will not have any conditional share capital. Upon completion of the Transaction, Transocean-Switzerland’s articles of association will provide for a conditional capital that, following the effectiveness of the Transaction, will allow the board of directors to authorize the issuance of additional registered shares up to a maximum amount of 50% of the share capital registered in the commercial register (which is expected to be approximately 168 million registered shares) without obtaining additional shareholder approval. These registered shares may be issued through:

In connection with the issuance of bonds, notes, warrants or other financial instruments or contractual obligations convertible into or exercisable or exchangeable for Transocean-Switzerland registered shares, the board of directors is authorized to withdraw or limit the advance subscription rights of shareholders in certain circumstances. See “—Preemptive Rights and Advance Subscription Rights” below.

The preemptive rights of shareholders are excluded with respect to registered shares issued to directors, employees, contractors, consultants or other persons providing services to Transocean-Switzerland or one of its subsidiaries.

Other Classes or Series of Shares. The board of directors may not create shares with increased voting powers without the affirmative resolution adopted by shareholders holding at least 66 ²/3% of the voting rights and a majority of the par value of the registered shares represented at a general meeting. The board of directors may create preferred stock with the vote of a majority of the voting rights represented at a general meeting.