EXHIBIT 10.28

 

ROBERT L. LONG

CHIEF EXECUTIVE OFFICER

 

 

February __, 2009

 

[NAME]

 

Dear [NAME]:

Transocean Ltd. (the "Company") hereby grants to you effective as of February
12, 2009, _______ deferred units ("Deferred Units") in accordance with the
Amended and Restated Long-Term Incentive Plan of Transocean Ltd. (the "Plan").
This award has been established on a target award of $___________.
The conversion to actual number of Deferred Units is based on the average price
over the 30 trading days up to the end of January 2009. This award is made and
shall vest in accordance with the Plan, with the Company acting as the plan
sponsor for its various employing subsidiaries. Your award is more fully
described in Appendix A, Terms and Conditions of Deferred Unit Award.

Your Deferred Units are being awarded in recognition of your performance and
contribution to the Company and, therefore, you do not need to pay any purchase
price. Unless otherwise provided in Appendix A, your Deferred Units will vest in
installments as follows ("Vesting Schedule"):

Period Beginning

Number of Deferred Units Vesting

February 12, 2010

February 12, 2011

February 12, 2012

«xxx»

«xxx»

«xxx»

 

Your Deferred Units are subject to the terms and conditions set forth in the
Plan, any additional terms and conditions set forth in Appendix A and the
Prospectus for the Plan, and any rules and regulations adopted by the Executive
Compensation Committee of the Board of Directors.

This award letter and the associated documents, which can be found within the
Transocean network at
http://www.rigcentral.com/hqs/hr/comp_ben/bonus_plans/ltip.asp, contain the
formal terms and conditions of your award.

Being a participant in the Plan means you have an opportunity to earn more and
it also means you have certain responsibilities as a key member of our team. For
the last several months, we have been focusing on driving a culture of
leadership (setting clear expectations and providing regular feedback),
compliance (rigorous adherence to the policies and procedures articulated in the
Company's Management System and systematic use of the Company's safety tools
Think and Start), and accountability (recognizing people for the contributions
they make to the Company's success). In order for us to fully develop this
culture, it is critical that you model these behaviors yourself and demand them
from the people with whom you work. Our ability to create this culture of
leadership, compliance, and accountability across our entire organization will
ultimately impact our success as a company.

Congratulations on your award.

Very truly yours,

 

Robert L. Long

 

 

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Appendix A

to Award Letter

Granted February 12, 2009 (the "Grant Date")

Terms and Conditions of

Deferred Unit Award

The deferred units ("Deferred Units") granted to you on the Grant Date by
Transocean Ltd. (the "Company") representing a specified number of registered
shares, par value 15.00 Swiss francs per share, of the Company ("Shares") are
subject to the terms and conditions set forth in the Long-Term Incentive Plan of
Transocean Ltd. (the "Plan"), any rules and regulations adopted by the Executive
Compensation Committee of the Board of Directors (the "Committee"), any
additional terms and conditions set forth in this Appendix A which forms a part
of the award letter to you ("Award Letter") and the Prospectus for the Plan. Any
terms used in this Appendix and not defined in the Award Letter have the
meanings set forth in the Plan. The terms and provisions of your Deferred Units
are governed by the terms of the Plan as amended and restated February 12, 2009,
which is subject to approval of the Company's shareholders. If the Company's
shareholders fail to approve the Plan as amended and restated, the terms and
provisions of your Deferred Units will be governed by the terms of the Plan in
existence prior to the amendment and restatement of February 12, 2009. In the
event there is an inconsistency between the terms of the Plan and the Award
Letter, the terms of the Plan will control.

1.

Vesting and Deferred Units

 

(a)

Unless vested on an earlier date as provided in this Appendix A, the Deferred
Units granted pursuant to your Award Letter will fully vest in installments in
accordance with the dates stated in the Vesting Schedule (the "Vesting Dates")
specified in your Award Letter.

 

(b)

In certain circumstances described in paragraphs 4 and 6 below, your Deferred
Units may vest before the final Vesting Date. In addition, the Committee may
accelerate the vesting of all or a portion of your Deferred Units at any time in
its discretion.

 

(c)

You do not need to pay any purchase price for the Deferred Units unless
otherwise required in accordance with applicable law.

2.

Restrictions on the Deferred Units

Until and unless you vest in your Deferred Units and receive a distribution of
Shares, you may not attempt to sell, transfer, assign or pledge them. Until the
date on which you receive a distribution of the Shares in respect of any vested
Deferred Units awarded hereunder, your award of Deferred Units will be evidenced
by credit to a book entry account. You are required to open a brokerage account
with Charles Schwab & Co., Inc. ("Schwab"), or such other broker as the Company
reserves the right to designate, prior to taking possession of any vested
shares. Failure to open and maintain such account and / or to follow
instructions of the Company in this regard can result in the forfeiture of the
Deferred Units. When Deferred Units vest, the net shares (total Shares
distributable in

 

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respect of vested Deferred Units minus any Shares retained by the Company in
accordance with the policies and requirements described in paragraph 7), will be
delivered to you within sixty days after the Vesting Date in street name to your
Schwab brokerage account (or, in the event of your death, to a Schwab brokerage
account in the name of your beneficiary under the Plan) or, at the Company's
option, a certificate for such shares will be delivered to you. Any Shares
distributed to you in respect of vested Deferred Units will be registered in
your name and will not be subject to any restrictions. There will be some delay
between the Vesting Date and the date your shares become available to you due to
administrative reasons.

3.

Dividends, Cash Consideration and Voting

 

(a)

Unvested Deferred Units

In the event that dividends are paid with respect to Shares, you will be
entitled to receive a cash payment equal to the amount of the dividend paid per
Share as of such dividend payment date multiplied by the number of unvested
Deferred Units credited to your account immediately prior to such dividend
payment date (the "Dividend Equivalent"). All Dividend Equivalents (if any)
payable with respect to your unvested Deferred Units will be paid directly to
you at the same time dividends are paid with respect to all other Shares of the
Company and shall be subject to all applicable withholding taxes. For any
non-cash dividends, the Committee may determine in its sole discretion the cash
value to be so paid to you in respect of such Deferred Units.

 

(b)

Vested Deferred Units

In the event that dividends are paid with respect to Shares, an amount equal to
that dividend will be paid to you in respect of any vested Deferred Units for
which Shares have not yet been distributed, at the same time dividends are paid
with respect to all other Shares of the Company and subject to all applicable
withholding taxes.

 

(c)

Cash Consideration

In the event that Shares are exchanged or reclassified by the Company resulting
in cash consideration paid for such Shares, you will be entitled to receive a
cash payment equal to the amount of cash consideration corresponding to the
number of unvested Deferred Units (including vested Deferred Units not yet
distributed to you) credited to your account at the same time such cash
consideration is paid with respect to all other Shares of the Company and
subject to all applicable withholding taxes.

 

(d)

Voting Shares

You will have the right to vote your Shares that have been distributed in
respect of any vested Deferred Units. There are no voting rights associated with
Deferred Units.

 

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(e)

No Other Rights

You shall have no other dividend equivalent, dividend or voting rights with
respect to any Deferred Unit.

4.

Termination of Employment

 

(a)

General

The following rules apply to the vesting of your Deferred Units in the event of
your death, disability, or other termination of employment.

 

(i)

Death or Disability. If your employment is terminated by reason of death or
disability (as determined by the Committee), all of your Deferred Units will
vest on your date of termination.

 

(ii)

Convenience of the Company. If the Company terminates your employment for the
convenience of the Company (as determined by the Committee), all of your
Deferred Units will vest on your date of termination.

 

(iii)

Other Termination of Employment. If your employment terminates for any reason
other than death, disability or termination for the convenience of the Company
(as those terms are used above), any of your Deferred Units which have not
vested prior to your termination of employment will be forfeited.

 

(iv)

Adjustments by the Committee. The Committee may, in its sole discretion
exercised before or after your termination of employment, accelerate the vesting
of all or any portion of your Deferred Units.

 

(b)

Committee Determinations

The Committee shall have absolute discretion to determine the date and
circumstances of termination of your employment, including without limitation
whether as a result of death, disability, convenience of the Company or any
other reason, and its determination shall be final, conclusive and binding upon
you.

5.

Beneficiary

You may designate a beneficiary to receive any portion of the Deferred Units
that become due to you after your death, and you may change your beneficiary
from time to time. Beneficiary designations must be duly executed using the
proper form designated by the Human Resources Department and timely filed with
the Administrator of the Long-Term Incentive Plan in that department. If you
fail to designate a beneficiary, Deferred Units due to you under the Plan will
be paid to the executor or administrator of your estate in the event of your
death.

 

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6.

Change of Control

 

(a)

Acceleration of Vesting

Notwithstanding the provisions of the Award Letter or paragraphs 1 or 4, all of
your Deferred Units will vest immediately upon a Change of Control Termination
(as defined below).

 

(b)

Change of Control Termination

Upon the date of your termination of employment by the Company or any Subsidiary
for any reason other than Cause (as defined below) within two years after the
date of a Change of Control (a "Change of Control Termination"), the provisions
of paragraph (a) shall apply.

"Cause" means (1) your willful and continued failure to substantially perform
your duties with the Company (other than any such failure resulting from your
incapacity due to physical or mental illness), or (2) your willful engagement in
conduct which is demonstrably and materially injurious to the Company or its
Subsidiaries, monetarily or otherwise. For purposes of clauses (1) and (2) of
this definition, no act, or failure to act, on your part shall be deemed
"willful" unless done, or omitted to be done, by you not in good faith and
without reasonable belief that your act, or failure to act, was in the best
interest of the Company.

 

(c)

Section 280G Limitation

Notwithstanding anything in the Award Letter (including this Appendix A) to the
contrary, if all or any portion of the benefits provided hereunder, either alone
or together with other payments and benefits received or to be received from the
Company or any affiliate or successor, would constitute a "parachute payment",
as such term is defined in Section 280G(b)(2) of the U.S. Internal Revenue Code
of 1986 (the "Code"), and the amount of the parachute payment, reduced by all
U.S. federal, state and local taxes applicable thereto, including the excise tax
imposed pursuant to Code Section 4999, is less than the amount you would receive
if you were paid three times your "base amount", as defined in Code Section
280G(b)(3), less one dollar, reduced by all U.S. federal, state and local taxes
applicable thereto, then the aggregate of the amounts constituting the parachute
payment shall be reduced to an amount that will equal three times your base
amount less one dollar, and such reduction shall be made to those amounts that
provide you with the best economic benefit (and to the extent any payments are
economically equivalent, each shall be reduced pro rata), which may include,
without limitation and to the extent necessary, a reduction to the award or
vesting of Deferred Units in order that this limitation not be exceeded;
provided, however, that this paragraph 6(c) shall be superseded in its entirety
by (i) any contrary treatment of parachute payments to which you have agreed in
writing prior to the Change of Control pursuant to any other plan, program or
agreement, or (ii) any

 

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more favorable treatment of the excise tax on parachute payments extended to you
by the Company or its affiliates pursuant to any other plan, program or
agreement.

7.

Income Tax Withholding

 

(a)

You should consult the Long-Term Incentive Plan Prospectus for a general summary
of the U.S. federal income tax consequences to you and, if applicable, the Swiss
tax consequences to you, from the grant and/or vesting of Deferred Units based
on currently applicable provisions of the Code, related regulations and Swiss
tax rules. The summary does not discuss state and local tax laws or the laws of
any other jurisdictions, which may differ from U.S. federal tax law and Swiss
tax rules. For these reasons, you are urged to consult your own tax advisor
regarding the application of the tax laws to your particular situation.

 

(b)

The Company shall make such provisions as it may deem appropriate for the
withholding of any taxes which it determines is required in connection with the
Deferred Units and, unless otherwise approved by the Company, the Company shall
reduce the number of Shares otherwise deliverable to you upon the vesting of
your Deferred Units by a number of Shares having a value approximately equal to
the amount required to be withheld under the Company&#65533;s policies and
procedures or applicable law. The Company may, in its discretion, permit you to
make other arrangements satisfactory to the Company to satisfy any applicable
withholding tax liability arising from the vesting of the Deferred Units.
Further, any Dividend Equivalents paid to you in respect of Deferred Units
pursuant to paragraph 3 above will be subject to tax withholding, as
appropriate, as additional compensation.

 

(c)

In addition to the previous withholding requirements, any award under the Plan
is also subject to all applicable withholding policies of the Company as may be
in effect from time to time, at the sole discretion of the Company. Without
limiting the generality of the foregoing, the Company expressly has the right to
withhold or cause to be withheld (whether upon award determination, grant,
vesting, or otherwise) any portion of an award (including without limitation any
portion of any securities issuable in connection with the Deferred Units)
pursuant to any tax equalization or other plan or policy, as any such policies
or plans may be in effect from time to time, irrespective of whether such
withholding correlates to the applicable tax withholding requirement with
respect to your award. Awards are further subject to any tax and other reporting
requirement that may be applicable in any pertinent jurisdiction including any
obligation to report awards (whether related to the granting or vesting thereof)
to any taxing authority or other pertinent third party.

8.

Restrictions on Resale

Other than the restrictions referenced in paragraph 2, there are no restrictions
imposed by the Plan on the resale of Shares acquired under the Plan. However,
under the provisions of the Securities Act of 1933 (the "Securities Act") and
the rules and regulations of the

 

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Securities and Exchange Commission (the "SEC"), resales of shares acquired under
the Plan by certain officers and directors of the Company who may be deemed to
be "affiliates" of the Company must be made pursuant to an appropriate effective
registration statement filed with the SEC, pursuant to the provisions of Rule
144 issued under the Securities Act, or pursuant to another exemption from
registration provided in the Securities Act. At the present time, the Company
does not have a currently effective registration statement pursuant to which
such resales may be made by affiliates. There are no restrictions imposed by the
SEC of shares acquired under the Plan by persons who are not affiliates of the
Company.

9.

Effect on Other Benefits

Income recognized by you as a result of the grant or vesting of Deferred Units,
the payment of any Dividend Equivalents with respect to your unvested Deferred
Units or the payment of any dividends with respect to your Shares acquired in
accordance with this Appendix A, will not be included in the formula for
calculating benefits under any of the Company's retirement and disability plans
or any other benefit plans.

10.

Code Section 409A Compliance

This award of Deferred Units is intended to comply with the provisions of
Section 409A and, wherever possible, shall be interpreted as being so compliant
therewith. No action taken to comply with Section 409A shall be deemed to impair
a benefit under the Award Letter or this Appendix A.

Your Award Letter, Appendix A and related documents, which can be found within
the Transocean network at
http://www.rigcentral.com/hqs/hr/comp_ben/bonus_plans/ltip.asp, contain the
formal terms and conditions of your award.

 

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