Document:

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                                                                    EXHIBIT 10.1

                          Executive Severance Benefit

1        POLICY

         The Company will provide executives that are terminated for the
         convenience of the Company with the severance benefits as defined
         herein. Whether a termination is for the convenience of the Company
         will be determined by the Executive Compensation Committee in its sole
         discretion.

2        PURPOSE

         The purpose of this policy is to define the executive severance policy
         of the Company.

3        SCOPE

         This policy shall apply to all executives as defined hereinafter. An
         executive for purposes of this policy is defined as an employee that
         holds a job title of vice president or higher, including without
         limitation a vice president, senior vice president, executive vice
         president, chief operating officer, president and executive chairman.
         No benefit shall be payable under this policy to employees who enter
         into separate written severance agreements with the Company after the
         effective date of this policy and who are entitled to receive severance
         payments thereunder as a result of their termination of employment. As
         a condition precedent to eligibility each employee will be required to
         execute a binding release satisfactory to the Company pursuant to which
         such employee releases the Company from any liability in connection
         with employment by the Company. Without limiting the generality of the
         foregoing, a corporate officer position held by an individual in any
         subsidiary of Transocean Inc. shall not be considered in the
         determination of whether such individual is an executive for purposes
         hereof.

4        PROCEDURE

         Executives who are terminated for reasons defined under this policy
         shall be provided the following payments, benefits and other services
         as hereinafter defined.

         4.1      BASE SALARY

         The Company will pay base salary up to the date of termination.

         4.2      BONUS

         The Company will pay the executive a prorata share of the bonus
         opportunity, to the extent not otherwise payable, up to the date of
         termination at the then projected year end rate of payout, in an
         amount, if any, as determined by the Committee in its sole discretion.

         4.3      SEVERANCE

         The executive will be eligible to receive a lump sum cash severance
         payment equal to one year base salary calculated using the annual
         salary rate in effect at the time of termination.

<PAGE>

                           Executive Severance Benefit

         4.4      LONG TERM INCENTIVES

         Terminations made under the provisions of this policy shall for
         purposes of any long term incentive awards held by the executive be
         deemed "For the Convenience of the Company", as defined within the
         individual LTIP award letters.

         4.5      OUTPLACEMENT

         The executive will be eligible to receive outplacement services the
         duration and costs for which shall be determined by the then prevailing
         Human Resources' practice concerning use of outplacement services, and
         in no event should exceed a cost to the Company of 5% of the base
         annual salary of the executive.

         4.6      OTHER BENEFITS

         Any other termination benefits will be managed consistent with current
         severance practices for non-executive employees.

5        RESPONSIBILITY

         Except as otherwise stated herein, this policy will be administered by
         the Vice President of Human Resources. This policy is subject to
         review, change or cancellation at any time at the sole discretion of
         the Executive Compensation Committee of Transocean Inc.

6        EFFECTIVE DATE

         The effective date of this policy is February 09, 2005<PAGE>

                                                                    EXHIBIT 10.2

ROBERT L. LONG
PRESIDENT AND CHIEF EXECUTIVE OFFICER

August 20, 2004

Dear            :

Transocean Inc. (the "Company") hereby grants to you effective as of July 8,
2004, a nonqualified option ("Option") to purchase up to   ordinary shares, par
value US $0.01 per share, of the Company ("Ordinary Shares") in accordance with
the Long-Term Incentive Plan of Transocean Inc. (the "Plan"). The exact number
of Ordinary Shares that may be exercisable under this Option will be determined
during the first half of 2006 (with the actual date being referred to as the
"Determination Date") by the Executive Compensation Committee of the Board of
Directors (the "Committee") based upon the achievement of certain performance
objectives. Please refer to the attached Appendix 1, Terms and Conditions of
Performance-Based Nonqualified Share Option Award, for further details.

The price at which you may purchase Ordinary Shares covered by the Option (if
any) is $28.12 per share ("Option Price"). Normal expiration of your Option is
July 7, 2014 ("Expiration Date") and the vesting of any exercisable shares is
indicated below ("Vesting Schedule"), excepting events as defined in the
attached Appendix 1:

<TABLE>
<CAPTION>
                       PERCENTAGE OF SHARES
   VESTING DATE           PURCHASABLE
------------------   ----------------------
<S>                  <C>
Determination Date        33-1/3%
 January 1, 2007          33-1/3%
 January 1, 2008          33-1/3%
</TABLE>

Your award is subject to the terms and conditions set forth in the enclosed
Plan, the Prospectus for the Plan, any additional terms and conditions set forth
in the attached Appendix 1, and any rules and regulations adopted by the
Committee.

This award letter and the attachments contain the formal terms and conditions of
your award and accordingly should be retained in your files for future
reference.

Congratulations on your award.

Very truly yours,

Robert L. Long
Enclosures

(713)232-7001 FAX        (713)232-7619 OFFICE        blong@houston.deepwater.com
<PAGE>

                                   APPENDIX 1
                                 TO AWARD LETTER
                     GRANTED JULY 8, 2004 (THE "GRANT DATE")

                             TERMS AND CONDITIONS OF
                PERFORMANCE-BASED 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 1 (which
includes Exhibit A attached hereto) which form 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.

1.    OPTION PRICE

      You may purchase Ordinary Shares covered by the Option for the Option
      Price stated in your Award Letter.

2.    DETERMINATION OF EXACT NUMBER OF ORDINARY SHARES EXERCISABLE UNDER THE
      OPTION

      The exact number of Ordinary Shares which may be exercisable under this
      Option will be based upon the Company's achievement of certain performance
      objectives over the two-year period consisting of calendar years 2004 and
      2005 (the "Performance Cycle"). The performance objectives are as follows:

            (i) The exercisability of fifty percent (50%) of the Ordinary Shares
            of your Option will be based on the Company's performance on
            unleveraged (i.e., excluding the effects of debt and interest)
            after-tax Cash Flow Return on Capital ("CFROC") compared against a
            peer group; and

            (ii) The exercisability of fifty percent (50%) of the Ordinary
            Shares of your Option will be based on the Company's performance on
            Total Shareholder Return ("TSR") compared against a peer group.

      The determination by the Committee with respect to the achievement of the
      objectives will be made in the first half of 2006 after all necessary
      Company and peer information is available. The date of such determination
      is referred to as the "Determination Date". After the Determination Date,
      the Committee will notify you of the number of Ordinary Shares under the
      Option that will be potentially exercisable. The portion (if any) of the
      Option covering Ordinary Shares which is not potentially exercisable shall
      be terminated effective as of the Determination Date. TODCO, a publicly
      traded drilling company in which the Company currently owns a majority
      interest, is excluded from the CFROC

                                        1

<PAGE>

      calculation. More detailed definitions and the methodology for calculating
      the exact number of Ordinary Shares which may be exercisable are set forth
      in Exhibit A.

3.    TERM OF OPTION

      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 7 of this Appendix 1 upon the occurrence of one of the
      events described in that paragraph. Regardless of the provisions of
      Section 7, 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.

4.    EARN-OUT OF OPTION

      (a)   Unless it becomes exercisable on an earlier date as provided in
            paragraphs 7 and 8 below, your Option will become exercisable in
            installments as set forth in the Vesting Schedule in your Award
            Letter.

      (b)   The Ordinary Shares covered by each installment will be in addition
            to the Ordinary Shares which previously became exercisable.

      (c)   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.

5.    EXERCISE OF OPTION

      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.

6.    SATISFACTION OF OPTION PRICE

      (a)   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.

      (b)   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

                                        2

<PAGE>

            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.

7.    TERMINATION OF EMPLOYMENT

      (a)   TERMINATION ON OR AFTER THE END OF THE PERFORMANCE CYCLE

            The following rules apply to your Option in the event of your death,
            disability, retirement, or other termination of employment on or
            after the end of the Performance Cycle.

            (i)   DEATH OR DISABILITY. If your employment is terminated by
                  reason of death or disability (as determined by the
                  Committee), the normal determination of exercisable Ordinary
                  Shares pursuant to Section 2 shall be made (if not already
                  made) and your Option will continue to vest as set forth in
                  the Vesting Schedule in your Award Letter, and will remain
                  exercisable until the Expiration Date.

            (ii)  CONVENIENCE OF THE COMPANY. If your employment is terminated
                  for the convenience of the Company (as determined by the
                  Committee), the normal determination of exercisable Ordinary
                  Shares shall be made pursuant to Section 2 (if not already
                  made) and your Option will continue to vest as set forth in
                  the Vesting Schedule in your Award Letter and will remain
                  exercisable until the Expiration Date.

            (iii) RETIREMENT. If your employment is terminated by reason of
                  retirement (as defined below), the normal determination of
                  exercisable Ordinary Shares shall be made pursuant to Section
                  2 (if not already made) and your Option will continue to vest
                  as set forth in the Vesting Schedule in your Award Letter and
                  will remain exercisable until the Expiration Date.

            (iv)  OTHER TERMINATION OF EMPLOYMENT. If your employment is
                  terminated for any reason other than death, disability,
                  termination for the convenience of the Company, or retirement
                  (as those terms are used herein), any vested Option will
                  terminate sixty (60) days after termination of your
                  employment. Following the termination of your employment, 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 to which you were entitled to
                  purchase under the Option on the date of the termination of
                  your employment. The portion of the Option which is not vested
                  as of the date of the termination shall be terminated as of
                  the date of termination.

                                        3

<PAGE>

      (b)   TERMINATION PRIOR TO THE END OF THE PERFORMANCE CYCLE

            The following rules apply to your Option in the event of your death,
            disability, retirement, or other termination of employment prior to
            the end of the Performance Cycle.

            (i)   DEATH OR DISABILITY. If your employment is terminated by
                  reason of death or disability (as determined by the
                  Committee), you will be entitled to a Pro-Rata share (as
                  defined below) of your Option that would otherwise have become
                  exercisable. Any exercisable Ordinary Shares will vest
                  pursuant to the Vesting Schedule and will remain exercisable
                  until the Expiration Date.

            (ii)  CONVENIENCE OF THE COMPANY. If your employment is terminated
                  for the convenience of the Company (as determined by the
                  Committee), you will be entitled to a Pro-Rata share (as
                  defined below) of your Option that would otherwise have become
                  exercisable. Any exercisable Ordinary Shares will vest
                  pursuant to the Vesting Schedule and will remain exercisable
                  until the Expiration Date.

            (iii) RETIREMENT. If your employment is terminated by reason of
                  retirement (as defined below), you will be entitled to a
                  Pro-Rata share (as defined below) of your Option that would
                  otherwise have become exercisable. Any exercisable Ordinary
                  Shares will vest pursuant to the Vesting Schedule and will
                  remain exercisable until the Expiration Date.

            (iv)  OTHER TERMINATION OF EMPLOYMENT. If your employment is
                  terminated for any reason other than death, disability,
                  termination for the convenience of the Company or retirement
                  (as those terms are used herein), your Option will be
                  forfeited.

      (c)   DEFINITION OF RETIREMENT

            Retirement is defined for the purpose of this section of Appendix 1
            as meeting the "Rule of 70", which requires a minimum age of 55,
            combined with years of service to total 70 or more. If you retire
            after the age of 55, yet your age and years of service do not lead
            to a combined 70, your termination will be treated as "Other
            Termination of Employment", unless designated by the Committee in
            its discretion as a termination for the "Convenience of the
            Company".

      (d)   DEFINITION OF PRO-RATA SHARE

            Pro-Rata Share shall be determined by multiplying the number of
            Ordinary Shares which would have been exercisable under the Option
            had your employment not been terminated by a fraction, the numerator
            of which is the number of calendar days you were employed during the
            Performance Cycle after the Grant Date and the denominator of which
            is the total number of calendar days in the Performance Cycle after
            the Grant Date.

                                        4

<PAGE>

      (e)   ADJUSTMENTS BY THE COMMITTEE

            The Committee may, in its sole discretion, exercised before or after
            your termination of employment, declare all or any portion of your
            Option immediately exercisable and/or permit all or any portion of
            your Option to remain exercisable for such period designated by it
            after the time when the Option would have otherwise terminated as
            provided in the applicable portion of this Section 7, but not beyond
            the Expiration Date of your Option.

      (f)   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, retirement or any other reason, and its
            determination shall be final, conclusive and binding upon you.

8.    CHANGE OF CONTROL

      Notwithstanding the provisions of Sections 4 and 7, upon the occurrence of
      a Change of Control (as defined in the Plan) at any time after the Grant
      Date, any Option outstanding at the time of such Change of Control and
      held by you as an employee of the Company at the time of such Change of
      Control shall become immediately exercisable and shall remain exercisable
      for the remainder of the Option term irrespective of whether the
      Determination Date has occurred.

9.    TAX CONSEQUENCES AND WITHHOLDING

      (a)   You should consult the Long-Term Incentive Plan Prospectus for a
            general summary of the U.S. federal income tax consequences of your
            Option based on currently applicable provisions of the U.S. Internal
            Revenue Code (the "Code") and related regulations. The summary does
            not discuss state and local tax laws or the laws of any other
            jurisdiction, which may differ from the U.S. federal tax law. For
            these reasons, you are urged to consult your own tax advisor
            regarding the application of the tax laws to your particular
            situation.

      (b)   This Option is not intended to be an incentive stock option, as
            defined in Section 422 of the Code.

      (c)   You must make arrangements satisfactory to the Company to satisfy
            any applicable U.S. federal, state or local withholding tax
            liability arising from the grant or exercise of your Option. You can
            either make a cash payment to Schwab of the required amount or you
            can elect to satisfy your withholding obligation by having Schwab
            retain Ordinary Shares having a value equal to the amount of your
            withholding obligation from the shares otherwise deliverable to you
            upon the exercise of your Option. You may not elect to have Schwab
            withhold Ordinary Shares having a value in excess of the minimum
            statutory withholding tax liability. If you fail to satisfy your
            withholding obligation in a time and manner satisfactory to the
            Company, the Company shall have the right to withhold the required
            amount from your salary or other amounts payable to you.

                                        5

<PAGE>

      (d)   In addition, you must make arrangements satisfactory to the Company
            to satisfy any applicable withholding tax liability imposed under
            the laws of any other jurisdiction arising from the grant or
            exercise of your Option. You may not elect to have Schwab withhold
            Ordinary Shares having a value in excess of the minimum statutory
            withholding tax liability. If you fail to satisfy such withholding
            obligation in a time and manner satisfactory to the Company, the
            Company shall have the right to withhold the required amount from
            your salary or other amounts payable to you.

10.   RESTRICTIONS ON RESALE

      There are no restrictions imposed by the Plan on the resale of Ordinary
      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 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 on the
      resale of shares acquired under the Plan by persons who are not affiliates
      of the Company; provided, however, that all employees are subject to the
      Company's policies against insider trading, and restrictions on resale may
      be imposed by the Company from time-to-time as may be necessary under
      applicable law.

11.   EFFECT ON OTHER BENEFITS

      Income recognized by you as a result of exercise of an Option 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.

If you have any questions regarding your Option or would like to obtain
additional information about the Plan or the Committee, please contact the
Company's Director of Compensation & Benefits, P.O. Box 2765, Houston, Texas.
Your Award Letter and this Appendix 1 contain the formal terms and conditions of
your award and accordingly should be retained in your files for future
reference.

                                       6
<PAGE>

        EXHIBIT "A" TO PERFORMANCE-BASED NONQUALIFIED SHARE OPTION AWARD

A.    DEFINITIONS:

1.    TOTAL SHAREHOLDER RETURN

Total Shareholder Return ("TSR") through the Performance Cycle is based on the
comparison of the closing share price for the thirty (30) business days prior to
start of the Performance Period and the average closing share price for the last
thirty (30) business days in the Performance Period. The same calculation is
conducted for the Company and all the companies in the following group:

            GlobalSantaFe  Ensco
            Noble          Diamond
            Pride          Rowan
            Nabors         Baker Hughes
            BJ             Schlumberger
            Halliburton    Smith
            Weatherford    Tidewater

The companies are then ranked from best to worst in percent
improvement/deterioration in share price, adjusted for dividends.

2.    CASH FLOW RETURN ON CAPITAL

A calculation of unleveraged (i.e., excluding the effects of debt and interest)
after-tax Cash Flow Return on Capital ("CFROC") is determined by taking an
average of all quarterly results in the Performance Period. The quarterly
calculation is made as follows:

Net Income (loss)
      Plus:          Impairment of assets, net of tax
      Plus:          Depreciation expense
      Plus (Minus):  Interest (income) expense
      Plus (Minus):  (Gain) loss on disposal of assets, net of tax
      Plus (Minus):  Unusual tax (benefits) expense
      Divided by:    Quarterly Weighted Average Tangible Capital

Where Tangible Capital Equals:

Total Equity
      Plus:   Debt (Short & Long Term)
      Minus:  Cash & cash equivalents
                  (to the extent they are less than or equal to Short Term Debt)
      Plus:   Accumulated Depreciation
      Minus:  Goodwill

                                       1
<PAGE>

These calculations and the adjustments indicated above are made on the basis of
audited, publicly available data from annual reports and unaudited publicly
available data from quarterly reports filed with the Securities and Exchange
Commission by Transocean and the other companies. The adjustments are applied so
as to "normalize" the measure and ensure the integrity of the ranking process.
TODCO, a publicly traded drilling company in which the Company currently owns a
majority interest, is excluded from the CFROC calculation.

The calculation is applied and a ranking made from best to worst for the Company
and the following group of companies:

              GlobalSantaFe  Ensco
              Noble          Diamond
              Pride          Rowan
              Nabors         Helmerich & Payne
              Tidewater

B.    COMMITTEE METHODOLOGY:

Once the calculations and rankings are completed for both TSR and CFROC for the
Performance Period, the number of shares that may become exercisable is
determined. In particular, a #1 ranking for both TSR and CFROC would result in a
determination that all shares may become exercisable. A ranking at or below 8th
and 11th for CFROC and TSR, respectively, would result in a determination that
no shares become exercisable. Share determination percentages for rankings
between these boundaries are made in accordance with the payout grid attached
hereto.

C.    EXAMPLE

Employee Award:      600 shares (Maximum Award)
Performance Period:  01/01/04 - 12/31/05
Determination Date:  04/15/06
TSR Ranking:         5th of 15
CFROC Ranking:       2nd of 10
Earned Percentage:   80%
Exercisable Shares:  480
Vesting Schedule:
                     160 shares on Determination Date
                     160 shares on 01/01/07
                     160 shares on 01/01/08

NOTE: THE COMMITTEE MAY IN ITS SOLE DISCRETION INTERPRET THE FORMULA AND REVISE
THE MAKEUP OF THE COMPANY GROUP(S) OR MODIFY THE TSR OR CFROC CALCULATIONS OR
APPLICATION IN RESPONSE TO MERGER ACTIVITY AMONGST COMPANIES OR OTHER EVENTS
ACTUALLY OR POTENTIALLY AFFECTING THE PERFORMANCE MEASURE(S). THE COMMITTEE'S
DETERMINATION WILL BE FINAL AND BINDING.

                                       2
<PAGE>

                PAYOUT GRID FOR CONTINGENT OPTIONS BASED ON TSR /
                           CFROC PERFORMANCE MEASURES

<TABLE>
<CAPTION>
     CFROC
TSR   1      2    3    4    5    6    7    8    9   10
---  -----  ---  ---  ---  ---  ---  ---  ---  ---  ---
<S>  <C>    <C>  <C>  <C>  <C>  <C>  <C>  <C>  <C>  <C>
  1  100%   95%  90%  85%  80%  75%  70%  65%  50%  50%
  2   96%   91%  86%  81%  76%  71%  66%  61%  46%  46%
  3   93%   88%  83%  78%  73%  68%  63%  58%  43%  43%
  4   89%   84%  79%  74%  69%  64%  59%  54%  39%  39%
  5   85%   80%  75%  70%  65%  60%  55%  50%  35%  35%
  6   81%   76%  71%  66%  61%  56%  51%  46%  31%  31%
  7   78%   73%  68%  63%  58%  53%  48%  43%  28%  28%
  8   74%   69%  64%  59%  54%  49%  44%  39%  24%  24%
  9   70%   65%  60%  55%  50%  45%  40%  35%  20%  20%
 10   66%   61%  56%  51%  46%  41%  36%  31%  16%  16%
 11   63%   58%  53%  48%  43%  38%  33%   0%   0%   0%
 12   50%   45%  40%  35%  30%  25%  20%   0%   0%   0%
 13   50%   45%  40%  35%  30%  25%  20%   0%   0%   0%
 14   50%   45%  40%  35%  30%  25%  20%   0%   0%   0%
 15   50%   45%  40%  35%  30%  25%  20%   0%   0%   0%
</TABLE>

                                       3

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