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                                                                     EXHIBIT 4.3

                            LONG-TERM INCENTIVE PLAN
                                       OF
                          TRANSOCEAN SEDCO FOREX INC.

              (As Amended and Restated Effective January 1, 2000)

                                  I. GENERAL

1.1 PURPOSE OF THE PLAN

     The Long-Term Incentive Plan (the "Plan") of Transocean Sedco Forex Inc., a
Cayman Islands exempted company (the "Company"), is intended to advance the best
interests of the Company and its subsidiaries by providing Directors and
employees with additional incentives through the grant of options ("Options") to
purchase ordinary shares, par value US $0.01 per share of the Company ("Ordinary
Shares"), share appreciation rights ("SARs"), restricted Ordinary Shares
("Restricted Shares") and cash performance awards ("Cash Awards"), thereby
increasing the personal stake of such Directors and employees in the continued
success and growth of the Company.

1.2  ADMINISTRATION OF THE PLAN

(a)  The Plan shall be administered by the Executive Compensation Committee or
     other designated committee (the "Committee") of the Board of Directors of
     the Company (the "Board of Directors") which shall consist of at least two
     Directors, all of whom (i) are not eligible for awards under Articles II
     and III of the Plan, (ii) are "non-employee directors" within the meaning
     of Rule 16b-3 under the Securities Exchange Act of 1934, and (iii) are
     outside directors satisfying the requirements of Section 162(m) of the
     Internal Revenue Code of 1986, as amended, or any successor thereto ("the
     Code").  The Committee shall have authority to interpret conclusively the
     provisions of the Plan, to adopt such rules and regulations for carrying
     out the Plan as it may deem advisable, to decide conclusively all questions
     of fact arising in the application of the Plan, and to make all other
     determinations necessary or advisable for the administration of the Plan.
     Notwithstanding the foregoing, the Committee shall have no power or
     discretion to vary the amount or terms of awards under Article IV of the
     Plan, except as provided in Section 6.2.  All decisions and acts of the
     Committee shall be final and binding upon all affected Plan participants.

(b)  The Committee shall designate the eligible employees, if any, to be granted
     awards under Articles II and III and the type and amount of such awards and
     the time when awards will be granted.  All awards granted under the Plan
     shall be on the terms and subject to the conditions hereinafter provided.

1.3  ELIGIBLE PARTICIPANTS

     Employees, including officers, of the Company and its subsidiaries, and of
partnerships or joint ventures in which the Company and its subsidiaries have a
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significant ownership interest as determined by the Committee (all of such
subsidiaries, partnerships and joint ventures being referred to as
"Subsidiaries") shall be eligible for awards under Articles II, III and V of the
Plan.  Directors who are not employees of the Company or its Subsidiaries shall
not be eligible for awards under Articles II, III and V.

     Each Director of the Company who is not an officer or employee of the
Company or any of its subsidiaries (an "Eligible Director") shall automatically
be granted awards under Article IV of the Plan.  Each Eligible Director to whom
Options or SARs are granted under Article IV is hereinafter referred to as a
"Participant."

1.4  AWARDS UNDER THE PLAN

     Awards to employees under Articles II and III may be in the form of (i)
Options to purchase Ordinary Shares, (ii) Share Appreciation Rights which may be
either freestanding or issued in tandem with Options, (iii) Restricted Ordinary
Shares, (iv) Supplemental Payments which may be awarded with respect to Options,
Share Appreciation Rights and Restricted Ordinary Shares, or (v) any combination
of the foregoing.  Awards to employees under Article V will be in the form of
performance awards payable in cash.

     Awards to Eligible Directors under Article IV shall be in the form of (i)
Options to purchase Ordinary Shares and Supplemental Payments with respect
thereto, or (ii) solely in the case of Eligible Directors residing in Norway,
freestanding SARs.

1.5  SHARES SUBJECT TO THE PLAN

     The aggregate number of Ordinary Shares which may be issued with respect to
awards made under Articles II and III shall not exceed 12,900,000 shares,
reduced by the number of shares which have been issued pursuant to such Articles
prior to the date of this Amendment and Restatement.  In addition, the aggregate
number of Ordinary Shares which may be issued with respect to awards made under
Article IV shall not exceed 400,000, reduced by the number of shares which have
been issued pursuant to such Article prior to the date of this Amendment and
Restatement.  At no time shall the number of shares issued plus the number of
shares estimated by the Committee to be ultimately issued with respect to
outstanding awards under the Plan exceed the number of shares that may be issued
under the Plan.  No employee shall be granted Share Options, freestanding Share
Appreciation Rights, or Restricted Ordinary Shares, or any combination of the
foregoing, with respect to more than 600,000 Ordinary Shares in any fiscal year
(subject to adjustment as provided in Section 6.2).  No employee shall be
granted a Supplemental Payment in any fiscal year with respect to more than the
number of Ordinary Shares covered by Share Options, freestanding Share
Appreciation Rights or Restricted Ordinary Shares awards granted to such
employee in such fiscal year.  Shares distributed pursuant to the Plan may
consist of authorized but unissued shares or treasury shares of the Company, as
shall be determined from time to time by the Board of Directors.

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     If any Option under the Plan shall expire, terminate or be canceled
(including cancellation upon the holder's exercise of a related Share
Appreciation Right) for any reason without having been exercised in full, or if
any Restricted Ordinary Shares shall be forfeited to the Company, the
unexercised Options and forfeited Restricted Ordinary Shares shall not count
against the above limit and shall again become available for grants under the
Plan (regardless of whether the holder of such Options or shares received
dividends or other economic benefits with respect to such Options or shares).
Ordinary Shares equal in number to the shares surrendered in payment of the
option price, and Ordinary Shares which are withheld in order to satisfy
federal, state or local tax liability, shall not count against the above limit
and shall again become available for grants under the Plan.  Only the number of
Ordinary Shares actually issued upon exercise of a Share Appreciation Right or
payment of a Supplemental Payment shall count against the above limit, and any
shares which were estimated to be used for such purposes and were not in fact so
used shall again become available for grants under the Plan.

     Freestanding Share Appreciation Rights which may be settled solely in cash
shall be issued with respect to no more than an aggregate of 250,000 underlying
shares.  Such SARs shall not count against the limits set forth above on the
number of Ordinary Shares which may be issued under the Plan.  If any
freestanding SAR shall expire, terminate, or be canceled for any reason without
having been exercised in full, the unexercised SARs shall not count against this
limit and shall again become available for grants under the Plan.

1.6  OTHER COMPENSATION PROGRAMS

     The existence and terms of the Plan shall not limit the authority of the
Board of Directors in compensating Directors and employees of the Company and
its subsidiaries in such other forms and amounts, including compensation
pursuant to any other plans as may be currently in effect or adopted in the
future, as it may determine from time to time.

               II.   SHARE OPTIONS AND SHARE APPRECIATION RIGHTS

2.1  TERMS AND CONDITIONS OF OPTIONS

     Subject to the following provisions, all Options granted under the Plan to
employees of the Company and its Subsidiaries shall be in such form and shall
have such terms and conditions as the Committee, in its discretion, may from
time to time determine.

(a)  Option Price.  The option price per share shall not be less than the fair
     market value of the Ordinary Shares (as determined by the Committee) on the
     date the Option is granted.  Notwithstanding the foregoing, the option
     price per share with respect to any Option granted by the Committee within
     90 days of the closing of the initial public offering of the Company's
     Ordinary Shares shall be at the initial public offering price for such
     Shares.

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(b)  Term of Option.  The term of an Option shall not exceed ten years from the
     date of grant, except as provided pursuant to Section 2.1(g) with respect
     to the death of an optionee.  No Option shall be exercised after the
     expiration of its term.

(c)  Exercise of Options.  Options shall be exercisable at such time or times
     and subject to such terms and conditions as the Committee shall specify in
     the Option grant.  The Committee shall have discretion to at any time
     declare all or any portion of the Options held by any optionee to be
     immediately exercisable.  An Option may be exercised in accordance with its
     terms as to any or all shares purchasable thereunder.

(d)  Payment for Shares.  The Committee may authorize payment for shares as to
     which an Option is exercised to be made in cash, Ordinary Shares or in such
     other manner as the Committee in its discretion may provide.

(e)  Nontransferability of Options.  No Option or any interest therein shall be
     transferable by the optionee other than by will or by the laws of descent
     and distribution.  During an optionee's lifetime, all Options shall be
     exercisable only by such optionee or by the guardian or legal
     representative of the optionee.

(f)  Shareholder Rights.  The holder of an Option shall, as such, have none of
     the rights of a shareholder.

(g)  Termination of Employment.  The Committee shall have discretion to specify
     in the Option grant or an amendment thereof, provisions with respect to the
     period during which the Option may be exercised following the optionee's
     termination of employment.  Notwithstanding the foregoing, the Committee
     shall not permit any Option to be exercised beyond the term of the Option
     established pursuant to Section 2.1(b), except that the Committee may
     provide that, notwithstanding such Option term, an Option which is
     outstanding on the date of an optionee's death shall remain outstanding and
     exercisable for up to one year after the optionee's death.

(h)  Change of Control.  Notwithstanding the exercisability schedule governing
     any Option, upon the occurrence of a Change of Control (as defined in
     Section 6.10) all Options outstanding at the time of such Change of Control
     and held by optionees who are employees of the Company or its Subsidiaries
     at the time of such Change of Control shall become immediately exercisable
     and, unless the optionee agrees otherwise in writing, shall remain
     exercisable for the remainder of the Option term.

2.2  SHARE APPRECIATION RIGHTS IN TANDEM WITH OPTIONS

(a)  The Committee may, either at the time of grant of an Option or at any time
     during the term of the Option, grant Share Appreciation Rights with respect
     to all or any portion of the Ordinary Shares covered by such Option.  A
     tandem Share Appreciation Right may be exercised at any time the Option to
     which it relates is then exercisable, but only to the extent the Option to
     which it relates is exercisable, and shall be subject to the conditions
     applicable to such Option.  When a tandem Share Appreciation Right is

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     exercised, the Option to which it relates shall cease to be exercisable to
     the extent of the number of shares with respect to which the tandem Share
     Appreciation Right is exercised.  Similarly, when an Option is exercised,
     the tandem Share Appreciation Rights relating to the shares covered by such
     Option exercise shall terminate.  Any tandem Share Appreciation Right which
     is outstanding on the last day of the term of the related Option (as
     determined pursuant to Section 2.1(b)) shall be automatically exercised on
     such date for cash without any action by the optionee.

(b)  Upon exercise of a tandem Share Appreciation Right, the holder shall
     receive, for each share with respect to which the tandem Share Appreciation
     Right is exercised, an amount (the "Appreciation") equal to the amount by
     which the fair market value (as defined below) of an Ordinary Share on the
     date of exercise of the Share Appreciation Right exceeds the option price
     per share of the Option to which the tandem Share Appreciation Right
     relates.  For purposes of the preceding sentence, the fair market value of
     an Ordinary Share shall be the average of the high and low prices of such
     share as reported on the consolidated reporting system. The Appreciation
     shall be payable in cash, Ordinary Shares, or a combination of both, at the
     option of the Committee, and shall be paid within 30 days of the exercise
     of the tandem Share Appreciation Right.

(c)  Notwithstanding the foregoing, if a tandem Share Appreciation Right is
     exercised within 60 days of the occurrence of a Change of Control, (i) the
     Appreciation and any Supplemental Payment (as defined in Section 2.4) to
     which the holder is entitled shall be payable solely in cash, and (ii) in
     addition to the Appreciation and the Supplemental Payment (if any), the
     holder shall receive, in cash, (1) the amount by which the greater of (a)
     the highest market price per Ordinary Share during the 60-day period
     preceding exercise of the tandem Share Appreciation Right or (b) the
     highest price per Ordinary Share (or the cash-equivalent thereof as
     determined by the Board of Directors) paid by an acquiring person during
     the 60-day period preceding a Change of Control, exceeds the fair market
     value of an Ordinary Share on the date of exercise of the tandem Share
     Appreciation Right, plus (2) if the holder is entitled to a Supplemental
     Payment, an additional payment, calculated under the same formula as used
     for calculating such holder's Supplemental Payment, with respect to the
     amount referred to in clause (1) of this sentence.

2.3  FREESTANDING SHARE APPRECIATION RIGHTS

     The Committee may grant Freestanding Share Appreciation Rights to employees
of the Company and its Subsidiaries, in such form and having such terms and
conditions as the Committee, in its discretion, may from time to time determine,
subject to the following provisions.

(a)  Base Price and Appreciation.  Each freestanding SAR shall be granted with a
     base price, which shall not be less than the fair market value of the
     Ordinary Shares (as determined by the Committee) on the date the SAR is
     granted.  Upon exercise of a freestanding SAR, the holder shall receive,
     for each share with respect to which the SAR is exercised, an amount (the
     "Appreciation") equal to the amount by which the fair

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     market value (as defined below) of an Ordinary Share on the date of
     exercise of the SAR exceeds the base price of the SAR. For purposes of the
     preceding sentence, the fair market value of an Ordinary Share shall be the
     average of the high and low prices of such share as reported on the New
     York Stock Exchange composite tape. The Appreciation shall be payable in
     cash and shall be paid within 30 days of the exercise of the SAR.

(b)  Term of SAR.  The term of a freestanding SAR shall not exceed ten years
     from the date of grant, except as provided pursuant to Section 2.3(f) with
     respect to the death of the grantee.  No SAR shall be exercised after the
     expiration of its term.  Any freestanding SAR which is outstanding on the
     last day of its term (as such term may be extended pursuant to Section
     2.3(f)) and as to which the Appreciation is a positive number on such date
     shall be automatically exercised on such date for cash without any action
     by the grantee.

(c)  Exercise of SARs.  Freestanding SARs shall be exercisable at such time or
     times and subject to such terms and conditions as the Committee may specify
     in the SAR grant.  The Committee shall have discretion to at any time
     declare all or any portion of the freestanding SARs then outstanding to be
     immediately exercisable.  A freestanding SAR may be exercised in accordance
     with its terms in whole or in part.

(d)  Nontransferability of SARs.  No SAR or any interest therein shall be
     transferable by the grantee other than by will or by the laws of descent
     and distribution.  During a grantee's lifetime, all SARs shall be
     exercisable only by such grantee or by the guardian or legal representative
     of the grantee.

(e)  Shareholder Rights.  The holder of an SAR shall, as such, have none of the
     rights of a shareholder.

(f)  Termination of Employment.  The Committee shall have discretion to specify
     in the SAR grant or an amendment thereof, provisions with respect to the
     period during which the SAR may be exercised following the grantee's
     termination of employment.  Notwithstanding the foregoing, the Committee
     shall not permit any SAR to be exercised beyond the term of the SAR
     established pursuant to Section 2.3(b), except that the Committee may
     provide that, notwithstanding such SAR term, an SAR which is outstanding on
     the date of a grantee's death shall remain outstanding and exercisable for
     up to one year after the grantee's death.

(g)  Change of Control.  Notwithstanding the exercisability schedule governing
     any SAR, upon the occurrence of a Change of Control (as defined in Section
     6.10) all SARs outstanding at the time of such Change of Control and held
     by grantees who are employees of the Company or its Subsidiaries at the
     time of such Change of Control shall become immediately exercisable and,
     unless the grantee agrees otherwise in writing, shall remain exercisable
     for the remainder of the SAR term. In addition, the Committee may provide
     that if a freestanding SAR is exercised within 60 days of the occurrence of
     a Change of Control, in addition to the Appreciation the holder shall
     receive, in cash, the amount by which the greater of (a) the highest market
     price per

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     Ordinary Share during the 60-day period preceding exercise of the SAR or
     (b) the highest price per Ordinary Share (or the cash equivalent thereof as
     determined by the Board of Directors) paid by an acquiring person during
     the 60-day period preceding a Change of Control, exceeds the fair market
     value of an Ordinary Share on the date of exercise of the SAR.

2.4  SUPPLEMENTAL PAYMENT ON EXERCISE OF OPTIONS OR SHARE APPRECIATION RIGHTS

     The Committee, either at the time of grant or at the time of exercise of
any Option or tandem Share Appreciation Right, may provide for a supplemental
payment (the "Supplemental Payment") by the Company to the optionee with respect
to the exercise of any Option or tandem Share Appreciation Right.  The
Supplemental Payment shall be in the amount specified by the Committee, which
shall not exceed the amount necessary to pay the income tax payable to the
national government with respect to both exercise of the Option or tandem Share
Appreciation Right and receipt of the Supplemental Payment, assuming the
optionee is taxed at the maximum effective income tax rate applicable thereto.
The Committee shall have the discretion to grant Supplemental Payments that are
payable solely in cash or Supplemental Payments that are payable in cash,
Ordinary Shares, or a combination of both, as determined by the Committee at the
time of payment.  The Supplemental Payment shall be paid within 30 days of the
date of exercise of an Option or Share Appreciation Right (or, if later, within
30 days of the date on which income is recognized for federal income tax
purposes with respect to such exercise).

2.5  STATUTORY OPTIONS

     Subject to the limitations on Option terms set forth in Section 2.1, the
Committee shall have the authority to grant (i) incentive stock options within
the meaning of Section 422 of the Code and (ii) Options containing such terms
and conditions as shall be required to qualify such Options for preferential tax
treatment under the Code as in effect at the time of such grant.  Options
granted pursuant to this Section 2.4 may contain such other terms and conditions
permitted by Article II of this Plan as the Committee, in its discretion, may
from time to time determine (including, without limitation, provision for Share
Appreciation Rights and Supplemental Payments), to the extent that such terms
and conditions do not cause the Options to lose their preferential tax
treatment.  To the extent the Code and Regulations promulgated thereunder
require a plan to contain specified provisions in order to qualify options for
preferential tax treatment, such provisions shall be deemed to be stated in this
Plan.

                       III.  RESTRICTED ORDINARY SHARES

3.1  TERMS AND CONDITIONS OF RESTRICTED ORDINARY SHARES AWARDS

     Subject to the following provisions, all awards of Restricted Ordinary
Shares under the Plan to employees of the Company and its Subsidiaries shall be
in such form and shall have such terms and conditions as the Committee, in its
discretion, may from time to time determine.

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(i)  The Restricted Ordinary Shares award shall specify the number of Restricted
     Ordinary Shares to be awarded, the price, if any, to be paid by the
     recipient of the Restricted Ordinary Shares, and the date or dates on which
     the Restricted Ordinary Shares will vest.  The vesting of Restricted
     Ordinary Shares may be conditioned upon the completion of a specified
     period of service with the Company or its Subsidiaries, upon the attainment
     of specified performance goals, or upon such other criteria as the
     Committee may determine in its sole discretion.

(ii) Share certificates representing the Restricted Ordinary Shares granted to
     an employee shall be registered in the employee's name.  Such certificates
     shall either be held by the Company on behalf of the employee, or delivered
     to the employee bearing a legend to restrict transfer of the certificate
     until the Restricted Ordinary Shares have vested, as determined by the
     Committee.  The Committee shall determine whether the employee shall have
     the right to vote and/or receive dividends on the Restricted Ordinary
     Shares before they have vested.  No Restricted Ordinary Shares may be sold,
     transferred, assigned, or pledged by the employee until they have vested in
     accordance with the terms of the Restricted Ordinary Shares award.  In the
     event of an employee's termination of employment before all of his
     Restricted Ordinary Shares have vested, or in the event other conditions to
     the vesting of Restricted Ordinary Shares have not been satisfied prior to
     any deadline for the satisfaction of such conditions set forth in the
     award, the Restricted Ordinary Shares which have not vested shall be
     forfeited and any purchase price paid by the employee shall be returned to
     the employee.  At the time Restricted Ordinary Shares vest (and, if the
     employee has been issued legended certificates of Restricted Ordinary
     Shares, upon the return of such certificates to the Company), a certificate
     for such vested shares shall be delivered to the employee (or the
     Beneficiary designated by the employee in the event of death), free of all
     restrictions.

(iii)  Notwithstanding the vesting conditions set forth in the Restricted
       Ordinary Shares award, (i) the Committee may in its discretion accelerate
       the vesting of Restricted Ordinary Shares at any time, and (ii) all
       Restricted Ordinary Shares shall vest upon a Change of Control of the
       Company.

3.2  PERFORMANCE AWARDS UNDER SECTION 162(M) OF THE CODE

     The Committee shall have the right to designate awards of Restricted
Ordinary Shares as "Performance Awards."  Notwithstanding any other provisions
of this Article III, awards so designated shall be granted and administered in a
manner designed to preserve the deductibility of the compensation resulting from
such awards in accordance with Section 162(m) of the Code.  The grant or vesting
of a Performance Award shall be subject to the achievement of performance
objectives (the "Performance Objectives") established by the Committee based on
one or more of the following criteria, in each case applied to the Company on a
consolidated basis and/or to a business unit, and either as an absolute measure
or as a measure of comparative performance relative to a peer group of
companies: sales, operating profits, operating profits before interest expense
and taxes, net earnings, earnings per share, return on equity, return on assets,
return on invested

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capital, total shareholder return, cash flow, debt to equity ratio, market
share, share price, economic value added, and market value added.

     The Performance Objectives for a particular Performance Award relative to a
particular fiscal year shall be established by the Committee in writing no later
than 90 days after the beginning of such year.  The Committee shall have the
authority to determine whether the Performance Objectives and other terms and
conditions of the award are satisfied, and the Committee's determination as to
the achievement of Performance Objectives relating to a Performance Award shall
be made in writing.  The Committee shall have discretion to modify or waive the
Performance Objectives or conditions to the grant or vesting of a Performance
Award only to the extent that the exercise of such discretion would not cause
the Performance Award to fail to qualify as "performance-based compensation"
within the meaning of Section 162(m) of the Code.

3.3  SUPPLEMENTAL PAYMENT ON VESTING OF RESTRICTED ORDINARY SHARES

     The Committee, either at the time of grant or at the time of vesting of
Restricted Ordinary Shares, may provide for a Supplemental Payment by the
Company to the employee in an amount specified by the Committee which shall not
exceed the amount necessary to pay the federal income tax payable with respect
to both the vesting of the Restricted Ordinary Shares and receipt of the
Supplemental Payment, assuming the employee is taxed at the maximum effective
federal income tax rate applicable thereto and has not elected to recognize
income with respect to the Restricted Ordinary Shares before the date such
Restricted Ordinary Shares vest.  The Supplemental Payment shall be paid within
30 days of each date that Restricted Ordinary Shares vest.  The Committee shall
have the discretion to grant Supplemental Payments that are payable solely in
cash or Supplemental Payments that are payable in cash, Ordinary Shares, or a
combination of both, as determined by the Committee at the time of payment.

         IV.  SHARE OPTIONS OR FREESTANDING SHARE APPRECIATION RIGHTS
                                 FOR DIRECTORS

4.1  GRANT OF OPTIONS OR FREESTANDING SARS

     Each person who becomes an Eligible Director (other than a person who first
becomes an Eligible Director on the date of an annual meeting of the Company's
shareholders) shall be granted, effective as of the date such person becomes an
Eligible Director, (i) an Option to purchase 4,000 Ordinary Shares, if such
person is not then residing in Norway, or (ii) a freestanding SAR with respect
to 4,000 Ordinary Shares, if such person is then residing in Norway.  Each
person who is or becomes an Eligible Director on the date of an annual meeting
of the Company's shareholders and whose service on the Board of Directors will
continue after such meeting shall be granted, effective as of the date of such
meeting, (i) an Option to purchase 4,000 Ordinary Shares, if such person is not
then residing in Norway, or (ii) a freestanding SAR with respect to 4,000
Ordinary Shares, if such person is then residing in Norway.

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4.2  TERMS AND CONDITIONS OF OPTIONS

     Each Option granted under this Article shall have the following terms and
conditions:

(a)  Option Price.  The option price per share shall be the closing sales price
     of an Ordinary Share on the date the Option is granted (or, if the Ordinary
     Shares are not traded on such date, on the immediately preceding date on
     which the Ordinary Shares are traded).

(b)  Term of Option.  Each Option shall expire ten years from the date of grant,
     except as provided in Section 4.2(c) with respect to the death of an
     optionee.  No Option shall be exercised after the expiration of its term.

(c)  Exercise of Options.  Subject to Section 4.2(g) and the remainder of this
     paragraph, each Option shall become exercisable in installments as follows:
     (1) a total of 1,333 Ordinary Shares may be purchased through exercise of
     the Option on or after the first anniversary of the date of grant; (2) a
     total of 2,666 Ordinary Shares may be purchased through exercise of the
     Option on or after the second anniversary of the date of grant; and (3) a
     total of 4,000 Ordinary Shares may be purchased through exercise of the
     Option on or after the third anniversary of the date of grant.  If a
     Participant ceases to be a Director of the Company as a result of death,
     disability, or retirement from the Board of Directors on his Retirement
     Date (as defined in Section 4.2(i)), each Option shall immediately become
     fully exercisable and shall remain exercisable for the remainder of its
     term, except that an Option which is outstanding on the date of an
     optionee's death shall remain outstanding and exercisable for a term of the
     greater of ten years from the date of grant or one year after the
     optionee's death.  If a Participant ceases to be a Director of the Company
     for any reason not set forth in the preceding sentence, no additional
     portions of the Option will become exercisable, and the portion of the
     Option that is then exercisable shall expire if not exercised within 60
     days after cessation of service as a Director.  An Option may be exercised
     in accordance with its terms as to any or all shares purchasable
     thereunder.

(d)  Payment for Shares.  Payment for shares as to which an Option is exercised
     shall be made in cash, Ordinary Shares or a combination thereof, in the
     discretion of the Participant, or in such other manner as the Committee in
     its discretion may provide.  Ordinary Shares delivered in payment of the
     Option price shall be valued at the average of the high and low prices of
     such Shares on the date of exercise (or, if the Ordinary Shares are not
     traded on such date, at the weighted average of the high and low prices on
     the nearest trading dates before and after such date).

(e)  Nontransferability of Options.  No Option or any interest therein shall be
     transferable by the Participant other than by will or by the laws of
     descent and distribution.  During a Participant's lifetime, all Options
     shall be exercisable only by such Participant or by the guardian or legal
     representative of the Participant.

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(f)  Shareholder Rights.  The holder of an Option shall, as such, have none of
     the rights of a shareholder.

(g)  Change of Control.  Notwithstanding any other provisions of the Plan, upon
     the occurrence of a Change of Control (as defined in Section 6.10) all
     Options outstanding at the time of such Change of Control shall become
     immediately exercisable and shall remain exercisable for the remainder of
     their term.

(h)  Tax Status.  The Options granted under this Article shall be "non-
     qualified" options, and shall not be incentive stock options as defined in
     Section 422 of the Code.

(i)  Retirement Date.  For purposes of this Article, a Participant's Retirement
     Date shall mean the date on which the Participant shall be required to
     retire from the Board of Directors under the retirement policies of the
     Board of Directors as in effect on the date of the Participant's
     retirement.

4.3  TERMS AND CONDITIONS OF FREESTANDING SHARE APPRECIATION RIGHTS

     Each Freestanding Share Appreciation Right granted under this Article shall
have the following terms and conditions:

(a)  Base Price and Appreciation.  The base price of the SAR shall be the
     closing sales price of an Ordinary Share on the date the SAR is granted
     (or, if the Ordinary Shares are not traded on such date, on the immediately
     preceding date on which the Ordinary Shares are traded).  Upon exercise of
     an SAR, the holder shall receive, for each share with respect to which the
     SAR is exercised, an amount (the "Appreciation") equal to the amount by
     which the fair market value of an Ordinary Share on the date of exercise of
     the SAR exceeds the base price of the SAR.  For purposes of the preceding
     sentence, the fair market value of an Ordinary Share shall be the average
     of the high and low prices of such share as reported on the New York Stock
     Exchange composite tape.  The Appreciation shall be payable in cash and
     shall be paid within 30 days of the exercise of the SAR.

(b)  Term of SAR.  Each SAR shall expire ten years from the date of grant,
     except as provided in Section 4.3(c) with respect to the death of a
     Participant.  No SAR shall be exercised after the expiration of its term.

(c)  Exercise of SARs.  Subject to Section 4.3(f) and the remainder of this
     paragraph, each SAR shall become exercisable in installments as follows:
     (1) the SAR shall be exercisable with respect to a total of 1,333 Ordinary
     Shares on or after the first anniversary of the date of grant; (2) the SAR
     shall be exercisable with respect to a total of 2,666 Ordinary Shares on or
     after the second anniversary of the date of grant; and (3) the SAR shall be
     exercisable with respect to a total of 4,000 Ordinary Shares on or after
     the third anniversary of the date of grant.  If a Participant ceases to be
     a Director of the Company as a result of death, disability, or retirement
     from the Board of Directors on his

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<PAGE>

     Retirement Date (as defined in Section 4.2(i)), each SAR shall immediately
     become fully exercisable and shall remain exercisable for the remainder of
     its term, except that notwithstanding the term of the SAR, an SAR which is
     outstanding on the date of a Participant's death shall remain outstanding
     and exercisable for a term of the greater of ten years from the date of
     grant or one year after the Participant's death. If a Participant ceases to
     be a Director of the Company for any reason not set forth in the preceding
     sentence, no additional portions of the SAR will become exercisable, and
     the portion of the SAR that is then exercisable shall expire if not
     exercised within 60 days after cessation of service as a Director. An SAR
     may be exercised in accordance with its terms in whole or in part.

(d)  Nontransferability of SARs.  No SAR or any interest therein shall be
     transferable by the Participant other than by will or by the laws of
     descent and distribution.  During a Participant's lifetime, all SARs shall
     be exercisable only by such Participant or by the guardian or legal
     representative of the Participant.

(e)  Shareholder Rights.  The holder of an SAR shall, as such, have none of the
     rights of a shareholder.

(f)  Change of Control.  Notwithstanding any other provisions of the Plan, upon
     the occurrence of a Change of Control (as defined in Section 6.10) all SARs
     outstanding at the time of such Change of Control shall become immediately
     exercisable and shall remain exercisable for the remainder of their term.

(g)  Special Provisions.  Notwithstanding the foregoing provisions of Section
     4.3, the freestanding SARs granted to Eligible Directors residing in Norway
     who were first elected to the Board of Directors in 1996 (and who waived
     the grant of an Option to which they were then entitled under the terms of
     the Plan as then in effect) with respect to their initial election to the
     Board of Directors (i) shall have a base price equal to the closing sales
     price of the Ordinary Shares on the date of their initial election, and
     (ii) shall have exercise and expiration dates determined as if such SARs
     had been granted on the date of their initial election.

4.4  SUPPLEMENTAL PAYMENT ON EXERCISE OF PRIOR AWARDS OF OPTIONS OR SARS

(a)  Supplemental Payments.  Within 30 days of each date that an Option or SAR
     granted prior to the date of this Amendment and Restatement is exercised, a
     Supplemental Payment shall be paid to the Participant (or to the
     Participant's Beneficiary in the event of death), in cash, in an amount
     equal to the amount necessary to pay the income tax payable to the national
     government where the Director resides with respect to both the exercise of
     such Option or SAR and receipt of the Supplemental Payment, assuming the
     Participant is taxed at the maximum effective income tax rate applicable
     thereto; provided, however, that no such payment shall be made if the
     Participant has waived his right to the payment pursuant to Section 4.4(b).

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<PAGE>

(b)  Waiver.  The Committee may grant an additional Option or SAR, as
     applicable, to any Participant who agrees in writing to waive the right to
     receive a supplemental cash payment under Section 4.4(a).  Such Option or
     SAR shall be immediately exercisable.  All other provisions of Section 4.2
     or 4.3 will apply as though the date of acceptance of the Option or SAR
     were the date of grant.  Notwithstanding the foregoing, however, in no
     event shall (i) the number of Ordinary Shares subject to this Section
     4.4(b) exceed 50,000, or (ii) the number of SARs subject to this Section
     4.4(b) exceed 50,000.

                          V.  CASH PERFORMANCE AWARDS

5.1  TERMS AND CONDITIONS OF CASH PERFORMANCE AWARDS

     A "Cash Award" is a cash bonus paid solely on account of the attainment of
one or more objective performance goals that have been preestablished by the
Committee.  Each Cash Award shall be subject to such terms and conditions,
restrictions and contingencies, if any, as the Committee shall determine.
Restrictions and contingencies limiting the right to receive a cash payment
pursuant to a Cash Award shall be based on the achievement of single or multiple
performance goals over a performance period established by the Committee.  No
employee shall receive Cash Awards during any calendar year aggregating in
excess of $1 million.

5.2  PERFORMANCE OBJECTIVES UNDER SECTION 162(M) OF THE CODE

     The Committee shall have the right to designate Cash Awards as "Cash
Performance Awards."  Notwithstanding any other provisions of this Article V,
awards so designated shall be granted and administered in a manner designed to
preserve the deductibility of the compensation resulting from such awards in
accordance with Section 162(m) of the Code.  The payment of a Cash Performance
Award shall be subject to the achievement of performance objectives (the
"Performance Objectives") established by the Committee based on one or more of
the following criteria, in each case applied to the Company on a consolidated
basis and/or to a business unit, and either as an absolute measure or as a
measure of comparative performance relative to a peer group of companies: sales,
operating profits, operating profits before interest expense and taxes, net
earnings, earnings per share, return on equity, return on assets, return on
invested capital, total shareholder return, cash flow, debt to equity ratio,
market share, share price, economic value added, and market value added.

     The Performance Objectives for a particular Cash Performance Award relative
to a particular fiscal year shall be established by the Committee in writing no
later than 90 days after the beginning of such year.  The Committee shall have
the authority to determine whether the Performance Objectives and other terms
and conditions of the award are satisfied, and the Committee's determination as
to the achievement of Performance Objectives relating to a Cash Performance
Award shall be made in writing.

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<PAGE>

                           VI. ADDITIONAL PROVISIONS

6.1  GENERAL RESTRICTIONS

     Each award under the Plan shall be subject to the requirement that, if at
any time the Committee shall determine that (i) the listing, registration or
qualification of the Ordinary Shares subject or related thereto upon any
securities exchange or under any state or federal law, or (ii) the consent or
approval of any government regulatory body, or (iii) an agreement by the
recipient of an award with respect to the disposition of Ordinary Shares is
necessary or desirable (in connection with any requirement or interpretation of
any federal or state securities law, rule or regulation) as a condition of, or
in connection with, the granting of such award or the issuance, purchase or
delivery of Ordinary Shares thereunder, such award may not be consummated in
whole or in part unless such listing, registration, qualification, consent,
approval or agreement shall have been effected or obtained free of any
conditions not acceptable to the Committee.

6.2  ADJUSTMENTS FOR CHANGES IN CAPITALIZATION

     In the event of a scheme of arrangement, reorganization, recapitalization,
Ordinary Share split, Ordinary Share dividend, combination of shares, rights
offer, liquidation, dissolution, merger, consolidation, spin-off, sale of
assets, payment of an extraordinary cash dividend, or any other change in or
affecting the corporate structure or capitalization of the Company, the
Committee shall make appropriate adjustment in the number and kind of shares
authorized by the Plan (including any limitations on individual awards), in the
number, price or kind of shares covered by the awards and in any outstanding
awards under the Plan; provided, however, that no such adjustment shall increase
the aggregate value of any outstanding award.

6.3  AMENDMENTS

(a)  The Board of Directors may amend the Plan from time to time.  No such
     amendment shall require approval by the shareholders unless shareholder
     approval is required to satisfy Rule 16b-3 under the Securities Exchange
     Act of 1934 or Section 162(m) of the Code, or by applicable law or Stock
     exchange requirements.

(b)  The Committee shall have the authority to amend any grant to include any
     provision which, at the time of such amendment, is authorized under the
     terms of the Plan; however, no outstanding award may be revoked or altered
     in a manner unfavorable to the holder without the written consent of the
     holder.

(c)  If a Participant has ceased or will cease to be a Director of the Company
     for the convenience of the Company (as determined by the Board of
     Directors), the Board of Directors may amend all or any portion of such
     Participant's Options or SARs so as to make such Options or SARs fully
     exercisable and/or specify a schedule upon which they become exercisable,
     and/or permit all or any portion of such Options or SARs to remain
     exercisable for such period designated by it, but not beyond the expiration
     of the term

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<PAGE>

     established pursuant to Section 4.2(b) or 4.3(b). A Participant shall not
     participate in the deliberations or vote by the Board of Directors under
     this paragraph with respect to his Options or SARs. The exercise periods of
     Options or SARs established by the Board of Directors pursuant to this
     paragraph shall override the provisions of Section 4.2(c) or 4.3(c) to the
     extent inconsistent therewith.

6.4  CANCELLATION OF AWARDS

     Any award granted under Articles II and III of the Plan may be canceled at
any time with the consent of the holder and a new award may be granted to such
holder in lieu thereof, which award may, in the discretion of the Committee, be
on more favorable terms and conditions than the canceled award; provided,
however, that the Committee may not reduce the exercise or base price of
outstanding Options or SARs where the existing exercise or base price is higher
than the then current market price of the Ordinary Shares.

6.5  BENEFICIARY

     An employee or Participant may file with the Company a written designation
of Beneficiary, on such form as may be prescribed by the Committee, to receive
any Options, SARs, Restricted Shares, Ordinary Shares and Supplemental Payments
that become deliverable to the employee or Participant pursuant to the Plan
after the employee's or Participant's death.  An employee or Participant may,
from time to time, amend or revoke a designation of Beneficiary.  If no
designated Beneficiary survives the employee or Participant, the executor or
administrator of the employee's or Participant's estate shall be deemed to be
the employee's or Participant's Beneficiary.

6.6  WITHHOLDING

(a)  Whenever the Company proposes or is required to issue or transfer Ordinary
     Shares under the Plan, the Company shall have the right to require the
     award holder to remit to the Company an amount sufficient to satisfy any
     applicable withholding tax liability prior to the delivery of any
     certificate for such shares.  Whenever under the Plan payments are to be
     made in cash, such payments shall be net of an amount sufficient to satisfy
     any withholding tax liability.

(b)  An employee entitled to receive Ordinary Shares under the Plan who has not
     received a cash Supplemental Payment may elect to have the withholding tax
     liability (or a specified portion thereof) with respect to such Ordinary
     Shares satisfied by having the Company withhold from the shares otherwise
     deliverable to the employee Ordinary Shares having a value equal to the
     amount of the tax liability to be satisfied with respect to the Ordinary
     Shares.  An election to have all or a portion of the tax liability
     satisfied using Ordinary Shares shall comply with such requirements as may
     be imposed by the Committee.

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<PAGE>

6.7  NON-ASSIGNABILITY

     Except as expressly provided in the Plan, no award under the Plan shall be
assignable or transferable by the holder thereof except by will or by the laws
of descent and distribution.  During the life of the holder, awards under the
Plan shall be exercisable only by such holder or by the guardian or legal
representative of such holder.

6.8  NON-UNIFORM DETERMINATIONS

     Determinations by the Committee under the Plan (including, without
limitation, determinations of the persons to receive awards under Articles II
and III; the form, amount and timing of such awards; the terms and provisions of
such awards and the agreements evidencing same; and provisions with respect to
termination of employment) need not be uniform and may be made by it selectively
among persons who receive, or are eligible to receive, awards under the Plan,
whether or not such persons are similarly situated.

6.9  NO GUARANTEE OF EMPLOYMENT OR DIRECTORSHIP

     The grant of an award under the Plan shall not constitute an assurance of
continued employment for any period or any obligation of the Board of Directors
to nominate any Director for re-election by the Company's shareholders.

6.10  CHANGE OF CONTROL

     A "Change of Control" means:

(a)  The acquisition by any individual, entity or group (within the meaning of
     Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
     amended (the "Exchange Act")) (a "Person") of beneficial ownership (within
     the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or
     more of either (i) the then outstanding ordinary shares of the Company (the
     "Outstanding Company Ordinary Shares") or (ii) the combined voting power of
     the then outstanding voting securities of the Company entitled to vote
     generally in the election of directors (the "Outstanding Company Voting
     Securities"); provided, however, that for purposes of this subsection (a),
     the following acquisitions shall not constitute a Change of Control: (i)
     any acquisition directly from the Company, (ii) any acquisition by the
     Company, (iii) any acquisition by any employee benefit plan (or related
     trust) sponsored or maintained by the Company or any corporation or other
     entity controlled by the Company or (iv) any acquisition by any corporation
     or other entity pursuant to a transaction which complies with clauses (i),
     (ii) and (iii) of subsection (c) of  this Section 6.10; or

(b)  Individuals who, as of the date hereof, constitute the Board of the Company
     (the "Incumbent Board") cease for any reason to constitute at least a
     majority of the Board of the Company; provided, however, that for purposes
     of this Section 6.10 any individual becoming a director subsequent to the
     date hereof whose election, or

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<PAGE>

     nomination for election by the Company's shareholders, was approved by a
     vote of at least a majority of the directors then comprising the Incumbent
     Board shall be considered as though such individual were a member of the
     Incumbent Board, but excluding, for this purpose, any such individual whose
     initial assumption of office occurs as a result of an actual or threatened
     election contest with respect to the election or removal of directors or
     other actual or threatened solicitation of proxies or consents by or on
     behalf of a Person other than the Board of the Company; or

(c)  Consummation of a scheme of arrangement, reorganization, merger or
     consolidation or sale or other disposition of all or substantially all of
     the assets of the Company (a "Business Combination"), in each case, unless,
     following such Business Combination, (i) all or substantially all of the
     individuals and entities who were the beneficial owners, respectively, of
     the Outstanding Company Ordinary Shares and Outstanding Company Voting
     Securities immediately prior to such Business Combination beneficially own,
     directly or indirectly, more than 50% of, respectively, the then
     outstanding ordinary shares or shares of common stock and the combined
     voting power of the then outstanding voting securities entitled to vote
     generally in the election of directors, as the case may be, of the
     corporation or other entity resulting from such Business Combination
     (including, without limitation, a corporation or other entity which as a
     result of such transaction owns the Company or all or substantially all of
     the Company's assets either directly or through one or more subsidiaries)
     in substantially the same proportions as their ownership, immediately prior
     to such Business Combination of the Outstanding Company Ordinary Shares and
     Outstanding Company Voting Securities, as the case may be, (ii) no Person
     (excluding any corporation or other entity resulting from such Business
     Combination or any employee benefit plan (or related trust) of the Company
     or such corporation or other entity resulting from such Business
     Combination) beneficially owns, directly or indirectly, 20% or more of,
     respectively, the then outstanding ordinary shares or shares of common
     stock of the corporation or other entity resulting from such Business
     Combination or the combined voting power of the then outstanding voting
     securities of such corporation or other entity except to the extent that
     such ownership existed prior to the Business Combination and (iii) at least
     a majority of the members of the board of directors of the corporation
     resulting from such Business Combination were members of the Incumbent
     Board at the time of the action of the Board of the Company providing for
     such Business Combination; or

(d)  Approval by the shareholders of the Company of a complete liquidation or
     dissolution of the Company.

6.11  DURATION AND TERMINATION

(a)  The Plan shall be of unlimited duration.  Notwithstanding the foregoing, no
     incentive Share option (within the meaning of Section 422 of the Code)
     shall be granted under the Plan, and no Options or SARs shall be granted
     under the Plan to Eligible Directors under Article IV, after May 1, 2003,
     but awards granted prior to such dates may extend beyond such dates, and
     the terms of this Plan shall continue to apply to all awards granted
     hereunder.

                                       17
<PAGE>

(b)  The Board of Directors may discontinue or terminate the Plan at any time.
     Such action shall not impair any of the rights of any holder of any award
     outstanding on the date of the Plan's discontinuance or termination without
     the holder's written consent.

6.12  EFFECTIVE DATE

     The Plan was originally effective May 1, 1993.  The Plan was amended and
restated effective March 13, 1997 and March 12, 1998 and amended effective May
14, 1999.  This amendment and restatement of the Plan was adopted by the
Compensation Committee of the Board of Directors effective January 1, 2000, and
the increase in the number of Ordinary Shares reserved for issuance under the
Plan and the increase in the aggregate number of Ordinary Shares subject to
awards of freestanding SARs to employees was approved by the holders of a
majority of issued and outstanding Ordinary Shares at the extraordinary general
shareholders' meeting held on December 10, 1999.

     IN WITNESS WHEREOF, this document has been executed effective as of
January 1, 2000.

                                  TRANSOCEAN SEDCO FOREX INC.


                                  By:    /s/ Eric B. Brown
                                       -------------------------
                                      Eric B. Brown
                                      Corporate Secretary

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