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                                                                     EXHIBIT 4.2

                       SANTA FE INTERNATIONAL CORPORATION

                          2001 LONG-TERM INCENTIVE PLAN


                     SECTION 1. GENERAL PROVISIONS RELATING
                    TO PLAN GOVERNANCE, COVERAGE AND BENEFITS

         1.1 PURPOSE. The purpose of the Santa Fe International Corporation 2001
Long-Term Incentive Plan (the "PLAN") is to foster and promote the long-term
financial success of Santa Fe International Corporation (the "COMPANY") and
materially increase the value of the equity interests in the Company by: (a)
encouraging the long-term commitment of selected Employees and Non-Employee
Directors (defined in Section 1.2 below), (b) motivating superior performance of
Employees and Non-Employee Directors by means of long-term performance related
incentives, (c) encouraging and providing Employees and Non-Employee Directors
with a formal program for obtaining an ownership interest in the Company, (d)
attracting and retaining outstanding Employees and Non- Employee Directors by
providing incentive compensation opportunities competitive with other major
companies and (e) enabling participation by Employees and Non-Employee Directors
in the long-term growth and financial success of the Company. The Plan provides
for payment of various forms of incentive compensation and, accordingly, is not
intended to be a plan that is subject to the Employee Retirement Income Security
Act of 1974, as amended, and shall be administered accordingly. This Plan is
effective upon approval by the shareholders of the Company (the "EFFECTIVE
TIME").

         1.2 DEFINITIONS. The following terms shall have the meanings set forth
below:

               (a) AWARD AGREEMENT. The written agreement entered into between
the Company and the Grantee pursuant to which an Incentive Award shall be made
under the Plan.

               (b) BOARD. The Board of Directors of the Company or its designee,
who will have overall responsibility for administering all aspects of the Plan.

               (c) CODE. The Internal Revenue Code of 1986, as amended.

               (d) COMMITTEE. The Compensation Committee of the Board or such
other committee appointed by the Board to administer the Plan, each member of
which shall comply with the requirements of Rule 16b-3 of the Exchange Act and,
shall be "outside directors" within the meaning of Section 162(m) of the Code.
The Board shall have the power to fill vacancies on the Committee arising by
resignation, death, removal or otherwise. In the absence of a Committee,
reference thereto shall be to the Board.

               (e) COMMON STOCK. The Company's Ordinary Shares par value $0.01
per share (or, if issued, common stock), which the Company is authorized to
issue or may in the future be authorized to issue.

               (f) COMPANY. Santa Fe International Corporation and any successor
corporation.

               (g) DISABILITY. Any complete and permanent disability as defined
in Section 22(e)(3) of the Code and determined in accordance with the procedures
set forth in the regulations, thereunder.

               (h) EMPLOYEE. Any common-law employee of the Company or any
Parent or Subsidiary, who, in the opinion of the Committee, is one of a select
group of executive officers, other officers or other key management personnel of
the Company or any Parent or Subsidiary.

               (i) EMPLOYER. The Company or any Parent or Subsidiary which
employs an Employee.

               (j) EXCHANGE ACT. The Securities Exchange Act of 1934, as
amended.

               (k) FAIR MARKET VALUE. The closing sales price of the Common
Stock on the composite tape, as published in the Wall Street Journal, of the
principal national securities exchange on which the Common Stock is listed or
admitted to trade, on the relevant date for valuation, or, if there is no
trading of the Common Stock



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on such date, then the closing price of the Common Stock as quoted on such
composite tape on the next preceding date on which there was trading in such
shares. If the shares of Common Stock are not listed on a national securities
exchange, the Fair Market Value of the Stock shall be established by the
Committee or as reported by such other referenced market as the Committee may
designate, at such time for purposes of this Plan.

               (l) GRANTEE. Any Employee or Non-Employee Director who in the
opinion of the Committee performs significant services for the benefit of the
Company and who is granted an Incentive Award under the Plan.

               (m) INCENTIVE AWARD. Any incentive award, individually or
collectively, as the case may be, including any Option, Tandem SAR, Stand-alone
SAR, Restricted Stock Award, Restricted Stock Unit, Performance Unit,
Performance Share, or Stock Bonus, granted to an Employee or Non-Employee
Director under the Plan. Notwithstanding the common use of the term Grantee,
Non-Employee Directors shall be eligible to receive only those types of
Incentive Awards indicated in Section 5.

               (n) INCENTIVE STOCK OPTION. A stock option which is intended to
qualify as an Incentive Stock Option under Section 422 of the Code and which
shall be granted by the Committee to an Employee under the Plan.

               (o) INTERCOMPANY AGREEMENT. The Intercompany Agreement dated as
of June 9, 1997 by and between the Company, SFIC Holdings (Cayman), Inc. and the
Kuwait Petroleum Corporation, as it may be amended from time to time.

               (p) NON-EMPLOYEE DIRECTOR. Any member of the Board who is not an
employee of the Company or any Parent or Subsidiary.

               (q) NON-QUALIFIED STOCK OPTION. A stock option granted by the
Committee to a Grantee under the Plan, which shall not qualify as an Incentive
Stock Option.

               (r) OPTION. A Non-Qualified Stock Option or Incentive Stock
Option granted under the Plan.

               (s) PARENT. Any corporation (whether now or hereafter existing)
which constitutes a "parent" of the Company, as defined in Section 424(e) of the
Code, and, except with respect to Incentive Stock Options, any other entity that
beneficially owns an equity interest in the Company representing at least 50% of
the Company's outstanding voting securities.

               (t) PERFORMANCE PERIOD. A period of time determined by the
Committee over which performance is measured for the purpose of determining a
Grantee's right to and the payment value of any Performance Units or Performance
Shares.

               (u) PERFORMANCE SHARE OR PERFORMANCE UNIT. An Incentive Award
representing a contingent right to receive cash or shares of Common Stock (which
may be Restricted Stock) at the end of a Performance Period and which, in the
case of Performance Shares, is denominated in Common Stock, and, in the case of
Performance Units, is denominated in cash values.

               (v) PLAN. Santa Fe International Corporation 2001 Long-Term
Incentive Plan, as hereinafter amended from time to time.

               (w) RESTRICTED STOCK. Shares of Common Stock issued or
transferred to a Grantee subject to the restrictions set forth in Section 3.3
hereof.

               (x) RESTRICTED STOCK AWARD. An authorization by the Committee to
issue or transfer Restricted Stock to a Grantee.

               (y) RESTRICTED STOCK UNIT. A bookkeeping entry which serves as a
unit of measurement relative to a share of Common Stock for purposes of
determining the payment, in Common Stock or cash, of an Incentive Award,
including a deferred right or benefit under the Plan granted to a Grantee under
Section 3 of the Plan.


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               (z) RESTRICTION PERIOD. The period of time determined by the
Committee during which Restricted Stock and Restricted Stock Units are subject
to the restrictions under the Plan.

               (aa) STOCK APPRECIATION RIGHT OR SAR. A right authorized under
the Plan to receive a number of shares of Common Stock or an amount of cash, or
a combination of shares and cash, the aggregate value or amount of which is
determined by reference to a change in the fair market value of the Common
Stock.

               (bb) STOCK BONUS. An award of shares of Common Stock granted
under the Plan for no consideration other than past services and without
restriction other than such transfer or other restrictions as the Committee may
deem advisable to assure compliance with law.

               (cc) SUBSIDIARY. Any corporation (whether now or hereafter
existing) which constitutes a "subsidiary" of the Company, as defined in Section
424(f) of the Code.

               (dd) TANDEM SAR. A stock appreciation right described in Section
2.4.

         1.3 ADMINISTRATION.

               (a) COMMITTEE POWERS. The Plan shall be administered by the
Committee which shall have full power and authority to:

                  (i) designate Grantees and determine the Incentive Awards to
         be granted to Grantees;

                  (ii) subject to Section 1.4 of the Plan, determine the Common
         Stock (or securities convertible into or exchangeable for Common Stock)
         to be covered by Incentive Awards and in connection therewith, to
         reserve shares of Common Stock as needed in order to cover grants of
         Incentive Awards;

                  (iii) grant Incentive Awards to Grantees, determine the price
         at which securities will be offered or awarded to any such persons, and
         determine the other specific terms and conditions of any such Incentive
         Award consistent with the express limits of the Plan, including but not
         limited to, establishing the installments (if any) in which such
         Incentive Awards shall become exercisable or vest and the events of
         termination or reversion of such Incentive Awards, and providing
         supplemental cash payments to Grantees in connection with the exercise
         of their Incentive Awards;

                  (iv) determine whether, to what extent, and under what
         circumstances Incentive Awards may be settled or exercised in cash,
         Common Stock, other securities, or other property, or canceled,
         substituted, forfeited or suspended, and the method or methods by which
         Incentive Awards may be settled, exercised, canceled, substituted,
         forfeited or suspended, subject to any required consent under Sections
         7.1 and 7.11;

                  (v) accelerate or extend the exercisability or extend the term
         of any or all of such outstanding Incentive Awards within the maximum
         term of Incentive Awards;

                  (vi) interpret and administer the Plan and any instrument or
         agreement relating to, or Incentive Award made under, the Plan;

                  (vii) to approve the forms of Award Agreements (which need not
         be identical either as to type of Incentive Award or among Grantees);

                  (viii) establish, amend, suspend or waive such rules and
         guidelines relating to the Plan as the Committee shall deem necessary
         or appropriate for administration of the Plan;

                  (ix) delegate such duties and powers, both ministerial and
         discretionary, with respect to the interpretation or administration of
         the Plan as it deems appropriate to officers and employees of the
         Company; provided, however, that the Committee shall retain the
         exclusive authority to determine both the grant of Incentive Awards
         under the Plan and the terms and conditions of such Incentive Awards,
         and excepting further that any dispute arising from any such
         interpretation or administration shall be determined by the Committee
         in its sole and absolute discretion; and



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                  (x) make any other determination and take any other action
         that it deems necessary or desirable for such administration.

               No member of the Committee shall vote or act upon any matter
relating solely to himself. All designations, determinations, interpretations
and other decisions with respect to the Plan or any Incentive Award shall be
within the sole discretion of the Committee and shall be final, conclusive and
binding upon all persons, including the Company or any Parent or Subsidiary, any
Grantee, any Non-Employee Director, any holder or beneficiary of any Incentive
Award, any owner of an equity interest in the Company and any Employee.

               (b) NO LIABILITY. No member of the Committee shall be liable for
any action or determination made in good faith by the Committee with respect to
this Plan or any Incentive Award under this Plan, and to the fullest extent
permitted by the Company's Articles of Association, the Company shall indemnify
each member of the Committee.

               (c) MEETINGS. The Committee shall designate a chairman from among
its members, who shall preside at all of its meetings, and shall designate a
secretary, without regard to whether that person is a member of the Committee,
who shall keep the minutes of the proceedings and all records, documents, and
data pertaining to its administration of the Plan. Meetings shall be held at
such times and places as shall be determined by the Committee. The Committee may
take any action otherwise proper under the Plan by the affirmative vote, taken
with or without a meeting, of a majority of its members.

         1.4 SHARES OF COMMON STOCK SUBJECT TO THE PLAN.

               (a) COMMON STOCK ISSUED OR TRANSFERRED. Subject to adjustment
under Section 6.5 of the Plan, the aggregate number of additional shares of
Common Stock which may be issued or transferred pursuant to Incentive Awards
under the Plan shall not exceed the sum of: (i) 6,686,085 shares; plus (ii) any
shares of Common Stock which as of the Effective Time are available or
thereafter become available for issuance under the Company's 1997 Long-Term
Incentive Plan and its 1997 Non-Employee Director Stock Option Plan
(collectively, the "Prior Plans") and which are not thereafter issued
thereunder. For purposes of the Plan, (x) any shares of Common Stock which are
forfeited back to the Company under the Plan or the Prior Plans, (y) any shares
which have been exchanged by a Grantee as full or partial payment to the Company
in connection with any award under the Plan or the Prior Plans, and (z) any
shares exchanged by a Grantee or withheld by the Company to satisfy the tax
withholding obligations related to an award under the Plan or the Prior Plans,
shall be available for issuance under the Plan in subsequent periods, and shall
not count against the limit in the prior sentence. To the extent, however, that
the number of shares issued or transferred pursuant to an Incentive Award would
exceed the sum of (i) and (ii) in the first sentence of the paragraph as a
result of shares exchanged or withheld under clauses (y) and (z) of the second
sentence above, any such issue or transfer shall be subject to such prior
consent as may be required under the Intercompany Agreement and/or the Company's
Articles of Association. No fractional shares shall be issued under the Plan;
payment for fractional shares shall be made in cash.

               (b) SHARES NOT COUNTED AGAINST SHARE LIMIT. If an Incentive Award
is settled in cash or a form other than shares, the shares that would have been
issued had there been no cash or other settlement shall not be counted against
the shares available for issuance under the Plan. The payment of cash dividends
and dividend equivalents in conjunction with outstanding Incentive Awards shall
not be counted against the shares available for issuance under the Plan. Any
shares that are issued by the Company, and any awards that are granted by, or
become obligations of, the Company, through the assumption by the company or an
affiliate of, or in substitution for, outstanding awards previously granted by
an acquired company (or previously granted by a predecessor employer (or direct
or indirect parent thereof) in the case of persons who become employed by the
Company (or a subsidiary or affiliate) in connection with a business or asset
acquisition or similar transaction) shall not be counted against the shares
available for issuance under the Plan. Notwithstanding the preceding sentence,
to the extent that the number of shares issued or transferred pursuant to an
Incentive Award would exceed the sum of (i) and (ii) in the first sentence of
clause (a) above as a result of any such issuance or grant pursuant to the
preceding sentence of this paragraph, any such issue or transfer shall be
subject to such prior consent as may be required under the Intercompany
Agreement and/or the Company's Articles of Association.

               (c) INCENTIVE AWARD ADJUSTMENTS/OPTION REPRICING/WAIVER OF
RESTRICTIONS.

                  (i) Subject to Sections 1.4(a), 6.5, 7.1 and 7.11 and the
         specific limitations on Incentive Awards contained in this Plan, the
         Committee from time to time may authorize, generally or in specific
         cases



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         only, for the benefit of any Grantee, any adjustment in the exercise or
         purchase price, the vesting schedule, the number of shares subject to,
         the restrictions upon or the term of, an Incentive Award or any other
         terms of other Incentive Awards. Such an adjustment shall be made by
         cancellation of an outstanding Incentive Award and a subsequent
         regranting of an Incentive Award, by amendment, by substitution of an
         outstanding Incentive Award, by waiver or by other legally valid means.
         If such action is effected by amendment, the effective date of such
         amendment shall be the date of the original grant.

                  (ii) Notwithstanding clause (i) above, the Board shall not
         authorize a repricing of Options or the cancellation and regrant of an
         Option under clause (2) above without prior approval by the
         shareholders.

               1.5 PARTICIPATION.

               (a) INCENTIVE AWARDS. The Committee shall from time to time
designate those Employees or Non-Employee Directors, if any, to be granted
Incentive Awards under the Plan, the type of awards granted, the number of
shares, options, rights or units, as the case may be, which shall be granted to
each such Employee or Non-Employee Director and any other terms or conditions
relating to the awards as it may deem appropriate, consistent with the
provisions of the Plan. An Employee or Non-Employee Director who has been
granted an Incentive Award may, if otherwise eligible, be granted additional
Incentive Awards at any time.

               (b) NON-EMPLOYEE DIRECTOR INCENTIVE AWARDS. Only those Incentive
Awards authorized under Section 5 of the Plan shall be made to Non-Employee
Directors.

         1.6 INCENTIVE AWARDS.

               (a) FORM OF INCENTIVE AWARDS. The forms of Incentive Awards under
this Plan are Stock Options, Tandem SARs and Stand-alone SARs as described in
Section 2, Restricted Stock and Restricted Stock Units as described in Section
3, and Performance-Based Awards and Bonus Stock Grants as described in Section
4. Non-Employee Director Incentive Awards are described in Section 5.

               (b) SHARE LIMITS. Other than shares of Common Stock issuable
under Options pursuant to Section 2.1, the total number of shares of Common
Stock issuable under Incentive Awards shall not exceed 2,000,000 shares. The
maximum number of shares that may be issued under Incentive Stock Options shall
not exceed 6,686,085 shares.


         1.7 MAXIMUM INDIVIDUAL GRANTS.

               (a) INCENTIVE AWARDS. Subject to adjustment in Section 6.5, no
Employee who is a Grantee may receive, during any three consecutive calendar
year period, Incentive Awards covering an aggregate of more than seven hundred
fifty thousand (750,000) shares of Common Stock and the maximum amount that may
be paid to any Employee who is a Grantee in any three consecutive calendar year
period pursuant to Performance-Based Awards under Section 4.1 shall not exceed
$5,000,000.

                        SECTION 2. STOCK OPTIONS AND SARS

         2.1 GRANT OF OPTIONS. The Committee is authorized to grant Options
(Non-Qualified Stock Options or Incentive Stock Options) to Grantees in
accordance with the terms and conditions of this Plan and with such additional
terms and conditions, not inconsistent with the provisions of the Plan, as the
Committee shall determine.

         2.2 OPTION TERMS.

               (a) EXERCISE PRICE. The exercise price per share of Common Stock
under each Option shall be determined by the Committee; provided, however, that
such exercise price shall not be less than 100% of the Fair Market Value per
share of such stock on the date the Option is granted, as determined by the
Committee (110% in the case of an Incentive Stock Option granted to a
Ten-Percent Stockholder (which shall mean an Employee who, at the time of the
grant owns Common Stock possessing more than 10% of the total combined voting
power of all classes of stock of the Company, its Parent or a Subsidiary)).



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               (b) TERM. The Committee shall fix the term of each Option which
shall be not more than ten years from the date of grant. In the event no term is
fixed, such term shall be ten years from the date of grant. The term shall be
five years in the case of an Incentive Stock Option granted to a Ten-Percent
Stockholder.

               (c) EXERCISE. The Committee shall determine the time or times at
which an Option may be exercised in whole or in part. The Committee may
accelerate the exercisability of any Option or any portion thereof at any time.
Notwithstanding the foregoing, the Committee may, in its sole discretion,
provide that all or part of the Common Stock received by a Grantee upon the
exercise of a Non-Qualified Stock Option shall be Restricted Stock subject to
any or all of the restrictions or conditions set forth in Section 3.2.

         2.3 OPTION EXERCISES.

               (a) METHOD OF EXERCISE. To purchase shares under any Option
granted under the Plan, Grantees must give notice in writing to the Company or
its designee of their intention to purchase and specify the number of shares of
Common Stock as to which they intend to exercise their Option. Upon the date or
dates specified for the completion of the purchase of the shares, the purchase
price will be payable in full. The purchase price may be paid in cash or an
equivalent acceptable to the Committee. At the discretion of the Committee, the
exercise price for Common Stock may be paid by the assignment and delivery to
the Company of shares of Common Stock owned by the Grantee or a combination of
cash and such shares equal in value to the exercise price; provided, however,
that any such shares used in payment that were previously acquired by the
Grantee from the Company upon exercise of an Option or otherwise shall have been
owned by the Grantee at least six months prior to the date of exercise. Any
shares so assigned and delivered to the Company in payment or partial payment of
the purchase price shall be valued at the Fair Market Value on the exercise
date. Shares of Restricted Stock granted under the Plan shall not be available
for payment of the purchase price until the restrictions on such shares lapse.
In addition, at the request of the Grantee and to the extent permitted by
applicable law, the Company in its discretion may selectively approve "cashless
exercise" arrangements with a brokerage firm under which such brokerage firm, on
behalf of the Grantee, shall pay to the Company or its designee the exercise
price of the Options being exercised, and the Company or its designee, pursuant
to an irrevocable notice from the Grantee, shall promptly deliver the shares
being purchased to such firm.

               In the case of Incentive Stock Options, the terms and conditions
of such grants shall be subject to and comply with Section 422 of the Code and
any rules or regulations promulgated thereunder, including the requirement that
the aggregate Fair Market Value (determined as of date the date of grant) of the
Common Stock with respect to which Incentive Stock Options granted under this
Plan and all other option plans of the Company or any Parent or Subsidiary
become exercisable by a Grantee during any calendar year shall not exceed
$100,000. To the extent that the limitation set forth in the preceding sentence
is exceeded for any reason (including the acceleration of the time for exercise
of an Option), the Option with respect to such excess amount shall be treated as
a Non-Qualified Stock Option.

               (b) PROCEEDS. The proceeds received by the Company from the sale
of shares of Common Stock pursuant to Options exercised under the Plan will be
used for paid-in capital and for general purposes of the Company.

         2.4 STOCK APPRECIATION RIGHTS IN TANDEM WITH OPTIONS.

               (a) GENERAL PROVISIONS. The Committee may, at the time of grant
of an Option, grant Tandem SARs with respect to all or any portion of the shares
of Common Stock covered by such Option. The exercise price per share of Common
Stock of a Tandem SAR shall be fixed in the Award Agreement and shall not be
less than 100% of the Fair Market Value of a share of Common Stock on the date
that the Option to which it relates is granted. A Tandem SAR may be exercised at
any time, and only to the extent, that the Option to which it relates is then
exercisable, and shall be subject to the conditions applicable to such Option.
When a Tandem SAR is exercised, the Option to which it relates shall terminate
to the extent of the number of shares with respect to which the Tandem SAR is
exercised. Similarly, when an Option is exercised, the Tandem SARs relating to
the shares covered by such Option exercise shall terminate. Any Tandem SAR which
is outstanding on the last day of the term of the related Option shall be
automatically exercised on such date for cash without any action by the Grantee.

               (b) EXERCISE. Upon exercise of a Tandem SAR the holder shall
receive, for each share with respect to which the Tandem SAR is exercised, an
amount equal to the excess, if any, of the Fair Market Value of a share of
Common Stock on the date the Tandem SAR is exercised over the exercise price per
share of the Option to




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which the Tandem SAR relates. Any amount payable in respect of the Tandem SAR
shall be payable in cash, Common Stock, or a combination of both, at the option
of the Committee, and shall be paid within 30 calendar days after the Tandem SAR
is exercised.

         2.5 STAND-ALONE SARS.

               (a) GRANT. In its discretion, the Committee may grant a Stock
Appreciation Right to an Employee independently of any other Incentive Award,
which shall become exercisable pursuant to the terms of the Award Agreement.

               (b) EXERCISE. Upon exercise of a Stand-alone SAR, the holder
shall be entitled to payment of an amount equal to the difference between the
Fair Market Value of a share of Common Stock on the date of grant (specified in
the Award Agreement) (the "Base Price") and the Fair Market Value of a share of
Common Stock on the date the SAR is exercised multiplied by the number of shares
with respect to which the SAR relates. Notwithstanding the prior sentence, if an
SAR is granted in substitution for an Option, the Base Price shall be any amount
greater than or equal to 100% of the Fair Market Value of a share of Common
Stock on the date that the Option for which the SAR is being granted in
substitution therefor was granted. Any amount payable in respect of the SAR
shall be payable in cash, Common Stock, or a combination of both, at the option
of the Committee, and shall be paid within 30 calendar days after the SAR is
exercised.


               SECTION 3. RESTRICTED STOCK AND RESTRICTED STOCK UNITS

         3.1 AWARD OF RESTRICTED STOCK.

               (a) GRANT. In consideration of the performance of services by the
Grantee, shares of Restricted Stock may be awarded under this Plan by the
Committee on such terms and conditions and with such restrictions as the
Committee may from time to time approve, all of which may differ with respect to
each Grantee. Such Restricted Stock shall be awarded for no additional
consideration or such additional consideration as the Committee shall determine.

               (b) IMMEDIATE TRANSFER WITHOUT IMMEDIATE DELIVERY OF RESTRICTED
STOCK. Each Restricted Stock Award will constitute an immediate transfer of the
record and beneficial ownership of the shares of Restricted Stock to the Grantee
in consideration of the performance of services, entitling such Grantee to all
voting and other ownership rights, but subject to the restrictions hereinafter
referred to. Each Restricted Stock Award may limit the Grantee's dividend rights
during the Restriction Period in which the shares of Restricted Stock are
subject to a substantial risk of forfeiture and restrictions on transfer. Shares
of Common Stock awarded pursuant to a grant of Restricted Stock will be held by
the Company, or in trust or in escrow or similar arrangement pursuant to an
agreement satisfactory to the Committee, as determined by the Committee, until
such time as the restrictions on transfer have expired. Any such trust, escrow
or similar arrangement shall not be insulated from the claims of the general
creditors of the Company in the event of bankruptcy or insolvency of the
Company.

         3.2 AWARD OF RESTRICTED STOCK UNITS The Committee may, in its
discretion, grant to any Employee or Non-Employee Director an Incentive Award of
Restricted Stock Units, for services rendered or to be rendered or in lieu of
other compensation, consistent with other applicable terms of this Plan, may
permit a Grantee to irrevocably elect to defer by means of Restricted Stock
Units or receive in Restricted Stock Units all or a portion of any Incentive
Award hereunder, or may grant Restricted Stock Units in lieu of, in exchange for
or in addition to any other Incentive Award under this Plan. The specific terms
relating to each Restricted Stock Unit grant or election shall be set forth in
or pursuant to the applicable Award Agreement and any relevant Company deferred
compensation plan, in form substantially as approved by the Committee.
Restricted Stock Units are not outstanding shares and do not entitle a Grantee
to any dividend, voting or other rights in respect of any Common Stock
represented thereby or acquired thereunder. Restricted Stock Units may, by
express provision in the applicable Award Agreement, entitle a Grantee to
dividend equivalent rights as determined by the Committee.



<PAGE>   8

         3.3 RESTRICTIONS.

               (a) RESTRICTIVE CONDITIONS. Restricted Stock and Restricted Stock
Units awarded to a Grantee shall be subject to the following restrictions as
applicable until the expiration of the Restriction Period: (i) the shares of
Common Stock included in the Restricted Stock Award shall be subject to one or
more restrictions, including without limitation, a restriction that constitutes
a "substantial risk of forfeiture" within the meaning of Section 83 of the Code
and regulations promulgated thereunder, and the restrictions on transferability
set forth in Section 6.2; (ii) unless otherwise approved by the Committee or
provided for in the Restricted Stock Award or Restricted Stock Unit Award, to
the extent that the shares of Restricted Stock and the rights in respect of
Restricted Stock Units remain subject to restrictions at such time as the
Grantee ceases to be employed by the Company or ceases to provide services to
the Company as a director, such shares shall be forfeited and all rights of the
Grantee to such shares and the Restricted Stock Units shall terminate without
further obligation on the part of the Company upon such termination of
employment or cessation of services; and (iii) Restricted Stock and Restricted
Stock Units may be subject to any other restrictions that the Committee may
determine in advance are necessary or appropriate.

               (b) FORFEITURE. If for any reason, the restrictions imposed by
the Committee upon Restricted Stock or Restricted Stock Units are not satisfied
at the end of the Restriction Period, any Restricted Stock or Restricted Stock
Units remaining subject to such restrictions shall thereupon be forfeited by the
Grantee and, in the case of Restricted Stock, reacquired by the Company.

               (c) REMOVAL OF RESTRICTIONS. The Committee shall have the
authority to remove any or all of the restrictions on the Restricted Stock or
Restricted Stock Units whenever it may determine that, by reason of changes in
applicable laws or other changes in circumstances arising after the applicable
date of grant, such action is appropriate.

         3.4 RESTRICTION PERIOD. The Restriction Period of Restricted Stock and
Restricted Stock Units shall commence on the date of grant and shall be
established by the Committee in the Award Agreement setting forth the terms of
the Restricted Stock Award or Restricted Stock Unit Award; provided, however,
that Restricted Stock and Restricted Stock Units shall vest and restrictions
shall lapse no earlier than three years after the date of grant unless (1) the
Restricted Stock or Restricted Stock Units are granted to a person in connection
with the commencement of his or her employment with the Company or (2) the
vesting of the Restricted Stock or Restricted Stock Units is accelerated as a
result of the Grantee's death, Disability, normal retirement, involuntary
termination or upon a change in control (as such terms are defined in the
applicable Award Agreement). Notwithstanding the prior sentence, the restriction
set forth in the proviso and clauses (1) and (2) of the prior sentence shall not
apply if the Restricted Stock and Restricted Stock Units are granted as payment
in lieu of compensation that would otherwise have been payable to a Grantee in
cash.

         3.5 DELIVERY OF SHARES OF COMMON STOCK. Subject to Section 7.6, at the
expiration of the Restriction Period, a stock certificate evidencing the
Restricted Stock (to the nearest full share) with respect to which the
Restriction Period has expired with all restrictions thereon having been
satisfied shall be delivered without charge to the Grantee, or his personal
representative, free of all restrictions under the Plan.

         3.6 PAYOUT OF RESTRICTED STOCK UNITS. The Committee in the applicable
Award Agreement or the relevant Company deferred compensation plan may permit
the Grantee to elect the form and time of payout of vested Restricted Stock
Units on such conditions or subject to such procedures as the Committee may
impose, and may permit Restricted Stock or Restricted Stock Unit offsets or
other provision for payment of any applicable taxes that may be due on the
crediting, vesting or payment in respect of the Restricted Stock Units.

           SECTION 4. PERFORMANCE BASED AWARDS AND STOCK BONUS GRANTS

         4.1 PERFORMANCE BASED AWARDS .

               (a) GRANT. The Committee is authorized to grant performance based
awards within the meaning of 162(m) of the Code to Employees in the form of
Performance Units and Performance Shares ("PERFORMANCE-BASED AWARDS"). The
Committee may make grants of Performance Units or Performance Shares in such a
manner that more than one Performance Period is in progress concurrently. For
each Performance Period, the Committee shall establish the number of Performance
Units or Performance Shares and the contingent value of



<PAGE>   9

any Performance Units or Performance Shares, which may vary depending on the
degree to which performance objectives established by the committee are met.

               (b) PERFORMANCE CRITERIA. The vesting of Performance-Based Awards
shall depend on the Company's achievement of pre-established performance goals.
Such performance goals shall be based on the Company's performance on a
consolidated, segment, subsidiary, division, station or business unit basis or
any combination thereof with reference to revenue growth, net earnings (before
or after taxes or before or after taxes, interest, depreciation, and/or
amortization), cash flow, return on equity or on assets or on net investment,
earnings per share, profit returns and margins, stock price, working capital or
cost containment or reduction, or any combination thereof (the "BUSINESS
CRITERIA"). Performance goals may reflect absolute entity performance or a
relative comparison of entity performance of a peer group of entities or other
external measure of the selected Business Criteria. The applicable Business
Criteria and the specific performance goals must be approved by the Committee in
advance of applicable deadlines under the Code and while the performance
relating to such goals remains substantially uncertain. The applicable
performance measurement period may be not less than one nor more than 10 years.

               (c) TERMS AND CONDITIONS OF PERFORMANCE-BASED AWARDS. At the
beginning of each Performance Period, the Committee shall (i) determine the
value of a Performance Unit or the number of shares under a Performance Share
grant relative to performance objectives; and (iii) notify each Grantee in
writing of the established performance objectives and minimum, target, and
maximum Performance Unit or Share value for such Performance Period.

               (d) MODIFICATION. The Committee, in its sole discretion, may
adjust or modify performance targets and objectives to mitigate the unbudgeted
impact of material, unusual or nonrecurring gains and losses, accounting changes
or other extraordinary events not foreseen at the time the targets were set.

               (e) PAYMENT. The basis for payment of Performance Units or
Performance Shares for a given Performance Period shall be the achievement of
those financial and non-financial performance objectives determined by the
Committee at the beginning of the Performance Period. If minimum performance is
not achieved for a Performance Period, no payment shall be made and all
contingent rights shall cease. If minimum performance is achieved or exceeded,
the value of a Performance Unit or Performance Share shall be based on the
degree to which actual performance exceeded the pre-established minimum
performance standards, as determined by the Committee. The amount of payment
shall be determined by multiplying the number of Performance Units or
Performance Shares granted at the beginning of the Performance Period by the
final Performance Unit or Performance Share value. Once the Committee has
certified that the material terms of the Performance-Based Award were satisfied,
payments shall be made, in the discretion of the Committee, solely in cash or
Common Stock, or a combination of cash and Common Stock following the close of
the applicable Performance Period.

         4.2 GRANTS OF STOCK BONUSES The Committee may grant a Stock Bonus to
any Grantee to reward exceptional or special services, contributions or
achievements, or issue Common Stock for past services in the ordinary course,
the value of which shall be determined by the Committee, in the manner and on
such terms and conditions (including any restrictions on such shares) as
determined from time to time by the Committee. The number of shares so awarded
shall be determined by the Committee. The Stock Bonus may be granted
independently or in lieu of a cash bonus.

                     SECTION 5. NON-EMPLOYEE DIRECTOR AWARDS

               5.1 GENERAL PROVISIONS. The Committee is authorized to grant
Non-Employee Directors Options in accordance with the terms and conditions
pursuant to Section 2, Restricted Stock and Restricted Stock Units in accordance
with the terms and conditions pursuant to Section 3 and Stock Bonuses in
accordance with the terms and conditions pursuant to Section 4.2 of the Plan.
Any such Incentive Awards will be subject to such additional terms and
conditions contained in the applicable Award Agreement, not inconsistent with
the provisions of the Plan, as the Committee shall determine.



<PAGE>   10

              SECTION 6. PROVISIONS RELATING TO PLAN PARTICIPATION

         6.1 PLAN CONDITIONS.

               (a) AWARD AGREEMENT. Each Grantee to whom an Incentive Award is
granted under the Plan shall be required to enter into an Award Agreement with
the Company in a form provided by the Committee, which shall contain certain
specific terms, as determined by the Committee, with respect to the Incentive
Award and shall include provisions that the Grantee (i) shall not disclose any
trade or secret data or any other confidential information of the Company
acquired during employment by the Employer, or service as a director, or after
the termination of employment or service, (ii) shall abide by all the terms and
conditions of the Plan and such other terms and conditions as may be imposed by
the Committee, and (iii) shall not interfere with the employment of any Company
employee.

               An Incentive Award may include a non-competition agreement with
respect to the Grantee and/or such other terms and conditions, including,
without limitation, rights of repurchase or first refusal, not inconsistent with
the Plan, as shall be determined from time to time by the Committee.

               (b) NO RIGHT TO EMPLOYMENT. Nothing in the Plan, Award Agreement
or any instrument executed pursuant to the Plan shall (1) with respect to an
Employee, create any employment rights (including without limitation, rights to
continued employment) in any Grantee or affect the right of the Company to
terminate the employment of any Grantee at any time for any reason whether
before the exercise date of any Option or during the Restriction Period of any
Restricted Stock or Restricted Stock Units or during the Performance Period of
any Performance Unit or Performance Share or (2) with respect to a Non-Employee
Director, give the Non-Employee Director any right to employment by the Company
or create any implication that the Non-Employee Director is an employee.

               (c) SECURITIES REQUIREMENTS. No shares of Common Stock will be
issued or transferred pursuant to an Incentive Award unless and until all
then-applicable requirements imposed by federal and state securities and other
laws, rules and regulations and by any regulatory agencies having jurisdiction
and by any stock market or exchange upon which the Common Stock may be listed,
have been fully met. As a condition precedent to the issuance of shares pursuant
to the grant or exercise of an Incentive Award, the Company may require the
Grantee to take any reasonable action to meet such requirements. The Company
shall not be obligated to take any affirmative action in order to cause the
issuance or transfer of shares pursuant to an Incentive Award to comply with any
law or regulation described in the second preceding sentence.

         6.2 TRANSFERABILITY.

               (a) LIMITS ON EXERCISE AND TRANSFER. Unless otherwise expressly
provided in this Section 6.2, by applicable law or by the Award Agreement, as
the same may be amended, Incentive Awards are non- transferable and shall not be
subject in any manner to sale, transfer, anticipation, alienation, assignment,
pledge, encumbrance or charge.

               (b) EXCEPTIONS FOR INCENTIVE AWARDS. The Committee may permit
Incentive Awards to be transferred to and exercised by and paid to certain
persons or entities related to the Grantee, including but not limited to members
of the Grantee's family, charitable institutions, or trusts or other entities
whose beneficiaries or beneficial owners are members of the Grantee's family
and/or charitable institutions, pursuant to such conditions and procedures as
the Committee may establish. Any permitted transfer shall be subject to the
condition that the Committee receive evidence satisfactory to it that the
transfer is being made for estate and/or tax planning purposes on a gratuitous
or donative basis and without consideration (other than nominal consideration).
Notwithstanding the foregoing, Restricted Stock Awards shall be subject to any
and all additional transfer restrictions under the Internal Revenue Code.

               (c) FURTHER EXCEPTIONS TO LIMITS ON EXERCISE AND TRANSFER. The
exercise and transfer restrictions in this Section 6.2 shall not apply to:

                           (i) transfers to the Company,

                           (ii) the designation of a beneficiary to receive
                  benefits in the event of the Grantee's death or, if the
                  Grantee has died, transfers to or exercise by the Grantee's
                  beneficiary, or, in the absence of a validly designated
                  beneficiary, transfers by will or the laws of descent and
                  distribution; provided that, no transfer by will or by the
                  laws of descent and distribution shall be effective to bind
                  the Company unless the Committee shall have been furnished
                  with a copy of the deceased Grantee's will or such other
                  evidence as the Committee may deem necessary to establish the
                  validity of the transfer.



<PAGE>   11

                           (iii) transfers pursuant to a domestic relations
                  order,

                           (iv) permitted transfers or exercises on behalf of
                  the Grantee by his or her legal representative, if the Grantee
                  has suffered a Disability, or

                           (v) the authorization by the Committee of "cashless
                  exercise" procedures with third parties who provide financing
                  for the purpose of (or who otherwise facilitate) the exercise
                  of Incentive Awards consistent with applicable laws and the
                  express authorization of the Committee.

               (d) ABILITY TO EXERCISE RIGHTS. Only the Grantee or his guardian
(if the Grantee incurs a Disability), or in the event of his death, his legal
representative or beneficiary, may exercise Options, receive cash payments and
deliveries of shares, or otherwise exercise rights under the Plan. The executor
or administrator of the Grantee's estate, or the person or persons to whom the
Grantee's rights under any Incentive Award will pass by will or the laws of
descent and distribution, shall be deemed to be the beneficiary or beneficiaries
of the rights of the Grantee hereunder and shall be entitled to exercise such
rights as are provided hereunder.

         6.3 RIGHTS AS A STOCKHOLDER. Except as otherwise provided in any Award
Agreement, a Grantee or a transferee of such Grantee shall have no rights as a
stockholder with respect to any shares of Common Stock until such person becomes
a holder of record of such Common Stock. Except as otherwise provided in Section
6.5, no adjustment shall be made for dividends (ordinary or extraordinary,
whether in cash, securities or other property) or distributions or other rights
for which the record date is prior to the date such shares are issued.

         6.4 LISTING AND REGISTRATION OF SHARES OF COMMON STOCK. Prior to
issuance and/or delivery of shares of Common Stock, Grantees shall consult with
representatives of Santa Fe International Corporation, as appropriate, regarding
compliance with laws, rules, regulations and Company policy that apply to such
shares. If the Company determines that such action is desirable, the Company
shall postpone the issuance and/or delivery of the affected shares of Common
Stock upon any exercise of an Incentive Award until completion of such stock
exchange listing, registration, or other qualification of such shares under any
state and/or federal law, rule or regulation as the Company may consider
appropriate, and may require any Grantee to make such representations and
furnish such information as it may consider appropriate in connection with the
issuance or delivery of the shares in compliance with applicable laws, rules,
regulations and Company policy. The Company shall not be obligated to take any
affirmative action in order to cause the issuance or transfer of shares pursuant
to an Incentive Award to comply with any law, rule or regulation described in
the immediately preceding sentence.

         6.5 CHANGE IN STOCK AND ADJUSTMENTS.

               (a) CHANGES IN CAPITALIZATION. If the outstanding shares of the
Common Stock, as constituted from time to time, shall be changed as a result of
a reclassification, recapitalization, stock split (including a stock split in
the form of a stock dividend) or reverse stock split; any merger, combination,
consolidation, or other reorganization; any spin-off, split-up, or similar
extraordinary dividend distribution in respect of the Common Stock (whether in
the form of securities or property); any exchange of Common Stock or other
securities of the Company, or any similar, unusual or extraordinary corporate
transaction in respect of the Common Stock; or a sale of all or substantially
all the assets of the Company as an entirety; then, for all purposes, references
herein to Common Stock, Restricted Stock or Restricted Stock Units shall mean
and include all securities or other property (other than cash) that holders of
Common Stock are entitled to receive in respect of Common Stock by reason of
each successive aforementioned event, which securities or other property (other
than cash) shall be treated in the same manner and shall be subject to the same
restrictions as the underlying Common Stock, Restricted Stock or Restricted
Stock Units.

               (b) CHANGES IN LAW OR CIRCUMSTANCES. In the event of any change
in applicable laws or any change in circumstances which results in or would
result in any dilution of the rights granted under the Plan, or which otherwise
warrants equitable adjustment because it interferes with the intended operation
of the Plan, then if the Committee shall, in its sole discretion, determine that
such change equitably requires an adjustment in the number or kind of shares of
stock or other securities or property theretofore subject, or which may become
subject, to issuance or transfer under the Plan or in the terms and conditions
of outstanding Incentive Awards, such adjustment shall be made in accordance
with such determination. Such adjustments may include without limitation changes
with respect to (i) the aggregate number of shares that may be issued under the
Plan, (ii) the number of shares subject to Incentive Awards and (iii) the price
per share for outstanding Incentive Awards. The Committee shall give notice to
each Grantee, and upon notice such adjustment shall be effective and binding for
all purposes of the Plan.



<PAGE>   12

         6.6 EFFECT OF TERMINATION OF EMPLOYMENT OR SERVICES. The Committee
shall establish in respect of each Incentive Award granted to a Grantee the
effect of a termination of employment or services as a director on the rights
and benefits thereunder and in so doing may make distinctions based on the cause
of termination; which provisions shall be contained in the applicable Award
Agreement.

         6.7 CHANGES IN CONTROL. The Committee shall establish in respect of
each outstanding Incentive Award granted to a Grantee the effect of a change in
control of the Company on the rights and benefits thereunder; which provisions
shall be contained in the applicable Award Agreement.


                            SECTION 7. MISCELLANEOUS

         7.1 AMENDMENTS TO INCENTIVE AWARDS. The Committee may waive any
conditions or rights with respect to, or amend, alter, suspend, discontinue, or
terminate, any unexercised Incentive Award theretofore granted, prospectively or
retroactively, with the consent of any relevant Grantee.

         7.2 EXCHANGE OF INCENTIVE AWARDS. The Committee may, in its discretion
and subject to Section 1.4(c)(ii), permit Grantees under the Plan to surrender
outstanding Incentive Awards in order to exercise or realize the rights under
other Incentive Awards, or in exchange for the grant of new Incentive Awards or
require holders of Incentive Awards to surrender outstanding Incentive Awards as
a condition precedent to the grant of new Incentive Awards.

         7.3 FINANCING. The Company may extend and maintain, or arrange for the
extension and maintenance of, financing to any Grantee to purchase shares
pursuant to exercise of an Incentive Award or to satisfy any tax withholding
obligations on such terms as may be approved by the Committee in its sole
discretion. In considering the terms for extension or maintenance of credit by
the Company, the Committee shall, among other factors, consider the cost to the
Company of any financing extended by the Company.

         7.4 EFFECTIVE DATE AND GRANT PERIOD. This Plan shall become effective
at the Effective Time. Unless sooner terminated by the Board, the Plan shall
terminate on the 10th anniversary of the Effective Time. After the termination
of the Plan, no Incentive Awards may be granted under the Plan, but previously
granted Incentive Awards shall remain outstanding in accordance with their
applicable terms and conditions.

         7.5 FUNDING. Except as provided under Section 3, no provision of the
Plan shall require the Company, for the purpose of satisfying any obligations
under the Plan, to purchase assets or place any assets in a trust or other
entity to which contributions are made or otherwise to segregate any assets in a
manner that would provide any Grantee any rights that are greater than those of
a general creditor of the Company, nor shall the Company maintain separate bank
accounts, books, records or other evidence of the existence of a segregated or
separately maintained or administered fund if such action would provide any
Grantee with any rights that are greater than those of a general creditor of the
Company. Grantees shall have no rights under the Plan other than as unsecured
general creditors of the Company except that insofar as they may have become
entitled to payment of additional compensation for the performance of services,
they shall have the same rights as other employees under applicable law.
However, the Company may establish a "Rabbi Trust" for purposes of securing the
payment pursuant to a change in control of the Company.

         7.6 WITHHOLDING TAXES. The Company shall have the right to (i) make
deductions from any settlement of an Incentive Award made under the Plan,
including the delivery of shares, or require shares or cash or both to be
withheld from any Incentive Award, in each case in an amount sufficient to
satisfy the withholding of any federal, state or local taxes required by law, or
(ii) take such other action as may be necessary or appropriate to satisfy any
such withholding obligations. The Committee may determine the manner in which
such tax withholding may be satisfied, and may permit shares of Common Stock
(rounded up to the next whole number) to be used to satisfy required tax
withholding based on the Fair Market Value of any such shares of Common Stock,
as of the delivery of shares or payment of cash in satisfaction of the
applicable Incentive Award.

         7.7 CONFLICTS WITH PLAN. In the event of any inconsistency or conflict
between the terms of the Plan and an Award Agreement, the terms of the Plan
shall govern.



<PAGE>   13

         7.8 NO GUARANTEE OF TAX CONSEQUENCES. Neither the Company nor the
Committee makes any commitment or guarantee that any federal, state or local tax
treatment will apply or be available to any person participating or eligible to
participate hereunder.

         7.9 SEVERABILITY. In the event that any provision of this Plan shall be
held illegal, invalid or unenforceable for any reason, such provision shall be
fully severable, but shall not affect the remaining provisions of the Plan, and
the Plan shall be construed and enforced as if the illegal, invalid, or
unenforceable provision had never been included herein.

         7.10 GENDER, TENSE AND HEADINGS. Whenever the context requires such,
words of the masculine gender used herein shall include the feminine and neuter,
and words used in the singular shall include the plural. Section headings as
used herein are inserted solely for convenience and reference and constitute no
part of the Plan.

         7.11 AMENDMENT AND TERMINATION.

               (a) BOARD AND COMMITTEE ACTION. The Plan may be amended or
terminated at any time by the Board by the affirmative vote of a majority of the
members in office. Notwithstanding the foregoing, the Compensation Committee of
the Board may amend the Plan by its own action if any such amendment is
necessary for the Plan to meet applicable legal requirements or if the amendment
does not materially increase the Plan costs nor substantially modify the
eligibility, vesting or benefit provisions of the Plan. The Plan, however, shall
not be amended, without prior written consent of each affected Grantee if such
amendment or termination of the Plan would adversely affect any material vested
benefits or rights of such person.

               (b) SHAREHOLDER APPROVAL. Any amendment to the Plan to increase
the number of shares available for issue or transfer pursuant to Section 1.4, or
to the extent then required under Sections 422 or 424 of the Code or any other
applicable law, or deemed necessary or advisable by the Board, shall be subject
to shareholder approval and such consent as may be required under the
Intercompany Agreement and/or the Company's Articles of Association.

         7.12 SECTION 280G PAYMENTS. Except as otherwise provided in an
Executive Severance Agreement between the Company and any Grantees, the
Committee may establish with respect to an Incentive Award or Incentive Awards
granted to a Grantee, a limit on the amount payable in respect of such Incentive
Award or Incentive Awards to the extent that any such payment would be
considered an "excess parachute payment" under Section 280G of the Code, which
provisions shall be contained in the applicable Award Agreement.

         7.13 GOVERNING LAW. The Plan shall be construed in accordance with the
laws of the State of Texas, except as superseded by federal law, and in
accordance with applicable provisions of the Code and regulations or other
authority issued thereunder by the appropriate governmental authority.

         IN WITNESS WHEREOF, this Plan has been executed as of the 15th day of
May, 2001.

                               SANTA FE INTERNATIONAL CORPORATION


                               By: /s/ Cary A. Moomjian, Jr.
                                  ----------------------------------------------
                                  Cary A. Moomjian, Jr.
                                  Vice President, General Counsel and Secretary