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                                                                     EXHIBIT 4.3

                    FORM OF GLOBALSANTAFE 401(k) SAVINGS PLAN

               (Amended and Restated Effective as of July 1, 2002)

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                    FORM OF GLOBALSANTAFE 401(k) SAVINGS PLAN

                  (Amended and Restated Effective July 1, 2002)

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ARTICLE I         DEFINITIONS..................................................2
1.1               2001 Plan....................................................2
1.2               Account......................................................2
1.3               Affiliate....................................................2
1.4               After-Tax Contributions......................................2
1.5               After-Tax Contribution Account...............................2
1.6               Annuity Starting Date........................................2
1.7               Beneficiary..................................................2
1.8               Benefits Executive Committee.................................2
1.9               Borrower.....................................................2
1.10              Business Day.................................................2
1.11              Catch-Up Contributions.......................................2
1.12              Catch-Up Contribution Account................................2
1.13              Claims Administrator.........................................3
1.14              Code.........................................................3
1.15              Committee....................................................3
1.16              Company......................................................3
1.17              Compensation.................................................3
1.18              Contribution.................................................3
1.19              Disability...................................................3
1.20              ERISA........................................................3
1.21              Effective Date...............................................3
1.22              Employee.....................................................3
1.23              Employer.....................................................4
1.24              Employer Contribution........................................4
1.25              Employer Contribution Account................................4
1.26              Employment Year..............................................4
1.27              Fiduciaries..................................................4
1.28              GlobalSantaFe Investment Savings & Profit Sharing Plan.......4
1.29              GlobalSantaFe Stock..........................................4
1.30              Hour of Service..............................................4
1.31              Income of the Trust Fund.....................................5
1.32              Investment Fund..............................................5
1.33              IS/PS Trust Fund.............................................5
1.34              Joint and 50% Survivor Annuity...............................5
1.35              Leased Employee..............................................5
1.36              Matching Contribution........................................6
1.37              Matching Contribution Account................................6
1.38              Non-Resident Matching Contribution...........................6
1.39              Non-Resident Matching Contribution Account...................6
1.40              Non-Resident Participant.....................................6

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1.41              Participant..................................................6
1.42              Pension Offset Account.......................................6
1.43              Plan.........................................................6
1.44              Plan Year....................................................6
1.45              Pre-Retirement Survivor Annuity..............................6
1.46              Pre-Tax Contributions........................................6
1.47              Pre-Tax Contribution Account.................................6
1.48              Prior Employer After-Tax Account.............................7
1.49              Prior Employer Matching Account..............................7
1.50              Rollover.....................................................7
1.51              Rollover Account.............................................7
1.52              Service......................................................7
1.53              Trust Agreement..............................................7
1.54              Trust Fund...................................................7
1.55              Trustee......................................................7
1.56              United States Payroll........................................7
1.57              Valuation Date...............................................7

ARTICLE II        ADMINISTRATION AND FIDUCIARY MATTERS OF THE PLAN.............9
2.1               Appointment of Committees....................................9
2.2               Records of Committee.........................................9
2.3               Committee Action.............................................9
2.4               Committee Disqualification...................................9
2.5               Committee Compensation, Expenses and Advisers...............10
2.6               Committee Liability.........................................10
2.7               Committee Determinations....................................10
2.8               General Powers of Committee.................................11
2.9               Allocation of Responsibility Among Fiduciaries
                  for Plan and Trust Administration...........................11
2.10              Annual Audit................................................11

ARTICLE III       PARTICIPATION...............................................12
3.1               Participation...............................................12
3.2               Participants to Furnish Required Information................12
3.3               Termination of Participation; Participation
                  upon Reemployment...........................................12

ARTICLE IV        CONTRIBUTIONS AND FORFEITURES...............................13
4.1               Employer Contributions......................................13
4.2               Pre-Tax Contributions.......................................13
4.3               After-Tax Contributions.....................................15
4.4               Deferral Elections..........................................15
4.5               Refunds to Employer.........................................15
4.6               Funding Policy..............................................16
4.7               Rollovers...................................................16

ARTICLE V         ACCOUNTS OF PARTICIPANTS....................................17
5.1               Individual Accounts.........................................17

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5.2               Account Adjustments.........................................17
5.3               Maximum Annual Additions....................................18
5.4               Valuation of Trust Fund.....................................23
5.5               Recognition of Different Investment Funds...................23

ARTICLE VI        PARTICIPANTS' BENEFITS......................................24
6.1               Termination of Service......................................24
6.2               Death of Participants.......................................24
6.3               Beneficiaries in the Event of Death.........................24
6.4               Qualified Election..........................................24
6.5               Valuation Dates Determinative of Participants' Rights.......25
6.6               Hardship Withdrawals........................................25
6.7               Special Withdrawals After Attainment of Age 59 1/2..........26
6.8               Loans.......................................................26
6.9               Voluntary Withdrawals.......................................28

ARTICLE VII       PAYMENT OF BENEFITS.........................................30
7.1               Payment of Benefits.........................................30
7.2               Pension Offset Account......................................31
7.3               Presenting Claims for Benefits..............................33
7.4               Claims Review Procedure.....................................34
7.5               Disputed Benefits...........................................36
7.6               Rollover Distribution.......................................36
7.7               Minimum Distribution Requirements...........................37

ARTICLE VIII      TRUST AGREEMENT AND TRUST FUND..............................39
8.1               Trust Agreement.............................................39
8.2               Investment Funds............................................39
8.3               Investment Directions of Participants.......................39
8.4               Change of Investment Directions.............................39
8.5               Voting of GlobalSantaFe Stock; Exercise of Other Rights.....39
8.6               Limitations on Insiders.....................................40
8.7               Compliance with Exchange Act Rule 10(b)(18).................40
8.8               Benefits Paid Solely from Trust Fund........................40
8.9               Authority to Designate Investment Manager...................41

ARTICLE IX        ADOPTION OF PLAN BY AFFILIATES; SEPARATION OF THE
                  TRUST FUND; AMENDMENT AND TERMINATION OF THE PLAN;
                  AND DISCONTINUANCE OF CONTRIBUTIONS TO THE TRUST
                  FUND........................................................42
9.1               Adoption of Plan by Affiliates..............................42
9.2               Effect of Adoption..........................................42
9.3               Separation of the Trust Fund................................42
9.4               Voluntary Separation........................................43
9.5               Amendment of the Plan.......................................43
9.6               Acceptance or Rejection of Amendment by Employers...........43
9.7               Termination of the Plan.....................................43

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9.8               Liquidation and Distribution of Trust Fund
                  upon Termination............................................44
9.9               Effect of Termination or Discontinuance of
                  Contributions...............................................44
9.10              Merger of Plan with Another Plan............................44

ARTICLE X         MISCELLANEOUS PROVISIONS....................................46
10.1              Terms of Employment.........................................46
10.2              Controlling Law.............................................46
10.3              Invalidity of Particular Provisions.........................46
10.4              Non-alienability of Rights of Participants..................46
10.5              Payments in Satisfaction of Claims of Participants..........46
10.6              Impossibility of Diversion of Trust Fund....................46
10.7              Unclaimed Benefits..........................................47

ARTICLE XI        TOP-HEAVY PLAN REQUIREMENTS.................................48
11.1              General Rule................................................48
11.2              Minimum Contribution Provisions.............................48
11.3              Limitation on Compensation..................................49
11.4              Coordination with Other Plans...............................49
11.5              Distributions to Certain Key Employees......................49
11.6              Determination of Top-Heavy Status...........................49
11.7              Modification of Top-Heavy Rules.............................53

ARTICLE XII       TESTING OF CONTRIBUTIONS....................................54
12.1              Definitions.................................................54
12.2              Actual Deferral Percentage..................................55
12.3              Actual Deferral Percentage Limits...........................55
12.4              Reduction of Pre-Tax Contribution Rates by
                  Leveling Method.............................................56
12.5              Increase in Pre-Tax Contribution Rates......................56
12.6              Excess Pre-Tax Contributions................................56
12.7              Contribution Percentage.....................................58
12.8              Contribution Percentage Limits..............................58
12.9              Treatment of Excess Aggregate Contributions.................59
12.10             Safe Harbor Provisions......................................61

                                      -iv-

<PAGE>

                    FORM OF GLOBALSANTAFE 401(k) SAVINGS PLAN

               (Amended and Restated Effective as of July 1, 2002)

                Effective as of January 1, 1987, Global Marine Corporate
Services Inc., a California corporation (the "Company"), established the Global
Marine Savings Incentive Plan (the "1987 Plan") for the benefit of its eligible
employees and retained the right to amend the 1987 Plan under Section 9.5
thereof. The 1987 Plan was amended and restated effective October 1, 1995 (the
"1995 Plan").

                The Company established the Global Marine Savings Incentive Plan
Trust Agreement by agreement effective January 1, 1987, between the Company and
Chemical Bank, Trustee, and as amended (the "1987 Trust"). The 1987 Trust was
amended and restated effective April 1, 1994, between the Company and Fidelity
Management Trust Company (the "Prior Trust Agreement"). The Prior Trust was
amended and restated effective July 1, 2002 and, as such, is intended to
constitute a part of the Plan as set forth herein.

                Effective as of October 1, 1995, the Board of Directors of the
Company authorized the amendment, restatement and continuation of the Global
Marine Savings Incentive Plan to consolidate the amendments to the 1987 Plan and
to make certain other changes therein.

                In 2001, Global Marine Inc. and Santa Fe International
Corporation entered into a business combination, pursuant to which Global Marine
Inc. and the Company became indirect, wholly-owned subsidiaries of GlobalSantaFe
Corporation (the "Merger"). In connection therewith, the Company was renamed
GlobalSantaFe Corporate Services Inc. The 1995 Plan was renamed the
GlobalSantaFe Savings Incentive Plan (the "Prior Plan") and was amended and
restated effective as of November 20, 2001 to incorporate terms resulting from
the Merger and to provide for changes required by the Retirement Protection Act
of 1994 under the General Agreement on Tariffs and Trades, the Uniformed
Services Employment and Reemployment Rights Act, the Small Business Job
Protection Act of 1996, the Tax Reform Act of 1997, the Internal Revenue Service
Restructuring and Reform Act of 1998 and the Community Renewal Tax Relief Act of
2000.

                Effective as of July 1, 2002, the Prior Plan was renamed the
GlobalSantaFe 401(k) Savings Plan and restated in the form of the plan set forth
herein (the "Plan") as part of a merger of the Prior Plan with the GlobalSantaFe
Investment Savings and Profit Sharing Plan and in order to provide certain
changes under the Economic Growth and Tax Reconciliation Act of 2001.

                The Plan and Trust Agreement are intended to meet the
requirements of Sections 401(a), 401(k) and 501(a) of the Internal Revenue Code
of 1986, and of the Employee Retirement Income Security Act of 1974, as either
may be amended from time to time.

                NOW, THEREFORE, the Company hereby amends, restates in its
entirety and continues the GlobalSantaFe 401(k) Savings Plan as follows:

                                       -1-

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                                    ARTICLE I

                                   DEFINITIONS

                As used in this Plan, the following words and phrases shall have
the following meanings unless the context clearly requires a different meaning:

        1.1     2001 Plan: The GlobalSantaFe Savings Incentive Plan as amended
and restated effective as of November 19, 2001.

        1.2     Account: Any of the accounts (other than a "Loan Account")
maintained for a Participant pursuant to Section 5.1, or all such accounts
collectively, as the context requires.

        1.3     Affiliate: A corporation or other trade or business which,
together with the Company or an Employer, is "under common control" within the
meaning of Section 414(b) or (c), as modified by Section 415(h) of the Code; any
organization (whether or not incorporated) which, together with the Company or
an Employer, is a member of an "affiliated service group" within the meaning of
Section 414(m) of the Code; and any other entity required to be aggregated with
the Employer pursuant to regulations under Section 414(o) of the Code.

        1.4     After-Tax Contributions: The amount contributed by a Participant
from his or her Compensation as an "After Tax Contribution" pursuant to Section
4.3.

        1.5     After-Tax Contribution Account: The account maintained for a
Participant to record After-Tax Contributions made by a Participant and
adjustments related thereto.

        1.6     Annuity Starting Date: The first day of the first period for
which the balance of a Participant's Pension Offset Account, if any, is paid as
an annuity pursuant to Section 7.2.

        1.7     Beneficiary: A Participant's spouse, or such other natural
person or persons, or the trustee of an inter vivos trust for the benefit of
natural persons, entitled to receive a Participant's death benefits, as provided
in Section 6.3 hereof.

        1.8     Benefits Executive Committee: The Benefits Executive Committee
of the Company.

        1.9     Borrower: A Borrower as defined in Section 6.8 of this Plan.

        1.10    Business Day: Any day on which the New York Stock Exchange is
open for trading.

        1.11    Catch-Up Contributions: The amount deferred by a Participant
from his or her Compensation as a "Catch-Up Contribution," pursuant to Section
4.2.

        1.12    Catch-Up Contribution Account: The account maintained for a
Participant to record the Catch-Up Contributions made by the Employer to the
Trust Fund, and any adjustments related thereto.

                                       -2-

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        1.13    Claims Administrator: The individual, committee or entity
designated, pursuant to Section 7.3, to act as "Claims Administrator" for this
Plan and to perform the duties described in Article VII hereunder.

        1.14    Code: The Internal Revenue Code of 1986, as amended from time to
time.

        1.15    Committee: The Benefits Administrative Committee appointed by
the Company to act as administrator of this Plan and to perform the duties
described in Article II hereof.

        1.16    Company: GlobalSantaFe Corporate Services Inc., a California
corporation, its predecessors and successors.

        1.17    Compensation: The regular salary and wages paid to a Participant
by an Employer, including overtime payments, non-exempt sick pay, vacation pay,
jury duty, military leave, bereavement pay, non-exempt personal days, and also
including any Participant deferrals made in regard to Code Sections 402(g)(3),
125 or 132(f)(4). Compensation shall not include compensation received for
extended travel payments, foreign service premiums, contract fulfillment
payments, bonuses, insurance premiums, area living and similar allowances,
expense accounts and reimbursements for expenses, reimbursements of foreign
income taxes, social benefits under foreign laws or regulations, housing
allowances, school tuition allowances, any form of payment or compensation
pursuant to a nonqualified incentive plan of an Employer, any form of irregular
or extra compensation (except as included above), or contributions under any
benefit plans, including pension and other retirement benefit plans, but
Compensation shall include Pre-Tax or Catch-Up Contributions to this Plan.
Notwithstanding anything herein to the contrary, in no event shall the
Compensation taken into account under the Plan for any Employee exceed $200,000
or such other dollar amount as may be prescribed by the Secretary of the
Treasury or his or her delegate.

        1.18    Contribution: Any amount contributed to the Trust Fund pursuant
to (i) the provisions of this Plan, whether incident to the original adoption of
this Plan and the establishment of the Trust Fund, or at any time subsequent
thereto, by an Employer, or by a Participant out of his or her Compensation or
(ii) as a result of the merger of this Plan with the GlobalSantaFe Investment
Savings & Profit Sharing Plan.

        1.19    Disability: A disability which results in the Participant (i)
receiving benefits under his or her Employer's long-term disability plan or (ii)
being placed on an unpaid medical leave of absence from his or her Employer in
accordance with that Employer's procedures established for such purpose.

        1.20    ERISA: Public Law No. 93-406, the Employee Retirement Income
Security Act of 1974, as amended from time to time.

        1.21    Effective Date: July 1, 2002, except as otherwise provided in
specific provisions of the Plan.

        1.22    Employee: An employee of an Employer; provided, however, that
the term "Employee" does not include any person who is covered by a collective
bargaining agreement unless such agreement specifically provides that the
employees covered thereunder may

                                       -3-

<PAGE>

participate in the Plan. The term "Employee" also includes individuals who are
Leased Employees.

        1.23    Employer: The Company, its predecessors and successors, and each
Affiliate considered an "Employer" pursuant to the provisions of Article IX
hereof, and the successors, if any, to such Affiliate for so long as the
successor is considered an Employer pursuant to Article IX.

        1.24    Employer Contribution: The amount contributed by the Employer to
the Trust Fund as a Matching Contribution and/or a Non-Resident Matching
Contribution, pursuant to Section 4.1.

        1.25    Employer Contribution Account: A reference to a Participant's
Matching Contribution Account and/or a Non-Resident Participant's Non-Resident
Matching Contribution Account, as applicable.

        1.26    Employment Year: A twelve (12) consecutive-month period
commencing on the Employee's date of employment or on any anniversary of such
employment date.

        1.27    Fiduciaries: The Employer, the Committee, the Benefits Executive
Committee, and the Trustee and any other person designated as a fiduciary with
respect to the Plan or Trust Agreement, but only with respect to the specific
responsibilities of each for Plan and Trust administration, all as described in
Section 2.9 hereof. Any person or group of persons may serve in more than one
fiduciary capacity with respect to the Plan.

        1.28    GlobalSantaFe Investment Savings & Profit Sharing Plan: The
Santa Fe Investment Savings & Profit Sharing Plan, as effective April 1, 1986,
as amended and restated January 1, 2001, and as thereafter amended and restated
in the form of the GlobalSantaFe Investment Savings & Profit Sharing Plan, as of
November 20, 2001, and as subsequently amended. Effective July 1, 2002, the
GlobalSantaFe Investment Savings & Profit Sharing Plan was merged into this
Plan.

        1.29    GlobalSantaFe Stock: Ordinary shares of GlobalSantaFe
Corporation.

        1.30    Hour of Service: For purposes of determining an Employee's
period of Service:

                (a)     Each hour for which an Employee is paid, or entitled to
        payment, (i) for the performance of duties for an Employer or Affiliate
        during the applicable computation period (each such hour to be credited
        for the computation period in which the Employee performed the duties),
        and (ii) on account of a period of time during which no duties are
        performed (irrespective of whether the employment relationship has
        terminated) due to vacation, holiday, illness, incapacity (including
        Disability), layoff, jury duty, military duty or leave of absence (each
        such hour to be credited for the computation period during which the
        Employee was absent). Hours of Service shall be credited for payments
        whether made by or due from the Employer or Affiliate directly, or
        indirectly through, among others, a trust fund, or insurer, to which the
        Employer or Affiliate contributes or pays premiums, and regardless of
        whether contributions made are

                                       -4-

<PAGE>

        due to the trust fund, insurer or other entity or for the benefit of
        particular employees or on behalf of a group of employees in the
        aggregate. No Hours of Service shall be credited for payments made or
        due under a plan maintained solely for the purpose of complying with the
        applicable workmen's compensation, "Jones Act," or unemployment
        compensation or disability laws, or which solely reimburse an Employee
        for medical or medically related expenses incurred by the Employee.

                (b)     Each hour for which credit is not otherwise given with
        respect to which back pay, irrespective of mitigation of damages, is
        either awarded or agreed to by the Employer or Affiliate (each such hour
        to be credited for the computation period with respect to which the back
        pay award or agreement pertains).

To the extent not otherwise provided in this section, Hours of Service shall be
determined or credited in accordance with Department of Labor Regulations,
Sections 2530.200b-2(b) and (c).

                Hours of Service will be credited for employment with other
members of an affiliated service group (under Code Section 414(m)), a controlled
group of corporations (under Code Section 414(b)), or a group of trades or
businesses under common control (under Code Section 414(c)), of which the
Employer is a member.

                Hours of Service will also be credited for any individual
considered an Employee for purposes of this Plan under Code Section 414(n).

        1.31    Income of the Trust Fund: The net gain or loss of the Trust Fund
from investments, as reflected by interest payments, dividends, realized and
unrealized gains and losses on securities and other investment transactions and
expenses paid from the Trust Fund.

        1.32    Investment Fund: One or more investment alternatives designated
by the Benefits Executive Committee pursuant to the Plan and Trust Agreement in
which Accounts held under the Trust Fund may be invested.

        1.33    IS/PS Trust Fund: The assets of that certain trust maintained
pursuant to the terms of the GlobalSantaFe Investment Savings & Profit Sharing
Plan.

        1.34    Joint and 50% Survivor Annuity: The form of "Joint and 50%
Survivor Annuity" described in Section 7.2(b).

        1.35    Leased Employee: Each person who is not an employee of the
Employer or an Affiliate but who performs services for the Employer or an
Affiliate pursuant to a leasing agreement (oral or written) between the Employer
or an Affiliate and any leasing organization, provided that such person has
performed such services for the Employer or an Affiliate or for related persons
(within the meaning of Section 144(a)(3) of the Code) on a substantially
full-time basis for a period of at least one year and such services are
performed under primary direction or control by the Employer or an Affiliate.
The term "Leased Employee" shall also include any individual who is deemed to be
an employee of the Employer under Section 414(o) of the Code.

                                       -5-

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Notwithstanding the preceding sentences, the term "Leased Employee" shall not
include any individual who is described in Section 414(n)(5) of the Code.

        1.36    Matching Contribution: The amount contributed by the Employer to
the Trust Fund as a "Matching Contribution," pursuant to Section 4.1.

        1.37    Matching Contribution Account: The account maintained for a
Participant to record his or her share of Matching Contributions, and
adjustments relating thereto.

        1.38    Non-Resident Matching Contribution: The amount contributed by
the Employer to the Trust Fund as a "Non-Resident Matching Contribution"
pursuant to Section 4.1.

        1.39    Non-Resident Matching Contribution Account: The account
maintained for a Non-Resident Participant to record his or her share of
Non-Resident Matching Contributions, and adjustments relating thereto.

        1.40    Non-Resident Participant: A Participant who is a non-resident
alien who has no "earned income" (within the meaning of Section 911(d)(2) of the
Code) from an Employer which constitutes income from U.S. sources within the
United States (within the meaning of Section 861(a)(3) of the Code).

        1.41    Participant: An Employee who, pursuant to the provisions of
Article III hereof, is participating in the Plan.

        1.42    Pension Offset Account: The account maintained for a Participant
to record contributions, forfeitures, income, expenses, gains and losses related
thereto, if any, in a Participant's Pension Offset Account, if any, under the
GlobalSantaFe Investment Savings & Profit Sharing Plan and which, as of the
Effective Date, was transferred to the Trust Fund from the IS/PS Trust on behalf
of such Participant. Each Participant's Pension Offset Account, if any, shall be
fully vested and nonforfeitable at all times.

        1.43    Plan: The GlobalSantaFe 401(k) Savings Plan set forth herein,
and as amended from time to time.

        1.44    Plan Year: The calendar year commencing January 1st and ending
December 31st.

        1.45    Pre-Retirement Survivor Annuity: An immediate annuity for the
life of the Participant's spouse, purchased with 100% of the Participant's
Pension Offset Account Balance as of the date of death, subject to applicable
adjustments and allocations.

        1.46    Pre-Tax Contributions: The amount deferred by a Participant from
his or her Compensation as "Pre-Tax Basic Contributions" and "Pre-Tax Excess
Contributions" pursuant to Section 4.2.

        1.47    Pre-Tax Contribution Account: The account maintained for a
Participant to record the Pre-Tax Contributions made on the Participant's behalf
by the Employer to the Trust Fund, and adjustments relating thereto.

                                       -6-

<PAGE>

        1.48    Prior Employer After-Tax Account: The account maintained for a
Participant to record the amount of after-tax contributions, income, expenses,
gains, and losses related thereto, if any, made to a Participant's Pre 87 After
Tax Savings Account or Post 86 After Tax Savings Account, if any, established
under the GlobalSantaFe Investment Savings & Profit Sharing Plan and which, as
of the Effective Date, was transferred to the Trust Fund from the IS/PS Trust
Fund on behalf of such Participant. Each Participant's Prior Employer After-Tax
Account, if any, shall be fully vested and nonforfeitable at all times.

        1.49    Prior Employer Matching Account: The account maintained for a
Participant to record the amount of matching contributions, income, expenses,
gains and losses related thereto, if any, made to a Participant's Company
Contribution Account, if any, established under the GlobalSantaFe Investment
Savings & Profit Sharing Plan and which, as of the Effective Date, was
transferred to the Trust Fund from the IS/PS Trust Fund on behalf of such
Participant. Each Participant's Prior Employer Matching Account, if any, shall
be fully vested and nonforfeitable at all times.

        1.50    Rollover: A "Rollover" shall be the taxable portion of any
distribution to an Employee of all or any portion of the balance to the credit
of the Employee from a qualified trust under Code Section 501(a) which is a part
of a plan qualified under Code Section 401(a), except that a Rollover shall not
include (i) any distribution which is one of a series of substantially equal
periodic payments (not less frequently than annually) made for the life (or life
expectancy) of the Employee or for the joint lives (or joint life expectancies)
of the Employee and the Employee's designated beneficiary, or for a specified
period of ten (10) years or more, (ii) any distribution to the extent it is
required under Code Section 401(a)(9), and (iii) any hardship distribution.
Additionally, a Rollover shall not include any distribution from a Code Section
403(a) or 403(b) annuity plan, a Code Section 457 governmental plan, or from any
funds which consist wholly or in part of after-tax contributions.

        1.51    Rollover Account: The account maintained for each Participant to
record Rollover contributions to the Plan pursuant to Section 4.7, and
adjustments thereto.

        1.52    Service: A Participant's period of employment with any Employer
or with any Affiliate, including a period of absence approved by the Employer or
Affiliate.

        1.53    Trust Agreement: The Trust Agreement provided for in Article
VIII hereof, as amended from time to time.

        1.54    Trust Fund: All Contributions of Employers and Participants held
by the Trustee under the Trust Agreement, together with all income, profits or
increments thereon.

        1.55    Trustee: The Trustee under the Trust Agreement.

        1.56    United States Payroll: A payroll system operated and originated
in the United States, excluding local payrolls operating outside the United
States which are denominated in U.S. dollars.

        1.57    Valuation Date: Each Business Day during the Plan Year. The last
Business Day of each calendar quarter shall be the "quarterly Valuation Date."

                                       -7-

<PAGE>

                Words used in this Plan and in the Trust Agreement in the
singular shall include the plural and in the plural the singular, and the gender
of words used shall be construed to include whichever may be appropriate under
any particular circumstances of the masculine, feminine or neuter genders.

                                       -8-

<PAGE>

                                   ARTICLE II

                ADMINISTRATION AND FIDUCIARY MATTERS OF THE PLAN

        2.1     Appointment of Committees:

                (a)     The Board of Directors of the Company shall appoint the
        Benefits Administrative Committee (the "Committee" herein), whose
        members may be employees of the Company or other Employers, to act as
        Administrator of the Plan and Named Fiduciary under ERISA and to perform
        the administrative duties set forth herein. Each member of the Committee
        shall serve for such term as the Board of Directors of the Company may
        designate or until his or her death, resignation or removal by said
        Board. The Board of Directors of the Company shall promptly appoint
        successors to fill any vacancies in the Committee.

                (b)     The Board of Directors of the Company shall appoint the
        Benefits Executive Committee (the "Benefits Executive Committee"
        herein), whose members may be employees of the Company or other
        Employers, to perform the duties of the Benefits Executive Committee
        related to Plan investment decisions and all other duties of the
        Benefits Executive Committee, as set forth herein. Each member of the
        Benefits Executive Committee shall serve for such term as the Board of
        Directors of the Company may designate or until his or her death,
        resignation or removal by said Board. The Board of Directors of the
        Company shall promptly appoint successors to fill any vacancies in the
        Benefits Executive Committee.

        2.2     Records of Committee: The Committee shall keep appropriate
records of its proceedings and the administration of the Plan. The Committee
shall make available to Participants and their Beneficiaries for examination,
during business hours, such records of the Plan as pertain to the examining
person and such documents relating to the Plan as are required by ERISA.

        2.3     Committee Action: Action may be taken by the Committee at any
meeting where a majority of its members are present and at any such meeting any
action may be taken which shall be approved by a majority of the members
present. The Committee may also take any action without a meeting that is
approved by a majority of the Committee members and is evidenced by a written
document signed by a member of the Committee. The Committee may delegate any of
its rights, powers and duties to any one or more of its members, or to any other
person, by written action as provided herein, acknowledged in writing by the
delegate or delegates. Such delegation may include, without limitation, the
power to execute any document on behalf of the Committee, and the Chairman of
the Committee shall be agent of the Plan and the Committee for the service of
legal process at the principal office of the Company in Houston, Texas.

        2.4     Committee Disqualification: A member of the Committee who may be
a Participant shall not vote on any question relating specifically to himself,
excluding questions related to or affecting Participants as a general class.

                                       -9-

<PAGE>

        2.5     Committee Compensation, Expenses and Advisers: The members of
the Committee and the Benefits Executive Committee shall serve without bond
(unless otherwise required by law) and without compensation for their services
as such. The Committee and the Benefits Executive Committee may each
respectively select, and authorize the Trustee to compensate suitably, such
attorneys, agents and representatives as may be deemed necessary or advisable to
the performance of its respective duties. All expenses of the Committee and/or
the Benefits Executive Committee that shall arise in connection with the
administration of the Plan shall be paid by the Company or by the Trustee out of
the Trust Fund.

        2.6     Committee Liability: Except to the extent that such liability is
created by ERISA, no member of the Committee or the Benefits Executive Committee
shall be liable for any act or omission of any other member of the Committee or
the Benefits Executive Committee, respectively, nor for any act or omission on
his or her own part except for his or her own gross negligence or willful
misconduct, nor for the exercise of any power or discretion in the performance
of any duty assumed by him hereunder. The Company shall indemnify and hold
harmless each member of the Committee and the Benefits Executive Committee from
any and all claims, losses, damages, expenses (including counsel fees approved
by such committee), and liabilities (including any amounts paid in settlement
with the such committee's approval but excluding any excise tax assessed against
any member or members of such committee pursuant to the provisions of Section
4975 of the Internal Revenue Code of 1986, as amended) arising from any act or
omission of such member in connection with duties and responsibilities under the
Plan, except when the same is judicially determined to be due to the gross
negligence or willful misconduct of such member.

        2.7     Committee Determinations: The Committee, on behalf of the
Participants and their Beneficiaries, shall enforce this Plan in accordance with
its terms and shall have all powers necessary for the accomplishment of that
purpose, including, but not by way of limitation, the following powers:

                (a)     To determine all questions relating to the eligibility
        of Employees to become Participants, the period of Service of
        Participants and the Compensation of Participants;

                (b)     To authorize in writing all disbursements by the Trustee
        from the Trust Fund;

                (c)     To interpret and construe all terms, provisions,
        conditions and limitations of this Plan and to reconcile any
        inconsistency or supply any omitted detail that may appear in this Plan,
        in its discretion, in such manner and to such extent, consistent with
        the general terms of this Plan, as the Committee shall deem appropriate
        to effectuate the Plan for the greatest benefit of all parties
        interested in the Plan; and

                (d)     To make and enforce such rules and regulations for the
        administration of the Plan as are not inconsistent with the terms set
        forth herein.

                                      -10-

<PAGE>

        2.8     General Powers of Committee: In addition to all other powers
herein granted, and in general consistent with the provisions hereof, the
Committee shall have all other rights and powers reasonably necessary to
supervise and control the administration of this Plan. The determination of any
fact by the Committee and the construction or interpretation placed by the
Committee upon the provisions of this Plan shall be binding upon all of the
Participants under this Plan, their Beneficiaries and the Employers. Benefits
under this Plan will be paid only if the Committee decides in its discretion
that the applicant is entitled to them.

        2.9     Allocation of Responsibility Among Fiduciaries for Plan and
Trust Administration: The Fiduciaries shall have only those specific powers,
duties, responsibilities and obligations as are specifically given them under
this Plan or the Trust Agreement. In general, the Employer shall have the sole
responsibility for making the Contributions provided for under Article IV. The
Company shall have the sole authority to appoint and remove the Trustee, members
of the Committee, and members of the Benefits Executive Committee. The Benefits
Executive Committee shall have the sole authority to select available investment
options under the Plan, in accordance with Code Section 404(c), and to make
investment decisions regarding Participant Pension Offset Accounts, to the
extent required of the Benefits Executive Committee under the Plan. The
Committee shall have the sole responsibility for the administration of the Plan.
Each Fiduciary may rely upon any direction, information or action of another
Fiduciary as being proper under this Plan or the Trust Agreement, and is not
required under this Plan or the Trust Agreement to inquire into the propriety of
any such direction, information or action. It is intended under this Plan and
the Trust Agreement that each Fiduciary shall be responsible for the proper
exercise of its own powers, duties, responsibilities and obligations under this
Plan and the Trust Agreement and shall not be responsible for any act or failure
to act of another Fiduciary. No Fiduciary guarantees the Trust Fund in any
manner against investment loss or depreciation in asset value.

        2.10    Annual Audit: If required by ERISA, the Committee shall engage,
on behalf of all Participants, an independent Certified Public Accountant who
shall conduct an annual examination of any financial statements of the Plan and
Trust and of other books and records of the Plan and Trust as the Certified
Public Accountant may deem necessary to enable him to form and provide a written
opinion as to whether the financial statements and related schedules required to
be filed with the Internal Revenue Service and/or the Department of Labor or
furnished to each Participant are presented fairly and in conformity with
generally accepted accounting principles.

                                      -11-

<PAGE>

                                   ARTICLE III

                                  PARTICIPATION

        3.1     Participation: Each Employee who, immediately prior to the
Effective Date, was a Participant under the 2001 Plan or the GlobalSantaFe
Investment Savings & Incentive Plan shall be a Participant in this Plan. Each
other Employee shall become eligible to participate in the Plan as of any
Business Day coinciding with or following his or her date of hire. An Employee
who does not participate in the Plan when he or she first becomes eligible may
commence such participation on any Entry Date thereafter, provided he or she is
otherwise eligible hereunder. Notwithstanding any provision of this Plan to the
contrary, the following individuals shall not be eligible to participate in the
Plan: (a) any person who is not on the United States Payroll of an Employer, (b)
any person who is a Leased Employee, (c) any individual who is designated,
compensated or otherwise classified or treated as a consultant, an independent
contractor or a Leased Employee (or leased employee) by an Employer or an
Affiliate, (d) persons who are on layoff status with an Employer, including
individuals who may be receiving salary continuation or stand-by payments from
an Employer while on layoff status, (e) any individual who is actively
participating in any United Kingdom pension plan sponsored by the Employer or a
subsidiary of the Employer, and (f) any independent contractor or any person (i)
who is not on the Employer's payroll, as determined by the Committee in its sole
discretion, (ii) who has agreed in writing to be treated as other than an
Employee, or (iii) whose compensation is U.S. source income but which is
reported to the Internal Revenue Service on a form other than Form W-2 or whose
compensation is reported on a Form W-2 solely by any person or entity other than
the Employer and in the case of clauses (i), (ii) or (iii) regardless of whether
such person is treated as an employee for federal income tax or other purposes.

        3.2     Participants to Furnish Required Information: Each Participant
shall furnish the Committee such information as the Committee may consider to be
necessary or desirable in administering the Plan.

        3.3     Termination of Participation; Participation upon Reemployment:
Participation in the Plan shall cease at the close of the pay period during
which termination of Service occurs. Termination of Service may result from
retirement, death or voluntary or involuntary termination of employment with the
Employer and its Affiliates, if any, unauthorized absence, or by failure to
return to active employment with the Employer by the date on which an authorized
absence expired. If an Employee is subsequently reemployed, the Employee shall
be entitled to recommence participation, if such Employee is otherwise eligible,
on any Business Day coinciding with or following the Employee's reemployment.

                                      -12-

<PAGE>

                                   ARTICLE IV

                          CONTRIBUTIONS AND FORFEITURES

        4.1     Employer Contributions:

                (a)     Following the end of each pay period, each Employer
        shall make a Matching Contribution to the Trust Fund on behalf of each
        Participant (other than a Non-Resident Participant) who was in the
        Service of that Employer during the pay period in an amount equal to one
        hundred percent (100%) of the first six percent (6%) of Compensation
        contributed to the Trust Fund during the pay period as Pre-Tax Basic
        Contributions for that Participant. Following the end of each pay
        period, each Employer shall make a Matching Contribution to the Trust
        Fund on behalf of each Non-Resident Participant who was in the service
        of that Employer during the pay period in an amount equal to one-hundred
        percent (100%) of the first six percent (6%) of Compensation contributed
        during the pay period as an After-Tax Contribution for that Participant.
        The total Employer Contributions shall not exceed the maximum amount
        deductible from the Employer's income for such year under Section
        404(a)(3)(A) of the Internal Revenue Code of 1986, as amended. Each
        Participant's Employer Contribution Account shall be fully vested and
        nonforfeitable at all times.

                (b)     In addition to the Employer Contributions made pursuant
        to Section 4.1(a) above for each Plan Year, each Employer shall make an
        Employer Contribution to the Trust Fund following the end of each Plan
        Year, on behalf of each Participant who is in the Service of that
        Employer as of the last day of the Plan Year, in an amount equal to the
        excess, if any, of (i) over (ii), where (i) is equal to 100% of the sum
        of (A) the Pre-Tax Basic Contributions made pursuant to Section 4.2 on
        behalf of each Participant during the Plan Year and (B) the After-Tax
        Contributions made by such Participant pursuant to Section 4.3 during
        the Plan Year, to the extent such sum is not in excess of 6% of such
        Participant's Compensation for such Plan, and (ii) is equal to the
        Employer Contributions made pursuant to Section 4.1(a) above for each
        such Participant during such Plan Year. For purposes of this Section
        4.1(b), Pre-Tax Basic Contributions will be deemed to be matched before
        After-Tax Contributions.

                (c)     It is the intent of the Plan that the foregoing
        provisions of this Section and other features of this Plan satisfy the
        "safe harbor" requirements of Sections 401(k)(12) and 401(k)(11) of the
        Code, and, effective as of January 1, 2003, the Plan shall be
        interpreted and applied in accordance with such intent.

        4.2     Pre-Tax Contributions: Each Participant, other than a
Non-Resident Participant, may elect to defer a portion of his or her salary as a
Pre-Tax Basic Contribution to be contributed to the Trust Fund in any whole
percent not less than one percent (1%) and not more than six percent (6%), as he
or she may designate, of his or her Compensation for each pay period. In
addition, each Participant, other than a Non-Resident Participant, may elect to
defer in any whole percent a portion of his or her Compensation, if any, for
each pay period, up to a maximum of nineteen percent (19%), as a Pre-Tax Excess
Contribution. A Participant's Pre-Tax Basic Contributions, if any, and Pre-Tax
Excess Contributions, if any, shall not exceed the maximum

                                      -13-

<PAGE>

contribution amount allowed pursuant to Section 402(g) of the Code (the "Code
Section 402(g) Limit") for each Plan Year, and shall be further limited by the
provisions of Sections 12.4 and 5.3. The Committee may prescribe such
nondiscriminatory rules and procedures for implementing the Code Section 402(g)
Limit as it may deem necessary and appropriate.

                Effective as of July 1, 2002, any Participant who is eligible to
make Pre-Tax Contributions under this Plan and who has attained age 50 before
the close of the Plan Year may elect to defer a portion of his or her
Compensation as a Catch-Up Contribution to be contributed to the Trust Fund in
any whole percentage not less than one percent (1%) and not more than
twenty-five percent (25%). Only the portion of a Participant's deferrals of
Compensation in excess of the applicable Code Section 402(g) Limit will be
considered Catch-Up Contributions. Additionally, a Participant's Catch-Up
Contribution, if any, shall be made in accordance with, and subject to, the
limitations of Code Section 414(v). Such Catch-Up Contributions shall at all
times be fully vested and nonforfeitable and shall share in the Income of the
Trust Fund in accordance with Section 5.2, but shall not share in Employer
Contributions. Such Catch-Up Contributions shall not be taken into account for
purposes of the provisions of this Section 4.2 of the Plan implementing the
required limitations of Code Sections 402(g) or the provisions of Section 5.3 of
the Plan. The Plan shall not be treated as failing to satisfy the provisions of
the Plan implementing the requirements of Code Sections 401(k)(3), 401(k)(11),
401(k)(12), 410(b), or 416, as applicable, by reason of the making of such
Catch-Up Contributions.

                Each Participant's Pre-Tax Basic Contributions and Pre-Tax
Excess Contributions, if any, shall be contributed to the Trust Fund by the
Employer at the end of each pay period. In the event a Participant's Pre-Tax
Contributions exceed the applicable Code Section 402(g) Limit, or in the event
the Participant submits a written claim to the Committee, at the time and in the
manner prescribed by the Committee, specifying an amount of Pre-Tax
Contributions that will exceed the applicable Code Section 402(g) Limit when
added to amounts deferred by the Participant in other plans or arrangements,
such excess (the "Excess Deferrals"), plus any income and minus any loss
allocable to such amount, shall be returned to the Participant by April 15th of
the following year. Such income shall include the allocable gain or loss for (i)
the Plan Year in which the Excess Deferral occurred and (ii) the period from the
end of that Plan Year to the date of distribution, and distribution shall first
be applied to Pre-Tax Excess Contributions and, upon their exhaustion, to
Pre-Tax Basic Contributions. The amount of any Excess Deferrals to be
distributed to a Participant for a taxable year shall be reduced by excess
Pre-Tax Contributions distributed pursuant to Section 12.6 for the Plan Year
beginning in such taxable year. The income or loss attributable to the
Participant's Excess Deferral for the Plan Year shall be determined by
multiplying the income or loss attributable to the Participant's respective
Pre-Tax Account balance for the Plan Year (or relevant portion thereof) by a
fraction, the numerator of which is the Excess Deferral and the denominator of
which is the Participant's total respective Pre-Tax Account balance as of the
Valuation Date next preceding the date of return of the Excess Deferral. Unless
the Committee elects otherwise, the income or loss attributable to the
Participant's Excess Deferral for the period between the end of the Plan Year
and the date of distribution shall be determined using the safe-harbor method
set forth in Treasury Regulations to Section 402(g) of the Code, and shall be
equal to ten percent (10%) of the allocable income or loss for the Plan Year,
calculated as set forth immediately above, multiplied by the number of calendar
months that have elapsed since the end of the Plan Year. For these purposes,
distribution of an Excess Deferral on or before the 15th day of a calendar

                                      -14-

<PAGE>

month shall be treated as having been made on the last day of the preceding
month, and a distribution made thereafter shall be treated as having been made
on the first day of the next month. Excess Deferrals which have not been
distributed from the Plan by April 15 of the year following the close of the
Plan Year in which the Excess Deferrals occurred shall be treated as Annual
Additions under Section 5.3 of the Plan. Each Participant's Pre-Tax Contribution
Account shall be fully vested and nonforfeitable at all times.

        4.3     After-Tax Contributions: Each Non-Resident Participant may elect
to contribute a portion of his or her salary as an After-Tax Contribution to the
Trust Fund in any whole percent not less than one percent (1%) and not more than
twenty-five percent (25%), as he or she may designate, of his or her
Compensation for each pay period; provided, however, that After-Tax
Contributions under this Section shall not be permitted in any Plan Year to the
extent that such After-Tax Contributions would, when combined with a
Participant's Pre-Tax Contributions in a Plan Year, exceed the Code Section
402(g) Limit specified in Section 4.2 of the Plan. Each Participant's After-Tax
Contributions, if any, shall be contributed to the Trust Fund by the Employer at
the end of each pay period. After-Tax Contributions shall be treated as Annual
Additions under Section 5.3 of the Plan. Each Participant's After-Tax
Contribution Account shall be fully vested and nonforfeitable at all times and
shall share in the Income of the Trust Fund in accordance with Section 5.2.
Additionally, Participants who were, immediately preceding the Effective Date,
participating in the GlobalSantaFe Investment Savings & Profit Sharing Plan, may
make After-Tax Contributions under this Section 4.3 of the Plan until December
31, 2002, at which time no Participant who is not a Non-Resident Participant
will be allowed to make After-Tax Contributions under the Plan.

        4.4     Deferral Elections: Each Participant shall give advance
notification in such manner as may be prescribed from time by the Committee, of
the amount that he or she elects to contribute as an After-Tax Contribution or
defer as a Pre-Tax Contribution or a Catch-Up Contribution from his or her
Compensation commencing with the pay period beginning on or after the date on
which the Participant elects to participate in the Plan. Each such election
shall continue in effect indefinitely unless the Participant shall give timely
notice, in accordance with procedures established from time to time by the
Committee, of his or her election to change or discontinue his or her Pre-Tax
Contribution, Catch-Up Contribution or After-Tax Contribution. A Participant may
change the rate of or discontinue his or her Pre-Tax Contribution, Catch-Up
Contribution or After-Tax Contribution, with no restrictions on frequency, in
such a manner as the Committee may prescribe from time to time. Any Participant
who completely discontinues his or her Pre-Tax Contribution, Catch-Up
Contribution or After-Tax Contribution may, to the extent otherwise allowed
under this Plan, recommence such contributions any time after his or her
discontinuance of such Contributions, so long as he or she has given notice of
such recommencement in accordance with procedures established by the Committee
from time to time. Pre-Tax Contributions, Catch-Up Contributions or After-Tax
Contributions that are not made in a period of discontinuance shall not be made
up retroactively.

        4.5     Refunds to Employer: Once Contributions are made to the Plan by
the Employer on behalf of the Participants, they are not refundable to the
Employer unless a Contribution:

                (a)     Was made by mistake of fact;

                                      -15-

<PAGE>

                (b)     Was made conditioned on the initial qualification of the
        Plan under the Code and the Plan does not so qualify; or

                (c)     Was made conditioned upon the contribution being allowed
        as a deduction and such deduction was disallowed.

Any Contribution made by the Employer during any pay period in excess of the
amount deductible or any Contribution attributable to a good faith mistake of
fact shall be refunded to the Employer. The amount which may be returned to the
Employer is the excess of the amount contributed over the amount that would have
been contributed had there not occurred a mistake of fact or the excess of the
amount contributed over the amount deductible, as applicable. A Contribution
made by reason of a mistake of fact may be refunded only within one (1) year
following the date of payment. Any Contribution to be refunded because it was
not deductible under Section 404 of the Internal Revenue Code may be refunded
only within one (1) year following the date the deduction was disallowed.
Earnings attributable to any such excess Contribution may not be withdrawn, but
losses attributable thereto must reduce the amount to be returned. In no event
may a refund be due which would cause the Account balance of any Participant to
be reduced to less than the Participant's Account balance would have been had
the mistaken amount, or the amount determined to be nondeductible, not been
contributed.

        4.6     Funding Policy: The provisions of this Article IV shall be
deemed the procedure for establishing and carrying out the funding policy and
method of the Plan. Such funding policy and method shall be administered by the
Employer and other Fiduciaries consistent with the objectives of the Plan and
with the requirements of Title I of ERISA.

        4.7     Rollovers: Any Participant may file a request with the Trustee
that the Trustee accept a Rollover from such Participant. The Committee or the
Trustee may develop such procedures and may require such information from the
Employee desiring to make such a transfer as it deems necessary or desirable to
determine that the proposed transfer will meet the requirements of this Section.
Upon approval of the Rollover, the amount transferred shall be deposited in the
Trust Fund and shall be credited to the Participant's Rollover Account. Such
amount shall at all times be fully vested and nonforfeitable and shall share in
the Income of the Trust Fund in accordance with Section 5.2, but shall not share
in Employer Contribution allocations. The Rollover Account shall be subject to
the investment directions of the Participant and the change thereof as otherwise
permitted herein. Upon termination of employment, the Rollover Account (and
adjustments thereto) shall be distributed in accordance with Article VII.

                                      -16-

<PAGE>

                                    ARTICLE V

                            ACCOUNTS OF PARTICIPANTS

        5.1     Individual Accounts: The Committee shall create and maintain
adequate records to disclose the interest in the Plan and Trust of each
Participant, former Participant and Beneficiary. Such records shall be in the
form of individual accounts, and credits and charges shall be made to such
accounts in the manner herein described. Each Participant shall have the
following separate accounts (more than one category may be applicable):

                        (i)     for Participants other than Non-Resident
                Participants, both a Matching Contribution Account and a Pre-Tax
                Contribution Account;

                        (ii)    for Non-Resident Participants, both an After-Tax
                Contribution Account and a Non-Resident Matching Contribution
                Account;

                        (iii)   for Participants who were, immediately preceding
                the Effective Date, participating in the GlobalSantaFe
                Investment Savings & Profit Sharing Plan, one or more of the
                following accounts, as appropriate: (w) an After-Tax
                Contribution Account, (x) a Prior Employer Matching Account, (y)
                a Prior Employer After-Tax Account, and (z) a Pension Offset
                Account;

                        (iv)    for Participants who make Catch-Up Contributions
                as provided in Section 4.2, a Catch-Up Contribution Account; and

                        (v)     for Participants who make a Rollover pursuant to
                Section 4.7, a Rollover Account.

                In addition, a Participant may have a "Loan Account" which shall
reflect the outstanding principal balance and accrued interest, if any, from
time to time of any loans made to the Participant pursuant to Section 6.8 below.
The maintenance of individual Accounts is only for accounting purposes, and a
segregation of the assets of the Trust Fund to each Account shall not be
required. Distributions and withdrawals made from an Account shall be charged to
the Account as of the date paid.

        5.2     Account Adjustments: The Accounts of Participants, former
Participants and Beneficiaries shall be adjusted as of each Valuation Date in
accordance with the following and the provisions of Section 5.5:

                (a)     Income of the Trust Fund: As of each Valuation Date
        during the Plan Year, the Trustee shall value the Trust Fund at its
        then-market value to determine the amount of Income of the Trust Fund
        for the day then ended. Then the Trustee shall allocate such Income of
        the Trust Fund among the Accounts of Participants, Former Participants
        and Beneficiaries who had unpaid balances in

                                      -17-

<PAGE>

        their Accounts as of the end of such Valuation Date in proportion to the
        balances in such Accounts at the beginning of such Date.

                (b)     Employer Contributions: Any unallocated Employer
        Contributions made on behalf of a Participant shall be allocated to his
        or her Matching Contribution Account or Non-Resident Matching Account,
        as applicable.

                (c)     Other Contributions: A Participant's Pre-Tax
        Contributions, After-Tax Contributions, Catch-Up Contributions, and
        Rollovers, if any are then unallocated, shall be allocated to the
        corresponding Account.

        5.3     Maximum Annual Additions: Notwithstanding anything contained
herein to the contrary, the total Annual Additions made to the Account of a
Participant for any Plan Year shall be subject to the following limitations:

                (a)     Single Defined Contribution Plan

                        (i)     If an Employer does not maintain any other
                qualified plan, the amount of Annual Additions which may be
                allocated under this Plan on a Participant's behalf for a
                Limitation Year shall not exceed the lesser of the Maximum
                Permissible Amount or any other limitation contained in this
                Plan.

                        (ii)    Prior to the determination of the Participant's
                actual Compensation for a Limitation Year, the Maximum
                Permissible Amount may be determined on the basis of the
                Participant's estimated annual Compensation for such Limitation
                Year. Such estimated annual Compensation shall be determined on
                a reasonable basis and shall be uniformly determined for all
                Participants similarly situated. Any Employer Contributions
                based on estimated annual Compensation shall be reduced by any
                Excess Amounts carried over from prior years.

                        (iii)   As soon as is administratively feasible after
                the end of the Limitation Year, the Maximum Permissible Amount
                for such Limitation Year shall be determined on the basis of the
                Participant's actual Compensation for such Limitation Year.

                        (iv)    If there is an Excess Amount with respect to a
                Participant for the Limitation Year, such Excess Amount shall be
                disposed of as follows:

                                (A)     There shall first be returned to the
                        Participant (i) his or her After-Tax Contributions
                        attributable to that Limitation Year, if any, then, (ii)
                        his or her Pre-Tax Excess Contributions attributable to
                        that Limitation Year, if any, and then

                                      -18-

<PAGE>

                        (iii) his or her Pre-Tax Basic Contributions
                        attributable to that Limitation Year, to the extent such
                        returned Contributions would reduce the Excess Amount.

                                (B)     If any such Excess Amount shall then
                        remain, there shall then be a reduction of the Employer
                        Contributions allocated to the Participant, and the
                        amount of the reduction of the Employer Contributions
                        for such Participant shall be reallocated out of the
                        Account of such Participant and shall be held in a
                        suspense account which shall be applied as a part of
                        (and to reduce to such extent what would otherwise be)
                        the Employer Contributions for all Participants required
                        to be made to the Plan during the next subsequent
                        calendar quarter or quarters. No portion of such Excess
                        Amount may be distributed to Participants or former
                        Participants. If a suspense account is in existence at
                        any time during the Limitation Year pursuant to this
                        Paragraph B, such suspense account shall not participate
                        in the allocation of investment gains or losses of the
                        Trust Fund.

                (b)     Two or More Defined Contribution Plans

                        (i)     If, in addition to this Plan, the Employer
                maintains any other qualified defined contribution plan, the
                amount of Annual Additions which may be allocated under this
                Plan on a Participant's behalf for a Limitation Year shall not
                exceed the lesser of:

                                (A)     the Maximum Permissible Amount, reduced
                        by the sum of any Annual Additions allocated to the
                        Participant's accounts for the same Limitation Year
                        under such other defined contribution plan or plans; or

                                (B)     any other limitation contained in this
                        Plan.

                        (ii)    Prior to the determination of the Participant's
                actual Compensation for the Limitation Year, the amount referred
                to in paragraph (i)(A) of this Section 5.3(b) may be determined
                on the basis of the Participant's estimated annual Compensation
                for such Limitation Year. Such estimated annual Compensation
                shall be determined on a reasonable basis and shall be uniformly

                                      -19-

<PAGE>

                determined for all Participants similarly situated. Any Employer
                Contribution (including allocation of Forfeitures) based on
                estimated annual Compensation shall be reduced by any Excess
                Amounts carried over from prior years.

                        (iii)   As soon as is administratively feasible after
                the end of the Limitation Year, the amounts referred to in
                paragraph (i)(A) of this Section 5.3(b) shall be determined on
                the basis of the Participant's actual Compensation for such
                Limitation Year.

                        (iv)    If a Participant's Annual Additions under this
                Plan and all such other defined contribution plans result in an
                Excess Amount, such Excess Amount shall be deemed to consist of
                the amounts last allocated.

                        (v)     If an Excess Amount was allocated to a
                Participant on an allocation date of this Plan which coincides
                with an allocation date of another plan, the Excess Amount
                attributed to this Plan will be the product of:

                                (A)     the total Excess Amount allocated as of
                        such date (including any amount which would have been
                        allocated but for the limitations of Section 415 of the
                        Code); times

                                (B)     the ratio of (i) the amount allocated to
                        the Participant as of such date under this Plan, divided
                        by (ii) the total amount allocated as of such date under
                        all qualified defined contribution plans (determined
                        without regard to the limitations of Section 415 of the
                        Code).

                        (vi)    Any Excess Amounts attributed to this Plan shall
                be disposed of as provided in paragraph (a) above.

                (c)     Definitions for the Purposes of this Section 5.3:

                        (i)     Employer - The Company and any other Employer
                that adopts this Plan. In the case of a group of employers which
                constitutes a controlled group of corporations (as defined in
                Section 414(b) of the Code as modified by Section 415(h)) or
                which constitutes trades and businesses (whether or not
                incorporated) which are under common control (as defined in
                Section 414(c) as modified by Section 415(h)) or an affiliated
                service group (as defined in Section 414(m)), all such employers
                shall be considered a single Employer for purposes of applying
                the limitations of these sections.

                                      -20-

<PAGE>

                        (ii)    Annual Additions - With respect to each
                Limitation Year, the total of the Employer Contributions,
                After-Tax Contributions, Pre-Tax Contributions, and amounts
                described in Sections 415(l) and 419A(d)(2) of the Code, which
                are allocated to the Participant's Account; excluding, however,
                any amounts contributed to reinstate an unclaimed benefit or any
                Rollovers.

                        (iii)   Excess Amount - The excess of the Participant's
                Annual Additions for the Limitation Year over the Maximum
                Permissible Amount.

                        (iv)    Limitation Year - A twelve (12) consecutive
                month period ending on December 31.

                        (v)     Maximum Permissible Amount - For a Limitation
                Year, the Maximum Permissible Amount with respect to any
                Participant shall be the lesser of:

                                (A)     $40,000, as adjusted by the Secretary of
                        the Treasury or his or her delegate, or

                                (B)     one-hundred percent (100%) of the
                        Participant's Compensation for the Limitation Year.

                                The Compensation limitation referred to in
                        subparagraph B above shall not apply to:

                                        (I)     Any contribution for medical
                                                benefits (within the meaning of
                                                Code Section 419A(f)(2)) after
                                                separation from service which is
                                                otherwise treated as an Annual
                                                Addition, or

                                        (II)    Any amount otherwise treated as
                                                an Annual Addition under Code
                                                Section 415(l)(1).

                        (vi)    Compensation - For purposes of determining
                compliance with the limitations of Code Section 415,
                Compensation shall include a Participant's earned income, wages,
                salaries, fees for professional service and other amounts
                received for personal services actually rendered in the course
                of employment with an Employer maintaining the Plan, to the
                extent that the amounts are includible in gross income
                (including, but not limited to, commissions paid salesmen,
                compensation for services on the basis of a percentage of
                profits, commissions on insurance

                                      -21-

<PAGE>

                premiums, tips, bonuses and fringe benefits), and excluding the
                following:

                                (A)     Employer contributions to a plan of
                        deferred compensation to the extent contributions are
                        not included in gross income of the Employee for the
                        taxable year in which contributed, or on behalf of an
                        Employee to a simplified employee pension plan to the
                        extent such contributions are deductible under Code
                        Section 219(b)(2), and any distributions from a plan of
                        deferred compensation whether or not includible in the
                        gross income of the Employee when distributed (however,
                        any amounts received by an Employee pursuant to an
                        unfunded non-qualified plan may be considered as
                        compensation in the year such amounts are included in
                        the gross income of the Employee);

                                (B)     amounts realized from the exercise of a
                        non-qualified stock option, or when restricted stock (or
                        property) held by an Employee becomes freely
                        transferable or is no longer subject to a substantial
                        risk of forfeiture;

                                (C)     amounts realized from the sale, exchange
                        or other disposition of stock acquired under a qualified
                        stock option; and

                                (D)     other amounts which receive special tax
                        benefits, or contributions made by an Employer (whether
                        or not under a salary reduction agreement) towards the
                        purchase of a Section 403(b) annuity contract (whether
                        or not the contributions are excludable from the gross
                        income of the Employee).

                For purposes of applying the limitations described in this
                Section 5.3, amounts included as compensation are those actually
                paid or made available to a Participant or an Employee within
                the Limitation Year. Compensation shall be limited to the amount
                set forth in Section 401(a)(17)(A) of the Code, as adjusted by
                the Secretary of the Treasury or his or her delegate pursuant to
                Section 401(a)(17)(B) of the Code. Notwithstanding anything to
                the contrary in this definition, Compensation shall include any
                and all items which may be includible in compensation under
                Section 415(c)(3) of the Code, including, effective January 1,
                1998, (i) any elective deferral (as defined in Code Section
                402(g)(3), (ii) any amount which is contributed or deferred by
                the Company at the

                                      -22-

<PAGE>

                election of the Employee and which is not includible in the
                gross income of the Employee by reason of Code Section 125 or
                457 and (iii) effective as of January 1, 2001, any amount which
                is contributed or deferred by the Employer at the election of
                the Employee and which is not includible in the gross income of
                the Employee by reason of Code Section 132(f)(4).

        5.4     Valuation of Trust Fund: A valuation of the Trust Fund shall be
made as of each Valuation Date and as of such other special Valuation Dates as
may be specified by the Committee. Each valuation shall be based on the fair
market value of assets in the Trust Fund at the end of the day on the Valuation
Date. For the purposes of each such valuation, the assets of the Trust Fund
shall be valued at their respective current market values, and the amount of any
obligations for which the Trust Fund may be liable, as shown on the books of the
Trustee, shall be deducted from the total value of the assets.

        5.5     Recognition of Different Investment Funds: As provided in
Article VIII, Investment Funds shall be established and each Participant shall
direct, within the limitations set forth in Section 8.3, the proportion of the
balance in his or her Accounts that shall be deposited in each Investment Fund.
Consequently, when appropriate, a Participant may have each type of Account in
each such Investment Fund and the allocations described in Section 5.2 shall be
adjusted in such manner as is appropriate to recognize the existence of the
Investment Funds. Because Participants have a choice of Investment Funds, any
reference in this Plan to an Account shall be deemed to mean and include all
accounts of a like nature which are maintained for the Participant under each
Investment Fund. Notwithstanding the foregoing, a Participant's Pension Offset
Account, if any, shall not be subject to a Participant's investment direction
and shall be invested as directed by the Benefits Executive Committee or its
representative until such time as such Participant terminates Service, at which
time such Participant may direct the investment of such Participant's Pension
Offset Account, if any, in accordance with the applicable provisions of the
Plan.

                                      -23-

<PAGE>

                                   ARTICLE VI

                             PARTICIPANTS' BENEFITS

        6.1     Termination of Service: In the event of a Participant's
Disability or termination of Service for any reason other than death, a
Participant shall be entitled to receive the entire amount credited to his or
her Account balance, including, subject to the provisions of Section 7.2, 100%
of his or her Pension Offset Account. Subject to the other provisions of this
Article VI and the Plan, a termination of Service for purposes of this Section
6.1 shall include a Participant's 'severance from employment' under Section
401(k)(2)(B)(i)(I) of the Code, occurring on or after January 1, 2002. A
distribution upon a 'severance from employment' shall be subject to the other
provisions of the Plan regarding distributions, other than provisions that
require a separation from service before such amounts may be distributed.
Notwithstanding the foregoing, if there is a transfer of Plan assets and
liabilities relating to any portion of a Participant's Account under the Plan to
a plan being maintained or created by such Participant's new employer (other
than a rollover or elective transfer), then such Participant has not experienced
a 'severance from employment' for purposes of the Plan.

        6.2     Death of Participants: If a Participant's Service is terminated
by reason of death, his or her Beneficiary shall be entitled to receive, after
receipt by the Committee of acceptable proof of death, the entire amount in the
Participant's Account balance, including, subject to the provisions of Section
7.2, 100% of his or her Pension Offset Account.

        6.3     Beneficiaries in the Event of Death: Upon the death of a
Participant, his or her Account shall be distributed to the Participant's
surviving spouse as Beneficiary, but if there is no surviving spouse, or if the
surviving spouse has already consented by a qualified election pursuant to
Section 6.4, to the Beneficiary or Beneficiaries designated by the Participant
in a written designation filed with his or her Employer or, if no such
designation shall have been so filed, to his or her estate which shall be
treated as the Beneficiary hereunder. No designation of any Beneficiary other
than the Participant's surviving spouse shall be effective unless in writing and
received by the Participant's Employer, and in no event shall it be effective as
of any date prior to such receipt. The former spouse of a Participant shall be
treated as a surviving spouse to the extent provided under a qualified domestic
relations order as described in Section 414(p) of the Code.

        6.4     Qualified Election: The Participant's spouse may waive the
right to receive the Participant's full Account balance or the right to receive
a distribution of a Participant's Pension Offset Account in the form provided in
Section 7.2. The election to waive the Participant's full Account balance or the
form of distribution of a Participant's Pension Offset Account must designate a
Beneficiary, which may not be changed without spousal consent (or the consent of
the spouse must expressly permit designation by the Participant without any
requirement of further consent of the spouse). If the spouse is legally
incompetent to give consent, the spouse's guardian, even if such spouse's
guardian is the Participant, may give consent. A consent that permits
designations by the Participant without a requirement of further consent by the
spouse must acknowledge that the spouse has the right to limit consent to a
specific beneficiary and that the spouse voluntarily elects to relinquish such
right. The waiver must be in writing and the Participant's spouse must
acknowledge the effect of the waiver. The spouse's consent to a

                                      -24-

<PAGE>

waiver must be witnessed by a Plan representative or a notary public. The
Participant may file a waiver without the spouse's consent if it is established
to the satisfaction of the Committee that such written consent may not be
obtained because there is no spouse or the spouse may not be located. Any
consent under this Section 6.4 will be valid only with respect to the spouse who
signs the consent. Additionally, a revocation of a prior waiver may be made by a
Participant without the consent of the spouse at any time before the
distribution of the Account. The number of revocations shall not be limited. A
former spouse's waiver shall not be binding on a new spouse.

        6.5     Valuation Dates Determinative of Participants' Rights: The
amount to which a Participant is entitled upon his or her death, Disability, or
other termination of Service shall be the value of his or her Account as of the
Valuation Date upon which the distribution is based, plus the Pre-Tax
Contributions, After-Tax Contributions, Catch-Up Contributions, Rollovers, and
Employer Contributions made after such date, if any, and the distribution of
such Participant's benefits shall commence at the time set forth in Section 7.1
or Section 7.2, as applicable.

        6.6     Hardship Withdrawals: A Participant who is an Employee may at
any time file with the Committee an appropriate written request for a hardship
withdrawal from his or her Pre-Tax Contribution Account, Catch-Up Contribution
Account or After-Tax Account. The approval or disapproval of such request shall
be made within the sole discretion of the Committee.

A Participant must first have taken all distributions and loans otherwise
available under all employee plans maintained by his or her Employer, in order
to be permitted to make a hardship withdrawal from his or her Pre-Tax
Contribution Account, Catch-Up Contribution Account or After-Tax Account. The
amount of the hardship withdrawal shall be limited to that amount which the
Committee determines to be required to meet the immediate financial need created
by the hardship and may be increased to include anticipated federal and state
income taxes and penalties resulting from the distribution.

The amount available to a Participant for a hardship withdrawal consists of the
amount of Pre-Tax Contributions and earnings thereon as of December 31, 1988,
plus Pre-Tax Contributions, Catch-Up Contribution and After-Tax Contributions,
excluding earnings thereon, made thereafter, but not exceeding the total value
of the sum of the Participant's Pre-Tax Contribution Account, Catch-Up
Contribution Account and After-Tax Account. The hardship withdrawal shall be
made in cash as soon as practicable after the Participant submits the hardship
request and the dollar amount withdrawn shall be determined by reference to the
value of the sum of the Pre-Tax Contribution Account, Catch-Up Contribution
Account and After-Tax Account as of the Valuation Date immediately preceding the
date of withdrawal.

The following standards (or such other standards as may be acceptable under
authorities issued pursuant to Section 401(k) of the Internal Revenue Code)
shall be applied on a uniform and nondiscriminatory basis in determining the
existence of such a hardship:

                (a)     medical expenses incurred (and/or expected to be
        incurred as evidenced by a written estimate thereof) by the Participant,
        or the Participant's spouse or dependents (as defined in Section 152 of
        the Internal Revenue Code),

                                      -25-

<PAGE>

                (b)     purchase (excluding mortgage payments) of a principal
        residence for the Participant,

                (c)     payment for tuition and related educational fees for the
        next twelve (12) months of post-secondary education for the Participant
        or the Participant's spouse, children or dependents, or

                (d)     the need to prevent the eviction of the Participant from
        his or her principal residence or foreclosure on the mortgage of the
        Participant's principal residence.

                A person shall be considered to be a dependent of the
Participant if the Participant certifies that he or she reasonably expects to be
entitled to claim that person as a dependent for Federal income tax purposes for
a calendar year coinciding with the Plan Year in which the certification of
hardship is made.

                A Participant who receives a hardship withdrawal shall be
prohibited from making Pre-Tax Contributions, Catch-Up Contributions and
After-Tax Contributions to this Plan and elective and employee contributions to
all other plans maintained by the Employer (except "welfare plans" as defined in
Section 3(1) of ERISA) for six (6) full consecutive months following the date of
distribution.

        6.7     Special Withdrawals After Attainment of Age 59 1/2: Each
Participant who has attained age fifty-nine and one-half (59 1/2) shall be
eligible to make withdrawals from each of the Participants Accounts, other than
the Participant's Pension Offset Account. Such withdrawals shall be distributed
as soon as practicable after the Company receives the withdrawal request. Any
such Participant making a withdrawal after attaining age fifty-nine and one-half
(59 1/2) may continue participation in the Plan and may make Pre-Tax
Contributions, Catch-Up Contributions, After-Tax Contributions and receive
Employer Contributions thereafter if he or she otherwise satisfies eligibility
requirements. Any distribution pursuant to this Section 6.7 shall be made in the
manner described in Section 7.1(b).

        6.8     Loans: A Participant who is an Employee and, to the extent
permitted by applicable law and which does not result in discrimination
prohibited by Code Section 401(a)(4), any other party who is a "party in
interest" with respect to the Plan within the meaning of ERISA Section 3(14) and
who must be eligible to obtain a Plan loan in order for the exemption set forth
in 29 C.F.R. Section 2550.408b-1 to apply to the Plan (hereinafter "Borrower")
may make application to the Trustee to borrow from the Account maintained by or
for the Borrower in the Trust Fund. Loans shall be granted by the Trustee in a
uniform and nondiscriminatory manner on terms and conditions established by the
Committee which shall not result in more favorable treatment of highly
compensated employees than other employees. The terms and conditions on which
Plan loans will be granted shall be set forth in written procedures promulgated
by the Committee in accordance with applicable governmental regulations. All
such loans shall also be subject to the following terms and conditions:

                (a)     The aggregate loan balance that a Borrower may have
        outstanding at any time shall not exceed the lesser of:

                                      -26-

<PAGE>

                        (i)     $50,000, reduced by the highest outstanding
                aggregate balance of all loans from all plans of the Employer or
                an Affiliate which are qualified under Code Section 401(a)
                during the one-year period ending on the day before the date on
                which such loan is made. The outstanding loan balance shall also
                include any deemed distribution that has not been repaid (such
                as by a Plan loan offset) and any interest accrued on such
                deemed distribution; and

                        (ii)    50% of the current value of the Borrower's
                Account balance under the Plan valued as of the immediately
                preceding Valuation Date; provided, however, the Borrower's
                Pension Offset Account shall be excluded from the value of the
                Borrower's Account balance.

        In no event shall a loan of less than $1,000 be made to a Borrower. A
        Borrower may not have more than one loan for the purchase of a principal
        residence and two loans for other purposes outstanding at one time under
        this Plan.

                (b)     The loan shall be for a term not to exceed 5 years,
        unless the loan is used to acquire any dwelling unit which within a
        reasonable time is to be used as a principal residence of the Borrower.
        A loan for the purchase of a principal residence shall be for a term not
        to exceed 15 years. The loan shall be evidenced by a note signed by the
        Borrower. The loan shall be payable in periodic installments and shall
        bear interest at a reasonable rate which shall be determined by the
        Committee on a uniform and consistent basis set forth in the Plan loan
        procedures in accordance with applicable governmental regulations.
        Payments by a Borrower who is an Employee will be made by means of
        payroll deduction from the Borrower's compensation. If the Borrower is
        not receiving compensation from the Employer, the loan repayment shall
        be made in accordance with the terms and procedures established by the
        Committee. A Borrower may repay an outstanding loan in full at any time.

                (c)     In the event an installment payment is not paid within 7
        days following a scheduled due date, the Committee shall give written
        notice to the Borrower sent to his or her last known address. If such
        installment payment is not made within 90 days after the scheduled due
        date, the Committee shall proceed with foreclosure in order to collect
        the full remaining loan balance or shall make such other arrangements
        with the Borrower as the Committee deems appropriate. Foreclosures need
        not be effected until occurrence of a distributable event under the
        terms of Article VI of the Plan and no rights against the Borrower or
        the security shall be deemed waived by the Plan as a result of such
        delay. Notwithstanding the foregoing, a deemed distribution of the
        unpaid loan balance plus accrued interest will occur as of the end of
        the 90 day period after the scheduled due date.

                                      -27-

<PAGE>

                (d)     Any unpaid balance of a loan, together with interest
        thereon, shall become due and payable upon the date of distribution of
        the Account or as set forth in the applicable procedures, and the
        Trustee shall first satisfy the indebtedness from the amount payable to
        the Borrower or to the Borrower's Beneficiary before making any payments
        to the Borrower or to the Beneficiary.

                (e)     Any loan to a Borrower under the Plan shall be
        adequately secured. Such security shall include a pledge of a portion of
        the Borrower's right, title and interest in the Trust Fund in the amount
        of the loan; provided that the total interest pledged for all loans
        under the Plan shall not exceed 50% of the current value of the
        Borrower's Account balance under the Plan as determined immediately
        after the loan is extended, excluding the Borrower's Pension Offset
        Account, if any. Such pledge shall be evidenced by the execution of a
        promissory note by the Borrower which shall grant the security interest
        and provide that, in the event of any default by the Borrower on a loan
        repayment, the Committee shall be authorized to take any and all
        appropriate lawful actions necessary to enforce collection of the unpaid
        loan.

                (f)     A request by a Borrower for a loan shall be made in
        accordance with the procedures established by the Committee or its
        delegate and shall specify the amount of the loan. If a Borrower's
        request for a loan is approved by the Trustee, the Trustee shall make
        the loan in a lump-sum payment of cash to the Borrower. The cash for
        such payment shall be obtained by redeeming as of the date of payment
        the Investment Fund or Funds, or portions thereof, that are credited to
        the Accounts of the Borrower and shall be redeemed on a pro rata basis;
        provided, however, that no loan may be made from the Participant's
        Pension Offset Account. Any expenses associated with the origination of
        the loan (the "Loan Origination Fee") and the maintenance of the loan
        (the "Loan Maintenance Fee") shall be charged to each Borrower who
        receives a loan under this Section 6.8. The Trustee shall first satisfy
        the Loan Origination Fee from the amount payable to the Borrower before
        making any payment to the Borrower. The Loan Maintenance Fee will be
        charged against the loan repayments from the Borrower.

                (g)     A loan to a Borrower shall be considered an investment
        of the separate Account(s) of the Borrower from which the loan is made.
        A record of the principal outstanding and interest accrued on the loan
        from time to time shall be maintained as the Participant's Loan Account.
        All loan repayments shall be credited as a reduction to the balance of
        the Loan Account when paid and shall be reinvested in the Borrower's
        then existing Accounts as described in the Plan loan procedures.

                (h)     Loan repayments will be suspended under this Plan as
        permitted under Section 414(u) of the Code.

                                      -28-

<PAGE>

        6.9     Voluntary Withdrawals

                (a)     Subject to the remaining provisions of this Section 6.9,
        a Participant shall be eligible to voluntarily withdraw all or any part
        of his or her Rollover Account, Prior Employer Matching Account, or
        Prior Employer After-Tax Account in the Trust Fund in accordance with
        such non-discriminatory and uniform procedures and limitations as shall
        be established by the Committee in writing from time to time. Any
        distribution pursuant to this Section 6.9 shall be made in the manner
        described in Section 7.1(b). Further, unless an Employee has been a
        Participant in the Plan and/or the GlobalSantaFe Investment Savings &
        Profit Sharing Plan for a combined total of 60 months, said Participant
        shall not be eligible to withdraw that part of his or her Prior Employer
        Matching Account in the Trust Fund to the extent that such funds
        (including growth thereon) have not been in the Trust Fund and/or the
        IS/PS Trust Fund for a combined minimum total of 24 months prior to such
        voluntary withdrawal.

                (b)     A Participant who makes any voluntary withdrawal shall
        be eligible to continue to make Pre-Tax Contributions, Catch-Up
        Contributions, and After-Tax Contributions, to the Trust Fund if he or
        she otherwise satisfies eligibility requirements. However, a Participant
        who prior to the Effective Date, elected to withdraw all or any part of
        his or her Employee Contributions Account or Basic Company Contributions
        Account under the GlobalSantaFe Investment Savings & Profit Sharing
        Plan, as such accounts are defined therein, shall not be eligible to
        have any Employer Contributions credited to his or her account for a
        period of three months beginning as soon as practicable thereafter but
        in no event any later than the second month following the month in which
        such withdrawal was requested by the Participant.

                (c)     The Committee may establish a limit on the number of
        voluntary withdrawals permitted Participants provided that such limit is
        in writing and applicable to all Participants and is administered on a
        uniform and non-discriminatory basis. Nothing in this Section 6.9(c)
        shall require the Committee to establish such a limit or to prohibit its
        modification once established. No withdrawals made prior to the
        effective date of any such limit shall be taken into account for
        purposes of this Section 6.9(c).

                                      -29-

<PAGE>

                                   ARTICLE VII

                               PAYMENT OF BENEFITS

        7.1     Payment of Benefits:

                (a)     A Participant shall be entitled to receive a
        distribution of the benefits to which he or she may be entitled under
        the terms of Section 6.1 of this Plan as soon as practicable after the
        date the occasion for distribution occurs. If the Participant's Account
        balance, including the Rollover Account, does not exceed $5,000,
        distribution of such amount shall be made in accordance with Section
        7.1(b), and the Participant shall not be entitled to defer distribution.
        Except as otherwise provided in Section 7.2, if the Participant's
        Account balance, including the Rollover Account, is in excess of $5,000,
        the Participant's Account balance shall be distributed only upon the
        Participant's election to receive a distribution in the form of such
        distribution determined pursuant to Section 7.1(b). A Participant who
        does not elect an immediate distribution may at any time subsequently
        elect, in the form and manner prescribed by the Committee, to receive
        payment of benefits. Unless the Participant is eligible for and elects
        an earlier distribution, the required beginning date for distributions
        of the Accounts of any Participant (other than a five percent (5%) owner
        as defined in Code Section 416) shall commence no later than April 1 of
        the Plan Year following the later of (i) the Plan Year in which the
        Participant attains age seventy and one-half (70 1/2) and (ii) the Plan
        Year in which the Participant retires. The required beginning date for a
        Distribution of the Accounts of any Participant who is a five percent
        (5%) owner shall commence no later than April 1 of the Plan Year
        following the Plan Year in which the Participant attains age seventy and
        one-half (70 1/2). Except for a distribution of a Participant's Pension
        Offset Account pursuant to Section 7.2, all benefits payable because of
        a Participant's death shall be paid within five years after the
        Participant's death to the Participant's Beneficiary in a single,
        lump-sum distribution.

                (b)     Other than distributions of a Participant's Pension
        Offset Account as provided in Section 7.2, any Participant, or a
        Beneficiary of a deceased Participant, may elect to receive a
        distribution in the form of (i) a lump-sum cash payment, or (ii) a
        distribution of the number of full shares of GlobalSantaFe Stock
        attributable to the investment of his or her Accounts in the
        GlobalSantaFe Stock Fund and a cash payment of the value of any
        fractional shares in the GlobalSantaFe Stock Fund and the Participant's
        interest, if any, in the remaining Investment Funds; provided, however,
        that any Insider (as described in Section 8.6 of this Plan) who elects
        to receive a distribution of shares of GlobalSantaFe Stock must comply
        with the requirements of Section 8.6 in order to receive such
        distribution. Any election made pursuant to the preceding sentence must
        be made in the time and manner specified by the Committee and must be
        furnished to the Committee prior to the date a distribution would
        otherwise commence in the absence of the Participant's (or
        Beneficiary's) consent

                                      -30-

<PAGE>

        pursuant to Section 7.1(a); in the absence of a timely, proper election
        as to the form of distribution, the Committee shall distribute the
        entire Account in a lump-sum payment of cash.

        7.2     Pension Offset Account:

                (a)     In the event a Participant is entitled to a distribution
        of such Participant's Pension Offset Account, if any, pursuant to the
        terms of Section 6.1 or 6.2 of this Plan, such distribution shall
        commence in the appropriate form provided in Section 7.2(b), 7.2(c), or
        7.2(d) of the Plan.

                (b)     Normal Form of Payment: Unless otherwise elected as
        provided below, a Participant who is married at the time he or she
        commences receipt of benefits from his or her Pension Offset Account as
        provided in Section 6.1 shall receive the value of his or her Pension
        Offset Account benefits through the purchase, with 100% of a
        Participant's Pension Offset Account balance, of a "Joint and 50%
        Survivor Annuity," providing benefits following the Participant's death
        to the Participant's spouse, during the spouse's lifetime, at a rate
        equal to 50% of the rate at which such benefits were payable to the
        Participant during the Participant's lifetime.

                        A Participant who is unmarried at the time he or she
        commences receipt of his or her Pension Offset Account benefits as
        provided in Section 6.1 shall receive the value of his or her Pension
        Offset Account benefit in the form of a single life annuity, purchased
        with 100% of a Participant's Pension Offset Account balance, providing
        for the payment of benefits only to the Participant during the
        Participant's lifetime. Such unmarried Participant, however, may elect
        in writing to waive the life annuity. The election must comply with the
        provisions of Section 7.2(e) as if it were an election to waive the
        Joint and 50% Survivor Annuity by a married Participant, but without the
        spousal consent requirement.

                        Election of benefits in a form other than the forms
        described in this Section 7.2(b) is subject to the requirement of
        Section 7.2(e)(i).

                (c)     Alternative to Normal Form: In the event, pursuant to
        Section 7.2(e)(i), a married Participant duly elects not to receive his
        or her benefit in the form of the Joint and 50% Survivor Annuity
        described in Section 7.2(b), or if such Participant is not married, in
        the form of a single life annuity, the Committee, pursuant to the
        election of the Participant, shall direct the distribution to a
        Participant or his or her Beneficiary any amount to which he or she is
        entitled under the Plan in one lump-sum payment of cash.

                (d)     Benefits Payable Upon Death Occurring Before Benefits
        Commence:

                        (i)     Pre-Retirement Survivor Annuity: Unless
                otherwise elected as provided for in Section 7.2(e)(ii), a
                Participant who dies before his or her benefit payments have
                commenced and

                                      -31-

<PAGE>

                who has a surviving spouse shall have the Pre-Retirement
                Survivor Annuity paid to his or her surviving spouse. Subject to
                the applicable provisions of Section 7.1 and Section 7.7, the
                Participant's spouse may, at any time after the Participant's
                death and in the form and manner provided by the Committee,
                elect to commence payment of the Pre-Retirement Survivor
                Annuity. Payment of the Pre-Retirement Survivor Annuity will
                begin as soon as administratively feasible after the election to
                begin payments is made.

                        (ii)    Alternatives to Pre-Retirement Survivor Annuity:
                In the event the Participant has no surviving spouse or there is
                an election to waive the Pre-Retirement Survivor Annuity, such
                death benefits shall be paid to the Participant's Beneficiary in
                one lump-sum payment of cash within five years of the
                Participant's death; or

                        (iii)   Time of Payment; Small Benefits: If the value of
                the Participant's Account balance, including the balance in a
                Rollover Account and the value of any benefit pursuant to this
                Section 7.2(d), payable to a surviving spouse or Beneficiary
                does not exceed $5,000, the Committee shall direct the
                distribution of such amount pursuant to Section 7.1(b) as soon
                as administratively feasible. No distribution may be made under
                the preceding sentence after the Annuity Starting Date unless
                the distributee consents in writing. If the value exceeds
                $5,000, an immediate distribution of the entire amount may be
                made to the distributee, provided such distributee consents in
                writing to such distribution. Any written consent required under
                this paragraph must be obtained not more than 90 days before
                commencement of the distribution and shall be made in a manner
                consistent with Section 7.2(e)(i).

                (e)     Waiver of Normal Form or Pre-Retirement Survivor
        Annuity:

                        (i)     Waiver of Normal Form: Any election to waive the
                Joint and 50% Survivor Annuity must be made by the Participant
                in writing during the election period and be consented to by the
                Participant's spouse. (Subject to the remainder of this Section
                7.2(e)(i), the election period to waive the Joint and 50%
                Survivor Annuity shall be the 90-day period ending on the
                Annuity Starting Date.) Such election shall be made in the
                manner provided in Section 6.4.

                With regard to the election, the Committee shall provide to the
                Participant no less than 30 days and not more than 90 days
                before the Annuity Starting Date a written explanation of:

                                      -32-

<PAGE>

                                (A)     the terms and conditions of the Joint
                        and 50% Survivor Annuity;

                                (B)     the Participant's right to make and the
                        effect of an election to waive the Joint and 50%
                        Survivor Annuity;

                                (C)     the right of the Participant's spouse to
                        consent to any election to waive the Joint and 50%
                        Survivor Annuity; and

                                (D)     the right of the Participant to revoke
                        such election, and the effect of such revocation.

                        (ii)    Waiver of Pre-Retirement Survivor Annuity: Any
                election to waive the Pre-Retirement Survivor Annuity before the
                Participant's death must be made by the Participant in writing
                during the applicable election period and shall require the
                spouse's irrevocable consent in the same manner provided for in
                Section 6.4. Further, the spouse's consent must acknowledge the
                specific non-spouse Beneficiary. Notwithstanding the foregoing,
                the non-spouse Beneficiary need not be acknowledged, provided
                the consent of the spouse acknowledges that the spouse has the
                right to limit consent only to a specific Beneficiary and that
                the spouse voluntarily elects to relinquish such right.

                The election period to waive the Pre-Retirement Survivor Annuity
                shall begin on the first day of the Plan Year in which the
                Participant attains age 35 and end on the date of the
                Participant's death. An earlier waiver (with spousal consent)
                may be made provided written explanation of the Pre-Retirement
                Survivor Annuity is given to the Participant and such waiver
                becomes invalid at the beginning of the Plan Year in which the
                Participant turns age 35. In the event a Participant separates
                from Service prior to the beginning of the election period, the
                election period shall begin on the date of such separation from
                Service.

                With regard to the election, the Committee shall provide each
                Participant a written explanation with respect to the
                Pre-Retirement Survivor Annuity, pursuant to Section
                417(a)(3)(B) of the Code.

        7.3     Presenting Claims for Benefits: A "Claims Administrator" shall
be appointed by the Committee or, absent such appointment, shall be the
Company's director of benefits, with such Claims Administrator authorized by the
Committee to conduct the initial review and render a decision as provided in
this Section for all claims for benefits under the Plan. The Committee shall
establish administrative processes and safeguards to ensure that benefit
determinations made pursuant to this Section 7.3 are made in accordance with the
Plan and have been made and

                                      -33-

<PAGE>

applied consistently to similarly situated claimants. Any Participant,
Beneficiary of any deceased Participant, or the authorized representative of
such claimant (collectively, the "Applicant") may submit written application to
the Claim Administrator for the payment of any benefit asserted to be due him
under the Plan. Such application shall set forth the nature of the claim and
such other information as the Claim Administrator may reasonably request. Within
a reasonable period of time following the receipt of any application required by
this Section, the Claim Administrator shall determine whether or not the
Participant or Beneficiary involved is entitled to a benefit hereunder and, if
so, the amount thereof and shall notify the Applicant of its findings.

If a claim is wholly or partially denied, the Claim Administrator shall so
notify the Applicant within a reasonable time after receipt of the application
by the Claims Administrator, such time not to exceed ninety (90) days unless
special circumstances require an extension of time for processing the
application. If such an extension of time for processing is required, written
notice of the extension shall be furnished to the Applicant prior to the end of
the initial ninety (90) day period. In no event shall such extension exceed a
period of ninety (90) days from the end of such initial period. The extension
notice shall indicate the special circumstances requiring an extension of time
and the date by which the Claim Administrator expects to render its final
decision. Notice of the Claim Administrator's decision to deny a claim in whole
or in part shall be set forth in a manner calculated to be understood by the
Applicant and shall contain the following:

                        (i)     the specific reason or reasons for the denial,

                        (ii)    specific reference to the pertinent Plan
                provisions on which the denial is based,

                        (iii)   a description of any additional material or
                information necessary for the Applicant to perfect the claim and
                an explanation of why such material or information is necessary,

                        (iv)    an explanation of the claims review procedure,
                including applicable time limits, as set forth in Section 7.4
                hereof, and

                        (v)     a statement of the claimant's right to bring a
                civil suit under Section 502(a) of ERISA following a denial on
                subsequent review.

        7.4     Claims Review Procedure: Upon the Claims Administrator's
denial, in whole or in part of a benefit applied for under Section 7.3, an
Applicant shall have the right to appeal such denial as set forth in this
Section 7.4. Benefits under the Plan will only be paid if the Committee decides
in its discretion that the claimant involved is entitled to them. The Committee
shall establish administrative processes and safeguards to ensure that benefit
determinations made pursuant to this Section 7.4 are made in accordance with the
Plan and have been made and applied consistently to similarly situated
claimants. Except as may be otherwise required by law, the decision of the
Committee on review of the claim denial shall be binding on all parties when

                                      -34-

<PAGE>

the Applicant has exhausted the claims procedure under this Section 7.4. No
action in law or at equity shall be brought to recover benefits under this Plan
until the appeal rights provided in this Section 7.4 have been exercised and the
benefits requested in such appeal have been denied in whole or in part.

If an application filed by the Applicant under Section 7.3 above shall result in
a denial by the Claim Administrator of the benefit applied for, either in whole
or in part, such Applicant shall have the right, to be exercised by written
request filed with the Committee within sixty (60) days after receipt of notice
of the denial of the application for a review of the application and of the
entitlement to the benefit for which the Applicant applied. Such request for
review may contain such additional information and comments as the Applicant may
wish to present.

The Committee shall reconsider the application in light of such additional
information and comments as the Applicant may have presented. Upon request, the
Committee shall provide, free of charge, the Applicant or his or her designated
representative with copies of all "relevant documents" (within the meaning of
Department of Labor regulation Section 2560.503-1(m)(8)) ("Relevant Documents")
in its possession, including copies of the Plan document and information
provided by the Company relating to the Applicant's entitlement to such benefit.

The Committee shall render a decision and notify the Applicant of the
Committee's determination on review no later than 60 days after receipt of the
Applicant's request for review, unless the Committee determines that special
circumstances require an extension of time for processing the claim. If the
Committee determines an extension of time for processing is required, written
notice of the extension shall be furnished to the Applicant prior to the
termination of the initial 60-day period. In no event, shall such extension
exceed a period of 60 days from the end of the initial period. The extension
notice shall indicate the special circumstance requiring an extension of time
and the date by which the Committee expects to render the determination on
review. In the event that the extension is a result of an Applicant's failure to
submit information necessary to decide a claim, the period in which the
determination must be made will be tolled from the date on which the
notification of the extension is sent to the Applicant until the date the
Applicant responds to the request for additional information.

Notice of the Committee's final decision shall be furnished to the Applicant in
writing, in a manner calculated to be understood by him, and if the Applicant's
claim on review is denied in whole or in part, the notice shall set forth:

                        (i)     the specific reason or reasons for the denial;
                and

                        (ii)    specific reference(s) to the pertinent plan
                provision(s) on which the denial is based; and

                        (iii)   the Applicant's right to receive upon request,
                free of charge, reasonable access to, and copies of, all
                Relevant Documents, records and other information to his or her
                claim; and

                        (iv)    the claimant's right to bring a civil action
                under Section 502(a) of ERISA.

                                      -35-

<PAGE>

        7.5     Disputed Benefits: If any dispute still exists between a
Participant or a Beneficiary and the Claims Administrator or the Committee after
a review of the claim or in the event any uncertainty shall develop as to the
person to whom payment of any benefit hereunder shall be made, the Trustee may
withhold the payment of all or any part of the benefits payable hereunder to the
Participant or Beneficiary until such dispute has been resolved by a court of
competent jurisdiction or settled by the parties involved.

        7.6     Rollover Distribution. This Section applies to distributions
made on or after January 1, 1993. Notwithstanding any provision of the Plan to
the contrary that would otherwise limit a distributee's election under this
Section, a distributee may elect, at the time and in the manner prescribed by
the Committee, to have any portion of an eligible rollover distribution paid
directly to an eligible retirement plan specified by the distributee in a direct
rollover. For the purposes of this Section 7.6, the following definitions are
applicable:

                (a)     Eligible rollover distribution. An eligible rollover
        distribution is any distribution of all or any portion of the balance to
        the credit of the distributee, except that an eligible rollover
        distribution does not include: any distribution that is one of a series
        of substantially equal periodic payments (not less frequently than
        annually) made for the life (or life expectancy) of the distributee or
        the joint lives (or joint life expectancies) of the distributee and the
        distributee's designated beneficiary, or for a specified period of ten
        years or more; any distribution to the extent such distribution is
        required under Section 401(a)(9) (required minimum distributions) of the
        Code; and the portion of any distribution that is not includible in
        gross income (determined without regard to the exclusion for net
        unrealized appreciation with respect to employer securities). Effective
        as of January 1, 2002, an eligible rollover does not include any
        hardship withdrawal made by a Participant. Additionally, effective
        January 1, 2002, a portion of a distribution shall not fail to be an
        eligible rollover distribution merely because the portion consists of
        after-tax employee contributions which are not includible in gross
        income. However, such portion may be transferred only to an individual
        retirement account or annuity described in Section 408(a) or (b) of the
        Code, or to a qualified defined contribution plan described in Section
        401(a) or 403(a) of the Code that agrees to separately account for
        amounts so transferred, including separately accounting for the portion
        of such distribution which is includible in gross income and the portion
        of such distribution which is not so includible.

                (b)     Eligible Retirement Plan. An eligible retirement plan is
        an individual retirement account described in Code Section 408(a), an
        individual retirement annuity described in Code Section 408(b), an
        annuity plan described in Code Section 403(a) or a qualified trust
        described in Code Section 401(a) or, from and after January 1, 2002, an
        annuity contract described in Section 403(b) of the Code or an eligible
        deferred compensation plan described in Section 457(b) of the Code which
        is maintained by an eligible employer described in Section 457(e)(1)(A)
        of the Code, that accepts the distributee's eligible rollover
        distribution However, prior to January 1, 2002, in the case of an
        eligible rollover distribution to the surviving spouse, an eligible
        retirement plan is an individual retirement account or individual
        retirement annuity.

                                      -36-

<PAGE>

                (c)     Distributee. A distributee includes an employee or
        former employee. In addition, the employee's or former employee's
        surviving spouse and the employee's or former employee's spouse or
        former spouse who is the alternate payee under a qualified domestic
        relations order, as defined in Section 414(p) of the Code, are
        distributees with regard to the interest of the spouse or former spouse.

                (d)     Direct rollover. A direct rollover is a payment by the
        plan to the eligible retirement plan specified by the distributee.

                (e)     In the event that a distributee, after receiving the
        explanation required by Code Section 402(f), does not affirmatively
        elect a direct rollover under this Section 7.6, the distributee shall be
        deemed to have elected not to have any portion of the eligible rollover
        distribution paid directly to an eligible retirement plan.

                In order for a distributee to have all or any portion of an
eligible rollover distribution paid to an eligible retirement plan as a direct
rollover, such distributee must furnish the Committee with such information as
it may deem necessary or appropriate.

        7.7     Minimum Distribution Requirements This Section applies to
distributions made on and after July 1, 2002. The requirements of this Section
7.7 shall take precedence over any inconsistent provisions of the Plan. All
distributions required under this Section 7.7 will be determined and made in
accordance with the Treasury Regulations under Section 401(a)(9) of the Code.
Notwithstanding any other provisions of this Section 7.7, distributions may be
made under a designation made before January 1, 1984, in accordance with Section
242(b)(2) of the Tax Equity and Fiscal Responsibility Act (TEFRA) and the
provisions of the Plan that relate to Section 242(b)(2) of TEFRA.

                (a)     Time and Manner of Distribution

                        (i)     Required Beginning Date. The Participant's
                entire interest will be distributed in a lump sum (or through a
                purchase of an annuity pursuant to Section 7.2) to the
                Participant no later than the Participant's Required Beginning
                Date.

                        (ii)    Death of Participant Before Distributions Begin.
                If the Participant dies before distributions begin, the
                Participant's entire interest will be distributed in a lump sum
                (or through a purchase of an annuity pursuant to Section 7.2) no
                later than as follows:

                                (A)     If the Participant's surviving spouse is
                        the Participant's sole Designated Beneficiary, the
                        Participant's entire interest will be distributed to the
                        surviving spouse by December 31 of the calendar year
                        containing the fifth anniversary of the Participant's
                        death, or by December 31 of the

                                      -37-

<PAGE>

                        calendar year in which the Participant would have
                        attained age 70 1/2, if later.

                                (B)     If the Participant's surviving spouse is
                        not the Participant's sole Designated Beneficiary, the
                        Participant's entire interest will be distributed to the
                        Designated Beneficiary by December 31 of the calendar
                        year containing the fifth anniversary of the
                        Participant's death.

                                (C)     If there is no Designated Beneficiary as
                        of September 30 of the year following the year of the
                        Participant's death, the Participant's entire interest
                        will be distributed to the Participant's estate by
                        December 31 of the calendar year containing the fifth
                        anniversary of the Participant's death.

                                (D)     If the Participant's surviving spouse is
                        the Participant's sole Designated Beneficiary and the
                        surviving spouse dies after the Participant but before
                        distribution to the surviving spouse has occurred, this
                        Section 7.7(a)(ii), other than subparagraph
                        7.7(a)(ii)(A), will apply as if the surviving spouse
                        were the Participant.

For purposes of this subparagraph 7.7(a)(ii), unless subparagraph 7.1(a)(ii)(D)
applies, distributions are considered to occur on the Participant's Required
Beginning Date. If subparagraph 7.7(a)(ii)(D) applies, distributions are
considered to occur on the date distributions are required to begin to the
surviving spouse under subparagraph 7.7(a)(ii)(A). If distributions under an
annuity purchased from an insurance company irrevocably commence to the
Participant before the Participant's Required Beginning Date (or to the
Participant's surviving spouse before the date distributions are required to
begin to the surviving spouse under subparagraph 7.7(a)(ii)(A)), the date
distributions are considered to begin is the date distributions actually
commence. If the Participant's interest is distributed in the form of an annuity
purchased from an insurance company, distributions thereunder will be made in
accordance with the requirements of section 401(a)(9) of the Code and the
Treasury regulations.

                (b)     Definitions. For purposes of this Section 7.7, the
        following definitions shall apply:

                        (i)     Designated Beneficiary. The individual who is
                designated as the Beneficiary under Section 6.3 of the Plan and
                is the Designated Beneficiary under section 401(a)(9) of the
                Code and Section 1.401(a)(9)-1, Q&A-4, of the Treasury
                regulations.

                        (ii)    Required Beginning Date. The required beginning
                date specified in Section 7.1 of the Plan.

                                      -38-

<PAGE>

                                  ARTICLE VIII

                         TRUST AGREEMENT AND TRUST FUND

        8.1     Trust Agreement: The Trust Agreement, referred to in Article I
hereof as the Trust Agreement and the provisions of which are herein
incorporated by reference as fully as if set out herein, shall mean the Trust
Agreement between the Company and Fidelity Management Trust Company, Trustee, or
any successor trustee.

        8.2     Investment Funds: All contributions to the Trust that are
allocated to any separate Account of a Participant shall be divided by the
Trustee and invested in shares of one or more of the Investment Funds pursuant
to the directions of the Participant given in accordance with the provision of
Sections 8.3 and 8.4.

        8.3     Investment Directions of Participants: Each Participant may, in
accordance with procedures established by the Committee, direct that the total
of the contributions allocable to his or her Account and the earnings and
accretions thereon be invested in such percentages as he or she may designate,
in one percent (1%) increments, among the Investment Funds. In the event a
Participant fails to direct the manner of investing his or her Accounts as
provided therein, his or her Accounts shall be invested only in the Fidelity
Money Market Trust: Retirement Money Market Portfolio. Notwithstanding the
foregoing, a Participant's Pension Offset Account shall not be subject to the
Participant's investment directions and shall be invested as directed by the
Benefits Executive Committee or its representatives until such time as such
Participant terminates Service, at which time such Participant may direct the
investment of such Participant's Pension Offset Account, if any, in accordance
with the applicable provisions of this Plan.

        8.4     Change of Investment Directions: Each Participant may, in
accordance with procedures established by the Committee, direct that the
investment of the total of the existing balances, other than a Pension Offset
Account, and/or the investment of all future Contributions by or on behalf of
the Participant be changed from one authorized option to another authorized
option available under Section 8.3. Notwithstanding the foregoing, a
Participant's Pension Offset Account shall not be subject to the Participant's
Investment directions and shall be invested as directed by the Benefits
Executive Committee or its representatives until such time as such Participant
terminates Service, at which time such Participant may direct the investment of
such Participant's Pension Offset Account, if any, in accordance with the
applicable provisions of this Plan.

        8.5     Voting of GlobalSantaFe Stock; Exercise of Other Rights:

                (a)     Voting rights with respect to shares of GlobalSantaFe
        Stock in the GlobalSantaFe Stock Fund allocated to the Accounts of
        Participants, former Participants and beneficiaries of deceased
        Participants ("GlobalSantaFe Participants") shall be exercised by the
        Trustee in such manner as may be directed by the respective
        GlobalSantaFe Participants, with fractional shares being voted on a
        combined basis to the extent possible to reflect the direction of the
        voting GlobalSantaFe Participants. Unless otherwise necessary to comply
        with the

                                      -39-

<PAGE>

        fiduciary requirements of ERISA, the Trustee shall not vote shares of
        GlobalSantaFe Stock for which it has not received timely direction.

                (b)     In the event that there is a tender offer or exchange
        offer for outstanding shares of GlobalSantaFe Stock, rights with respect
        to the tender offer or exchange offer shall be as with respect to voting
        rights described in Section 8.5(a) above. Unless otherwise necessary to
        comply with the fiduciary requirements of ERISA, if the Trustee shall
        not receive adequate and timely instruction from a GlobalSantaFe
        Participant as to the manner in which to respond to such a tender offer,
        the Trustee shall not tender or exchange any shares of GlobalSantaFe
        Stock with respect to which such GlobalSantaFe Participant has the right
        to give directions.

                (c)     Solicitation of exercise of GlobalSantaFe Participants'
        voting rights by management of GlobalSantaFe Corporation, the Company
        and others under a proxy or consent provision applicable to all holders
        of GlobalSantaFe Stock shall be permitted. Solicitation of exercise of
        GlobalSantaFe Participants' tender or exchange offer rights by
        management of GlobalSantaFe Corporation, the Company and others shall be
        permitted. The Committee shall notify GlobalSantaFe Participants of each
        occasion for the exercise of voting rights or rights with respect to a
        tender offer or exchange offer within a reasonable time before such
        rights are to be exercised. Such notification shall include all
        information distributed to shareholders by GlobalSantaFe Corporation
        regarding the exercise of such rights. Copies of GlobalSantaFe
        Corporation written communications to GlobalSantaFe Participants
        relating to each opportunity for GlobalSantaFe Participants' exercise of
        rights under this Section 8.5 shall be promptly furnished to the
        Trustee. The instructions received by the Trustee from GlobalSantaFe
        Participants shall be held by the Trustee in confidence and shall not be
        divulged or released to any person, including the Committee or officers
        or employees of the Company or its Affiliates.

        8.6     Limitations on Insiders: The Committee may impose such
restrictions or conditions as it may deem appropriate on investment in the
GlobalSantaFe Stock Fund or withdrawals therefrom by Participants who are
subject to the restrictions on short-swing trading imposed by Section 16 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act").

        8.7     Compliance with Exchange Act Rule 10(b)(18): At any time that
the Trustee makes open market purchases of GlobalSantaFe Stock, the Trustee will
either (i) be an "agent independent of the issuer" as that term is defined in
Rule 10(b)(18) promulgated pursuant to the Exchange Act or (ii) make such open
market purchases in accordance with the provisions, and subject to the
restrictions, of Rule 10(b)(18) of the Exchange Act.

        8.8     Benefits Paid Solely from Trust Fund: All of the benefits
provided to be paid under Article VI hereof shall be paid by the Trustee out of
the Trust Fund to be administered under such Trust Agreement. No fiduciary shall
be responsible or liable in any manner for payment of any such benefits, and all
Participants hereunder shall look solely to such Trust Fund

                                      -40-

<PAGE>

and to the adequacy thereof for the payment of any such benefits of any nature
or kind which may at any time be payable hereunder.

        8.9     Authority to Designate Investment Manager: The Benefits
Executive Committee may appoint an Investment Manager or Managers to manage
(including the power to acquire and dispose of) any assets of the Trust Fund in
accordance with the terms of the Trust Agreement and ERISA.

                                      -41-

<PAGE>

                                   ARTICLE IX

                         ADOPTION OF PLAN BY AFFILIATES;
                     SEPARATION OF THE TRUST FUND; AMENDMENT
                        AND TERMINATION OF THE PLAN; AND
                DISCONTINUANCE OF CONTRIBUTIONS TO THE TRUST FUND

        9.1     Adoption of Plan by Affiliates: Each Affiliate of the Company
shall be considered an Employer, and shall remain an Employer, under this Plan
upon its employment of an Employee who would otherwise be eligible to
participate in the Plan under Section 3.11 if the Affiliate was considered an
Employer; provided, however, that an Affiliate shall not be an Employer if:

                (a)     The Affiliate is specifically excluded from coverage
        either through termination of this Plan or by action of the Board of
        Directors of the Company or the Affiliate; or,

                (b)     The Affiliate becomes an Affiliate after the Effective
        Date as a result of a transaction involving a transfer of ownership
        interest in an entity, and no action has been taken by the Affiliate or
        the Company that specifically contemplates that the Affiliate shall
        become an Employer in this Plan.

By its participation in the Plan, each Affiliate acknowledges the appointment
and authority of the Benefits Administrative Committee as Administrator and
agrees to the Plan's terms, including, but not limited to, an Employer's funding
obligations to the Plan. By its participation in the Plan, any such Affiliate
also authorizes and designates the Company and the Benefits Administrative
Committee as the Affiliate's agents to act in all transactions affecting the
continued operation of the Plan.

        9.2     Effect of Adoption: The following special provisions shall
apply to all Employers:

                (a)     An Employee shall be considered in Service while
        employed simultaneously or successively by one or more Employers or
        Affiliates.

                (b)     The transfer of an Employee from one Employer or
        Affiliate to another Employer or Affiliate shall not be deemed a
        termination of Service.

        9.3     Separation of the Trust Fund: A separation of the Trust Fund as
to the interest therein of the Participants who are Employees of any particular
Employer may be made by an Employer at any time. In such event, the Trustee
shall set apart that portion of the Trust Fund which shall be allocated to such
Participants pursuant to a valuation and allocation of the Trust Fund made in
accordance with the procedures set forth in Sections 5.2 and 5.4 hereof but as
of the date when such separation of the Trust Fund shall be effective. Such
portion may in the Trustee's discretion be set apart in cash or in kind out of
the properties of the Trust Fund. That portion of the Trust Fund so set apart
shall continue to be held by the Trustee as though such Employer had entered
into the Trust Agreement as a separate Trust Agreement with the Trustee. Such
Employer may in such event designate a new Trustee of its selection to act as
Trustee under

                                      -42-

<PAGE>

the Trust Agreement. Such Employer shall thereupon be deemed to have adopted the
Plan as its own separate Plan, and shall subsequently have all such powers of
amendment or modification of the Plan as are reserved herein to the Company.
Following such separation, such Employer shall cease to be an "Employer" for
purposes of participation in this Plan.

        9.4     Voluntary Separation: If any Employer shall desire to separate
its interest in the Trust Fund, it may request such a separation in a notice in
writing to the Company and the Trustee. Such separation shall then be made as of
any specified date after service of such notice, and such separation shall be
accomplished in the manner set forth in Section 9.3 above.

        9.5     Amendment of the Plan: The Company, by action of the Board of
Directors of the Company or the Benefits Executive Committee, shall have the
right to amend or modify this Plan and (with the consent of the Trustee) the
Trust Agreement at any time and from time to time to any extent deemed
advisable; provided such amendment(s) is adopted at either a regular or special
meeting of, or by unanimous written consent of, the Board of Directors of the
Company or the Benefits Executive Committee, as applicable. Any such amendment
or modification shall be set out in an instrument in writing and executed with
equal formality as this Plan. No such amendment or modification shall, however,
increase the duties or responsibilities of the Trustee without its consent
thereto in writing, or have the effect of transferring to or vesting in any
Employer any interest or ownership in any properties of the Trust Fund, or of
permitting the same to be used for or diverted to purposes other than for the
exclusive benefit of the Participants and their Beneficiaries. No amendment
shall decrease the Account of any Participant. Notwithstanding anything herein
to the contrary, the Plan or the Trust Agreement may be amended in such manner
as may be required at any time to make it conform to the requirements of the
Internal Revenue Code of 1986, as amended, or of any United States statutes with
respect to employees' trusts, or of any amendment thereto, or of any regulations
or rulings issued pursuant thereto, and no such amendment shall be considered
prejudicial to any then existing rights of any Participant or his or her
Beneficiary under the Plan.

        9.6     Acceptance or Rejection of Amendment by Employers: Each
Employer will be deemed to have consented to each amendment to the Plan made
pursuant to Section 9.5 unless it notifies the Company and the Trustee in
writing within thirty (30) days after the effective date of such amendment that
is does not consent thereto, and requests a separation of its interest in the
Trust Fund in accordance with the provisions of Section 9.3, as of the first day
of the month following such written notification to the Company and the Trustee;
notwithstanding the foregoing, an Employer will be deemed to have consented to
each amendment to the Plan upon such Employer's submission of information or
contributions to the Plan and/or Trust Fund pursuant to the terms of the Plan,
as amended.

        9.7     Termination of the Plan: The Company assumes no obligation to
continue this Plan in effect and reserves the right at any time, and in its sole
and absolute discretion, by action of the Board of Directors of the Company, to
terminate this Plan in whole or part. A termination of the Plan as to any
particular Employer (and only as to any such particular Employer) shall occur
under the following circumstances:

                (a)     The Plan may be terminated by the delivery to the
        Trustee of an instrument in writing approved and authorized by the Board
        of Directors of such

                                      -43-

<PAGE>

        Employer. In such event, termination of the Plan shall be effective as
        of any subsequent day specified in such instrument.

                (b)     Partial termination of the Plan shall occur under
        circumstances set forth in Code Regulation Section 1.411(d)-2(b).

                (c)     The Plan shall terminate with respect to any Employer
        effective at the expiration of sixty (60) days following the merger,
        dissolution, or complete liquidation of the Employer, unless within such
        time a successor organization approved by the Company shall deliver to
        the Trustee a written instrument certifying that such organization (i)
        has become the employer of more than fifty percent (50%) of those
        Employees of such Employer who are then Participants under this Plan and
        (ii) has adopted the Plan as to its Employees.

        9.8     Liquidation and Distribution of Trust Fund upon Termination: In
the event a termination of the Plan in respect of any Employer shall occur, a
separation of the Trust Fund in respect of the Participants of such Employer
shall be made as of the effective date of such termination of the Plan in
accordance with the procedure set forth in Section 9.3 hereof. Following
separation of the Trust Fund in respect of the Participants of any Employer as
to whom the Plan has been terminated, the properties of the Trust Fund so set
apart shall be reduced to cash as soon as may be expeditious under the
circumstances. Any administrative costs or expenses incurred incident to the
final liquidation of such separate Trust Funds shall be paid by the Employer,
except that in the case of bankruptcy or insolvency of such Employer any such
costs shall be charged against the Trust Fund. Following such reduction of such
Trust Fund to cash, the Accounts of the Participants shall then be valued as
provided in Article V and shall be fully vested, whereupon, to the extent
allowed by law, each such Participant shall receive the entire amount of cash in
his or her Account.

        9.9     Effect of Termination or Discontinuance of Contributions: If
any Employer shall completely discontinue its Contributions to the Trust Fund or
suspend its Contributions to the Trust Fund under such circumstances as to
constitute a complete discontinuance of Contributions within the purview of the
reasoning of U.S. Treasury Regulations Seciton 1.401-6(c), then throughout any
such period of discontinuance of Contributions by an Employer all other
provisions of the Plan shall continue in full force and effect with respect to
such Employer other than the provisions for Contributions by such Employer.

        9.10    Merger of Plan with Another Plan: In the event of any merger or
consolidation of the Plan with, or transfer in whole or in part of the assets
and liabilities of the Trust Fund to another trust fund held under, any other
plan of deferred compensation maintained or to be established for the benefit of
all or some of the Participants of this Plan, the assets of the Trust Fund
applicable to such Participants shall be transferred to the other trust fund
only if:

                (a)     Each Participant would (if either this Plan or the other
        plan then terminated) receive a benefit immediately after the merger,
        consolidation or transfer which is equal to or greater than the benefit
        he or she would have been entitled to receive immediately before the
        merger, consolidation or transfer (if this Plan had then terminated);

                                      -44-

<PAGE>

                (b)     Resolutions of the Board of Directors of the Employer
        under this Plan, or of any new or successor employer of the affected
        Participants, shall authorize such transfer of assets; and, in the case
        of the new or successor employer of the affected Participants, its
        resolutions shall include an assumption of liabilities with respect to
        such Participants' inclusion in the new employer's plan; and

                (c)     Such other plan and trust are qualified under Sections
        401(a) and 501(a) of the Internal Revenue Code of 1986, as amended.

                                      -45-

<PAGE>

                                    ARTICLE X

                            MISCELLANEOUS PROVISIONS

        10.1    Terms of Employment: The adoption and maintenance of the
provisions of this Plan shall not be deemed to constitute a contract between any
Employer and any Employee, or to be a consideration for, or an inducement or
condition of, the employment of any person. Nothing herein contained shall be
deemed to give to any Employee the right to be retained in the employ of an
Employer or to interfere with the right of an Employer to discharge an Employee
at any time, nor shall it be deemed to give to an Employer the right to require
any Employee to remain in its employ, nor shall it interfere with any Employee's
right to terminate his or her employment at any time.

        10.2    Controlling Law: This Plan shall be construed, regulated and
administered under the laws of the State of Texas.

        10.3    Invalidity of Particular Provisions: In the event any provision
of this Plan shall be held illegal or invalid for any reason, said illegality or
invalidity shall not affect the remaining provisions of this Plan but shall be
fully severable, and this Plan shall be construed and enforced as if said
illegal or invalid provisions had never been inserted therein.

        10.4    Non-alienability of Rights of Participants: Except with respect
to loans made pursuant to Section 6.8 hereunder and, effective as of August 5,
1997, except with respect to certain judgments and settlements pursuant to
Section 401(a)(13) of the Code, no interest, right or claim in or to any part of
the Trust Fund or any payment therefrom shall be assignable, transferable or
subject to sale, mortgage, pledge, hypothecation, commutation, anticipation,
garnishment, attachment, execution or levy of any kind, and the Trustee shall
not recognize any attempt to assign, transfer, sell, mortgage, pledge,
hypothecate, commute or anticipate the same, except to the extent required by
law. The preceding sentence shall also apply to the creation, assignment, or
recognition of a right to any benefit payable with respect to a Participant
pursuant to a domestic relations order, unless such order is determined to be a
qualified domestic relations order, as defined in Section 414(p) of the Code. If
the Committee receives a qualified domestic relations order with respect to a
Participant, the Committee may authorize the immediate distribution of the
amount assigned to the Participant's former spouse, to the extent permitted by
law, from the Participant's Accounts.

        10.5    Payments in Satisfaction of Claims of Participants: Any payment
or distribution to any Participant or his or her legal representative or any
Beneficiary in accordance with the provisions of this Plan shall be in full
satisfaction of all claims under the Plan against the Trust Fund, the Trustee
and the Employer. The Trustee may require that any distributee execute and
deliver to the Trustee a receipt and a full and complete release as a condition
precedent to any payment or distribution under the Plan.

        10.6    Impossibility of Diversion of Trust Fund: Notwithstanding any
provision herein to the contrary, no part of the corpus or the Income of the
Trust Fund shall ever be used for or diverted to purposes other than for the
exclusive benefit of the Participants or their Beneficiaries

                                      -46-

<PAGE>

or for the payment of expenses of the Plan. No part of the Trust Fund shall ever
directly or indirectly revert to the Employer, except as provided in Section 4.5
hereof.

        10.7    Unclaimed Benefits: If at, after or during the time when a
benefit hereunder is payable to any Participant, Beneficiary or other
distributee, the Committee, upon request of the Trustee or at its own instance,
shall mail by registered or certified mail to such distributee, at his or her
last known address, a written demand for his or her present address or for
satisfactory evidence of his or her continued life, or both, and if such
distributee shall fail to furnish the same to the Committee within two (2) years
from mailing of such demand, then the Committee may, in its sole discretion,
determine that such Participant, Beneficiary or other distributee has forfeited
his or her right to such benefit and may declare such benefit, or any unpaid
portion thereof, terminated as if the death of the distributee (with no
surviving Beneficiary) has occurred on the later of the date of the last payment
made thereon, or the date such Participant, Beneficiary or other distributee
first became entitled to receive benefit payments; provided, however, that such
forfeited benefit shall be reinstated if a claim for the same is made by the
Participant, Beneficiary or other distributee at any time thereafter. Such
reinstatement shall be made by a mandatory Contribution by the Company,
allocated solely to such reinstatement. Any benefit forfeited under this Section
shall be used to reduce Employer Contributions.

                                      -47-

<PAGE>

                                   ARTICLE XI

                           TOP-HEAVY PLAN REQUIREMENTS

        11.1    General Rule: For any Plan Year for which this Plan is a
Top-Heavy Plan, as defined in Section 11.6, and despite any other provisions of
this Plan to the contrary, this Plan shall be subject to the provisions of this
Article XI.

        11.2    Minimum Contribution Provisions: Each Participant who (i) is a
Non-Key Employee, as defined in Section 11.6 and (ii) is employed on the last
day of the Plan Year (regardless of whether the Participant has completed one
thousand (1,000) Hours of Service during the Plan Year) will be entitled to have
contributions and forfeitures (if applicable) allocated to his or her Account of
not less than three percent (3%) (the "Minimum Contribution Percentage") of the
Participant's Compensation. This Minimum Contribution Percentage shall be
provided without taking Pre-Tax Contributions into Account. A Non-Key Employee
may not fail to receive a Minimum Contribution Percentage because of a failure
to receive a specified minimum amount of compensation or a failure to make
mandatory employee or elective contributions. This Minimum Contribution
Percentage will be reduced for any Plan Year to the percentage at which
contributions (including forfeitures if applicable) are made or are required to
be made under the Plan for the Plan Year for the Key Employee for whom such
percentage is the highest for such Plan Year. For this purpose, the percentage
with respect to a Key Employee will be determined by dividing the contributions
(including forfeitures if applicable) made for such Key Employee by his or her
total compensation (as defined in Section 415 of the Code) not in excess of
$200,000 for the Plan Year.

                Such amount will be adjusted in the same manner as the amount
set forth in Section 11.3 below.

                Contributions considered under the first paragraph of this
Section 11.2 will include Employer contributions under this Plan and under all
other defined contribution plans required to be included in an Aggregation Group
(as defined in Section 11.6 below), but will not include Employer contributions
under any plan required to be included in such aggregation group if the plan
enables a defined benefit plan required to be included in such group to meet the
requirements of the Code prohibiting discrimination as to contributions in favor
of employees who are officers, shareholders, or highly compensated or
prescribing the minimum participation standards. If the highest rate allocated
to a Key Employee for a year in which the Plan is top-heavy is less than three
percent (3%), amounts contributed as a result of a salary reduction agreement
must be included in determining contributions made on behalf of Key Employees.

                Contributions considered under this Section will not include any
contributions under the Social Security Act or any other federal or state law.
The Employer Contributions shall be taken into consideration for purposes of
satisfying the Minimum Contribution Percentage. Any Employer Contribution used
to satisfy the Minimum Contribution Percentage shall also be treated as Matching
Contributions or Non-Resident Matching Contributions, as applicable, for the
purposes of the actual contribution percentage test and other requirements of
Section 401(k) of the Code.

                                      -48-

<PAGE>

        11.3    Limitation on Compensation: Annual Participant Compensation
taken into account under this Article XI and under Articles IV and V, for
purposes of computing benefits under this Plan, will not exceed the amount set
forth in Section 401(a)(17)(A) of the Code. Such amount will be adjusted
automatically for each Plan Year to the amount prescribed by Section
401(a)(17)(B) of the Code for the calendar year in which such Plan Year
commences.

        11.4    Coordination with Other Plans: If another defined contribution
or defined benefit plan maintained by the Company, other Employer or an
Affiliate (hereinafter in this Article collectively referred to as a "Considered
Company") provides contributions or benefits on behalf of a Participant in this
Plan, the other plan will be treated as a part of this Plan pursuant to
applicable principles prescribed by U.S. Treasury Regulations or applicable IRS
rulings (such as Revenue Ruling 81-202 or any successor ruling) to determine
whether this Plan satisfies the requirements of Sections 11.2 and 11.3 and to
avoid inappropriate omissions or inappropriate duplication of minimum
contributions. The determination will be made by the Committee upon the advice
of counsel.

                In the event a Participant is covered by both a top-heavy
defined benefit plan and a top-heavy defined contribution plan, a comparability
analysis (as prescribed by Revenue Ruling 81-202 or any successor ruling) shall
be performed in order to establish that the plans are providing benefits at
least equal to the defined benefit minimum. If it becomes necessary to establish
that the plans are providing benefits not less than the defined benefit minimum,
the Employer or Company shall take appropriate action to cause an adjustment in
either or both of benefits or contributions in order that such minimum benefits
are provided.

        11.5    Distributions to Certain Key Employees: Notwithstanding any
other provision of this Plan to the contrary, the entire interest in this Plan
of each Participant who is a Key Employee, by reason of clause (ii) of
subparagraph (c) of Section 11.6 (determined with respect to the calendar year
in which the Participant attains age seventy and one-half (70 1/2)) shall
commence to be distributed to such Participant not later than the April 1
following such calendar year.

        11.6    Determination of Top-Heavy Status: The Plan will be a Top-Heavy
Plan for any Plan Year if, as of the Determination Date, the aggregate of the
Accounts under the Plan (determined as of the Valuation Date) for Participants
(including former Participants) who are Key Employees exceeds sixty percent
(60%) of the aggregate of the Accounts of all Participants, excluding former Key
Employees, or if this Plan is required to be in an Aggregation Group, any such
Plan Year in which such Group is a Top-Heavy Group. In determining Top-Heavy
status, if an individual has not been credited with at least one (1) Hour of
Service with any Considered Company at any time during the one (1) year period
ending on the Determination Date, any accrued benefit for such individual and
the aggregate Accounts of such individual shall not be taken into account.

                For purposes of this Section, the capitalized words have the
following meanings:

                (a)     "Aggregation Group" means the group of plans, if any,
        that includes both the group of plans required to be aggregated and the
        group of plans

                                      -49-

<PAGE>

        permitted to be aggregated. The group of plans required to be aggregated
        (the "required aggregation group") includes:

                        (i)     Each plan of a Considered Company in which a Key
                Employee is a participant in the Plan Year containing the
                Determination Date, and

                        (ii)    Each other plan, including collectively
                bargained plans, of a Considered Company which, during this
                period, enables a plan in which a Key Employee is a participant
                to meet the requirements of Section 401(a)(4) or 410 of the
                Code.

        The group of plans that are permitted to be aggregated (the "permissive
        aggregation group") includes the required aggregation group plus one or
        more plans of a Considered Company that is not part of the required
        aggregation group and that the Considered Company certifies as a plan
        within the permissive aggregation group. Such plan or plans may be added
        to the permissive aggregation group only if, after the addition, the
        aggregation group as a whole continues to satisfy the requirements of
        Sections 401(a)(4) and 410 of the Code.

                (b)     "Determination Date" means for any Plan Year the last
        day of the immediately preceding Plan Year. However, for the first Plan
        Year of this Plan, Determination Date means the last day of that Plan
        Year.

                (c)     "Key Employee" means any Employee or former Employee
        under this Plan who, at any time during the Plan Year in question or
        during the Plan Year, is or was one of the following:

                        (i)     An officer of a Considered Company having an
                annual compensation greater than $130,000, as adjusted under
                Section 416(i)(1)(A) of the Code. Whether an individual is an
                officer shall be determined by the Considered Company on the
                basis of all the facts and circumstances, such as an
                individual's authority, duties, and term of office, not on the
                mere fact that the individual has the title of an officer. For
                any such Plan Year, officers considered to be Key Employees will
                be no more than the fewer of:

                                (A)     Fifty (50) Employees; or

                                (B)     Ten percent (10%) of the Employees or,
                        if greater than ten percent (10%), three (3) Employees.

                For this purpose, the highest-paid officers shall be selected.

                        (ii)    Any person who owns (or is considered as owning,
                within the meaning of the constructive ownership rules of

                                      -50-

<PAGE>

                Section 416(i)(1)(B) of the Code) more than five percent (5%) of
                the outstanding stock of a Considered Company or stock
                possessing more than five percent (5%) of the combined voting
                power of all stock of the Considered Company.

                        (iii)   Any person who has an annual compensation from
                the Considered Company of more than $150,000 and who owns (or is
                considered as owning within the meaning of the constructive
                ownership rules of Section 416(i)(1)(B) of the Code) more than
                one percent (1%) of the outstanding stock of the Considered
                Company or stock possessing more than one percent (1%) of the
                total combined voting power of all stock of the Considered
                Company.

        For purposes of this subsection (c), compensation means all items
        includible as compensation for purposes of applying the limitations on
        annual additions to a Participant account in a defined contribution plan
        and the maximum benefit payable under a defined benefit plan under
        Treasury Regulation Section 1.415-2(d). For purposes of this subsection
        (c), a Beneficiary of a Key Employee shall be treated as a Key Employee.
        For purposes of parts (ii) and (iii), each Considered Company is treated
        separately in determining ownership percentages; but all such Considered
        Companies shall be considered a single employer in determining the
        amount of compensation.

                (d)     "Non-Key Employee" means any Employee (and any
        Beneficiary of an Employee) who is not a Key Employee.

                (e)     "Top-Heavy Group" means the Aggregation Group if, as of
        the applicable Determination Date, the sum of the present value of the
        cumulative accrued benefits for Key Employees under all defined benefit
        plans included in the Aggregation Group plus the aggregate of the
        accounts of Key Employees under all defined contribution plans included
        in the Aggregation Group exceeds sixty percent (60%) of the sum of the
        present value of the cumulative accrued benefits for all employees,
        excluding former Key Employees as provided in paragraph (i) below, under
        all such defined benefit plans plus the aggregate accounts for all
        employees, excluding former Key Employees as provided in paragraph (i)
        below, under all such defined contribution plans. In determining
        Top-Heavy status, if an individual has not performed one (1) Hour of
        Service for any Considered Company at any time during the one (1) year
        period ending on the Determination Date, any accrued benefit for such
        individual and the aggregate accounts of such individual shall not be
        taken into account. If the Aggregation Group that is a Top-Heavy Group
        is a required aggregation group, each plan in the group will be a
        Top-Heavy Plan. If the Aggregation Group that is a Top-Heavy Group is a
        permissive aggregation group, only those plans that are part of the
        required aggregation group will be treated as Top-Heavy Plans. If the
        Aggregation Group is not a Top-Heavy Group, no plan within such group
        will be a Top-Heavy Plan.

                                      -51-

<PAGE>

        In determining whether this Plan constitutes a Top-Heavy Plan, the
        Committee (or its agent) will make the following adjustments:

                (f)     When more than one plan is aggregated, the Committee
        shall determine separately for each plan as of each plan's Determination
        Date the present value of the accrued benefits (for this purpose using
        the actuarial assumptions set forth in the applicable plan) or Account
        Balance. The results shall then be aggregated by adding the results of
        each plan as of the Determination Dates for such plans that fall within
        the same calendar year.

                (g)     In determining the present value of the cumulative
        accrued benefit or the amount of the account of any employee, such
        present value or account will include the amount in dollar value of the
        aggregate distributions made to such employee under the applicable plan
        during the one (1) year period (five (5) years for in-service
        distributions) ending on the Determination Date unless reflected in the
        value of the accrued benefit or Account Balance as of the most recent
        Valuation Date. The amounts will include distributions to employees
        representing the entire amount credited to their accounts under the
        applicable plan.

                (h)     Further, in making such determination, such present
        value or such account shall include any rollover contribution (or
        similar transfer), as follows:

                        (i)     If the rollover contribution (or similar
                transfer) is initiated by the employee and made to or from a
                plan maintained by another Considered Company, the plan
                providing the distribution shall include such distribution in
                the present value of such account; the plan accepting the
                distribution shall not include such distribution in the present
                value of such account unless the plan accepted it after December
                31, 1983.

                        (ii)    If the rollover contribution (or similar
                transfer) is either not initiated by the employee or made from a
                plan maintained by another Considered Company, the plan
                accepting the distribution shall include such distribution in
                the present value of such account, whether the plan accepted the
                distribution before or after December 31, 1983; the plan making
                the distribution shall not include the distribution in the
                present value of such account.

                (i)     In any case where an individual is a Non-Key Employee
        with respect to an applicable plan but was a Key Employee with respect
        to such plan for any prior Plan Year, any accrued benefit and any
        account of such employee will be altogether disregarded.

                (j)     "Valuation Date" means, for purposes of determining the
        present value of an accrued benefit as of the Determination Date, the
        date determined as of the most recent Valuation Date which is within a
        twelve (12) month period

                                      -52-

<PAGE>

        ending on the Determination Date. For the first Plan Year of a plan, the
        accrued benefit for a current employee shall be determined either (i) as
        if the individual terminated service as of the Determination Date, or
        (ii) as if the individual terminated service as of the Valuation Date,
        but taking into account the estimated accrued benefit as of the
        Determination Date. The Valuation Date shall be determined in accordance
        with the principles set forth in Q. & A. T-25 of Treasury Regulations
        Seciton 1.416-1.

                (k)     For purposes of this Article, "Compensation" shall have
        the meaning given to it in Section 5.3(c)(vi) of the Plan.

        11.7    Modification of Top-Heavy Rules: The requirements of this
Article XI shall not apply in any year beginning after December 31, 2001, in
which the Plan consists solely of a cash or deferral arrangement that meets the
"safe harbor" requirements of Code Section 401(k)(12) and Code Section
401(m)(11).

                                      -53-

<PAGE>

                                   ARTICLE XII

                            TESTING OF CONTRIBUTIONS

        12.1    Definitions: For purposes of this Article XII, the capitalized
words have the following meanings:

                (a)     "After-Tax Contributions" shall mean After-Tax
        Contributions made by Participants other than Non-Resident Participants.

                (b)     "Compensation" shall mean the Employee's compensation as
        defined in either Treasury Regulation Section 1.414(s)-1 and as provided
        in the definition of Compensation provided in Section 1.17 of the Plan.
        Such Compensation shall be limited to the amount set forth in Section
        401(a)(17)(A) of the Code, as adjusted by the Secretary of the Treasury
        or his or her delegate in the manner permitted by Section 401(a)(17)(B)
        of the Code.

                (c)     "Employer Contributions" shall mean Employer Matching
        Contributions.

                (d)     "Highly Compensated Employee" shall mean any Employee
        and any employee of an Affiliate who is a highly compensated employee
        under Section 414(q) of the Code, including any Employee and any
        employee of an Affiliate who,

                        (i)     was a 5% owner during the current Plan Year or
                prior Plan Year; or

                        (ii)    received Compensation during the prior Plan Year
                (as defined in Section 5.3(c)(vi) in excess of $85,000 or such
                other dollar amount as may be prescribed by the Secretary of the
                Treasury or his or her/her delegate.

                In determining an Employee's status as a Highly Compensated
        Employee within the meaning of Section 414(q), the entities set forth in
        Treasury Regulation Section 1.414(q)-1T Q&A-6(a)(1) through (4) must be
        taken into account as a single employer.

                A former Employee shall be treated as a Highly Compensated
        Employee if (1) such former Employee was a Highly Compensated Employee
        when he or she separated from Service, or (2) such former Employee was a
        Highly Compensated Employee in Service at any time after attaining age
        fifty-five (55). Any former Employee who separated from Service before
        January 1, 1987 will be treated as a Highly Compensated Employee only if
        the former Employee was a five percent (5%) owner or received
        Compensation (as defined in Section 5.3(c)(vi)) in excess of $50,000
        during (i) the Employee's separation year (or the year preceding such
        separation year) or (ii) any year ending on or after the former
        Employee's

                                      -54-

<PAGE>

        fifty-fifth (55th) birthday (or the last year ending before his or her
        fifty-fifth (55th) birthday).

                (e)     "Pre-Tax Contributions" shall mean Pre-Tax
        Contributions.

        12.2    Actual Deferral Percentage: The Actual Deferral Percentage for
a specified group of Employees for a Plan Year shall be the average of the
ratios (calculated separately for each Employee in such group) of:

                (a)     The amount of Pre-Tax Contributions actually paid to the
        Plan on behalf of each such Employee for such Plan Year which relate to
        Compensation that either would have been received by the Employee in
        such Plan Year (but for the deferral election) or are attributable to
        services performed by the Employee in the Plan Year and would have been
        received by the Employee within two and one-half (2 1/2) months after
        the close of the Plan Year (but for the deferral election), over

                (b)     The Employee's Compensation for such Plan Year, but
        limited to Compensation attributable to the portion of the Plan Year in
        which such Employee was eligible to participate in the Plan.

The individual ratios and Actual Deferral Percentages shall be calculated to the
nearest one-hundredth (1/100) of one percent (1%) of an Employee's Compensation.

                Effective January 1, 1997, the Plan shall use the Actual
        Deferral Percentage for Participants who are Highly Compensated
        Employees for the current Plan Year and the Actual Deferral Percentage
        for Participants who are non-Highly Compensated Employees for the
        current Plan Year in performing the nondiscrimination testing required
        under this Article for the current Plan Year.

        12.3    Actual Deferral Percentage Limits: The Actual Deferral
Percentage for the eligible Highly Compensated Employees for any Plan Year shall
not exceed the greater of (a) or (b), as follows:

                (a)     The Actual Deferral Percentage of Compensation for the
        eligible non-Highly Compensated Employees times 1.25, or

                (b)     The lesser of (i) the Actual Deferral Percentage of
        Compensation for the eligible non-Highly Compensated Employees times 2.0
        or (ii) the Actual Deferral Percentage of Compensation for the eligible
        non-Highly Compensated Employees plus two (2) percentage points.

                The Actual Deferral Percentage for any Highly Compensated
Employee who is eligible to have deferred contributions allocated to his or her
account under one (1) or more plans described in Section 401(k) of the Code that
are maintained by an Employer or an Affiliate in addition to this Plan shall be
determined as if all such contributions were made to this Plan. For purposes of
determining whether the Actual Deferral Percentage limits of Section 12.3 are
satisfied, all Pre-Tax Contributions that are made under two (2) or more plans
that are aggregated

                                      -55-

<PAGE>

for purposes of Code Section 401(a)(4) or 410(b) (other than Code Section
410(b)(2)(A)(ii)) are to be treated as made under a single plan, and if two (2)
or more plans are permissively aggregated for purposes of Code Section 401(k),
the aggregated plans must also satisfy Code Sections 401(a)(4) and 410(b) as
though they were a single plan.

        12.4    Reduction of Pre-Tax Contribution Rates by Leveling Method: If
on the basis of the Pre-Tax Contribution rates elected by Participants for any
Plan Year, the Committee determines, in its sole discretion, that neither of the
tests contained in (a) or (b) of Section 12.3 will be satisfied, the Committee
may reduce the Pre-Tax Contribution rate of any Participant who is among the
eligible Highly Compensated Employees to the extent necessary to reduce the
overall Actual Deferral Percentage for eligible Highly Compensated Employees to
a level which will satisfy either (a) or (b) of Section 12.3. The reductions in
Pre-Tax Contribution rates shall be made in a manner so that the Actual Deferral
Percentage of the affected Participants who elected the highest Actual Deferral
Percentage shall be first lowered to the level of the affected Participants who
elected the next to the highest Actual Deferral Percentage. If further overall
reductions are required to achieve compliance with (a) or (b) of Section 12.3,
both of the above-described groups of Participants will be lowered to the level
of Participants with the next highest Actual Deferral Percentage, and so on,
until sufficient total reductions in Pre-Tax Contribution rates have occurred to
achieve compliance with (a) or (b) of Section 12.3. To the extent practicable,
the Committee may prospectively limit a Participant's Pre-Tax Contribution rate
for the remainder of any Plan Year in which the Committee determines, based on
the Pre-Tax Contribution rates elected by such Participants, that neither of the
tests contained in Section 12.3 will be satisfied, and such Participant may
elect to receive a distribution as of the end of the Plan Year of any such
excess Pre-Tax Contributions.

        12.5    Increase in Pre-Tax Contribution Rates: If a Participant's
Pre-Tax Contribution rate is reduced below the level necessary to satisfy either
(a) or (b) of Section 12.3 for the Plan Year, such Participant may be eligible
to increase his or her Pre-Tax Contribution rate for the remainder of the Plan
Year to a level not in excess of that level which will satisfy the greater of
(a) or (b) of Section 12.3. Such an increase in the Pre-Tax Contribution rate
shall be made by Participants on a uniform and non-discriminatory basis,
pursuant to such rules and procedures as the Committee may prescribe.

        12.6    Excess Pre-Tax Contributions: As soon as possible following the
end of the Plan Year, the Committee shall determine whether either of the tests
contained in Section 12.3 were satisfied as of the end of the Plan Year, and any
excess Pre-Tax Contributions, plus any income and minus any loss attributable
thereto, of those Participants who are among the Highly Compensated Employees
shall be distributed to such Participants. Such income shall include the
allocable gain or loss for (i) the Plan Year and (ii) the period between the end
of the Plan Year and the date of distribution.

                The total amount of Excess Pre-Tax Contributions which must be
distributed from the accounts of Highly Compensated Employees will be determined
using the ratio leveling method, whereby, the Actual Deferral Percentage of such
Participants who have the highest Actual Deferral Percentage under Section 12.2
shall be first lowered to the level of such Participants with the next to the
highest Actual Deferral Percentage. If further overall reductions are required
to achieve compliance with Section 12.3(a) or (b), both of the above-described

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<PAGE>

groups of Participants will be lowered to the level of Participants with the
next highest Actual Deferral Percentage, and so on, until sufficient total
reductions have occurred to achieve compliance with Section 12.3(a) or (b). For
each Participant who is a Highly Compensated Employee, the amount of Excess
Pre-Tax Contributions is equal to the total Pre-Tax Contributions made on behalf
of the Participant (determined prior to the application of this paragraph) minus
the amount determined by multiplying the Participant's Actual Deferral
Percentage (determined after application of this paragraph) by his Compensation
used in determining such ratio. The total amount of Excess Pre-Tax Contributions
is equal to the sum of the Excess Pre-Tax Contributions as determined above for
each individual Highly Compensated Employee whose Actual Deferral Percentage was
lowered in order to satisfy the Average Actual Deferral Percentage requirements
of Section 12.3(a) or (b).

                Distribution of the excess Pre-Tax Contributions for any Plan
        Year shall be made to Highly Compensated Employees on the basis of the
        amount of contributions by, or on behalf of, each of such Employees.
        Excess Pre-Tax Contributions will be distributed according to the
        following procedures:

                (a)     The dollar amount of excess Pre-Tax Contributions is
        computed for each affected Highly Compensated Employee in accordance
        with the provisions of this Section 12.6 as in effect immediately prior
        to January 1, 1997.

                (b)     The excess Pre-Tax Contributions are distributed in the
        following manner:

                        (i)     reduce the applicable contributions of the
                Highly Compensated Employees beginning with the Highly
                Compensated Employee with the highest dollar amount, to equal
                the dollar amount of the Highly Compensated Employee with the
                next highest dollar amount of contributions;

                        (ii)    this amount will be distributed to the Highly
                Compensated Employee with the highest dollar amount.

                (c)     Repeat the procedure outlined in step (b) above until
        total excess Pre-Tax Contributions are distributed.

        If these distributions are made, the Actual Deferral Percentage is
        treated as meeting the nondiscrimination test of Section 401(k)(3) of
        the Code regardless of whether the Actual Deferral Percentage, if
        recalculated after distributions, would satisfy Section 401(k)(3) of the
        Code. The above procedures are used for purposes of recharacterizing
        excess Pre-Tax Contributions under Section 401(k)(8)(A)(ii) of the Code.
        For purposes of Section 401(m)(9) of the Code, if a corrective
        distribution of excess Pre-Tax Contributions has been made, or a
        recharacterization has occurred, the Actual Deferral Percentage for
        Highly Compensated Employees is deemed to be the largest amount
        permitted under Section 401(k)(3) of the Code.

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<PAGE>

                The income or loss attributable to the Participant's excess
Pre-Tax Contributions for the Plan Year shall be determined by multiplying the
income or loss attributable to the Participant's Pre-Tax Contribution Account
balance for the Plan Year by a fraction, the numerator of which is the excess
Pre-Tax Contribution and the denominator of which is the Participant's total
Pre-Tax Contribution Account balance. Unless the Committee elects otherwise, the
income or loss attributable to the Participant's excess Pre-Tax Contributions
for the period between the end of the Plan Year and the date of distribution
shall be determined using the safe harbor method set forth in Treasury
Regulations to Section 401(k) of the Code, and shall be equal to ten percent
(10%) of the allocable income or loss for the Plan Year, calculated as set forth
immediately above, multiplied by the number of calendar months that have elapsed
since the end of such Plan Year. A calendar month shall be deemed to have
elapsed and shall be counted as a full month for this purpose if the
distribution of excess Pre-Tax Contributions is made after the fifteenth (15th)
day of that month; otherwise such distribution shall be treated as having been
made on the last day of the preceding month. Excess Pre-Tax Contributions shall
be treated as Annual Additions under Section 5.3 of the Plan.

        12.7    Contribution Percentage: The Contribution Percentage for a
specified group of Employees for a Plan Year shall be the average of the ratios
(calculated separately for each Employee in such group) of:

                (a)     The total of the Employer Contributions and After-Tax
        Contributions (the "Aggregate Contributions") paid under the Plan on
        behalf of each Employee for such Plan Year which are made on account of
        the Employee's Contributions for the Plan Year, are allocated to the
        Employee's corresponding Account during such Plan Year and are paid to
        the Trust no later than the end of the next following Plan Year, to

                (b)     The Employee's Compensation for such Plan Year, but
        limited to Compensation attributable to the portion of the Plan Year in
        which such Employee was eligible to participate in the Plan.

                To the extent permitted by the Code and applicable regulations,
the Employer may elect to take into account, in computing the Contribution
Percentage, pre-tax contributions and after-tax contributions made under this
Plan or any other plan of the Employer. A Participant's Contribution Percentage
shall be determined after determining the Participant's Excess Deferrals, if
any, pursuant to Section 4.2, and after determining the Participant's excess
Pre-Tax Contributions pursuant to Section 12.6.

                Effective January 1, 1997, the Plan shall use the Contribution
Percentage for Participants who are Highly Compensated Employees for the current
Plan Year and the Contribution Percentage for Participants who are non-Highly
Compensated Employees for the current Plan Year in performing the
non-discrimination testing required under this Article for the current Plan
Year.

        12.8    Contribution Percentage Limits: The Contribution Percentage for
the eligible Employees for any Plan Year who are Highly Compensated Employees
shall not exceed the greater of (a) or (b), as follows:

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<PAGE>

                (a)     The Contribution Percentage for the eligible Employees
        who are not Highly Compensated Employees times 1.25, or

                (b)     The lesser of (i) the Contribution Percentage for the
        eligible Employees who are not Highly Compensated Employees times 2.0 or
        (ii) the Contribution Percentage for the eligible Employees who are not
        Highly Compensated Employees plus two (2) percentage points.

                The Contribution Percentage for any Highly Compensated Employee
for any Plan Year who is eligible to have matching employer contributions made
on his or her behalf or to make after-tax contributions under one or more plans
described in Section 401(a) of the Code that are maintained by an Employer or an
Affiliate in addition to this Plan shall be determined as if all such
contributions were made to this Plan.

                In the event that this Plan must be combined with one or more
other plans in order to satisfy the requirements of Code Section 410(b), then
the Contribution Percentage shall be determined as if all such plans were a
single plan.

        12.9    Treatment of Excess Aggregate Contributions: If neither of the
tests described in (a) or (b) of Section 12.8 are satisfied, the excess
Aggregate Contributions, plus any income and minus any loss attributable
thereto, shall be forfeited, or if not forfeitable, shall be distributed no
later than the last day of the Plan Year following the Plan Year in which such
excess Aggregate Contributions were made. Such income shall include the
allocable gain or loss for (i) the Plan Year and (ii) the period between the end
of the Plan Year and the date of distribution. The income or loss attributable
to the Participant's excess Aggregate Contributions for the Plan Year shall be
determined by multiplying the aggregate income or loss attributable to the
Participant's Employer Contribution Account and After-Tax Account for the Plan
Year by a fraction, the numerator of which is the excess Aggregate Contribution,
and the denominator of which is the aggregate total of the Participant's
Employer Contribution Account balance and After-Tax Account balance. Unless the
Committee elects otherwise, the income or loss attributable to the Participant's
excess Aggregate Contributions for the period between the end of the Plan Year
and the date of distribution shall be determined using the safe harbor method
set forth in Treasury Regulations to Code Section 401(m), and shall be equal to
ten percent (10%) of the allocable income or loss for the Plan Year (as
calculated immediately above) multiplied by the number of calendar months that
have elapsed since the end of the Plan Year. A calendar month shall be deemed to
have elapsed and a full month shall be counted for this purpose if the
distribution of excess Aggregate Contributions is made after the fifteenth
(15th) day of that month; otherwise such distribution shall be treated as having
been made on the last day of the preceding month. Excess Aggregate Contributions
shall be treated as Annual Additions under Section 5.3 of the Plan.

                The total amount of excess Aggregate Contributions which must be
distributed from the accounts of Highly Compensated Employees will be determined
using the ratio leveling method, whereby, the Contribution Percentage of such
Participants who have the highest actual contribution ratio under Section 12.7
shall be first lowered to the level of such Participants with the next to the
highest actual contribution ratio under Section 12.7. If further overall
reductions are required to achieve compliance with (a) or (b) of Section 12.8,
both of the above-described

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<PAGE>

described groups of Participants will be lowered to the level of Participants
with the next highest actual contribution ration under Section 12.7, and so on,
until sufficient total reductions have occurred to achieve compliance with (a)
or (b) of Section 12.8. For each Participant who is a Highly Compensated
Employee, the amount of excess Aggregate Contributions is equal to the total
Employer Contributions on behalf of the Participant (determined prior to the
application this paragraph) minus the amount determined by multiplying the
Participant's actual contribution ratio (determined after application of this
paragraph) by his Compensation used in determining such ratio. The individual
ratios and Contribution Percentages shall be calculated to the nearest
one-hundredth (1/100) of one percent (1%) of the Employee's Compensation as such
term is used in paragraph (b) of Section 12.7

                Effective January 1, 1997, any distribution of the excess
Aggregate Contributions for any Plan Year shall be made to Highly Compensated
Employees on the basis of the amount of contributions on behalf, or by, each
such Employee. Forfeitures of excess Aggregate Contributions may not be
allocated to Participants whose contributions are reduced under this paragraph.
Excess Aggregate Contributions will be distributed according to the following
procedures:

                (a)     The dollar amount of excess Aggregate Contributions is
        computed for each affected Highly Compensated Employee in accordance
        with the provisions of this Section 12.9 as in effect immediately prior
        to January 1, 1997.

                (b)     The excess Aggregate Contributions are distributed in
        the following manner:

                        (i)     reduce the applicable contributions of the
                Highly Compensated Employees beginning with the Highly
                Compensated Employee with the highest dollar amount, to equal
                the dollar amount of the Highly Compensated Employee with the
                next highest dollar amount of contributions;

                        (ii)    this amount will be distributed to the Highly
                Compensated Employee with the highest dollar amount.

                (c)     Repeat the procedure outlined in step (b) above until
        total excess Aggregate Contributions are distributed.

                If these distributions are made, the Contribution Percentage is
                treated as meeting the nondiscrimination test of Section
                401(m)(2) of the Code regardless of whether the Contribution
                Percentage, if recalculated after distributions would satisfy
                Section 401(m)(2) of the Code. For purposes of Section 401(m)(9)
                of the Code, if a corrective distribution of excess Aggregate
                Contributions has been made, the Contribution Percentage for
                Highly Compensated Employees is deemed to be the largest amount
                under Section 401(m)(2) of the Code.

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<PAGE>

        12.10   Safe Harbor Provisions: The foregoing notwithstanding, the
testing provisions of this Article XII with respect to Pre-Tax Contributions and
Employer Contributions shall not be applicable for Plan Years for which the Plan
satisfies the "safe harbor" requirements of Code Sections 401(k)(12) and
401(k)(11).


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