<PAGE>

EXHIBIT 10.2

                              EMPLOYMENT AGREEMENT

     AGREEMENT by and between Transocean Offshore Deepwater Drilling Inc. (the
"Company"), a wholly-owned subsidiary of Transocean Sedco Forex Inc. (the
"Parent") and Jon C. Cole (the "Executive"), dated effective as of 3 October,
2000 (the "Effective Date").

     WHEREAS, the Company and Executive have previously entered into an
Employment Agreement dated effective May 14, 1999 (the "Prior Employment
Agreement"); and

     WHEREAS, the Prior Employment Agreement became operative effective December
31, 1999 as a result of the transactions contemplated by the Agreement and Plan
of Merger among Schlumberger Limited, Sedco Forex Holdings Limited and the
Parent dated as of July 12, 1999 (the "Merger"); and

     WHEREAS, this Agreement replaces the Prior Employment Agreement, which
Prior Employment Agreement is superseded and revoked as of the execution and
effectiveness of this Agreement.

     NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

1.  EMPLOYMENT PERIOD.  The Company hereby agrees to continue the Executive in
its employ, and the Executive hereby agrees to remain in the employ of the
Company subject to the terms and conditions of this Agreement, for the period
commencing on the Effective Date and ending on December 31, 2003 (the
"Employment Period").

2.  TERMS OF EMPLOYMENT.

(a)  Duties.  During the Employment Period, and excluding any periods of
     vacation and sick leave to which the Executive is entitled, the Executive
     agrees to devote reasonable attention and time during normal business hours
     to the business and affairs of the Company and, to the extent necessary to
     discharge the responsibilities assigned to the Executive hereunder, to use
     the Executive's reasonable best efforts to perform faithfully and
     efficiently such responsibilities. During the Employment Period it shall
     not be a violation of this Agreement for the Executive to (A) serve on
     corporate, civic or charitable boards or committees, (B) deliver lectures,
     fulfill speaking engagements or teach at educational institutions and (C)
     manage personal investments, so long as such activities do not
     significantly interfere with the performance of the Executive's
     responsibilities as an employee of the Company in accordance with this
     Agreement. It is expressly understood and agreed that, to the extent that
     any such activities have been conducted by the Executive prior to the
     Effective Date, the continued conduct of such activities (or the conduct of
     activities similar in nature and scope thereto) subsequent to the Effective
     Date shall not thereafter be deemed to interfere with the performance of
     the Executive's responsibilities to the Company.
<PAGE>

(b)  Compensation.

     (i)  Base Salary. During the Employment Period, the Executive shall receive
          an annual base salary ("Annual Base Salary"), which shall be paid at a
          rate at least equal to twelve times the highest monthly base salary
          paid or payable, including any base salary which has been earned but
          deferred, to the Executive by the Company and its affiliated companies
          in respect of the twelve-month period immediately preceding the month
          in which the Effective Date occurs. During the Employment Period, the
          Annual Base Salary shall be reviewed no more than 12 months after the
          last salary increase awarded to the Executive prior to the Effective
          Date and thereafter at least annually. Any increase in Annual Base
          Salary shall not serve to limit or reduce any other obligation to the
          Executive under this Agreement. Annual Base Salary shall not be
          reduced after any such increase and the term Annual Base Salary as
          utilized in this Agreement shall refer to Annual Base Salary as so
          increased. As used in this Agreement, the term "affiliated companies"
          shall include any company controlled by, controlling or under common
          control with the Company.

     (ii) Incentive, Savings and Retirement Plans. During the Employment Period,
          the Executive shall be entitled to participate in all incentive,
          savings and retirement plans, practices, policies and programs
          applicable generally to other peer executives of the Company and its
          affiliated companies, but in no event shall such plans, practices,
          policies and programs provide the Executive with incentive
          opportunities (measured with respect to both regular and special
          incentive opportunities, to the extent, if any, that such distinction
          is applicable), savings opportunities and retirement benefit
          opportunities, in each case, less favorable, in the aggregate, than
          the most favorable of those provided by the Company and its affiliated
          companies for the Executive under such plans, practices, policies and
          programs as in effect at any time during the 120-day period
          immediately preceding the Effective Date or if more favorable to the
          Executive, those provided generally at any time after the Effective
          Date to other peer executives of the Company and its affiliated
          companies.

    (iii) Welfare Benefit Plans. During the Employment Period, the Executive
          and/or the Executive's family, as the case may be, shall be eligible
          for participation in and shall receive all benefits under welfare
          benefit plans, practices, policies and programs provided by the
          Company and its affiliated companies (including, without limitation,
          medical, prescription, dental, disability, employee life, group life,
          accidental death and travel accident insurance plans and programs) to
          the extent applicable generally to other peer executives of the
          Company and its affiliated companies, but in no event shall such
          plans, practices, policies and programs provide the Executive with
          benefits which are less favorable, in the aggregate, than the most
          favorable of such plans, practices, policies and programs in effect
          for the Executive at any time during the 120-day period immediately

                                       2
<PAGE>

          preceding the Effective Date or, if more favorable to the Executive,
          those provided generally at any time after the Effective Date to other
          peer executives of the Company and its affiliated companies.

     (iv) Expenses. During the Employment Period, the Executive shall be
          entitled to receive prompt reimbursement for all reasonable expenses
          incurred by the Executive in accordance with the most favorable
          policies, practices and procedures of the Company and its affiliated
          companies in effect for the Executive at any time during the 120-day
          period immediately preceding the Effective Date or, if more favorable
          to the Executive, as in effect generally at any time thereafter with
          respect to other peer executives of the Company and its affiliated
          companies.

      (v) Fringe Benefits. During the Employment Period, the Executive shall be
          entitled to fringe benefits, including, without limitation, tax and
          financial planning services, payment of club dues, and, if applicable,
          use of an automobile and payment of related expenses, in accordance
          with the most favorable plans, practices, programs and policies of the
          Company and its affiliated companies in effect for the Executive at
          any time during the 120-day period immediately preceding the Effective
          Date or, if more favorable to the Executive, as in effect generally at
          any time thereafter with respect to other peer executives of the
          Company and its affiliated companies.

     (vi) Office and Support Staff. During the Employment Period, the Executive
          shall be entitled to an office or offices of a size and with
          furnishings and other appointments, and to exclusive personal
          secretarial and other assistance, at least equal to the most favorable
          of the foregoing provided to the Executive by the Company and its
          affiliated companies at any time during the 120-day period immediately
          preceding the Effective Date or, if more favorable to the Executive,
          as provided generally at any time thereafter with respect to other
          peer executives of the Company and its affiliated companies.

    (vii) Vacation. During the Employment Period, the Executive shall be
          entitled to paid vacation in accordance with the most favorable plans,
          policies, programs and practices of the Company and its affiliated
          companies as in effect for the Executive at any time during the 120-
          day period immediately preceding the Effective Date or, if more
          favorable to the Executive, as in effect generally at any time
          thereafter with respect to other peer executives of the Company and
          its affiliated companies.

3.  TERMINATION OF EMPLOYMENT.

(a)  Death or Disability.  The Executive's employment shall terminate
     automatically upon the Executive's death during the Employment Period. If
     the Company determines in good faith that the Disability of the Executive
     has occurred during the Employment Period (pursuant to the definition of
     Disability set forth below),

                                       3
<PAGE>

     it may give to the Executive written notice in accordance with Section
     10(b) of this Agreement of its intention to terminate the Executive's
     employment. In such event, the Executive's employment with the Company
     shall terminate effective on the 30th day after receipt of such notice by
     the Executive (the "Disability Effective Date"), provided that, within the
     30 days after such receipt, the Executive shall not have returned to full-
     time performance of the Executive's duties. For purposes of this Agreement,
     "Disability" shall mean the absence of the Executive from the Executive's
     duties with the Company on a full-time basis for 180 consecutive business
     days as a result of incapacity due to mental or physical illness which is
     determined to be total and permanent by a physician selected by the Company
     or its insurers and acceptable to the Executive or the Executive's legal
     representative.

(b)  Cause.  The Company may terminate the Executive's employment during the
     Employment Period for Cause. For purposes of this Agreement, "Cause" shall
     mean:

     (i)  The willful and continued failure of the Executive to perform
          substantially the Executive's duties with the Company or one of its
          affiliates (other than any such failure resulting from incapacity due
          to physical or mental illness), after a written demand for substantial
          performance is delivered to the Executive by the Parent Board (as
          defined herein) or the Chief Executive Officer of the Company which
          specifically identifies the manner in which the Parent Board or Chief
          Executive Officer believes that the Executive has not substantially
          performed the Executive's duties; or

     (ii) The willful engaging by the Executive in illegal conduct or gross
          misconduct which is materially and demonstrably injurious to the
          Parent.

    (iii) For purposes of this provision, no act or failure to act, on the part
          of the Executive, shall be considered "willful" unless it is done, or
          omitted to be done, by the Executive in bad faith or without
          reasonable belief that the Executive's action or omission was in the
          best interests of the Company. Any act, or failure to act, based upon
          authority given pursuant to a resolution duly adopted by the Parent
          Board or upon the instructions of the Chief Executive Officer or a
          senior officer of the Company or Parent or based upon the advice of
          counsel for the Company or Parent shall be conclusively presumed to be
          done, or omitted to be done, by the Executive in good faith and in the
          best interests of the Company. The cessation of employment of the
          Executive shall not be deemed to be for Cause unless and until there
          shall have been delivered to the Executive a copy of a resolution duly
          adopted by the affirmative vote of not less than three-quarters of the
          entire membership of the Parent Board at a meeting of the Parent Board
          called and held for such purpose (after reasonable notice is provided
          to the Executive and the Executive is given an opportunity, together
          with counsel, to be heard before the Parent Board), finding that, in
          the good faith opinion of the Parent Board, the Executive is guilty of
          the

                                       4
<PAGE>

          conduct described in subparagraph (i) or (ii) above, and specifying
          the particulars thereof in detail. As used in this Section, "Parent
          Board" means the board of directors of the Parent, except that in the
          event that the Parent no longer owns 50% of the outstanding voting
          securities of the Company, then Parent Board shall mean the Board of
          Directors of the Company.

(c)  Notice of Termination.  Any termination by the Company for Cause, shall be
     communicated by Notice of Termination to the other party hereto given in
     accordance with Section 10(b) of this Agreement. For purposes of this
     Agreement, a "Notice of Termination" means a written notice which (i)
     indicates the specific termination provision in this Agreement relied upon,
     (ii) to the extent applicable, sets forth in reasonable detail the facts
     and circumstances claimed to provide a basis for termination of the
     Executive's employment under the provision so indicated and (iii) if the
     Date of Termination (as defined below) is other than the date of receipt of
     such notice, specifies the termination date (which date shall be not more
     than thirty days after the giving of such notice). The failure by the
     Company to set forth in the Notice of Termination any fact or circumstance
     which contributes to a showing of  Cause shall not waive any right of the
     Company hereunder or preclude the Company from asserting such fact or
     circumstance in enforcing the Company's rights hereunder.

(d)  Date of Termination.  "Date of Termination" means (i) if the Executive's
     employment is terminated by the Company for Cause, the date of receipt of
     the Notice of Termination or any later date specified therein, as the case
     may be, (ii) if the Executive's employment is terminated by the Company
     other than for Cause or Disability, the Date of Termination shall be the
     date on which the Company notifies the Executive of such termination, (iii)
     if the Executive's employment is terminated by reason of death or
     Disability, the Date of Termination shall be the date of death of the
     Executive or the Disability Effective Date, as the case may be and (iv) if
     the Executive voluntarily terminates employment, the Date of Termination
     shall be the actual date of termination of Executive's employment.

4.  OBLIGATIONS OF THE COMPANY UPON TERMINATION.

(a)  Other Than for Cause, Death or Disability or Voluntary Termination prior to
     July 1, 2002.  If, during the Employment Period, (i) the Company and its
     affiliated companies shall terminate the Executive's employment other than
     for Cause or Disability, or (ii) the Executive shall voluntarily terminate
     employment for any reason, other than Disability, after June 30, 2002, and
     after giving 30 days' prior written notice of such termination to the
     Company:

     (i)  The Company shall pay to the Executive, within 30 days after the Date
          of Termination, a lump-sum cash payment of $1,999,933, together with
          interest on this amount accrued from January 1, 2001 through the date
          of payment at 120% of the short-term Applicable Federal Rate for
          January, 2001, compounded semi-annually, as published by the Internal
          Revenue

                                       5
<PAGE>

          Service for purposes of Section 1274(d) of the Internal Revenue Code
          of 1986, as amended (the "Code");

     (ii) Should the Executive move his residence in order to pursue other
          business opportunities within three years of the Date of Termination
          (or until his normal retirement date, whichever is sooner), the
          Company shall reimburse him for any expenses incurred in that
          relocation (including taxes payable on the reimbursement) which are
          not reimbursed by another employer; provided, however, that the
          Executive shall be entitled to such reimbursement with respect to only
          one such relocation, and the Executive shall be entitled to specify
          the relocation for which reimbursement hereunder is to be made.
          Benefits under this provision will include the assistance, at no cost
          to the Executive, in selling his home and other assistance which was
          customarily provided to executives transferred within the Company or
          between the Company and its affiliated companies prior to the
          Effective Date;

    (iii) For three years after the Executive's Date of Termination, or such
          longer period as may be provided by the terms of the appropriate plan,
          program, practice or policy, the Company shall continue benefits to
          the Executive and/or the Executive's family at least equal to those
          which would have been provided to them in accordance with the plans,
          programs, practices and policies described in Section 2(b)(iii) of
          this Agreement if the Executive's employment had not been terminated
          or, if more favorable to the Executive, as in effect generally at any
          time thereafter with respect to other peer executives of the Company
          and its affiliated companies and their families, provided, however,
          that if the Executive becomes reemployed with another employer and is
          eligible to receive medical or other welfare benefits under another
          employer provided plan, the medical and other welfare benefits
          described herein shall be secondary to those provided under such other
          plan during such applicable period of eligibility. For purposes of
          determining eligibility (but not the time of commencement of benefits)
          of the Executive for retiree benefits pursuant to such plans,
          practices, programs and policies, the Executive shall be considered to
          have remained employed until three years after the Date of Termination
          and to have retired on the last day of such period;

     (iv) The Company shall, at its sole expense as incurred, provide the
          Executive with outplacement services the scope and provider of which
          shall be selected by the Executive in his sole discretion; and

     (v)  To the extent not theretofore paid or provided, the Company shall
          timely pay or provide to the Executive any other amounts or benefits
          required to be paid or provided or which the Executive is eligible to
          receive under any plan, program, policy or practice or contract or
          agreement of the Company and its affiliated companies (such other
          amounts and benefits shall be hereinafter referred to as the "Other
          Benefits").

                                       6
<PAGE>

(b)  Death.  If the Executive's employment is terminated by reason of the
     Executive's death during the Employment Period, the Company shall pay the
     Executive's legal representatives a lump-sum cash payment in an amount
     determined under Paragraph 4(a)(i) of this Agreement and will also provide
     the Other Benefits. With respect to the provision of Other Benefits, the
     term Other Benefits as utilized in this Section 4(b) shall include, without
     limitation, and the Executive's estate and/or beneficiaries shall be
     entitled to receive, benefits at least equal to the most favorable benefits
     provided by the Company and affiliated companies to the estates and
     beneficiaries of peer executives of the Company and such affiliated
     companies under such plans, programs, practices and policies relating to
     death benefits, if any, as in effect with respect to other peer executives
     and their beneficiaries at any time during the 120-day period immediately
     preceding the Effective Date or, if more favorable to the Executive's
     estate and/or the Executive's beneficiaries, as in effect on the date of
     the Executive's death with respect to other peer executives of the Company
     and its affiliated companies and their beneficiaries.

(c)  Disability.  If the Executive's employment is terminated by reason of the
     Executive's Disability during the Employment Period, the Company shall pay
     the Executive a lump-sum cash payment in an amount determined under
     Paragraph 4(a)(i) of this Agreement and will also provide the Other
     Benefits.  With respect to the provision of Other Benefits, the term Other
     Benefits as utilized in this Section 4(c) shall include, and the Executive
     shall be entitled after the Disability Effective Date to receive,
     disability and other benefits at least equal to the most favorable of those
     generally provided by the Company and its affiliated companies to disabled
     executives and/or their families in accordance with such plans, programs,
     practices and policies relating to disability, if any, as in effect
     generally with respect to other peer executives and their families at any
     time during the 120-day period immediately preceding the Effective Date or,
     if more favorable to the Executive and/or the Executive's family, as in
     effect at any time thereafter generally with respect to other peer
     executives of the Company and its affiliated companies and their families.

(d)  Voluntary Termination Prior to July 1, 2002.  If the Executive voluntarily
     terminates employment prior to July 1, 2002 for any reason other than
     Disability, this Agreement shall terminate without further obligations to
     the Executive, other than for the timely payment or provision of Other
     Benefits.

(e)  Cause.  If the Executive's employment shall be terminated for Cause at any
     time during the term of this Agreement, this Agreement shall terminate
     without further obligations to the Executive other than the obligation to
     pay to the Executive (x) his Annual Base Salary through the Date of
     Termination, (y) the amount of any compensation previously deferred by the
     Executive, and (z) Other Benefits, in each case to the extent theretofore
     unpaid.

5.  NON-EXCLUSIVITY OF RIGHTS.  Nothing in this Agreement shall prevent or limit
the Executive's continuing or future participation in any plan, program, policy
or practice provided by the

                                       7
<PAGE>

Company or any of its affiliated companies and for which the Executive may
qualify, nor, subject to Section 10(f), shall anything herein limit or otherwise
affect such rights as the Executive may have under any contract or agreement
with the Company or any of its affiliated companies. Amounts which are vested
benefits or which the Executive is otherwise entitled to receive under any plan,
policy, practice or program of, or any contract or agreement with the Company or
any of its affiliated companies at or subsequent to the Date of Termination
shall be payable in accordance with such plan, policy, practice or program, or
contract or agreement except as explicitly modified by this Agreement.

6. FULL SETTLEMENT. The Company's obligation to make the payments provided for
in this Agreement and otherwise to perform its obligations hereunder shall not
be affected by any set-off, counterclaim, recoupment, defense or other claim,
right or action which the Company or its affiliated companies may have against
the Executive or others. In no event shall the Executive be obligated to seek
other employment or take any other action by way of mitigation of the amounts
payable to the Executive under any of the provisions of this Agreement and such
amounts shall not be reduced whether or not the Executive obtains other
employment. The Company agrees to pay as incurred, to the full extent permitted
by law, all legal fees and expenses which the Executive may reasonably incur as
a result of any contest (regardless of the outcome thereof) by the Company, the
Executive or others of the validity or enforceability of, or liability under,
any provision of this Agreement or any guarantee of performance thereof
(including as a result of any contest by the Executive about the amount of any
payment pursuant to this Agreement), plus in each case interest on any delayed
payment at the applicable Federal rate provided for in Section 7872(f)(2)(A) of
the Code.

7.  CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY.

(a)  Anything in this Agreement to the contrary notwithstanding and except as
     set forth below, in the event it shall be determined that any payment or
     distribution by the Company, and any affiliated company to or for the
     benefit of the Executive (whether paid or payable or distributed or
     distributable pursuant to the terms of this Agreement or otherwise, but
     determined without regard to any additional payments required under this
     Section 7) (a "Payment") would be subject to the excise tax imposed by
     Section 4999 of the Code or any interest or penalties are incurred by the
     Executive with respect to such excise tax (such excise tax, together with
     any such interest and penalties, are hereinafter collectively referred to
     as the "Excise Tax"), then the Executive shall be entitled to receive an
     additional payment (a "Gross-Up Payment") in an amount such that after
     payment by the Executive of all taxes (including any interest or penalties
     imposed with respect to such taxes), including, without limitation, any
     income taxes (and any interest and penalties imposed with respect thereto)
     and Excise Tax imposed upon the Gross-Up Payment, the Executive retains an
     amount of the Gross-Up Payment equal to the Excise Tax imposed upon the
     Payments. Notwithstanding the foregoing provisions of this Section 7(a), if
     it shall be determined that the Executive is entitled to a Gross-Up
     Payment, but that the Payments do not exceed 110% of the greatest amount
     (the "Reduced Amount") that could be paid to the Executive such that the
     receipt of Payments would not give rise to any Excise

                                       8
<PAGE>

     Tax, then no Gross-Up Payment shall be made to the Executive and the
     Payments, in the aggregate, shall be reduced to the Reduced Amount.

(b)  Subject to the provisions of Section 7(c), all determinations required to
     be made under this Section 7, including whether and when a Gross-Up Payment
     is required and the amount of such Gross-Up Payment, and the assumptions to
     be utilized in arriving at such determination, shall be made by Ernst &
     Young, L.L.P. or such other certified public accounting firm as may be
     designated by the Executive (the "Accounting Firm") which shall provide
     detailed supporting calculations both to the Company and the Executive
     within 15 business days of the receipt of notice from the Executive that
     there has been a Payment, or such earlier time as is requested by the
     Company.  All fees and expenses of the Accounting Firm shall be borne
     solely by the Company. Any Gross-Up Payment, as determined pursuant to this
     Section 7, shall be paid by the Company to the Executive within five days
     of the receipt of the Accounting Firm's determination. Any determination by
     the Accounting Firm shall be binding upon the Company and the Executive. As
     a result of the uncertainty in the application of Section 4999 of the Code
     at the time of the initial determination by the Accounting Firm hereunder,
     it is possible that Gross-Up Payments which will not have been made by the
     Company should have been made ("Underpayment") consistent with the
     calculations required to be made hereunder. In the event that the Company
     exhausts its remedies pursuant to Section 7(c) and the Executive thereafter
     is required to make a payment of any Excise Tax, the Accounting Firm shall
     determine the amount of the Underpayment that has occurred and any such
     Underpayment shall be promptly paid by the Company to or for the benefit of
     the Executive.

(c)  The Executive shall notify the Company in writing of any claim by the
     Internal Revenue Service that, if successful, would require the payment by
     the Company of the Gross-Up Payment. Such notification shall be given as
     soon as practicable but no later than ten business days after the Executive
     is informed in writing of such claim and shall apprise the Company of the
     nature of such claim and the date on which such claim is requested to be
     paid. The Executive shall not pay such claim prior to the expiration of the
     30-day period following the date on which it gives such notice to the
     Company (or such shorter period ending on the date that any payment of
     taxes with respect to such claim is due). If the Company notifies the
     Executive in writing prior to the expiration of such period that it desires
     to contest such claim, the Executive shall:

     (i)  Give the Company any information reasonably requested by the Company
          relating to such claim;

     (ii) Take such action in connection with contesting such claim as the
          Company shall reasonably request in writing from time to time,
          including, without limitation, accepting legal representation with
          respect to such claim by an attorney reasonably selected by the
          Company;

                                       9
<PAGE>

    (iii) Cooperate with the Company in good faith in order effectively to
          contest such claim; and

     (iv) Permit the Company to participate in any proceedings relating to such
          claim;

     (v)  Provided, however, that the Company shall bear and pay directly all
          costs and expenses (including additional interest and penalties)
          incurred in connection with such contest and shall indemnify and hold
          the Executive harmless, on an after-tax basis, for any Excise Tax or
          income tax (including interest and penalties with respect thereto)
          imposed as a result of such representation and payment of costs and
          expenses. Without limitation on the foregoing provisions of this
          Section 7(c), the Company shall control all proceedings taken in
          connection with such contest and, at its sole option, may pursue or
          forgo any and all administrative appeals, proceedings, hearings and
          conferences with the taxing authority in respect of such claim and
          may, at its sole option, either direct the Executive to pay the tax
          claimed and sue for a refund or contest the claim in any permissible
          manner, and the Executive agrees to prosecute such contest to a
          determination before any administrative tribunal, in a court of
          initial jurisdiction and in one or more appellate courts, as the
          Company shall determine; provided, however, that if the Company
          directs the Executive to pay such claim and sue for a refund, the
          Company shall advance the amount of such payment to the Executive, on
          an interest-free basis and shall indemnify and hold the Executive
          harmless, on an after-tax basis, from any Excise Tax or income tax
          (including interest or penalties with respect thereto) imposed with
          respect to such advance or with respect to any imputed income with
          respect to such advance; and further provided that any extension of
          the statute of limitations relating to payment of taxes for the
          taxable year of the Executive with respect to which such contested
          amount is claimed to be due is limited solely to such contested
          amount. Furthermore, the Company's control of the contest shall be
          limited to issues with respect to which a Gross-Up Payment would be
          payable hereunder and the Executive shall be entitled to settle or
          contest, as the case may be, any other issue raised by the Internal
          Revenue Service or any other taxing authority.

(d)  If, after the receipt by the Executive of an amount advanced by the Company
     pursuant to Section 7(c), the Executive becomes entitled to receive any
     refund with respect to such claim, the Executive shall (subject to the
     Company's complying with the requirements of Section 7(c)) promptly pay to
     the Company the amount of such refund (together with any interest paid or
     credited thereon after taxes applicable thereto). If, after the receipt by
     the Executive of an amount advanced by the Company pursuant to Section
     7(c), a determination is made that the Executive shall not be entitled to
     any refund with respect to such claim and the Company does not notify the
     Executive in writing of its intent to contest such denial of refund prior
     to the expiration of 30 days after such determination, then

                                       10
<PAGE>

     such advance shall be forgiven and shall not be required to be repaid and
     the amount of such advance shall offset, to the extent thereof, the amount
     of Gross-Up Payment required to be paid.

8.  CONFIDENTIAL INFORMATION.  The Executive shall hold in a fiduciary capacity
for the benefit of the Company and all affiliated companies, all secret or
confidential information, knowledge or data relating to the Company or any of
its affiliated companies, and their respective businesses, which shall have been
obtained by the Executive during the Executive's employment by the Company or
any of its affiliated companies and which shall not be or become public
knowledge (other than by acts by the Executive or representatives of the
Executive in violation of this Agreement). After termination of the Executive's
employment with the Company, the Executive shall not, without the prior written
consent of the Company or as may otherwise be required by law or legal process,
communicate or divulge any such information, knowledge or data to anyone other
than the Company and those designated by it. In no event shall an asserted
violation of the provisions of this Section 8 constitute a basis for deferring
or withholding any amounts otherwise payable to the Executive under this
Agreement.

9.  SUCCESSORS.

(a)  This Agreement is personal to the Executive and without the prior written
     consent of the Company shall not be assignable by the Executive otherwise
     than by will or the laws of descent and distribution. This Agreement shall
     inure to the benefit of and be enforceable by the Executive's legal
     representatives.

(b)  This Agreement shall inure to the benefit of and be binding upon the
     Company and its respective successors and assigns.

(c)  The Company will require any successor (whether direct or indirect, by
     purchase, merger, consolidation or otherwise) to all or substantially all
     of the business and/or assets of the Company to assume expressly and agree
     to perform this Agreement in the same manner and to the same extent that
     the Company would be required to perform it if no such succession had taken
     place. As used in this Agreement, "Company" shall mean the Company as
     hereinbefore defined and any respective successor to its business and/or
     assets as aforesaid which assumes and agrees to perform this Agreement by
     operation of law, or otherwise.

10.  MISCELLANEOUS.

(a)  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
     LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO PRINCIPLES OF CONFLICT
     OF LAWS. The captions of this Agreement are not part of the provisions
     hereof and shall have no force or effect. This Agreement may not be amended
     or modified otherwise than by a written agreement executed by the parties
     hereto or their respective successors and legal representatives.

                                       11
<PAGE>

(b)  All notices and other communications hereunder shall be in writing and
     shall be given by hand delivery to the other party or by registered or
     certified mail, return receipt requested, postage prepaid, addressed as
     follows:

               If to the Executive:

               Jon C. Cole
               3427 Del Monte Drive
               Houston, TX 77019

               If to the Company:

               Transocean Offshore Deepwater Drilling Inc.
               4 Greenway Plaza
               Houston, Texas 77046
               Attention: General Counsel

     or to such other address as either party shall have furnished to the other
     in writing in accordance herewith. Notice and communications shall be
     effective when actually received by the addressee.

(c)  The invalidity or unenforceability of any provision of this Agreement shall
     not affect the validity or enforceability of any other provision of this
     Agreement.

(d)  The Company may withhold from any amounts payable under this Agreement such
     Federal, state, local or foreign taxes as shall be required to be withheld
     pursuant to any applicable law or regulation.

(e)  The Executive's or the Company's failure to insist upon strict compliance
     with any provision of this Agreement or the failure to assert any right the
     Executive or the Company may have hereunder, shall not be deemed to be a
     waiver of such provision or right or any other provision or right of this
     Agreement.

(f)  The Executive and the Company acknowledge that, from and after the
     Effective Date, this Agreement shall supersede any other agreement between
     the parties with respect to the subject matter hereof including, without
     limitation, the Prior Employment Agreement.

                                       12
<PAGE>

     IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand and
the Company has caused these presents to be executed in its name on its behalf,
all as of the day and year first above written.

                                       /s/  JOHN C. COLE
                                     -------------------------------
                                    Jon C. Cole

                                    TRANSOCEAN OFFSHORE DEEPWATER DRILLING INC.


                                    By: /s/ J. MICHAEL TALBERT
                                        ------------------------------

                                       13