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                                                                    Exhibit 10.6

                         TODCO LONG-TERM INCENTIVE PLAN

         (Effective as of the Closing Date of the IPO as defined below)


                                   I. GENERAL

1.1      PURPOSE OF THE PLAN

         The purpose of the TODCO Long-Term Incentive Plan (the "Plan") is to
provide a means whereby TODCO, a Delaware company (the "Company"), may advance
the best interests of the Company and its subsidiaries by providing Directors
and employees with additional incentives through the grant of options
("Options") to purchase Class A Common Stock of the Company, par value US $0.01
per share ("Common Stock"), stock appreciation rights ("SARs"), shares of
restricted Common Stock ("Restricted Stock"), deferred stock units ("Deferred
Units") and cash performance awards ("Cash Awards"), thereby increasing the
personal stake of such Directors and employees in the continued success and
growth of the Company.

1.2      ADMINISTRATION OF THE PLAN

         (a) With respect to awards to eligible employees, the Plan shall be
administered (i) prior to the closing date of an initial public offering of
shares of Class A Common Stock, par value $.01 per share, of TODCO (the "IPO"),
by the Board of Directors of the Company (the "Board") and (ii) on and after the
closing date of the IPO, by the Executive Compensation Committee or other
designated committee of the Board of Directors of the Company (the "Committee"),
which shall consist of at least two Directors, all of whom (1) are not eligible
for awards under the Plan, (2) are "non-employee directors" within the meaning
of Rule 16b-3 under the Securities and Exchange Act of 1934 (the "Exchange
Act"), and (3) are outside directors satisfying the requirements of Section
162(m) of the Internal Revenue Code of 1986, as amended, or any successor
thereto (the "Code"). Notwithstanding the foregoing, prior to the IPO, the
Executive Compensation Committee or other designated committee of the Board of
Directors of Transocean Inc., a Cayman Island exempted company (the "Transocean
Committee"), which shall consist of at least two directors, all of whom are
outside directors of Transocean Inc. satisfying the requirements of Section
162(m) of the Code shall designate the type and amount of awards to the
following senior executives of the Company: (i) President and Chief Executive
Officer, (ii) Vice President and Chief Financial Officer, (iii) Vice
President-Marketing, and (iv) Vice President and Controller (collectively,
referred to as the "Senior Executives").

         (b) With respect to awards to Eligible Directors (as defined in Section
1.3), the Plan shall be administered by the Board. The Board shall have
authority to interpret conclusively the provisions of the Plan, to adopt such
rules and regulations for carrying out


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the Plan as it may deem advisable, to decide conclusively all questions of fact
arising in the application of the Plan, and to make all other determinations
necessary or advisable for the administration of the Plan. All decisions and
acts of the Board, with respect to Eligible Directors, shall be final and
binding upon all affected Plan participants.

         (c) The Board, prior to the IPO, and the Committee, on and after the
IPO, shall designate the eligible employees, if any, to be granted awards under
the Plan, the type and amount of such awards and the time when awards will be
granted. Prior to the IPO, the Transocean Committee shall designate the type and
amount of awards to the Senior Executives. The Board shall designate the
Eligible Directors (as defined in Section 1.3), if any, to be granted awards
under the Plan, the type and amount of such awards and the time when awards will
be granted. All awards granted under the Plan shall be on the terms and subject
to the conditions hereinafter provided.

1.3      ELIGIBLE PARTICIPANTS

         Employees, including officers, of the Company and its subsidiaries, and
of partnerships or joint ventures in which the Company and its subsidiaries have
a significant ownership interest as determined by the Committee (all of such
subsidiaries, partnerships and joint ventures being referred to as
"Subsidiaries") shall be eligible for awards under the Plan.

         Each Director of the Company who is not an officer or employee of the
Company or any of its Subsidiaries (an "Eligible Director") shall be eligible
for awards under the Plan. Notwithstanding the foregoing, any Eligible Director
including, without limitation, any director that is an employee of Transocean
(as defined in Section 6.10(a)), may decline any such award. Eligible Directors
shall not be entitled to receive awards under Section 2.6.

         An employee or Eligible Director to whom an award is granted under the
Plan may be hereinafter referred to as a "Participant."

1.4      AWARDS UNDER THE PLAN

         Awards to eligible employees and Eligible Directors under the Plan may
be in the form of (a) Options to purchase Common Stock, (b) SARs which may be
either freestanding or issued in tandem with Options, (c) Restricted Stock, (d)
Deferred Units, (e) Supplemental Payments (as defined in Section 2.4) which may
be awarded with respect to Options, SARs, Restricted Stock and Deferred Units,
(f) performance awards payable in cash, or (g) any combination of the foregoing.

1.5      SHARES OF COMMON STOCK SUBJECT TO THE PLAN

         The aggregate number of shares of Common Stock which may be issued with
respect to awards made under the Plan shall not exceed three million shares (the
"Available Shares"). Of such authorized shares, the aggregate number of shares
of Restricted Stock and Deferred Units which may be issued pursuant to Article
III, shall not exceed 50% of the Available Shares, and the aggregate number of
shares which may be


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subject to incentive stock options pursuant to Section 2.6 shall not exceed all
Available Shares. No employee or Eligible Director shall be granted Options,
freestanding SARs, Restricted Stock, Deferred Units, or any combination of the
foregoing, with respect to more than 25% of the Available Shares of Common Stock
in any fiscal year (subject to adjustment as provided in Section 6.2). No
employee or Eligible Director shall be granted a Supplemental Payment in any
fiscal year with respect to more than the number of shares of Common Stock
covered by Options, freestanding SARs, Restricted Stock awards and Deferred Unit
awards granted to such employee or Eligible Director in such fiscal year. Shares
of Common Stock distributed pursuant to the Plan may consist of authorized but
unissued shares of Common Stock or treasury shares of Common Stock, as shall be
determined from time to time by the Board.

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

         Freestanding SARs which may be settled solely in cash shall be issued
with respect to no more than an aggregate of 50% of the Available Shares. Such
SARs shall not count against the limits set forth above on the number of shares
of Common Stock which may be issued under the Plan. If any freestanding SAR
shall expire, terminate, or be canceled for any reason without having been
exercised in full, the unexercised SARs shall not count against this limit and
shall again become available for awards under the Plan.

1.6      OTHER COMPENSATION PROGRAMS

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


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                    II. OPTIONS AND STOCK APPRECIATION RIGHTS

2.1      TERMS AND CONDITIONS OF OPTIONS

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

         (a) Option Price. The option price per share of Common Stock shall not
be less than the fair market value of a share of Common Stock (as determined by
the Committee) on the date the Option is granted. Notwithstanding the foregoing,
the option price per share of Common Stock with respect to any Option granted by
the Committee prior to closing date of the first registered public offering of
the Company's Class A Common Stock after the Effective Date (as defined in
Section 6.12) shall be equal to the price to the public of a share of Class A
Common Stock sold (or other class sold) in the IPO on the closing date of the
IPO.

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

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

         (d) Payment for Shares of Common Stock. The Committee may authorize
payment for shares of Common Stock as to which an Option is exercised to be made
in cash, in shares of Common Stock or in such other manner as the Committee in
its discretion may provide. The Committee may provide for procedures to permit
the payment for shares of Common Stock as to which an Option is exercised to be
made by use of proceeds to be received from the sale of Common Stock issuable
pursuant to an award under the Plan.

         (e) Nontransferability of Options. No Option or any interest therein
shall be transferable by the Participant other than by will, by the laws of
descent and distribution or pursuant to a qualified domestic relations order as
defined in the Code or Title I of the Employee Retirement Income Security Act
("ERISA"), or the rules thereunder. During a Participant's lifetime, all Options
shall be exercisable only by such Participant or by the guardian or legal
representative of the Participant.

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

         (g) Termination of Employment. The Committee shall have discretion to
specify in the Option grant or an amendment thereof, provisions with respect to
the period during


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which the Option may be exercised following the optionee's termination of
employment. Notwithstanding the foregoing, the Committee shall not permit any
Option to be exercised beyond the term of the Option established pursuant to
Section 2.1(b), except that the Committee may provide that, notwithstanding such
Option term, an Option which is outstanding on the date of a Participant's death
shall remain outstanding and exercisable for up to one year after the
Participant's death.

         (h) Change in Control. Notwithstanding the exercisability schedule
governing any Option, upon the occurrence of a Change in Control (as defined in
Section 6.10), any Option outstanding at the time of such Change in Control and
held by a Participant at the time of such Change in Control shall become
immediately exercisable and, unless the Participant agrees otherwise in writing,
shall remain exercisable for the remainder of the Option term.

2.2      SARS IN TANDEM WITH OPTIONS

         (a) The Committee may, either at the time of grant of an Option or at
any time during the term of the Option, grant SARs with respect to all or any
portion of the shares of Common Stock covered by such Option. A tandem SAR may
be exercised at any time the Option to which it relates is then exercisable, but
only to the extent the Option to which it relates is exercisable, and shall be
subject to the conditions applicable to such Option. When a tandem SAR is
exercised, the Option to which it relates shall cease to be exercisable to the
extent of the number of shares with respect to which the tandem SAR is
exercised. Similarly, when an Option is exercised, the tandem SARs relating to
the shares covered by such Option exercise shall terminate. Any tandem SAR which
is outstanding on the last day of the term of the related Option (as determined
pursuant to Section 2.1(b)) shall be automatically exercised on such date for
cash without any action by the Participant.

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

         (c) Notwithstanding the foregoing, if a tandem SAR is exercised within
60 days of the occurrence of a Change in Control (as defined in Section 6.10),
(i) the Appreciation and any Supplemental Payment (as defined in Section 2.4) to
which the Participant is entitled shall be payable solely in cash, and (ii) in
addition to the Appreciation and the Supplemental Payment (if any), the
Participant shall receive, in cash, (1) the amount by which the greater of (a)
the highest market price per share of Common Stock during the 60-day period
preceding exercise of the tandem SAR or (b) the highest price per share of
Common Stock (or the cash-equivalent thereof as determined by the Board of
Directors of


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the Company) paid by an acquiring person during the 60-day period preceding a
Change in Control, exceeds the fair market value of a share of Common Stock on
the date of exercise of the tandem SAR, plus (2) if the Participant is entitled
to a Supplemental Payment, an additional payment, calculated under the same
formula as used for calculating such Participant's Supplemental Payment, with
respect to the amount referred to in clause (1) of this sentence.

2.3      FREESTANDING SARS

         (a) Base Price and Appreciation. Each freestanding SAR shall be granted
with a base price, which shall not be less than the fair market value per share
of Common Stock (as determined by the Committee) on the date the SAR is granted.
Upon exercise of a freestanding SAR, the Participant shall receive, for each
share with respect to which the SAR is exercised, an amount (the "Appreciation")
equal to the amount by which the fair market value (as defined below) of a share
of Common Stock on the date of exercise of the SAR exceeds the base price of the
SAR. For purposes of the preceding sentence, the fair market value of a share of
Common Stock shall be the average of the high and low prices of such share as
reported on the New York Stock Exchange composite tape. The Appreciation shall
be payable in cash and shall be paid within 30 days of the exercise of the SAR.

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

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

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

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

         (f) Termination of Employment. The Committee shall have discretion to
specify in the SAR grant or an amendment thereof, provisions with respect to the
period during which the SAR may be exercised following the Participant's
termination of employment. Notwithstanding the foregoing, the Committee shall
not permit any SAR to be exercised


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beyond the term of the SAR established pursuant to Section 2.3(b), except that
the Committee may provide that, notwithstanding such SAR term, an SAR which is
outstanding on the date of a Participant's death shall remain outstanding and
exercisable for up to one year after the Participant's death.

         (g) Change in Control. Notwithstanding the exercisability schedule
governing any SAR, upon the occurrence of a Change in Control (as defined in
Section 6.10), any SAR outstanding at the time of such Change in Control and
held by a Participant at the time of such Change in Control shall become
immediately exercisable and, unless the Participant agrees otherwise in writing,
shall remain exercisable for the remainder of the SAR term. In addition, the
Committee may provide that if a freestanding SAR is exercised within 60 days of
the occurrence of a Change in Control, in addition to the Appreciation the
holder shall receive, in cash, the amount by which the greater of (i) the
highest market price per share of Common Stock during the 60-day period
preceding exercise of the SAR or (ii) the highest price per share of Common
Stock (or the cash equivalent thereof as determined by the Board of Directors)
paid by an acquiring person during the 60-day period preceding a Change in
Control, exceeds the fair market value per share of Common Stock on the date of
exercise of the SAR.

2.4      SUPPLEMENTAL PAYMENT ON EXERCISE OF OPTIONS OR SARS

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

2.5      ELIGIBLE DIRECTOR AWARDS

          With respect to Options, SARs and Supplemental Payment awards to
Eligible Directors, the Board shall make all determinations otherwise assigned
to the Committee under Article II and any reference to "employment" shall be
changed to "service."

2.6      STATUTORY OPTIONS

         Subject to the limitations on Option terms set forth in Section 2.1,
the Committee shall have the authority to grant to employees of the Company and
its Subsidiaries (a) incentive stock options within the meaning of Section 422
of the Code and (b) Options containing such terms and conditions as shall be
required to qualify such Options for


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preferential tax treatment under the Code as in effect at the time of such
grant. Options granted pursuant to this Section 2.6 may contain such other terms
and conditions permitted by Article II of the Plan as the Committee, in its
discretion, may from time to time determine, to the extent that such terms and
conditions do not cause the Options to lose their preferential tax treatment. To
the extent the Code and regulations promulgated thereunder require a plan to
contain specified provisions in order to qualify options for preferential tax
treatment, such provisions shall be deemed to be stated in the Plan. Eligible
Directors shall not be entitled to receive incentive stock options as defined in
Section 422 of the Code.

2.7      AWARDS PRIOR TO THE IPO

         Notwithstanding the foregoing, prior to the IPO, the Board shall make
all determinations otherwise assigned to the Committee under Article II with
respect to Options, SARs and Supplemental Payment awards to eligible employees
(except for the Senior Executives). With respect to Options, SARs and
Supplemental Payment awards to the Senior Executives, prior to the IPO, the
Transocean Committee shall make all determinations otherwise assigned to the
Committee under Article II.

                    III. RESTRICTED STOCK AND DEFERRED UNITS

3.1      TERMS AND CONDITIONS OF RESTRICTED STOCK AWARDS

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

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

         (b) Stock certificates representing the shares of Restricted Stock
awarded to a Participant shall be registered in such Participant's name. Such
certificates shall either be held by the Company on behalf of the Participant,
or delivered to the Participant bearing a legend to restrict transfer of the
certificate until the shares of Restricted Stock have vested, as determined by
the Committee. The Committee shall determine whether the Participant shall have
the right to vote and/or receive dividends on the shares of Restricted Stock
before they have vested. No shares of Restricted Stock may be sold, transferred,
assigned, or pledged by the Participant until they have vested in accordance
with the terms of the Restricted Stock award. In the event of the Participant's
termination of employment before all of his shares of Restricted Stock have
vested, or in the event other conditions to the vesting of shares of Restricted
Stock have not been satisfied prior to any deadline for


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the satisfaction of such conditions set forth in the award, the shares of
Restricted Stock which have not vested shall be forfeited and any purchase price
paid by the Participant shall be returned to such Participant. At the time the
shares of Restricted Stock vest (and, if the Participant has been issued
legended certificates representing the shares of Restricted Stock, upon the
return of such certificates to the Company), a certificate for such vested
shares shall be delivered to the Participant (or the Beneficiary designated by
such Participant in the event of death), free of all restrictions.

         (c) Notwithstanding the vesting conditions set forth in the Restricted
Stock award, (i) the Committee may in its discretion accelerate the vesting of
the shares of Restricted Stock at any time, and (ii) all shares of Restricted
Stock shall vest upon a Change in Control of the Company (as defined in Section
6.10).

3.2      TERMS AND CONDITIONS OF DEFERRED UNITS

         (a) A "Deferred Unit" is a unit that is equal to one share of Common
Stock which is used to measure the benefits payable to an employee or an
Eligible Director under a Deferred Unit award. Each Deferred Unit award shall be
subject to such terms and conditions as the Committee, in its discretion, may
from time to time determine.

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

         (c) The Company shall set up an appropriate record (the "Deferred Unit
Ledger") that shall from time to time reflect the name of each Participant, the
number of Deferred Units awarded to him and the date or dates on which the
Deferred Units will vest.

         (d) The Committee shall determine whether the Participant shall have
the right to receive dividends on the Deferred Units before they have vested. In
such cases, it is intended that the amount of the payment shall be equal to the
dividend that the Participant would have received had he been the owner of a
number of shares of Common Stock equal to the number of Deferred Units credited
to him in the Deferred Unit Ledger as of the dividend record date.
Notwithstanding the foregoing, no amount shall be paid to a Participant with
respect to Deferred Units held by such Participant on a dividend record date but
forfeited by him prior to the dividend payment date. No shares of Common Stock
subject to a Deferred Unit award may be sold, transferred, assigned or pledged
by the Participant until the Deferred Units have vested in accordance with the
terms of the Deferred Unit award. In the event of a Participant's termination of
employment before all of his Deferred Units have vested, or in the event other
conditions to the vesting of the Deferred Units have not been satisfied prior to
any deadline for the satisfaction of such conditions set forth in the award, the
Deferred Units which have not vested shall be forfeited and any purchase price
paid by the Participant shall be returned to such Participant.


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         (e) Upon the vesting of the Deferred Units, as determined by the
Committee, a certificate for the number of shares of Common Stock equal to the
number of vested Deferred Units held by the Participant shall be delivered to
such Participant (or the Beneficiary designated by such Participant in the event
of death), free of all restrictions. Notwithstanding the vesting conditions set
forth in the Deferred Unit award, (i) the Committee may in its discretion
accelerate the vesting of the Deferred Units at any time, and (ii) the Deferred
Units shall vest upon a Change in Control of the Company (as defined in Section
6.10).

3.3      SUPPLEMENTAL PAYMENT ON VESTING OF RESTRICTED STOCK AND DEFERRED UNITS

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

3.4      ELIGIBLE DIRECTOR AWARDS

         With respect to Restricted Stock, Deferred Units and Supplemental
Payment awards to Eligible Directors, the Board shall make all determinations
otherwise assigned to the Committee under this Article III and any reference to
"employment" shall be changed to "service."

3.5      AWARDS PRIOR TO THE IPO

         Notwithstanding the foregoing, prior to the IPO, the Board shall make
all determinations otherwise assigned to the Committee under Article III with
respect to Restricted Stock, Deferred Units and Supplemental Payment awards to
eligible employees (except for the Senior Executives). With respect to
Restricted Stock, Deferred Units and Supplemental Payment awards to the Senior
Executives, prior to the IPO, the Transocean Committee shall make all
determinations otherwise assigned to the Committee under Article III.

                                 IV. CASH AWARDS

4.1      TERMS AND CONDITIONS OF CASH AWARDS

         A "Cash Award" is a cash bonus paid solely on account of the attainment
of one or more objective performance goals that have been preestablished by the
Committee. Each Cash Award shall be subject to such terms and conditions,
restrictions and contingencies,


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if any, as the Committee shall determine. Restrictions and contingencies
limiting the right to receive a cash payment pursuant to a Cash Award shall be
based on the achievement of single or multiple performance goals over a
performance period established by the Committee. No employee shall receive Cash
Awards during any calendar year aggregating in excess of $1 million.

4.2      ELIGIBLE DIRECTOR AWARDS

         With respect to Cash Awards to Eligible Directors, the Board shall make
all determinations otherwise assigned to the Committee under Article IV.

4.3      AWARDS PRIOR TO THE IPO

         Notwithstanding the foregoing, prior to the IPO, the Board shall make
all determinations otherwise assigned to the Committee under Article IV with
respect to Cash Awards to eligible employees (except for the Senior Executives).
With respect to Cash Awards to Senior Executives, prior to the IPO, the
Transocean Committee shall make all determinations otherwise assigned to the
Committee under Article IV.

                              V. PERFORMANCE AWARDS

5.1      TERMS AND CONDITIONS OF PERFORMANCE AWARDS

         The Committee shall have the right to designate any Option, SAR,
Supplemental Payment, Restricted Stock award, Deferred Unit award or Cash Award
as a "Performance Award." The grant or vesting of a Performance Award shall be
subject to the achievement of performance objectives (the "Performance
Objectives") established by the Committee based on one or more of the following
criteria, in each case applied to the Company on a consolidated basis and/or to
a business unit, and either as an absolute measure or as a measure of
comparative performance relative to a peer group of companies: sales, operating
profits, operating profits before interest expense and taxes, net earnings,
earnings per share, return on equity, return on assets, return on invested
capital, total shareholder return, cash flow, debt to equity ratio, market
share, price per share of Common Stock, economic value added, and market value
added.

         The Committee shall have the authority to determine whether the
Performance Objectives and other terms and conditions of the award are
satisfied, and the Committee's determination as to the achievement of
Performance Objectives relating to a Performance Award shall be made in writing.
Notwithstanding the foregoing provisions, if the Committee intends for a
Performance Award to be granted and administered in a manner designed to
preserve the deductibility of the compensation resulting from such award in
accordance with Section 162(m) of the Code, then the Performance Objectives for
such particular Performance Award relative to the particular period of service
to which the Performance Objectives relate shall be established by the Committee
in writing (a) no later than 90 days after the beginning of such period and (b)
prior to the completion of 25% of such period. The Committee shall have no
discretion to modify or waive the Performance Objectives or


                                      -11-
<PAGE>

conditions to the grant or vesting of a Performance Award unless such award is
not intended to qualify as qualified performance-based compensation under
Section 162(m) of the Code and the relevant award agreement provides for such
discretion.

5.2      AWARDS PRIOR TO THE IPO

         Notwithstanding the foregoing, prior to the IPO, the Board shall make
all determinations otherwise assigned to the Committee under Article V with
respect to Performance Awards to eligible employees (except for the Senior
Executives). With respect to Performance Awards to the Senior Executives, prior
to the IPO, the Transocean Committee shall make all determinations otherwise
assigned to the Committee under Article V.

                            VI. ADDITIONAL PROVISIONS

6.1      GENERAL RESTRICTIONS

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

         Notwithstanding the foregoing, with respect to awards to eligible
employees granted prior to the IPO and to awards to Eligible Directors, the
Board shall have the authority and discretion otherwise assigned to the
Committee under this Section 6.1. In addition, with respect to awards to the
Senior Executives granted prior to the IPO, the Transocean Committee shall have
the authority and discretion otherwise assigned to the Committee under this
Section 6.1.

6.2      ADJUSTMENTS FOR CHANGES IN CAPITALIZATION

         From and after the closing date of the IPO, in the event of a
reorganization, recapitalization, stock split, stock dividend, combination of
shares, rights offer, liquidation, dissolution, merger, consolidation, spin-off,
sale of assets, payment of an extraordinary cash dividend, or any other change
in or affecting the corporate structure or capitalization of the Company, the
Committee (or the Board, with respect to Eligible Directors) shall make
appropriate adjustment in the number and kind of shares of Common Stock
authorized by the Plan (including any limitations on individual awards), in the
number, price or kind of shares of Common Stock covered by the awards and in any
outstanding awards


                                      -12-
<PAGE>

under the Plan; provided, however, that no such adjustment shall increase the
aggregate value of any outstanding award.

6.3      AMENDMENTS

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

         (b) The Committee (or the Board, with respect to Eligible Directors)
shall have the authority to amend any award to include any provision which, at
the time of such amendment, is authorized under the terms of the Plan; however,
no outstanding award may be revoked or altered in a manner unfavorable to the
Participant without the written consent of the Participant. Notwithstanding the
foregoing, with respect to awards granted to eligible employees prior to the IPO
and to awards to Eligible Directors, the Board shall have the authority and
discretion otherwise assigned to the Committee under this Section 6.3. In
addition, with respect to awards to the Senior Executives granted prior to the
IPO, the Transocean Committee shall have the authority otherwise assigned to the
Committee under this Section 6.3.

6.4      CANCELLATION OF AWARDS

         Any award granted under the Plan may be canceled at any time with the
consent of the Participant and a new award may be granted to such Participant in
lieu thereof, which award may, in the discretion of the Committee, be on more
favorable terms and conditions than the canceled award; provided, however, that
the exercise or base price of the new award shall not be less than the then
current market price of the shares of Common Stock on the date of grant of any
outstanding Option or SAR that is relinquished in connection with the grant of
such new award.

         Notwithstanding the foregoing, with respect to awards to eligible
employees granted prior to the IPO and to awards to Eligible Directors, the
Board shall have the authority and discretion otherwise assigned to the
Committee under this Section 6.4. In addition, with respect to awards to the
Senior Executives granted prior to the IPO, the Transocean Committee shall have
the authority and discretion otherwise assigned to the Committee under this
Section 6.4.

6.5      BENEFICIARY

         A Participant may file with the Company a written designation of
Beneficiary, on such form as may be prescribed by the Committee (or the Board,
prior to the IPO or with respect to Eligible Directors), to receive any Options,
SARs, Restricted Stock and Common Stock that become deliverable to the
Participant pursuant to the Plan after the Participant's death. A Participant
may, from time to time, amend or revoke a designation of Beneficiary. If no
designated Beneficiary survives the Participant, the executor or administrator
of the Participant's estate shall be deemed to be the Participant's Beneficiary.


                                      -13-
<PAGE>

6.6      WITHHOLDING

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

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

6.7      NON-ASSIGNABILITY

         Except as expressly provided in the Plan, no award under the Plan shall
be assignable or transferable by the Participant thereof except by will, by the
laws of descent and distribution or pursuant to a qualified domestic relations
order as defined by the Code or Title I of ERISA, or the rules thereunder.
During the life of the Participant, awards under the Plan shall be exercisable
only by such Participant or by the guardian or legal representative of such
Participant.

6.8      NON-UNIFORM DETERMINATIONS

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

6.9      NO GUARANTEE OF EMPLOYMENT OR DIRECTORSHIP

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

6.10     CHANGE IN CONTROL

         A Change in Control of the Company shall be deemed to have occurred as
of the first day any one or more of the following conditions shall have been
satisfied:


                                      -14-
<PAGE>

         (a) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of shares representing 20% or more of the combined voting power of
the then outstanding voting securities of the Company entitled to vote generally
in the election of directors (the "Outstanding Company Voting Securities");
provided, however, that for purposes of this subsection (a), the following
acquisitions shall not constitute a Change in Control: (i) any acquisition
directly from the Company, (ii) any acquisition by the Company, (iii) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation or other entity controlled by the
Company, (iv) any acquisition by any corporation or other entity pursuant to a
transaction which complies with clauses (i), (ii) and (iii) of Section 6.10(c),
(v) an acquisition of securities effected in connection with a distribution of
any class of Common Stock of the Company to shareholders of Transocean Inc. in a
transaction (including any distribution in exchange for shares of capital stock
or other securities of Transocean Inc.) intended to qualify as a tax-free
distribution under Section 355 of the Code (a "Tax-Free Spin-Off"), (vi) any
acquisition by Transocean Inc. or any of its affiliates excluding the Company
and its Subsidiaries (collectively, "Transocean"), (vii) any acquisition from
Transocean pursuant to a public offering of securities registered under a
registration statement filed with the Securities and Exchange Commission, or
(viii) any acquisition immediately following which Transocean has beneficial
ownership of at least 50% or more of the Outstanding Company Voting Securities;
provided that any such acquisition that, but for this clause (viii), would
otherwise constitute a Change in Control under this Section 6.10(a) shall be
deemed to be a Change in Control at the time that Transocean no longer has
beneficial ownership of at least 50% or more of the Outstanding Company Voting
Securities, if such individual, entity or group that made such acquisition
continues to own 20% or more of the Outstanding Company Voting Securities
following such time that Transocean no longer has such beneficial ownership;

         (b) Individuals who, as of the Effective Date (as defined in Section
6.12), are members of the Board of Directors of the Company (the "Incumbent
Board") cease for any reason to constitute at least a majority of the Board of
Directors of the Company; provided, however, that for purposes of this Section
6.10, any individual becoming a director subsequent to the date hereof whose
election, or nomination for election by the Company's shareholders, was approved
by either (i) a vote of at least a majority of the directors then comprising the
Incumbent Board or (ii) Transocean, shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than either Transocean or the Board
of Directors of the Company; or

         (c) Consummation of a reorganization, merger, conversion or
consolidation or sale or other disposition of all or substantially all of the
assets of the Company (a "Business Combination"), in each case, unless,
following such Business Combination, (i) all or substantially all of the
individuals and entities who were the beneficial owners, respectively, of the
Outstanding Company Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 50% of the then
outstanding


                                      -15-
<PAGE>

combined voting power of the then outstanding voting securities entitled to vote
generally in the election of directors of the corporation or other entity
resulting from such Business Combination (including, without limitation, a
corporation or other entity which as a result of such transaction owns the
Company or all or substantially all of the Company's assets either directly or
through one or more subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Business Combination of the Outstanding
Company Voting Securities, (ii) no Person (excluding Transocean and any
corporation or other entity resulting from such Business Combination or any
employee benefit plan (or related trust) of the Company or such corporation or
other entity resulting from such Business Combination) beneficially owns,
directly or indirectly, 20% or more of the combined voting power of the then
outstanding voting securities of the corporation or other entity resulting from
such Business Combination except to the extent that such ownership existed prior
to the Business Combination and (iii) at least a majority of the members of the
board of directors of the corporation or other entity resulting from such
Business Combination were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the Board of Directors
of the Company, providing for such Business Combination; or

         (d) Approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company other than in connection with the
transfer of all or substantially all of the assets of the Company to Transocean
or a transfer to an affiliate or a Subsidiary of the Company.

         Notwithstanding the foregoing, no Business Combination between
Transocean and the Company and its Subsidiaries or between the Company and its
own Subsidiaries shall constitute a Change in Control under this Section 6.10 of
the Plan.

6.11     DURATION AND TERMINATION

         (a) The Plan shall be of unlimited duration. Notwithstanding the
foregoing, no incentive stock option (within the meaning of Section 422 of the
Code) shall be granted under the Plan after tenth anniversary of the Effective
Date, but awards granted prior to such date may extend beyond such date, and the
terms of the Plan shall continue to apply to all awards granted hereunder.

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

6.12     EFFECTIVE DATE

         The Plan, as approved by the Board, is effective as of [INSERT IPO
DATE] (the "Effective Date").


                                      -16-
<PAGE>

         IN WITNESS WHEREOF, this document has been executed effective as of the
Effective Date.

                                                TODCO

                                                By:
                                                    ----------------------------
                                                    [NAME]
                                                    Corporate Secretary


                                      -17-