<PAGE>   1
                        MARINE DRILLING COMPANIES, INC.

                      EXECUTIVE DEFERRED COMPENSATION PLAN





                            As Amended and Restated
                             Effective July 1, 1996
<PAGE>   2
                               TABLE OF CONTENTS
<TABLE>
<CAPTION>
ARTICLE                                                                                                PAGE
-------                                                                                                ----
<S>                                                                                                  <C>
                                                                                               
I        -    Definitions and Construction  . . . . . . . . . . . . . . . . . . . . . . . . . .         I-1
                                                                                               
II       -    Participation   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        II-1
                                                                                               
III      -    Account Credits and Allocations of Income or Loss   . . . . . . . . . . . . . . .       III-1
                                                                                               
IV       -    Deemed Investment of Funds  . . . . . . . . . . . . . . . . . . . . . . . . . . .        IV-1
                                                                                               
V        -    Determination of Vested Interest and Forfeitures  . . . . . . . . . . . . . . . .         V-1
                                                                                               
VI       -    In-Service Distributions  . . . . . . . . . . . . . . . . . . . . . . . . . . . .        VI-1
                                                                                               
VII      -    Termination Benefits  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       VII-1
                                                                                               
VIII     -    Administration of the Plan  . . . . . . . . . . . . . . . . . . . . . . . . . . .      VIII-1
                                                                                               
IX       -    Administration of Funds   . . . . . . . . . . . . . . . . . . . . . . . . . . . .        IX-1
                                                                                               
X        -    Nature of the Plan  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         X-1
                                                                                               
XI       -    Adopting Entities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        XI-1
                                                                                               
XII      -    Miscellaneous   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       XII-1
</TABLE>                                                                  
                                                                          
                                                                          



                                      (i)
<PAGE>   3
                        MARINE DRILLING COMPANIES, INC.

                      EXECUTIVE DEFERRED COMPENSATION PLAN



                             W I T N E S S E T H :


         WHEREAS, MARINE DRILLING COMPANIES, INC. (the "COMPANY"), desiring to
aid certain of its employees in making more adequate provision for their
retirement, has heretofore adopted the MARINE DRILLING COMPANIES, INC.
EXECUTIVE DEFERRED COMPENSATION PLAN (the "PLAN"); and

         WHEREAS, the Company desires to restate the Plan and to amend the Plan
in several respects, intending thereby to provide an uninterrupted and
continuing program of benefits;

         NOW THEREFORE, the Plan is hereby restated in its entirety as follows
with no interruption in time, effective as of July 1, 1996, except as otherwise
indicated herein:





                                      (ii)
<PAGE>   4
                                       I.

                          DEFINITIONS AND CONSTRUCTION

         1.1     DEFINITIONS.  The capitalized words or terms used in the Plan
and which are not otherwise defined herein shall have the same meanings as such
words or terms have in the Marine Drilling Companies 401(k) Profit Sharing
Plan, as the same may be amended from time to time.  Where the following words
and phrases appear in the Plan, they shall have the respective meanings set
forth below, unless their context clearly indicates to the contrary.

(1)      ACCOUNT(S):  A Member's Company Account and/or Deferral Account,
         including the amounts credited thereto.

(2)      AFFILIATE:  Each trade or business (whether or not incorporated) which
         together with the Company would be deemed to be a "single employer"
         within the meaning of subsections (b), (c), (m) or (o) of section 414
         of the Code.

(3)      CHANGE IN CONTROL: A "Change in Control" of the Company, as such term
         is defined in Section 9(b) of the Marine Drilling 1992 Long Term
         Incentive Plan.

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

(5)      COMMITTEE:  The administrative committee appointed by the Directors to
         administer the Plan.

(6)      COMPANY:  Marine Drilling Companies, Inc., Marine Drilling Management
         Company and any other adopting entity which adopts the Plan pursuant
         to the provisions of Article XI, jointly and severally.

(7)      COMPANY ACCOUNT:  An individual account for each Member to which is
         credited the Company Deferrals made on his behalf pursuant to Section
         3.2 and which is credited (or debited) for such account's allocation
         of net income (or net loss) as provided in Section 3.3.

(8)      COMPANY DEFERRALS:  Deferrals made by the Company on a Member's behalf
         pursuant to Section 3.2.

(9)      COMPENSATION:  Amounts equal to a Member's "Compensation," as such
         term is defined under the Profit Sharing Plan, including amounts a
         Member could have received in cash in lieu of Compensation deferrals
         pursuant to Section 3.1, and without regard to the maximum dollar
         limitation of section 401(a)(17) of the Code.

(10)     DEFERRAL ACCOUNT:  An individual account for each Member to which is
         credited his Compensation deferrals pursuant to Section 3.1 and which
         is credited (or debited) for such account's allocation of net income
         (or net loss) as provided in Section 3.3.





                                      I-1
<PAGE>   5
(11)     DIRECTORS:  The Board of Directors of Marine Drilling Companies, Inc.

(12)     DISABILITY:  A Member's "disability," as such term is defined under
         the Profit Sharing Plan.

(13)     EFFECTIVE DATE:  July 1, 1996, as to this restatement of the Plan.

(14)     FUNDS:  The investment funds designated from time to time for the
         deemed investment of Accounts pursuant to Article IV.

(15)     INVOLUNTARY TERMINATION:  Any termination of a Member's employment
         with the Company which:

                 (i)      results from a resignation by the Member within 12
         months after the date upon which a Change in Control occurs if such
         resignation occurs within 30 days after the Member receives notice
         from the Company that the Member will be subject to a Material Change
         in Employment Terms; or

                 (ii)     results from a termination by the Company within 12
         months after the date upon which a Change in Control occurs;

         provided, however, the term "Involuntary Termination" shall not
         include a Termination for Cause or any termination after attainment of
         a Member's Retirement Date or as a result of death or Disability.

(16)     MATERIAL CHANGE IN EMPLOYMENT TERMS:  A "Material Change in Employment
         Terms" shall mean any one or more of the following:

                 (i)      a material diminution in the nature or scope of the
         Member's authorities, powers, functions or duties from those
         applicable to him immediately prior to the date on which a Change in
         Control occurs;

                 (ii)     a reduction in the Member's annual base salary from
         that provided to him immediately prior to the date on which a Change
         in Control occurs;

                 (iii)    a significant diminution in the Member's eligibility
         to participate in bonus, stock option, incentive award and other
         compensation plans under which the Member is participating immediately
         prior to the date on which a Change in Control occurs; or

                 (iv)     a change in the location of the Member's principal
         place of employment by the Company by more than 50 miles from the
         location where he was principally employed immediately prior to the
         date on which a Change in Control occurs.





                                      I-2
<PAGE>   6
(17)     MEMBER:  Each individual who has been selected for participation in
         the Plan and who has become a Member pursuant to Article II.

(18)     PLAN:  The Marine Drilling Companies, Inc. Executive Deferred
         Compensation Plan, as amended from time to time.

(19)     PLAN YEAR:  The twelve-consecutive month period commencing January 1
         of each year.

(20)     PROFIT SHARING PLAN:  The Marine Drilling Companies 401(k) Profit
         Sharing Plan, as amended from time to time.

(21)     RETIREMENT DATE:  The date upon which a Member has attained fifty-five
         years of age.

(22)     TERMINATION FOR CAUSE:  A "Termination for Cause" shall mean
         termination of the Member's employment by the Company for any of the
         following reasons:

                 (i)      The Member has engaged in gross negligence or willful
         misconduct in the performance of the duties required of him;

                 (ii)     The Member has been convicted of a felony or a
         misdemeanor involving moral turpitude;

                 (iii)    The Member has willfully refused without proper legal
         reason to perform the duties and responsibilities required of him;

                 (iv)     The Member has materially breached any material
         corporate policy or code of conduct established by the Company; or

                 (v)      The Member has willfully engaged in conduct that he
         knows or should know is materially injurious to the Company or any of
         its affiliates.

(23)     TRUST:  The trust, if any, established under the Trust Agreement.

(24)     TRUST AGREEMENT:  The agreement, if any, entered into between the
         Company and the Trustee pursuant to Article X.

(25)     TRUST FUND:  The funds and properties, if any, held pursuant to the
         provisions of the Trust Agreement, together with all income, profits
         and increments thereto.

(26)     TRUSTEE:  The trustee or trustees appointed by the Directors who are
         qualified and acting under the Trust Agreement at any time.

(27)     VALUATION DATES:  The last business day of each calendar month and any
         other interim Valuation Date determined by the Committee on a
         nondiscriminatory basis.





                                      I-3
<PAGE>   7
(28)     VESTED INTEREST:  The portion of a Member's Accounts which, pursuant
         to the Plan, is nonforfeitable.

         1.2     NUMBER AND GENDER.  Wherever appropriate herein, words used in
the singular shall be considered to include the plural and words used in the
plural shall be considered to include the singular.  The masculine gender,
where appearing in the Plan, shall be deemed to include the feminine gender.

         1.3     HEADINGS.  The headings of Articles and Sections herein are
included solely for convenience, and if there is any conflict between such
headings and the text of the Plan, the text shall control.





                                      I-4
<PAGE>   8
                                      II.

                                 PARTICIPATION

         2.1     PARTICIPATION.  The Committee, in its sole discretion, shall
select and notify those management or highly compensated employees of the
Company who shall be eligible to become Members.  Any such eligible employee
may become a Member on the date designated by the Committee by executing and
filing with the Committee, prior to such date, the form prescribed by the
Committee.  Subject to the provisions of Section 2.2, a Member shall remain
eligible to defer Compensation hereunder and receive an allocation of Company
Deferrals for each Plan Year following his initial year of participation in the
Plan.

         2.2     CESSATION OF ACTIVE PARTICIPATION.  Notwithstanding any
provision herein to the contrary, an individual who has become a Member of the
Plan shall cease to be entitled to defer Compensation hereunder or receive an
allocation of Company Deferrals effective as of any date designated by the
Committee.  Any such Committee action shall be communicated to the affected
individual prior to the effective date of such action.  Further, an individual
who has become a Member of the Plan may cancel his Compensation deferrals
hereunder and his right to receive an allocation of Company Deferrals,
effective as of the first day of any subsequent Plan Year, by executing and
delivering to the Company the form prescribed by the Committee prior to such
date and within the time period prescribed by the Committee.  An individual
described in the preceding provisions of this Section 2.2 may again become
entitled to defer Compensation hereunder and receive an allocation of Company
Deferrals beginning on the first day of any subsequent Plan Year selected by
the Committee in its sole discretion.





                                      II-1
<PAGE>   9
                                      III.

               ACCOUNT CREDITS AND ALLOCATIONS OF INCOME OR LOSS

         3.1     MEMBER DEFERRALS.

                 (a)      Prior to January 1, 1997, for each payroll period
following the date a Member has made the maximum Elective Deferral
Contributions under the Profit Sharing Plan permitted under section 402(g) of
the Code, such Member may elect to defer hereunder an integral percentage of
from 1% to 15% of his Compensation.  Effective January 1, 1997, a Member may
elect to defer hereunder an integral percentage of from 1% to 80% of his
Compensation for any Plan Year.  Notwithstanding the foregoing, if an employee
initially becomes a Member on a date other than the first day of a Plan Year,
such Member's deferral election shall apply only to Compensation (including  a
pro rata portion of any bonus or other supplemental pay) for services performed
after the date of such election.

                 (b)      For each Plan Year in which a Member's Elective
Deferral Contributions under the Profit Sharing Plan are limited as a result of
the limitations contained in section 401(k)(3) and/or 415 of the Code, such
Member may elect to defer hereunder an amount equal to the reduction in such
Member's Elective Deferral Contributions to the Profit Sharing Plan as a result
solely of the application of such limitations.

                 (c)      A Member's election to defer a percentage of his
Compensation for any Plan Year shall be made prior to the first day of such
Plan Year.  Notwithstanding the foregoing, if an employee initially becomes a
Member on a date other than the first day of a Plan Year, such Member's
election to defer a percentage of his Compensation for such Plan Year shall be
made prior to such date.  A Member's Compensation deferrals shall remain in
force and effect unless and until such deferrals are to cease in accordance
with the provisions of Section 2.2.  Compensation for a Plan Year not deferred
by a Member pursuant to the above paragraphs shall be received by such Member
in cash except as provided by any other plan maintained by the Company and its
Affiliates.  Deferrals of Compensation under the Plan shall be made before
elective deferrals or contributions of Compensation under any other plan
maintained by the Company and its Affiliates.  Compensation deferrals made by a
Member shall be credited to such Member's Deferral Account as of a date
determined in accordance with procedures established from time to time by the
Committee; provided, however, that such deferrals shall be credited to the
Member's Deferral Account no later than 30 days after the date upon which the
Compensation deferred would have been received by such Member in cash if he had
not elected to defer such amount pursuant to this Section 3.1.  The Company
shall effect a Member's Compensation deferrals by withholding such deferrals
from such Member's Compensation within the Plan Year.

         3.2     COMPANY DEFERRALS.

                 (a)      For each calendar month, the Company shall credit a
Member's Company Account with an amount which equals 100% of the Compensation
deferrals made by such Member





                                     III-1
<PAGE>   10
pursuant to Section 3.1(a) and (b) during such month; provided, however, that
the amount credited to the Member's Company Account pursuant to this Paragraph
shall not exceed 5% of a Member's Compensation for such month.

                 (b)      For each Plan Year during which a Member has made the
maximum Elective Deferral Contributions under the Profit Sharing Plan pursuant
to section 402(g) of the Code or under the terms of the Profit Sharing Plan,
the Company shall credit a Member's Company Account with an amount equal to the
difference, if any, between (1) 100% of such Member's Elective Deferral
Contributions under the Profit Sharing Plan for such Plan Year, and (2) the
Matching Contributions made by the Company on such Member's behalf under the
Profit Sharing Plan for such Plan Year; provided, however, that the sum of (i)
the amounts credited to the Member's Company Account pursuant to this Paragraph
and (ii) the Matching Contributions made by the Company on such Member's behalf
under the Profit Sharing Plan during any Plan Year shall not exceed 5% of such
Member's Compensation for such Plan Year.

                 (c)      Company Deferrals made on a Member's behalf shall be
credited to his Company Account in accordance with the procedures established
from time to time by the Committee.
 
         3.3     ALLOCATION OF NET INCOME OR LOSS AND CHANGES IN VALUE AMONG
ACCOUNTS.

                 (a)      As of each Valuation Date, the Committee shall
determine the net income (or net loss) of each Fund for the period elapsed
since the next preceding Valuation Date.  The net income (or net loss) of each
Fund since the next preceding Valuation Date shall be ascertained by the
Committee in such manner as it deems appropriate, which may include expenses of
administering the Fund, the Trust and the Plan.

                 (b)      For purposes of allocations of net income (or net
loss), each Member's Accounts shall be divided into subaccounts to reflect such
Member's deemed investment in a particular Fund or Funds pursuant to Article
IV.  As of each Valuation Date, the net income (or net loss) of each Fund,
separately and respectively, shall be allocated among the corresponding
subaccounts of the Members who had such corresponding subaccounts invested in
such Funds since the next preceding Valuation Date.

                 (c)      So long as there is any balance in any Account, such
Account shall continue to receive allocations pursuant to this Section.





                                     III-2
<PAGE>   11
                                      IV.

                           DEEMED INVESTMENT OF FUNDS

         The Committee shall designate, in accordance with procedures
established by it from time to time, the manner in which the amounts allocated
to the Accounts of Members shall be deemed to be invested from among the Fund
or Funds designated from time to time for such purpose by the Committee.  The
Committee may designate one Fund for the deemed investment of all the amounts
allocated to the Accounts of Members or the Committee may split the deemed
investment of the amounts allocated to such Accounts among more than one Fund
in such increments as the Committee may determine.  From time to time, the
Committee may, in its discretion, change the deemed investment designation for
future amounts to be allocated to the Accounts of Members and/or convert the
deemed investment designation with respect to amounts already allocated to such
Accounts.  All determinations and designations by the Committee pursuant to
this Article shall apply to all Members in a uniform and nondiscriminatory
manner.





                                      IV-1
<PAGE>   12
                                       V.

                DETERMINATION OF VESTED INTEREST AND FORFEITURES

         5.1     DEFERRAL ACCOUNT.  A Member shall have a 100% Vested Interest
in his Deferral Account at all times.

         5.2     COMPANY ACCOUNT.  Except as provided in the remaining
provisions of this Section 5.2, a Member shall have a 0% Vested Interest in his
Company Account.  A Member shall have a 100% Vested Interest in his Company
Account upon completion of five years of continuous employment with the Company
and its Affiliates.  Employment prior to the Effective Date shall be considered
for this purpose.  Further, a Member shall have a 100% Vested Interest in his
Company Account upon his termination of employment with the Company and its
Affiliates after attainment of his Retirement Date or by reason of death or
Disability.  Finally, a Member who is employed by the Company immediately prior
to a Change in Control shall have a 100% Vested Interest in his Company Account
if his employment shall be subject to an Involuntary Termination.

         5.3     FORFEITURES.  A Member who terminates employment with the
Company and its Affiliates with a Vested Interest in his Company Account that
is less than 100% shall forfeit to the Company the nonvested portion of such
Account as of the date of such termination.





                                      V-1
<PAGE>   13
                                      VI.

                            IN-SERVICE DISTRIBUTIONS

         In-service distributions shall not be permitted under the Plan.
Members shall not be permitted to make withdrawals from the Plan prior to
termination of employment with the Company and its Affiliates.  Members shall
not, at any time, be permitted to borrow from the Trust Fund.  Following
termination of employment with the Company and its Affiliates, the amounts
credited to a Member's Accounts shall be payable to such Member in accordance
with the provisions of Article VII.





                                      VI-1
<PAGE>   14
                                      VII.

                              TERMINATION BENEFITS

         7.1     AMOUNT OF BENEFIT.  Upon termination of employment of a Member
with the Company and its Affiliates for any reason, the Member, or, in the
event of the death of the Member while employed by the Company or an Affiliate,
the Member's designated beneficiary, shall be entitled to a benefit equal in
value to the Member's Vested Interest in the balance in his Accounts as of the
Valuation Date next preceding the date the payment of such benefit is to
commence pursuant to Section 7.2.

         7.2     TIME OF PAYMENT.  Payment of a Member's benefit under Section
7.1 shall commence as soon as administratively practicable after the Valuation
Date coincident with or next succeeding the date the Member terminates his
employment with the Company and its Affiliates.

         7.3     ALTERNATIVE FORMS OF BENEFIT PAYMENTS.  A Member's benefit
under Section 7.1 shall be paid in one of the following forms irrevocably
elected by such Member in writing on the form prescribed by the Committee on or
before the date he became a Member of the Plan:

                          (1)     A single lump sum, cash payment; or

                          (2)     Annual installment payments for a term
         certain of either 5, 10 or 15 years payable to the Member or, in the
         event of such Member's death prior to the end of such term certain, to
         his designated beneficiary as provided in Section 7.4.

In the event such Member fails to timely elect the form in which his benefit
payments are to be made, such benefit payments shall be in the form of annual
installment payments for a term certain of 10 years payable to such Member or,
in the event of such Member's death prior to the end of such term certain, to
his designated beneficiary as provided in Section 7.4.  If a Member dies prior
to the date the payment of his benefit begins and if the Member failed to
timely elect the form in which his benefit payments are to be made, then
benefit payments shall be made to the Member's designated beneficiary in the
form described in the preceding sentence.  If a Member dies prior to the date
the payment of his benefit begins and if the Member did timely elect the form
in which his benefit payments are to be made, then benefit payments shall be
made to the Member's designated beneficiary in the form elected by the Member.

         7.4     DESIGNATION OF BENEFICIARIES.

                 (a)      Each Member shall have the right to designate the
beneficiary or beneficiaries to receive payment of his benefit in the event of
his death.  Each such designation shall be made by executing the beneficiary
designation form prescribed by the Committee and filing same with the
Committee.  Any such designation may be changed at any time by execution of a
new designation in accordance with this Section.





                                     VII-1
<PAGE>   15
                 (b)      If no such designation is on file with the Committee
at the time of the death of the Member or such designation is not effective for
any reason as determined by the Committee, then the designated beneficiary or
beneficiaries to receive such benefit shall be as follows:

                          (1)     If a Member leaves a surviving spouse, his
         benefit shall be paid to such surviving spouse;

                          (2)     If a Member leaves no surviving spouse, his
         benefit shall be paid to such Member's executor or administrator, or
         to his heirs at law if there if no administration of such Member's
         estate.

         7.5     ACCELERATED PAY-OUT OF CERTAIN BENEFITS.  Notwithstanding any
provision in Section 7.3 to the contrary, if a Member's benefit payments are to
be paid in a form other than a single lump sum, cash payment and the aggregate
amount to be paid with respect to such Member in any particular calendar year
is less than $10,000, then the Committee may, in its sole discretion, elect to
cause the entire remaining Account balance with respect to such Member to be
paid in a single lump sum, cash payment.

         7.6     PAYMENT OF BENEFITS.  To the extent the Trust Fund has
sufficient assets, the Trustee shall pay benefits to Members or their
beneficiaries, except to the extent the Company pays the benefits directly and
provides adequate evidence of such payment to the Trustee.  To the extent the
Trustee does not or cannot pay benefits out of the Trust Fund, the benefits
shall be paid by the Company.  Any benefit payments made to a Member or for his
benefit pursuant to any provision of the Plan shall be debited to such Member's
Accounts.  All benefit payments shall be made in cash to the fullest extent
practicable.

         7.7     UNCLAIMED BENEFITS.  In the case of a benefit payable on
behalf of a Member, if the Committee is unable to locate the Member or
beneficiary to whom such benefit is payable, upon the Committee's determination
thereof, such benefit shall be forfeited to the Company.  Notwithstanding the
foregoing, if subsequent to any such forfeiture the Member or beneficiary to
whom such benefit is payable makes a valid claim for such benefit, such
forfeited benefit shall be restored to the Plan by the Company.





                                     VII-2
<PAGE>   16
                                     VIII.

                           ADMINISTRATION OF THE PLAN

         8.1     APPOINTMENT OF COMMITTEE.  The general administration of the
Plan shall be vested in the Committee which shall be appointed by the Directors
and shall consist of one or more persons.  Any individual, whether or not an
employee of the Company, is eligible to become a member of the Committee.

         8.2     TERM, VACANCIES, RESIGNATION, AND REMOVAL.  Each member of the
Committee shall serve until he resigns, dies, or is removed by the Directors.
At any time during his term of office, a member of the Committee may resign by
giving written notice to the Directors and the Committee, such resignation to
become effective upon the appointment of a substitute member or, if earlier,
the lapse of thirty days after such notice is given as herein provided.  At any
time during his term of office, and for any reason, a member of the Committee
may be removed by the Directors with or without cause, and the Directors may in
their discretion fill any vacancy that may result therefrom.  Any member of the
Committee who is an employee of the Company shall automatically cease to be a
member of the Committee as of the date he ceases to be employed by the Company
and its Affiliates.

         8.3     SELF-INTEREST OF MEMBERS.  No member of the Committee shall
have any right to vote or decide upon any matter relating solely to himself
under the Plan (including, without limitation, Committee decisions under
Article II) or to vote in any case in which his individual right to claim any
benefit under the Plan is particularly involved.  In any case in which a
Committee member is so disqualified to act and the remaining members cannot
agree, the Directors shall appoint a temporary substitute member to exercise
all the powers of the disqualified member concerning the matter in which he is
disqualified.

         8.4     COMMITTEE POWERS AND DUTIES.  The Committee shall supervise
the administration and enforcement of the Plan according to the terms and
provisions hereof and shall have all powers necessary to accomplish these
purposes, including, but not by way of limitation, the right, power, authority,
and duty:

                 (a)      To make rules, regulations, and bylaws for the
         administration of the Plan that are not inconsistent with the terms
         and provisions hereof, and to enforce the terms of the Plan and the
         rules and regulations promulgated thereunder by the Committee;

                 (b)      To construe in its discretion all terms, provisions,
         conditions, and limitations of the Plan;

                 (c)      To correct any defect or to supply any omission or to
         reconcile any inconsistency that may appear in the Plan in such manner
         and to such extent as it shall deem in its discretion expedient to
         effectuate the purposes of the Plan;





                                     VIII-1
<PAGE>   17
                 (d)      To employ and compensate such accountants, attorneys,
         investment advisors, and other agents, employees, and independent
         contractors as the Committee may deem necessary or advisable for the
         proper and efficient administration of the Plan;

                 (e)      To determine in its discretion all questions relating
         to eligibility;

                 (f)      To determine whether and when there has been a
         termination of a Member's employment with the Company and its
         Affiliates, and the reason for such termination;

                 (g)      To make a determination in its discretion as to the
         right of any person to a benefit under the Plan and to prescribe
         procedures to be followed by distributees in obtaining benefits
         hereunder;

                 (h)      To receive and review reports from the Trustee as to
         the financial condition of the Trust Fund, including its receipts and
         disbursements; and

                 (i)      To establish or designate Funds as provided in
         Article IV.

         8.5     CLAIMS REVIEW.  In any case in which a claim for Plan benefits
of a Member or beneficiary is denied or modified, the Committee shall furnish
written notice to the claimant within ninety days (or within 180 days if
additional information requested by the Committee necessitates an extension of
the ninety-day period), which notice shall:

                 (a)      State the specific reason or reasons for the denial
         or modification;

                 (b)      Provide specific reference to pertinent Plan
         provisions on which the denial or modification is based;

                 (c)      Provide a description of any additional material or
         information necessary for the Member, his beneficiary, or
         representative to perfect the claim and an explanation of why such
         material or information is necessary; and

                 (d)      Explain the Plan's claim review procedure as
         contained herein.

In the event a claim for Plan benefits is denied or modified, if the Member,
his beneficiary, or a representative of such Member or beneficiary desires to
have such denial or modification reviewed, he must, within sixty days following
receipt of the notice of such denial or modification, submit a written request
for review by the Committee of its initial decision.  In connection with such
request, the Member, his beneficiary, or the representative of such Member or
beneficiary may review any pertinent documents upon which such denial or
modification was based and may submit issues and comments in writing.  Within
sixty days following such request for review the Committee shall, after
providing a full and fair review, render its final decision in writing to the
Member, his beneficiary or the representative of such Member or beneficiary
stating specific reasons for such decision and making specific references to
pertinent Plan provisions upon which the decision is based.  If special
circumstances require an extension of such sixty-day period, the Committee's
decision shall be





                                     VIII-2
<PAGE>   18
rendered as soon as possible, but not later than 120 days after receipt of the
request for review.  If an extension of time for review is required, written
notice of the extension shall be furnished to the Member, beneficiary, or the
representative of such Member or beneficiary prior to the commencement of the
extension period.

         8.6     COMPANY TO SUPPLY INFORMATION.  The Company shall supply full
and timely information to the Committee, including, but not limited to,
information relating to each Member's Compensation, age, retirement, death, or
other cause of termination of employment and such other pertinent facts as the
Committee may require.  The Company shall advise the Trustee of such of the
foregoing facts as are deemed necessary for the Trustee to carry out the
Trustee's duties under the Plan and the Trust Agreement.  When making a
determination in connection with the Plan, the Committee shall be entitled to
rely upon the aforesaid information furnished by the Company.

         8.7     INDEMNITY.  To the extent permitted by applicable law, the
Company shall indemnify and save harmless the Directors and each member of the
Committee against any and all expenses, liabilities and claims (including legal
fees incurred to defend against such liabilities and claims) arising out of
their discharge in good faith of responsibilities under or incident to the
Plan.  Expenses and liabilities arising out of willful misconduct shall not be
covered under this indemnity.  This indemnity shall not preclude such further
indemnities as may be available under insurance purchased by the Company or
provided by the Company under any bylaw, agreement, vote of stockholders or
disinterested directors or otherwise, as such indemnities are permitted under
applicable law.





                                     VIII-3
<PAGE>   19
                                      IX.

                            ADMINISTRATION OF FUNDS

         9.1     PAYMENT OF EXPENSES.  All expenses incident to the
administration of the Plan and Trust, including but not limited to, legal,
accounting, Trustee fees, and expenses of the Committee, may be paid by the
Company and, if not paid by the Company, shall be paid by the Trustee from the
Trust Fund, if any.

         9.2     TRUST FUND PROPERTY.  All income, profits, recoveries,
contributions, forfeitures and any and all moneys, securities and properties of
any kind at any time received or held by the Trustee, if any, shall be held for
investment purposes as a commingled Trust Fund pursuant to the terms of the
Trust Agreement.  The Committee shall maintain one or more Accounts in the name
of each Member, but the maintenance of an Account designated as the Account of
a Member shall not mean that such Member shall have a greater or lesser
interest than that due him by operation of the Plan and shall not be considered
as segregating any funds or property from any other funds or property contained
in the commingled fund.  No Member shall have any title to any specific asset
in the Trust Fund, if any.





                                      IX-1
<PAGE>   20
                                       X.

                               NATURE OF THE PLAN

         The Company intends and desires by the adoption of the Plan to
recognize the value to the Company of the past and present services of
employees covered by the Plan and to encourage and assure their continued
service with the Company by making more adequate provision for their future
retirement security.  The establishment of the Plan is, in part, made necessary
by certain benefit limitations which are imposed on the Profit Sharing Plan by
the Code.  The Plan is intended to constitute an unfunded, unsecured plan of
deferred compensation for a select group of management or highly compensated
employees of the Company.  Plan benefits herein provided are to be paid out of
the Company's general assets.  Nevertheless, subject to the terms hereof and of
the Trust Agreement, the Company may transfer money or other property to the
Trustee and the Trustee shall pay Plan benefits to Members and their
beneficiaries out of the Trust Fund.

         The Directors, in their sole discretion, may establish the Trust and
enter into the Trust Agreement.  In such event, the Company shall remain the
owner of all assets in the Trust Fund and the assets shall be subject to the
claims of Company creditors if the Company ever becomes insolvent.  For
purposes hereof, the Company shall be considered "insolvent" if (a) the Company
is unable to pay its debts as they become due, or (b) the Company is subject to
a pending proceeding as a debtor under the United Sates Bankruptcy Code (or any
successor federal statute).  The chief executive officer of the Company and its
board of directors shall have the duty to inform the Trustee in writing if the
Company becomes insolvent.  Such notice given under the preceding sentence by
any party shall satisfy all of the parties' duty to give notice.  When so
informed, the Trustee shall suspend payments to the Members and hold the assets
for the benefit of the Company's general creditors.  If the Trustee receives a
written allegation that the Company is insolvent, the Trustee shall suspend
payments to the Members and hold the Trust Fund for the benefit of the
Company's general creditors, and shall determine within the period specified in
the Trust Agreement whether the Company is insolvent.  If the Trustee
determines that the Company is not insolvent, the Trustee shall resume payments
to the Members.  No Member or beneficiary shall have any preferred claim to, or
any beneficial ownership interest in, any assets of the Trust Fund.





                                      X-1
<PAGE>   21
                                      XI.

                               ADOPTING ENTITIES

          It is contemplated that other corporations, associations,
partnerships or proprietorships may adopt this Plan and thereby become the
Company.  Any such entity, whether or not presently existing, may become a
party hereto by appropriate action of its officers without the need for
approval of its board of directors or noncorporate counterpart or of the
Directors; provided, however, that such entity must be an Affiliate.  The
provisions of the Plan shall apply separately and equally to each Company and
its employees in the same manner as is expressly provided for Marine Drilling
Companies, Inc. and its employees, except that the power to appoint or
otherwise affect the Committee or the Trustee and the power to amend or
terminate the Plan or amend the Trust Agreement shall be exercised by the
Directors alone.  Transfer of employment among Companies and Affiliates shall
not be considered a termination of employment hereunder.  Any Company may, by
appropriate action of its officers without the need for approval of its board
of directors or noncorporate counterpart or the Directors, terminate its
participation in the Plan.  Moreover, the Directors may, in their discretion,
terminate a Company's Plan participation at any time.





                                      XI-1
<PAGE>   22
                                      XII.

                                 MISCELLANEOUS

         12.1    NOT CONTRACT OF EMPLOYMENT.  The adoption and maintenance of
the Plan shall not be deemed to be a contract between the Company and any
person or to be consideration for the employment of any person.  Nothing herein
contained shall be deemed to give any person the right to be retained in the
employ of the Company or to restrict the right of the Company to discharge any
person at any time nor shall the Plan be deemed to give the Company the right
to require any person to remain in the employ of the Company or to restrict any
person's right to terminate his employment at any time.

         12.2    ALIENATION OF INTEREST FORBIDDEN.  The interest of a Member or
his beneficiary or beneficiaries hereunder may not be sold, transferred,
assigned, or encumbered in any manner, either voluntarily or involuntarily, and
any attempt so to anticipate, alienate, sell, transfer, assign, pledge,
encumber, or charge the same shall be null and void; neither shall the benefits
hereunder be liable for or subject to the debts, contracts, liabilities,
engagements or torts of any person to whom such benefits or funds are payable,
nor shall they be an asset in bankruptcy or subject to garnishment, attachment
or other legal or equitable proceedings.

         12.3    WITHHOLDING.  All Compensation deferrals and payments provided
for hereunder shall be subject to applicable withholding and other deductions
as shall be required of the Company under any applicable local, state or
federal law.

         12.4    AMENDMENT AND TERMINATION.  The Directors may from time to
time, in their discretion, amend, in whole or in part, any or all of the
provisions of the Plan; provided, however, that no amendment may be made that
would impair the rights of a Member with respect to amounts already allocated
to his Accounts.  The Directors may terminate the Plan at any time.  In the
event that the Plan is terminated, the balance in a Member's Accounts shall be
paid to such Member or his designated beneficiary in the manner specified by
the Committee, which may include the payment of a single lump sum, cash payment
in full satisfaction of all of such Member's or beneficiary's benefits
hereunder.

         12.5    SEVERABILITY.  If any provision of this Plan shall be held
illegal or invalid for any reason, said illegality or invalidity shall not
affect the remaining provisions hereof; instead, each provision shall be fully
severable and the Plan shall be construed and enforced as if said illegal or
invalid provision had never been included herein.

         12.6    GOVERNING LAWS.  ALL PROVISIONS OF THE PLAN SHALL BE CONSTRUED
IN ACCORDANCE WITH THE LAWS OF TEXAS EXCEPT TO THE EXTENT PREEMPTED BY FEDERAL
LAW.





                                     XII-1
<PAGE>   23
         EXECUTED effective as of July 1, 1996.


                          MARINE DRILLING COMPANIES, INC.
                          
                          
                          
                          By:                                                 
                                   ---------------------------------------------
                                   William H. Flores
                                   Senior Vice President/Chief Financial Officer
                          
                          
                                   


                                     (iii)