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                                                                     EXHIBIT 4.3

                            LONG-TERM INCENTIVE PLAN
                                       OF
                          TRANSOCEAN SEDCO FOREX INC.

              (As Amended and Restated Effective January 1, 2000)

                                  I. GENERAL

1.1 PURPOSE OF THE PLAN

     The Long-Term Incentive Plan (the "Plan") of Transocean Sedco Forex Inc., a
Cayman Islands exempted company (the "Company"), is intended to 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 ordinary shares, par value US $0.01 per share of the Company ("Ordinary
Shares"), share appreciation rights ("SARs"), restricted Ordinary Shares
("Restricted Shares") 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)  The Plan shall be administered by the Executive Compensation Committee or
     other designated committee (the "Committee") of the Board of Directors of
     the Company (the "Board of Directors") which shall consist of at least two
     Directors, all of whom (i) are not eligible for awards under Articles II
     and III of the Plan, (ii) are "non-employee directors" within the meaning
     of Rule 16b-3 under the Securities Exchange Act of 1934, and (iii) 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").  The Committee shall have authority to interpret conclusively the
     provisions of the Plan, to adopt such rules and regulations for carrying
     out 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.
     Notwithstanding the foregoing, the Committee shall have no power or
     discretion to vary the amount or terms of awards under Article IV of the
     Plan, except as provided in Section 6.2.  All decisions and acts of the
     Committee shall be final and binding upon all affected Plan participants.

(b)  The Committee shall designate the eligible employees, if any, to be granted
     awards under Articles II and III and 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
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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 Articles II, III and V of the
Plan.  Directors who are not employees of the Company or its Subsidiaries shall
not be eligible for awards under Articles II, III and V.

     Each Director of the Company who is not an officer or employee of the
Company or any of its subsidiaries (an "Eligible Director") shall automatically
be granted awards under Article IV of the Plan.  Each Eligible Director to whom
Options or SARs are granted under Article IV is hereinafter referred to as a
"Participant."

1.4  AWARDS UNDER THE PLAN

     Awards to employees under Articles II and III may be in the form of (i)
Options to purchase Ordinary Shares, (ii) Share Appreciation Rights which may be
either freestanding or issued in tandem with Options, (iii) Restricted Ordinary
Shares, (iv) Supplemental Payments which may be awarded with respect to Options,
Share Appreciation Rights and Restricted Ordinary Shares, or (v) any combination
of the foregoing.  Awards to employees under Article V will be in the form of
performance awards payable in cash.

     Awards to Eligible Directors under Article IV shall be in the form of (i)
Options to purchase Ordinary Shares and Supplemental Payments with respect
thereto, or (ii) solely in the case of Eligible Directors residing in Norway,
freestanding SARs.

1.5  SHARES SUBJECT TO THE PLAN

     The aggregate number of Ordinary Shares which may be issued with respect to
awards made under Articles II and III shall not exceed 12,900,000 shares,
reduced by the number of shares which have been issued pursuant to such Articles
prior to the date of this Amendment and Restatement.  In addition, the aggregate
number of Ordinary Shares which may be issued with respect to awards made under
Article IV shall not exceed 400,000, reduced by the number of shares which have
been issued pursuant to such Article prior to the date of this Amendment and
Restatement.  At no time shall the number of shares issued plus the number of
shares estimated by the Committee to be ultimately issued with respect to
outstanding awards under the Plan exceed the number of shares that may be issued
under the Plan.  No employee shall be granted Share Options, freestanding Share
Appreciation Rights, or Restricted Ordinary Shares, or any combination of the
foregoing, with respect to more than 600,000 Ordinary Shares in any fiscal year
(subject to adjustment as provided in Section 6.2).  No employee shall be
granted a Supplemental Payment in any fiscal year with respect to more than the
number of Ordinary Shares covered by Share Options, freestanding Share
Appreciation Rights or Restricted Ordinary Shares awards granted to such
employee in such fiscal year.  Shares distributed pursuant to the Plan may
consist of authorized but unissued shares or treasury shares of the Company, as
shall be determined from time to time by the Board of Directors.

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     If any Option under the Plan shall expire, terminate or be canceled
(including cancellation upon the holder's exercise of a related Share
Appreciation Right) for any reason without having been exercised in full, or if
any Restricted Ordinary Shares shall be forfeited to the Company, the
unexercised Options and forfeited Restricted Ordinary Shares shall not count
against the above limit and shall again become available for grants under the
Plan (regardless of whether the holder of such Options or shares received
dividends or other economic benefits with respect to such Options or shares).
Ordinary Shares equal in number to the shares surrendered in payment of the
option price, and Ordinary Shares 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 grants under the Plan.  Only the number of
Ordinary Shares actually issued upon exercise of a Share Appreciation Right or
payment of a Supplemental Payment 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 grants under the Plan.

     Freestanding Share Appreciation Rights which may be settled solely in cash
shall be issued with respect to no more than an aggregate of 250,000 underlying
shares.  Such SARs shall not count against the limits set forth above on the
number of Ordinary Shares 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 grants under the Plan.

1.6  OTHER COMPENSATION PROGRAMS

     The existence and terms of the Plan shall not limit the authority of the
Board of Directors 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.

               II.   SHARE OPTIONS AND SHARE APPRECIATION RIGHTS

2.1  TERMS AND CONDITIONS OF OPTIONS

     Subject to the following provisions, all Options granted under the Plan to
employees of the Company and its Subsidiaries 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 shall not be less than the fair
     market value of the Ordinary Shares (as determined by the Committee) on the
     date the Option is granted.  Notwithstanding the foregoing, the option
     price per share with respect to any Option granted by the Committee within
     90 days of the closing of the initial public offering of the Company's
     Ordinary Shares shall be at the initial public offering price for such
     Shares.

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(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 an optionee.  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 optionee to be
     immediately exercisable.  An Option may be exercised in accordance with its
     terms as to any or all shares purchasable thereunder.

(d)  Payment for Shares.  The Committee may authorize payment for shares as to
     which an Option is exercised to be made in cash, Ordinary Shares or in such
     other manner as the Committee in its discretion may provide.

(e)  Nontransferability of Options.  No Option or any interest therein shall be
     transferable by the optionee other than by will or by the laws of descent
     and distribution.  During an optionee's lifetime, all Options shall be
     exercisable only by such optionee or by the guardian or legal
     representative of the optionee.

(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 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 an optionee's death shall remain outstanding and
     exercisable for up to one year after the optionee's death.

(h)  Change of Control.  Notwithstanding the exercisability schedule governing
     any Option, upon the occurrence of a Change of Control (as defined in
     Section 6.10) all Options outstanding at the time of such Change of Control
     and held by optionees who are employees of the Company or its Subsidiaries
     at the time of such Change of Control shall become immediately exercisable
     and, unless the optionee agrees otherwise in writing, shall remain
     exercisable for the remainder of the Option term.

2.2  SHARE APPRECIATION RIGHTS 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 Share Appreciation Rights with respect
     to all or any portion of the Ordinary Shares covered by such Option.  A
     tandem Share Appreciation Right 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 Share Appreciation Right is

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     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 Share
     Appreciation Right is exercised.  Similarly, when an Option is exercised,
     the tandem Share Appreciation Rights relating to the shares covered by such
     Option exercise shall terminate.  Any tandem Share Appreciation Right 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 optionee.

(b)  Upon exercise of a tandem Share Appreciation Right, the holder shall
     receive, for each share with respect to which the tandem Share Appreciation
     Right is exercised, an amount (the "Appreciation") equal to the amount by
     which the fair market value (as defined below) of an Ordinary Share on the
     date of exercise of the Share Appreciation Right exceeds the option price
     per share of the Option to which the tandem Share Appreciation Right
     relates.  For purposes of the preceding sentence, the fair market value of
     an Ordinary Share 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, Ordinary Shares, or a combination of both, at the
     option of the Committee, and shall be paid within 30 days of the exercise
     of the tandem Share Appreciation Right.

(c)  Notwithstanding the foregoing, if a tandem Share Appreciation Right is
     exercised within 60 days of the occurrence of a Change of Control, (i) the
     Appreciation and any Supplemental Payment (as defined in Section 2.4) to
     which the holder is entitled shall be payable solely in cash, and (ii) in
     addition to the Appreciation and the Supplemental Payment (if any), the
     holder shall receive, in cash, (1) the amount by which the greater of (a)
     the highest market price per Ordinary Share during the 60-day period
     preceding exercise of the tandem Share Appreciation Right or (b) the
     highest price per Ordinary Share (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 of Control, exceeds the fair market
     value of an Ordinary Share on the date of exercise of the tandem Share
     Appreciation Right, plus (2) if the holder is entitled to a Supplemental
     Payment, an additional payment, calculated under the same formula as used
     for calculating such holder's Supplemental Payment, with respect to the
     amount referred to in clause (1) of this sentence.

2.3  FREESTANDING SHARE APPRECIATION RIGHTS

     The Committee may grant Freestanding Share Appreciation Rights to employees
of the Company and its Subsidiaries, in such form and having such terms and
conditions as the Committee, in its discretion, may from time to time determine,
subject to the following provisions.

(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 of the
     Ordinary Shares (as determined by the Committee) on the date the SAR is
     granted.  Upon exercise of a freestanding SAR, the holder 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

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     market value (as defined below) of an Ordinary Share 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 an Ordinary Share 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 grantee.  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 grantee.

(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 grantee other than by will or by the laws of descent
     and distribution.  During a grantee's lifetime, all SARs shall be
     exercisable only by such grantee or by the guardian or legal representative
     of the grantee.

(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 grantee's
     termination of employment.  Notwithstanding the foregoing, the Committee
     shall not permit any SAR to be exercised 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 grantee's death shall remain outstanding and exercisable for
     up to one year after the grantee's death.

(g)  Change of Control.  Notwithstanding the exercisability schedule governing
     any SAR, upon the occurrence of a Change of Control (as defined in Section
     6.10) all SARs outstanding at the time of such Change of Control and held
     by grantees who are employees of the Company or its Subsidiaries at the
     time of such Change of Control shall become immediately exercisable and,
     unless the grantee 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 of Control, in addition to the Appreciation the holder shall
     receive, in cash, the amount by which the greater of (a) the highest market
     price per

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     Ordinary Share during the 60-day period preceding exercise of the SAR or
     (b) the highest price per Ordinary Share (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 of Control, exceeds the fair market
     value of an Ordinary Share on the date of exercise of the SAR.

2.4  SUPPLEMENTAL PAYMENT ON EXERCISE OF OPTIONS OR SHARE APPRECIATION RIGHTS

     The Committee, either at the time of grant or at the time of exercise of
any Option or tandem Share Appreciation Right, may provide for a supplemental
payment (the "Supplemental Payment") by the Company to the optionee with respect
to the exercise of any Option or tandem Share Appreciation Right.  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 Share
Appreciation Right and receipt of the Supplemental Payment, assuming the
optionee 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,
Ordinary Shares, 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 Share Appreciation Right (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  STATUTORY OPTIONS

     Subject to the limitations on Option terms set forth in Section 2.1, the
Committee shall have the authority to grant (i) incentive stock options within
the meaning of Section 422 of the Code and (ii) Options containing such terms
and conditions as shall be required to qualify such Options for preferential tax
treatment under the Code as in effect at the time of such grant.  Options
granted pursuant to this Section 2.4 may contain such other terms and conditions
permitted by Article II of this Plan as the Committee, in its discretion, may
from time to time determine (including, without limitation, provision for Share
Appreciation Rights and Supplemental Payments), 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 this
Plan.

                       III.  RESTRICTED ORDINARY SHARES

3.1  TERMS AND CONDITIONS OF RESTRICTED ORDINARY SHARES AWARDS

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

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(i)  The Restricted Ordinary Shares award shall specify the number of Restricted
     Ordinary Shares to be awarded, the price, if any, to be paid by the
     recipient of the Restricted Ordinary Shares, and the date or dates on which
     the Restricted Ordinary Shares will vest.  The vesting of Restricted
     Ordinary Shares 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.

(ii) Share certificates representing the Restricted Ordinary Shares granted to
     an employee shall be registered in the employee's name.  Such certificates
     shall either be held by the Company on behalf of the employee, or delivered
     to the employee bearing a legend to restrict transfer of the certificate
     until the Restricted Ordinary Shares have vested, as determined by the
     Committee.  The Committee shall determine whether the employee shall have
     the right to vote and/or receive dividends on the Restricted Ordinary
     Shares before they have vested.  No Restricted Ordinary Shares may be sold,
     transferred, assigned, or pledged by the employee until they have vested in
     accordance with the terms of the Restricted Ordinary Shares award.  In the
     event of an employee's termination of employment before all of his
     Restricted Ordinary Shares have vested, or in the event other conditions to
     the vesting of Restricted Ordinary Shares have not been satisfied prior to
     any deadline for the satisfaction of such conditions set forth in the
     award, the Restricted Ordinary Shares which have not vested shall be
     forfeited and any purchase price paid by the employee shall be returned to
     the employee.  At the time Restricted Ordinary Shares vest (and, if the
     employee has been issued legended certificates of Restricted Ordinary
     Shares, upon the return of such certificates to the Company), a certificate
     for such vested shares shall be delivered to the employee (or the
     Beneficiary designated by the employee in the event of death), free of all
     restrictions.

(iii)  Notwithstanding the vesting conditions set forth in the Restricted
       Ordinary Shares award, (i) the Committee may in its discretion accelerate
       the vesting of Restricted Ordinary Shares at any time, and (ii) all
       Restricted Ordinary Shares shall vest upon a Change of Control of the
       Company.

3.2  PERFORMANCE AWARDS UNDER SECTION 162(M) OF THE CODE

     The Committee shall have the right to designate awards of Restricted
Ordinary Shares as "Performance Awards."  Notwithstanding any other provisions
of this Article III, awards so designated shall be granted and administered in a
manner designed to preserve the deductibility of the compensation resulting from
such awards in accordance with Section 162(m) of the Code.  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

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capital, total shareholder return, cash flow, debt to equity ratio, market
share, share price, economic value added, and market value added.

     The Performance Objectives for a particular Performance Award relative to a
particular fiscal year shall be established by the Committee in writing no later
than 90 days after the beginning of such year.  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.  The Committee shall have discretion to modify or waive the
Performance Objectives or conditions to the grant or vesting of a Performance
Award only to the extent that the exercise of such discretion would not cause
the Performance Award to fail to qualify as "performance-based compensation"
within the meaning of Section 162(m) of the Code.

3.3  SUPPLEMENTAL PAYMENT ON VESTING OF RESTRICTED ORDINARY SHARES

     The Committee, either at the time of grant or at the time of vesting of
Restricted Ordinary Shares, may provide for a Supplemental Payment by the
Company to the employee 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 Ordinary Shares and receipt of the
Supplemental Payment, assuming the employee is taxed at the maximum effective
federal income tax rate applicable thereto and has not elected to recognize
income with respect to the Restricted Ordinary Shares before the date such
Restricted Ordinary Shares vest.  The Supplemental Payment shall be paid within
30 days of each date that Restricted Ordinary Shares 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, Ordinary Shares, or a
combination of both, as determined by the Committee at the time of payment.

         IV.  SHARE OPTIONS OR FREESTANDING SHARE APPRECIATION RIGHTS
                                 FOR DIRECTORS

4.1  GRANT OF OPTIONS OR FREESTANDING SARS

     Each person who becomes an Eligible Director (other than a person who first
becomes an Eligible Director on the date of an annual meeting of the Company's
shareholders) shall be granted, effective as of the date such person becomes an
Eligible Director, (i) an Option to purchase 4,000 Ordinary Shares, if such
person is not then residing in Norway, or (ii) a freestanding SAR with respect
to 4,000 Ordinary Shares, if such person is then residing in Norway.  Each
person who is or becomes an Eligible Director on the date of an annual meeting
of the Company's shareholders and whose service on the Board of Directors will
continue after such meeting shall be granted, effective as of the date of such
meeting, (i) an Option to purchase 4,000 Ordinary Shares, if such person is not
then residing in Norway, or (ii) a freestanding SAR with respect to 4,000
Ordinary Shares, if such person is then residing in Norway.

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4.2  TERMS AND CONDITIONS OF OPTIONS

     Each Option granted under this Article shall have the following terms and
conditions:

(a)  Option Price.  The option price per share shall be the closing sales price
     of an Ordinary Share on the date the Option is granted (or, if the Ordinary
     Shares are not traded on such date, on the immediately preceding date on
     which the Ordinary Shares are traded).

(b)  Term of Option.  Each Option shall expire ten years from the date of grant,
     except as provided in Section 4.2(c) with respect to the death of an
     optionee.  No Option shall be exercised after the expiration of its term.

(c)  Exercise of Options.  Subject to Section 4.2(g) and the remainder of this
     paragraph, each Option shall become exercisable in installments as follows:
     (1) a total of 1,333 Ordinary Shares may be purchased through exercise of
     the Option on or after the first anniversary of the date of grant; (2) a
     total of 2,666 Ordinary Shares may be purchased through exercise of the
     Option on or after the second anniversary of the date of grant; and (3) a
     total of 4,000 Ordinary Shares may be purchased through exercise of the
     Option on or after the third anniversary of the date of grant.  If a
     Participant ceases to be a Director of the Company as a result of death,
     disability, or retirement from the Board of Directors on his Retirement
     Date (as defined in Section 4.2(i)), each Option shall immediately become
     fully exercisable and shall remain exercisable for the remainder of its
     term, except that an Option which is outstanding on the date of an
     optionee's death shall remain outstanding and exercisable for a term of the
     greater of ten years from the date of grant or one year after the
     optionee's death.  If a Participant ceases to be a Director of the Company
     for any reason not set forth in the preceding sentence, no additional
     portions of the Option will become exercisable, and the portion of the
     Option that is then exercisable shall expire if not exercised within 60
     days after cessation of service as a Director.  An Option may be exercised
     in accordance with its terms as to any or all shares purchasable
     thereunder.

(d)  Payment for Shares.  Payment for shares as to which an Option is exercised
     shall be made in cash, Ordinary Shares or a combination thereof, in the
     discretion of the Participant, or in such other manner as the Committee in
     its discretion may provide.  Ordinary Shares delivered in payment of the
     Option price shall be valued at the average of the high and low prices of
     such Shares on the date of exercise (or, if the Ordinary Shares are not
     traded on such date, at the weighted average of the high and low prices on
     the nearest trading dates before and after such date).

(e)  Nontransferability of Options.  No Option 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 Options
     shall be exercisable only by such Participant or by the guardian or legal
     representative of the Participant.

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

(g)  Change of Control.  Notwithstanding any other provisions of the Plan, upon
     the occurrence of a Change of Control (as defined in Section 6.10) all
     Options outstanding at the time of such Change of Control shall become
     immediately exercisable and shall remain exercisable for the remainder of
     their term.

(h)  Tax Status.  The Options granted under this Article shall be "non-
     qualified" options, and shall not be incentive stock options as defined in
     Section 422 of the Code.

(i)  Retirement Date.  For purposes of this Article, a Participant's Retirement
     Date shall mean the date on which the Participant shall be required to
     retire from the Board of Directors under the retirement policies of the
     Board of Directors as in effect on the date of the Participant's
     retirement.

4.3  TERMS AND CONDITIONS OF FREESTANDING SHARE APPRECIATION RIGHTS

     Each Freestanding Share Appreciation Right granted under this Article shall
have the following terms and conditions:

(a)  Base Price and Appreciation.  The base price of the SAR shall be the
     closing sales price of an Ordinary Share on the date the SAR is granted
     (or, if the Ordinary Shares are not traded on such date, on the immediately
     preceding date on which the Ordinary Shares are traded).  Upon exercise of
     an SAR, the holder 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 of an Ordinary Share 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 an Ordinary Share 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.  Each SAR shall expire ten years from the date of grant,
     except as provided in Section 4.3(c) with respect to the death of a
     Participant.  No SAR shall be exercised after the expiration of its term.

(c)  Exercise of SARs.  Subject to Section 4.3(f) and the remainder of this
     paragraph, each SAR shall become exercisable in installments as follows:
     (1) the SAR shall be exercisable with respect to a total of 1,333 Ordinary
     Shares on or after the first anniversary of the date of grant; (2) the SAR
     shall be exercisable with respect to a total of 2,666 Ordinary Shares on or
     after the second anniversary of the date of grant; and (3) the SAR shall be
     exercisable with respect to a total of 4,000 Ordinary Shares on or after
     the third anniversary of the date of grant.  If a Participant ceases to be
     a Director of the Company as a result of death, disability, or retirement
     from the Board of Directors on his

                                       11
<PAGE>

     Retirement Date (as defined in Section 4.2(i)), each SAR shall immediately
     become fully exercisable and shall remain exercisable for the remainder of
     its term, except that notwithstanding the term of the SAR, an SAR which is
     outstanding on the date of a Participant's death shall remain outstanding
     and exercisable for a term of the greater of ten years from the date of
     grant or one year after the Participant's death. If a Participant ceases to
     be a Director of the Company for any reason not set forth in the preceding
     sentence, no additional portions of the SAR will become exercisable, and
     the portion of the SAR that is then exercisable shall expire if not
     exercised within 60 days after cessation of service as a Director. An 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)  Change of Control.  Notwithstanding any other provisions of the Plan, upon
     the occurrence of a Change of Control (as defined in Section 6.10) all SARs
     outstanding at the time of such Change of Control shall become immediately
     exercisable and shall remain exercisable for the remainder of their term.

(g)  Special Provisions.  Notwithstanding the foregoing provisions of Section
     4.3, the freestanding SARs granted to Eligible Directors residing in Norway
     who were first elected to the Board of Directors in 1996 (and who waived
     the grant of an Option to which they were then entitled under the terms of
     the Plan as then in effect) with respect to their initial election to the
     Board of Directors (i) shall have a base price equal to the closing sales
     price of the Ordinary Shares on the date of their initial election, and
     (ii) shall have exercise and expiration dates determined as if such SARs
     had been granted on the date of their initial election.

4.4  SUPPLEMENTAL PAYMENT ON EXERCISE OF PRIOR AWARDS OF OPTIONS OR SARS

(a)  Supplemental Payments.  Within 30 days of each date that an Option or SAR
     granted prior to the date of this Amendment and Restatement is exercised, a
     Supplemental Payment shall be paid to the Participant (or to the
     Participant's Beneficiary in the event of death), in cash, in an amount
     equal to the amount necessary to pay the income tax payable to the national
     government where the Director resides with respect to both the exercise of
     such Option or SAR and receipt of the Supplemental Payment, assuming the
     Participant is taxed at the maximum effective income tax rate applicable
     thereto; provided, however, that no such payment shall be made if the
     Participant has waived his right to the payment pursuant to Section 4.4(b).

                                       12
<PAGE>

(b)  Waiver.  The Committee may grant an additional Option or SAR, as
     applicable, to any Participant who agrees in writing to waive the right to
     receive a supplemental cash payment under Section 4.4(a).  Such Option or
     SAR shall be immediately exercisable.  All other provisions of Section 4.2
     or 4.3 will apply as though the date of acceptance of the Option or SAR
     were the date of grant.  Notwithstanding the foregoing, however, in no
     event shall (i) the number of Ordinary Shares subject to this Section
     4.4(b) exceed 50,000, or (ii) the number of SARs subject to this Section
     4.4(b) exceed 50,000.

                          V.  CASH PERFORMANCE AWARDS

5.1  TERMS AND CONDITIONS OF CASH PERFORMANCE 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, 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.

5.2  PERFORMANCE OBJECTIVES UNDER SECTION 162(M) OF THE CODE

     The Committee shall have the right to designate Cash Awards as "Cash
Performance Awards."  Notwithstanding any other provisions of this Article V,
awards so designated shall be granted and administered in a manner designed to
preserve the deductibility of the compensation resulting from such awards in
accordance with Section 162(m) of the Code.  The payment of a Cash 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, share price, economic value added, and market value added.

     The Performance Objectives for a particular Cash Performance Award relative
to a particular fiscal year shall be established by the Committee in writing no
later than 90 days after the beginning of such year.  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 Cash Performance
Award shall be made in writing.

                                       13
<PAGE>

                           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 (i) the listing, registration or
qualification of the Ordinary Shares subject or related thereto upon any
securities exchange or under any state or federal law, or (ii) the consent or
approval of any government regulatory body, or (iii) an agreement by the
recipient of an award with respect to the disposition of Ordinary Shares 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 Ordinary Shares 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.

6.2  ADJUSTMENTS FOR CHANGES IN CAPITALIZATION

     In the event of a scheme of arrangement, reorganization, recapitalization,
Ordinary Share split, Ordinary Share 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 shall make appropriate adjustment in the number and kind of shares
authorized by the Plan (including any limitations on individual awards), in the
number, price or kind of shares covered by the awards and in any outstanding
awards under the Plan; provided, however, that no such adjustment shall increase
the aggregate value of any outstanding award.

6.3  AMENDMENTS

(a)  The Board of Directors 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 Securities Exchange
     Act of 1934 or Section 162(m) of the Code, or by applicable law or Stock
     exchange requirements.

(b)  The Committee shall have the authority to amend any grant 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 holder without the written consent of the
     holder.

(c)  If a Participant has ceased or will cease to be a Director of the Company
     for the convenience of the Company (as determined by the Board of
     Directors), the Board of Directors may amend all or any portion of such
     Participant's Options or SARs so as to make such Options or SARs fully
     exercisable and/or specify a schedule upon which they become exercisable,
     and/or permit all or any portion of such Options or SARs to remain
     exercisable for such period designated by it, but not beyond the expiration
     of the term

                                       14
<PAGE>

     established pursuant to Section 4.2(b) or 4.3(b). A Participant shall not
     participate in the deliberations or vote by the Board of Directors under
     this paragraph with respect to his Options or SARs. The exercise periods of
     Options or SARs established by the Board of Directors pursuant to this
     paragraph shall override the provisions of Section 4.2(c) or 4.3(c) to the
     extent inconsistent therewith.

6.4  CANCELLATION OF AWARDS

     Any award granted under Articles II and III of the Plan may be canceled at
any time with the consent of the holder and a new award may be granted to such
holder 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 Committee may not reduce the exercise or base price of
outstanding Options or SARs where the existing exercise or base price is higher
than the then current market price of the Ordinary Shares.

6.5  BENEFICIARY

     An employee or Participant may file with the Company a written designation
of Beneficiary, on such form as may be prescribed by the Committee, to receive
any Options, SARs, Restricted Shares, Ordinary Shares and Supplemental Payments
that become deliverable to the employee or Participant pursuant to the Plan
after the employee's or Participant's death.  An employee or Participant may,
from time to time, amend or revoke a designation of Beneficiary.  If no
designated Beneficiary survives the employee or Participant, the executor or
administrator of the employee's or Participant's estate shall be deemed to be
the employee's or Participant's Beneficiary.

6.6  WITHHOLDING

(a)  Whenever the Company proposes or is required to issue or transfer Ordinary
     Shares under the Plan, the Company shall have the right to require the
     award holder 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.  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 Ordinary Shares under the Plan who has not
     received a cash Supplemental Payment may elect to have the withholding tax
     liability (or a specified portion thereof) with respect to such Ordinary
     Shares satisfied by having the Company withhold from the shares otherwise
     deliverable to the employee Ordinary Shares having a value equal to the
     amount of the tax liability to be satisfied with respect to the Ordinary
     Shares.  An election to have all or a portion of the tax liability
     satisfied using Ordinary Shares shall comply with such requirements as may
     be imposed by the Committee.

                                       15
<PAGE>

6.7  NON-ASSIGNABILITY

     Except as expressly provided in the Plan, no award under the Plan shall be
assignable or transferable by the holder thereof except by will or by the laws
of descent and distribution.  During the life of the holder, awards under the
Plan shall be exercisable only by such holder or by the guardian or legal
representative of such holder.

6.8  NON-UNIFORM DETERMINATIONS

     Determinations by the Committee under the Plan (including, without
limitation, determinations of the persons to receive awards under Articles II
and III; 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) 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
to nominate any Director for re-election by the Company's shareholders.

6.10  CHANGE OF CONTROL

     A "Change of Control" means:

(a)  The acquisition by any individual, entity or group (within the meaning of
     Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
     amended (the "Exchange Act")) (a "Person") of beneficial ownership (within
     the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or
     more of either (i) the then outstanding ordinary shares of the Company (the
     "Outstanding Company Ordinary Shares") or (ii) 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 of 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 or (iv) any acquisition by any corporation
     or other entity pursuant to a transaction which complies with clauses (i),
     (ii) and (iii) of subsection (c) of  this Section 6.10; or

(b)  Individuals who, as of the date hereof, constitute the Board of the Company
     (the "Incumbent Board") cease for any reason to constitute at least a
     majority of the Board 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

                                       16
<PAGE>

     nomination for election by the Company's shareholders, was approved by a
     vote of at least a majority of the directors then comprising the Incumbent
     Board 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 the Board of the Company; or

(c)  Consummation of a scheme of arrangement, reorganization, merger 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 Ordinary Shares and Outstanding Company Voting
     Securities immediately prior to such Business Combination beneficially own,
     directly or indirectly, more than 50% of, respectively, the then
     outstanding ordinary shares or shares of common stock and the combined
     voting power of the then outstanding voting securities entitled to vote
     generally in the election of directors, as the case may be, 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 Ordinary Shares and
     Outstanding Company Voting Securities, as the case may be, (ii) no Person
     (excluding 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,
     respectively, the then outstanding ordinary shares or shares of common
     stock of the corporation or other entity resulting from such Business
     Combination or the combined voting power of the then outstanding voting
     securities of such corporation or other entity 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
     resulting from such Business Combination were members of the Incumbent
     Board at the time of the action of the Board 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.

6.11  DURATION AND TERMINATION

(a)  The Plan shall be of unlimited duration.  Notwithstanding the foregoing, no
     incentive Share option (within the meaning of Section 422 of the Code)
     shall be granted under the Plan, and no Options or SARs shall be granted
     under the Plan to Eligible Directors under Article IV, after May 1, 2003,
     but awards granted prior to such dates may extend beyond such dates, and
     the terms of this Plan shall continue to apply to all awards granted
     hereunder.

                                       17
<PAGE>

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

6.12  EFFECTIVE DATE

     The Plan was originally effective May 1, 1993.  The Plan was amended and
restated effective March 13, 1997 and March 12, 1998 and amended effective May
14, 1999.  This amendment and restatement of the Plan was adopted by the
Compensation Committee of the Board of Directors effective January 1, 2000, and
the increase in the number of Ordinary Shares reserved for issuance under the
Plan and the increase in the aggregate number of Ordinary Shares subject to
awards of freestanding SARs to employees was approved by the holders of a
majority of issued and outstanding Ordinary Shares at the extraordinary general
shareholders' meeting held on December 10, 1999.

     IN WITNESS WHEREOF, this document has been executed effective as of
January 1, 2000.

                                  TRANSOCEAN SEDCO FOREX INC.

                                  By:    /s/ Eric B. Brown
                                       -------------------------
                                      Eric B. Brown
                                      Corporate Secretary

                                       18<PAGE>

                                                                     EXHIBIT 4.3

                           EMPLOYEE MATTERS AGREEMENT

                        (Dated as of December 13, 1999)
<PAGE>

                           EMPLOYEE MATTERS AGREEMENT
                                     INDEX
<TABLE>
<CAPTION>
                                                                Page
                                                                ----
<S>                                                             <C>
ARTICLE I ALLOCATION OF  EMPLOYEES............................    2
  1.1    Identification of Sedco Forex Employees..............    2
  1.2    Transfer of Employees................................    2
  1.3    Certain Employees....................................    2

ARTICLE II BENEFITS OBLIGATIONS FOLLOWING THE DISTRIBUTION
 DATE.........................................................    3
  2.1    In General...........................................    3
  2.2    Sedco Forex Participation In Schlumberger Plans......
  2.3    Employee Stock Purchase Plans........................    5
  2.4    Continued Eligibility for Certain Schlumberger
         Benefits.............................................    6
  2.5    Service Accrual for Benefit Eligibility under
         Schlumberger Plans...................................    7
  2.6    Local Law And Union Exceptions.......................    7
  2.7    Sedco Forex Plan Sponsorship.........................    7
  2.8    Administrative Obligations...........................    7
  2.9    Certain Taxes........................................    8

ARTICLE III DISPOSITION OF CERTAIN ACCRUED SCHLUMBERGER
 BENEFITS.....................................................    8
  3.1    Discounted Stock Purchase Plan.......................    8
  3.2    Deferred Medical Plan................................    9
  3.3    IS Plans.............................................    9
  3.4    Sedco Forex Resources Savings and Profit Sharing Plan
         and Sedco Forex Profit Sharing Plan for Citizens of
         the United States of America Employed Abroad.........    9
  3.5    Qualified Plans......................................   10
  3.6    Foreign Pension or Savings Plans.....................   10
  3.7    Schlumberger Incentive Compensation Plan for 1999....   10
ARTICLE IV STOCK OPTIONS......................................   11
  4.1    Vested Options.......................................   11
  4.2    Non-Vested Options...................................   11
ARTICLE V ALLOCATION OF LIABILITIES...........................   12
  5.1    Liabilities Assumed By Sedco Forex...................   12
</TABLE>

                                       i
<PAGE>

<TABLE>
<CAPTION>
                                                                PAGE
                                                                ----
<S>                                                             <C>
  5.2    Liabilities Retained By Schlumberger.................   13
ARTICLE VI GENERAL............................................   14
  6.1    Cooperation..........................................   14
  6.2    Payment of and Accounting Treatment for Balance Sheet
         Amounts..............................................   14
  6.3    Plan Audits..........................................   14
  6.4    Requests For Internal Revenue Service Rulings And
         United States Department Of Labor Opinions...........   15
  6.5    Consent Of Third Parties.............................   15
  6.6    Effect If Distribution Does Not Occur................   16
  6.7    Relationship Of Parties..............................   16
  6.8    Affiliates...........................................   16
  6.9    Survival.............................................   16
  6.10   Notices..............................................   16
  6.11   Interpretation.......................................   17
  6.12   Governing Law........................................   17
  6.13   No Assignment........................................   17
  6.14   No Right To Continued Employment.....................   18
  6.15   No Third Party Beneficiaries; No Amendment
         Limitation...........................................   18
  6.16   Indemnification......................................   18
  6.17   Entire Agreement.....................................   18
  6.18   Counterparts.........................................   18
  6.19   Headings.............................................   18
  6.20   Severability.........................................   18
  6.21   Amendment............................................   19
  6.22   Waiver...............................................   19
ARTICLE VII DEFINITIONS.......................................   19
  Agreement...................................................   19
  Benefits Maintenance Period.................................   19
  COBRA.......................................................   19
  Contribution Period.........................................   19
  Covered Countries...........................................   19
  CSI Plan....................................................   19
</TABLE>

                                       ii
<PAGE>

<TABLE>
<CAPTION>
                                                                PAGE
                                                                ----
<S>                                                             <C>
  CTI Plan....................................................   20
  Distribution................................................   20
  Distribution Agreement......................................   20
  Distribution Date...........................................   20
  DM Plan.....................................................   20
  DSPP........................................................   20
  Employed Abroad Plan........................................   20
  Excluded Plans..............................................   20
  Final Employee List.........................................   20
  French Sedco Forex Employees................................   20
  Home Country National.......................................   21
  IS Pension Plan.............................................   21
  IS Plans....................................................   21
  IS Profit Sharing Plan......................................   21
  Liabilities.................................................   21
  New Options.................................................   21
  Non-Vested Options..........................................   21
  Plan........................................................   21
  Proposed Final Employee List................................   21
  Schlumberger................................................   21
  Schlumberger Common Stock...................................   22
  Schlumberger Employees......................................   22
  Schlumberger Funded Plan....................................   22
  Schlumberger Group..........................................   22
  Schlumberger Liabilities....................................   22
  Schlumberger Plans..........................................   22
  Sedco Forex.................................................   22
  Sedco Forex Employees.......................................   22
  Sedco Forex Group...........................................   23
  Sedco Forex Liabilities.....................................   23
  Shared Resources Employees..................................   23
  Transocean..................................................   23
</TABLE>

                                      iii
<PAGE>

<TABLE>
<CAPTION>
                                                                PAGE
                                                                ----
<S>                                                             <C>
  Transocean 423 Plan.........................................   23
  US Employee Profit Sharing Plans............................   23
  US Plan.....................................................   23
  Vested Options..............................................   24
</TABLE>

                                       iv
<PAGE>

                           EMPLOYEE MATTERS AGREEMENT

                                    RECITALS

          WHEREAS, Schlumberger and Sedco Forex have entered into a Distribution
Agreement (the "Distribution Agreement") dated as of July 12, 1999 pursuant to
which Schlumberger has agreed to spin off the Sedco Forex Business (as defined
in the Distribution Agreement) by distributing the capital stock of Sedco Forex
to Schlumberger's shareholders; and

          WHEREAS, Schlumberger, Sedco Forex and Transocean have entered into an
Agreement and Plan of Merger (the "Merger Agreement") dated as of July 12, 1999
pursuant to which a wholly owned subsidiary of Transocean will merge with and
into Sedco Forex directly following the spin-off (the "Merger"); and

          WHEREAS, as provided in the Distribution Agreement, Schlumberger,
Transocean and Sedco Forex (collectively, the "Parties") are entering into this
Agreement for the purpose of allocating current and former employees and assets,
liabilities and responsibilities with respect to employee compensation, benefits
and other matters; and

          WHEREAS, this Agreement is intended to embody and formalize the "Terms
of Employee Matters Agreement" attached as Exhibit A to the Distribution
Agreement and to supercede such terms in their entirety;

          NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein and in the Distribution Agreement, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties agree as follows:
<PAGE>

                                   ARTICLE I

                            ALLOCATION OF EMPLOYEES

1.1  IDENTIFICATION OF SEDCO FOREX EMPLOYEES

          Schlumberger has previously provided Transocean a schedule of
projected Sedco Forex Employees.  Transocean and Schlumberger shall consult and
mutually agree with respect to the headquarters or division staff employees of
Schlumberger (known as "Shared Resources" employees at Schlumberger, and
hereinafter referred to as "Shared Resources Employees") who shall be Sedco
Forex Employees.  Such mutual agreement shall take into account the staffing
needs of both Transocean and Schlumberger following the Merger.  Any unresolved
disputes regarding the identification of Shared Resources Employees as Sedco
Forex Employees shall be resolved by referral to the Chairman and Chief
Executive Officer of Transocean and the Vice Chairman of Schlumberger.  Not
later than 15 days prior to the Distribution Date, Schlumberger shall provide a
final projected list of Sedco Forex Employees (a "Proposed Final Employee List")
to Transocean, which list shall be consistent with the mutual agreement
described above.

(a)  Notwithstanding the foregoing, the Proposed Final Employee List shall not
     be considered final until it is reconciled against the Sedco Forex Employee
     payroll as of the Distribution Date, so as to determine that all
     individuals listed in the Proposed Final Employee List were actively
     employed in the Sedco Forex Business immediately preceding the Distribution
     Date.  For this purpose, (i) any person on long-term disability shall not
     be considered an "active" employee and (ii) any person listed on Exhibit A,
                                                                      ---------
     which exhibit shall be delivered by Schlumberger to Transocean not later
     than 15 days prior to the Distribution Date, who takes "Special Early
     Retirement" under the Sedco Forex Resources, Inc. Pension Plan between
     December 10, 1999 and the Distribution Date shall be treated as an "active"
     employee on the Sedco Forex Employee payroll as of the Distribution Date
     and as actively employed in the Sedco Forex Business immediately preceding
     the Distribution Date.  Upon reconciliation against the payroll as
     described above, the Proposed Final Employee List shall be final (the
     "Final Employee List").

1.2  TRANSFER OF EMPLOYEES

          Effective on or prior to the Distribution Date, Schlumberger shall
transfer all employees on the Final Employee List to Sedco Forex or its
Subsidiaries (to the extent such employees are not previously employed by Sedco
Forex or its Subsidiaries) and Sedco Forex shall transfer all Schlumberger
Employees then employed by Sedco Forex or any of its Subsidiaries to
Schlumberger or its Subsidiaries (excluding Sedco Forex and its Subsidiaries).

1.3  CERTAIN EMPLOYEES
          Effective as of the Distribution Date, all persons who have taken
Special Early Retirement as described in Section 1.1(b) shall be offered
employment by Sedco Forex.

                                       2
<PAGE>

                                  ARTICLE II

              BENEFITS OBLIGATIONS FOLLOWING THE DISTRIBUTION DATE

2.1  IN GENERAL

          During the Benefits Maintenance Period, Sedco Forex shall provide
benefits to or in respect of Sedco Forex Employees that, in the aggregate, are
substantially comparable to the benefits provided to or in respect of Sedco
Forex Employees under Schlumberger Plans as in effect on July 12, 1999,
excluding benefits provided under the CTI Plan, the CSI Plan, the DM Plan and
the DSPP (provided, however, that the DSPP benefits shall be excluded for the
determination of "substantial comparability" only in countries other than the
Covered Countries and, subject to Section 2.3, France) (together, the "Excluded
Plans").  Notwithstanding the foregoing, for a period of six months following
the Distribution Date, Sedco Forex shall provide severance benefits for each
Sedco Forex Employee that are not less than the employer-provided severance
benefits applicable to such employee immediately prior to the Distribution Date,
excluding benefits under the Excluded Plans.

          In addition, Sedco Forex shall, from and after the Distribution Date:

(a)  grant Sedco Forex Employees credit for service with Schlumberger and its
     Subsidiaries during periods on or before the Distribution Date (or the date
     that the employee transfers to employment by Sedco Forex or one of its
     Subsidiaries, if later) for purposes of eligibility and vesting (but not
     benefit accrual) under all Plans of Sedco Forex and its Subsidiaries
     (including vacation and severance) in which such employees are eligible to
     participate, including any Schlumberger Plan that Sedco Forex adopts
     pursuant to Section 2.2;

(b)  waive any limitations regarding pre-existing conditions of each Sedco Forex
     Employee and his or her eligible dependents under any welfare or other
     Plans in which they participate after the Distribution Date (except to the
     extent that such limitations would have applied under the corresponding
     Plan of the employee's employer immediately prior to the Distribution
     Date); and

(c)  provide that any expenses incurred by or on behalf of any Sedco Forex
     Employee, on or before the Distribution Date (or the date that the employee
     transfers to employment by Sedco Forex or one of its Subsidiaries, if
     later) and during the coverage period including the applicable such date,
     shall be taken into account under the Plans referred to in subparagraph (b)
     above for purposes of satisfying applicable deductible, coinsurance and
     maximum out-of-pocket provisions.

Subject to the provisions of Section 2.2 and Section 2.3, Sedco Forex may elect,
in its sole discretion, the means by which to provide all benefits contemplated
by this Section 2.1 during the Benefits Maintenance Period, including adoption
of Schlumberger Plans as contemplated by Section 2.2.

                                       3
<PAGE>

2.2  SEDCO FOREX PARTICIPATION IN SCHLUMBERGER PLANS

(a)  PARTICIPATION IN IS PENSION PLAN AND IS PROFIT SHARING PLAN:  Effective as
     of the Distribution Date, Sedco Forex shall adopt the IS Plans as a
     participating employer for the benefit of all eligible Sedco Forex
     Employees (including those who are participating in such Plans immediately
     prior to the Distribution Date).  Sedco Forex shall maintain its status as
     a participating employer in the IS Plans, including all rights and
     responsibilities associated with such status, through December 31, 2000,
     and shall terminate its participation effective January 1, 2001, or in the
     case of the IS Profit Sharing Plan, the earlier of January 1, 2001 or the
     effective date pay harmonization is otherwise achieved.  During the time
     Sedco Forex continues to be a participating employer in the IS Profit
     Sharing Plan, the profit-sharing contribution to be made by Sedco Forex
     shall be determined by Sedco Forex in its sole discretion to reflect the
     performance of the Sedco Forex business.  Treatment of benefits accrued as
     of December 31, 2000 under such plans is addressed in Article III.  For the
     avoidance of doubt, no person who commences employment with the Sedco Forex
     Group on or after the Distribution Date, other than a Sedco Forex Employee,
     shall be eligible to participate in any IS Plan, unless otherwise
     determined in the sole discretion of Sedco Forex.

(b)  PARTICIPATION IN OTHER SCHLUMBERGER PLANS:  Effective as of the
     Distribution Date, Sedco Forex shall continue to participate in each of the
     Schlumberger Plans set forth in Schedule 1 hereto for the benefit of Sedco
     Forex Employees, including the IS Plans as described in Section 2.2(a).
     Sedco Forex shall cease participation effective as of the Merger Date for
     those Schlumberger Plans listed in Schedule 2.  Subject to the requirements
     of this Section 2.2, with respect to those Schlumberger Plans listed in
     Schedule 1 and not listed in Schedule 2, Sedco Forex may maintain status as
     a participating employer, including all rights and responsibilities
     associated with such status, through December 31, 2000, or such earlier
     date as it may determine, subject to Schlumberger receiving at least 30
     days' prior written notice of such earlier date, and shall in all events
     terminate its participation in such Schlumberger Plans effective January 1,
     2001.  Nothing in this paragraph (b) shall reduce the obligations otherwise
     applicable to Sedco Forex under Section 2.1.

(c)  HOME COUNTRY NATIONALS:  Subject to the provisions of any applicable legal
     requirements, Sedco Forex (i) may assume sponsorship of each of the
     Schlumberger Plans covering Home Country Nationals, a list of which is
     attached as Schedule 3 hereto, with respect to areas or jurisdictions in
     which Schlumberger Employees do not continue to be covered by any such plan
     following the Distribution Date, or (ii) may elect in lieu of such
     assumption of sponsorship to provide the same or better benefits during the
     Benefit Maintenance Period.  In areas or jurisdictions where Schlumberger
     Employees continue to be covered by such plans following the Distribution
     Date, Sedco Forex shall adopt each such Schlumberger Plan covering Home
     Country Nationals as a participating employer for the benefit of all
     eligible Home Country Nationals.  On or before the Distribution Date,
     Schlumberger shall provide Transocean a list of the areas or jurisdictions,
     if any, on Schedule 3 in which Schlumberger Employees will not continue to
     be covered by the plans listed for such areas or jurisdictions following
     the Distribution Date.  Sedco Forex shall have 60 days following the
     Distribution Date in which to elect

                                       4
<PAGE>

     to assume sponsorship of the listed plans in such areas or jurisdictions,
     if any. For the period from the Distribution Date through such election
     Sedco Forex shall adopt each of the listed plans in such areas or
     jurisdictions as a participating employer, and Schlumberger shall maintain
     its sponsorship of such plans. If Sedco Forex assumes the sponsorship of a
     Schlumberger Plan pursuant to this paragraph, Schlumberger and its
     affiliates shall have no further interest in any such plan. If Sedco Forex
     adopts a Schlumberger Plan pursuant to this paragraph, it shall maintain
     its status as a participating employer, including all rights and
     responsibilities associated with such status, through the Benefits
     Maintenance Period and shall end its participation upon the expiration of
     the Benefits Maintenance Period.

(d)  SEDCO FOREX'S GENERAL OBLIGATIONS AS PARTICIPATING EMPLOYER:  With respect
     to any Schlumberger Plan (other than the IS Pension Plan) in which Sedco
     Forex participates after the Distribution Date pursuant to this Section
     2.2, Sedco Forex shall be responsible for and shall timely pay the employer
     and employee contributions or costs required under the Plans attributable
     to the Sedco Forex Employees for the Contribution Period as required under
     the terms of the applicable Plan document.  With respect to the IS Pension
     Plan, Sedco Forex shall be responsible for and shall timely pay the
     employer contributions or costs required under the plan attributable to the
     Sedco Forex Employees for the Contribution Period as required to fund the
     normal cost of providing plan benefits, after taking into consideration
     employee contributions.  To the extent that Sedco Forex is a participating
     employer in any Schlumberger Plans, Schlumberger shall invoice Sedco Forex
     for its contributions and costs relating to such plan participation, on a
     monthly basis, with such invoice providing adequate disclosure for the
     calculation of the amount invoiced.  Sedco Forex shall perform with respect
     to its participation in the Schlumberger Plans, and shall cause each other
     member of the Sedco Forex Group that is a participating employer in any
     Schlumberger Plan to perform, the duties of a participating employer as set
     forth in such Plans or any procedures adopted pursuant thereto, but Sedco
     Forex shall have no responsibility for administration of any Schlumberger
     Plan.

2.3  EMPLOYEE STOCK PURCHASE PLANS

          Effective as of January 1, 2000 or the date of the Merger, whichever
is later, Transocean shall permit Sedco Forex Employees employed in countries in
which the employee stock purchase plan maintained by Transocean pursuant to
Internal Revenue Code Section 423 (the "Transocean 423 Plan") is offered to
Transocean employees generally, currently the United States, the United Kingdom
and Norway (the "Covered Countries"), to participate in the Transocean 423 Plan
to the extent such persons would be eligible to participate in such plan
pursuant to the terms thereof were such persons employees of Transocean.
Transocean shall amend the terms of the Transocean 423 Plan to permit
participating Sedco Forex Employees to elect that refunded DSPP contributions
for the DSPP plan year commencing July 1, 1999 be deposited in the Transocean
423 Plan for the plan year beginning January 1, 2000, subject to applicable plan
limitations and Section 3.1.

          Subject to approval of the French securities regulatory authorities
and any other applicable regulatory authorities, Transocean shall offer to Sedco
Forex Employees who are residents of France for French income tax purposes the
opportunity to participate in the

                                       5
<PAGE>

Transocean 423 Plan, including the ability to deposit refunded DSPP
contributions as described in the preceding paragraph. As soon as practicable,
Transocean shall make such filings and take such other actions as may be
required in order to seek such approval from such regulatory authorities, and
shall make the Transocean 423 Plan available to such Sedco Forex Employees as
promptly as practicable after such approval is obtained.

          Transocean agrees that any liability incurred by Schlumberger as a
result of payroll deductions from Sedco Forex Employees for Transocean 423 Plan
contributions that arises solely as a result of any failure of the Transocean
423 Plan to meet any applicable legal requirement shall be a Sedco Forex
Liability.

2.4  CONTINUED ELIGIBILITY FOR CERTAIN SCHLUMBERGER BENEFITS

          Following the Distribution Date, Schlumberger shall continue to make
certain benefits under the DM Plan, the CTI Plan and the CSI Plan available to
eligible Sedco Forex Employees, to the extent provided below:

(a)  DEFERRED MEDICAL PLAN:  Sedco Forex Employees who, on or before December
     31, 1999, have attained age 50 and are credited with at least 15 years of
     service with Schlumberger or any Schlumberger Subsidiary, shall continue to
     be eligible for the benefits provided under the DM Plan.  Each such
     employee shall be eligible to continue to accrue benefits in accordance
     with the terms of the DM Plan during employment with Sedco Forex or any
     Sedco Forex Subsidiary through December 31, 2000, but shall not be entitled
     to accrue any further benefit with respect to such employment following
     December 31, 2000.  On or before December 1, 1999, Schlumberger shall
     provide appropriate notices to affected Sedco Forex Employees regarding
     their continued eligibility for benefits under the DM Plan.

(b)  CTI PLAN AND CSI PLAN:  Each Sedco Forex Employee who, on the Distribution
     Date (or, if later, the date of transfer to employment by Sedco Forex or
     any of its Subsidiaries) is eligible for benefits under the CTI Plan or the
     CSI Plan, shall continue to be eligible to receive CTI Plan or CSI Plan
     benefits, as applicable, while employed by Sedco Forex or any of its
     Subsidiaries.  Each such employee shall also be eligible to continue to
     accrue benefits in accordance with the terms of the applicable plan during
     employment with Sedco Forex or any Sedco Forex Subsidiary through December
     31, 2000, but shall not be entitled to accrue any further benefit for such
     Sedco Forex service following December 31, 2000.  Notwithstanding the
     foregoing, solely for purposes of eligibility for conversion of accrued CTI
     Plan or CSI Plan benefits to pension benefits as provided for under the
     applicable plan, each such employee shall be credited with service with
     Sedco Forex or any of its Subsidiaries as though such service were service
     with Schlumberger.  On or before December 31, 1999, Schlumberger shall
     provide appropriate notices to affected Sedco Forex Employees regarding
     their continued eligibility under the CSI Plan or the CTI Plan, as
     applicable.  Sedco Forex shall pay Schlumberger for the accrual of
     additional benefits by Sedco Forex Employees under the CTI Plan or the CSI
     Plan between the Distribution Date and December 31, 2000 at the rate of 4%
     of Total Payroll (salary plus coefficient, if any) for the CTI Plan and
     3.5% of Admissible Compensation (salary plus coefficient plus Performance
     Incentive Program

                                       6
<PAGE>

     payments) for the CSI Plan. If any applicable law requires the payment of
     mandatory severance benefits to any Sedco Forex Employee who is covered
     under the CSI or CTI Plans, to the extent that such applicable law requires
     payment of mandatory severance that is not satisfied by CSI or CTI Plan
     payments to such employees, such mandatory severance for such employees
     shall be a Sedco Forex Liability.

2.5  SERVICE ACCRUAL FOR BENEFIT ELIGIBILITY UNDER SCHLUMBERGER PLANS

          Except as provided in Section 3.2, following the Distribution Date,
all benefit-related liabilities under Schlumberger Funded Plans with respect to
Sedco Forex Employees shall be calculated based upon employment and compensation
through the Distribution Date with vesting and eligibility for such benefits
calculated based upon combined employment with Schlumberger and its
Subsidiaries, Sedco Forex and its Subsidiaries and with Transocean and its
Subsidiaries (without regard to whether Sedco Forex Employees participate in any
such Plan after the Distribution Date).

2.6  LOCAL LAW AND UNION EXCEPTIONS

          To the extent that any provision of this Article II is inconsistent
with any local law or regulation as it applies to any Sedco Forex Employee, the
inconsistent provision shall not apply.  To the extent any provision of this
Article II is contrary to the provisions of any applicable collective bargaining
agreement to which Schlumberger or any affiliate of Schlumberger is a party, as
it applies to any Sedco Forex Employee, the terms of such collective bargaining
agreement shall prevail.  The parties shall work together in order to
disassociate for purposes of all collective bargaining agreements as soon as
practicable following the Distribution Date.

2.7  SEDCO FOREX PLAN SPONSORSHIP

          Except as otherwise agreed in writing by Schlumberger and Transocean
prior to the Distribution Date, all Schlumberger Funded Plans that are sponsored
by Sedco Forex or its Subsidiaries shall be transferred to the sponsorship of
Schlumberger prior to the Distribution Date.

2.8  ADMINISTRATIVE OBLIGATIONS

(a)  FOR SCHLUMBERGER PLANS:  Schlumberger shall provide or make available all
     administrative or professional services (including services involving the
     payment of premiums and benefits) required for the operation of any
     Schlumberger Plan that Sedco Forex adopts pursuant to Section 2.2(a)
     through (c) above for the Benefits Maintenance Period, and Sedco Forex
     shall promptly reimburse Schlumberger for the reasonable cost of any such
     services to the extent such services are not payable by the applicable
     employee benefit plans or employee benefit arrangements.

(b)  COBRA AND HIPAA:  Schlumberger shall be responsible for administering
     compliance with the continuation coverage requirements for "group health
     plans" under Title X of the Consolidated Omnibus Budget Reconciliation Act
     of 1985, as amended ("COBRA"), and the portability requirements under the
     Health Insurance

                                       7
<PAGE>

     Portability and Accountability Act of 1996 with respect to Sedco Forex
     Employees whose coverage under the Schlumberger group health plans
     terminates, regardless of whether such termination takes place prior or
     subsequent to the Distribution Date. Sedco Forex shall be responsible for
     administering compliance under COBRA and HIPAA for those Sedco Forex
     Employees who terminate subsequent to their becoming eligible to
     participate in the group health plans of Transocean Sedco Forex. The
     parties agree that no "qualifying event" within the meaning of COBRA shall
     occur by reason of the transfer of employees between the parties as
     described herein in connection with the transactions contemplated by the
     Distribution Agreement or the Merger Agreement.

(c)  Workers' Compensation Program:  Workers' compensation liability for all
     Sedco Forex Employees shall be assessed by Sedco Forex at and following the
     Distribution Date.  Schlumberger shall administer workers' compensation
     and/or job related personal injury claims for a period of five years
     following the Distribution Date with respect to injuries incurred by Sedco
     Forex Employees resulting from an accident or other event that occurred
     prior to the Distribution Date; provided, however, that Sedco Forex may
     terminate such administration upon 30 days' written notice to Schlumberger.
     Sedco Forex shall pay (or reimburse Schlumberger) for all Liabilities
     (including expenses) for workers' compensation relating to payments that
     become due after the Distribution Date.  In determining any such
     Liabilities and expenses, Schlumberger shall give Sedco Forex credit for
     any Liability reimbursed through insurance or otherwise on behalf of Sedco
     Forex Employees relating to payments that become due after the Distribution
     Date.  Sedco Forex shall be entitled to review the status of workers'
     compensation claims with Schlumberger periodically and to participate in
     the annual review of self-insured reserves with respect to workers'
     compensation.  No individual workers' compensation claim relating to a
     Sedco Forex Employee shall be settled for more than $50,000 without Sedco
     Forex's prior written approval.

2.9  CERTAIN TAXES

          Certain personal income taxes in respect of Sedco Forex Employees
shall be paid  as described in Exhibit B hereto.

                                  ARTICLE III

             DISPOSITION OF CERTAIN ACCRUED SCHLUMBERGER BENEFITS

3.1  DISCOUNTED STOCK PURCHASE PLAN

          Each Sedco Forex Employee who is a participant in the Schlumberger
Discounted Stock Purchase Plan ("DSPP") for the plan year commencing July 1,1999
shall be permitted to elect, as soon as practicable following the date of the
Merger but effective as of January 1, 2000 or the date of the Merger, whichever
is later, (a) to receive a refund of his or her contributions to the DSPP for
the 1999 plan year, together with interest as provided for under the DSPP or (b)
if employed in a Covered Country or, subject to Section 2.3, in France, to
direct a transfer of all or any part of such refunded contributions and interest
to the Transocean 423 Plan, subject to applicable plan limitations, which
contribution shall be treated as any other employee

                                       8
<PAGE>

contribution to the Transocean 423 Plan for the 2000 plan year and which funds
shall be paid directly by Schlumberger (and not by any employees) to Transocean
as soon as practicable following interest allocation to DSPP accounts, which
allocation is anticipated to occur during February 2000.

3.2  DEFERRED MEDICAL PLAN

          Each Sedco Forex Employee who has not, as of December 31, 1999, both
attained age 50 and been credited with at least 15 years of Schlumberger
service, shall be entitled to a refund of his or her contributions to the DM
Plan, together with accrued interest.  On or before December 31, 1999,
Schlumberger shall provide appropriate notices to affected Sedco Forex Employees
regarding their termination of participation and scheduled refunds under the DM
Plan.

3.3  IS PLANS

          Sedco Forex presently is a participating employer in the IS Pension
Plan and the IS Profit Sharing Plan (together, the "IS Plans") and shall
continue to be a participating employer in the IS Plans through December 31,
2000, as provided in Section 2.2(a).  However, service by Sedco Forex Employees
with Schlumberger and its Subsidiaries, Sedco Forex and its Subsidiaries and
Transocean and its Subsidiaries (without regard to whether Sedco Forex Employees
participate in any such Plan after the Distribution Date) shall be considered in
calculating service for the purpose of vesting and benefit eligibility in
accordance with Section 2.5 of this Agreement.  Effective as of January 1, 2001,
Sedco Forex and Schlumberger, as appropriate, shall cause Sedco Forex to
withdraw as a participating employer in the IS Plans and amend the IS Plans to
provide no future accruals to Sedco Forex Employees.  From and after January 1,
2001, Sedco Forex shall have no interest in, responsibility for, or Liability
with respect to the IS Plans, except for the contributions and costs
contemplated by Section 2.2(d) that are accrued and unpaid as of that date.
Schlumberger agrees to cause each Sedco Forex Employee to have a fully vested
and nonforfeitable interest in each such employee's accrued benefit or account
balance in the applicable IS Plan as of January 1, 2001.  Schlumberger agrees to
cause the IS Pension Plan to permit participants who are employees of Sedco
Forex as of January 1, 2001 to elect to receive a distribution of their accrued
benefit in the IS Pension Plan as soon as practicable after January 1, 2001.

3.4  SEDCO FOREX RESOURCES SAVINGS AND PROFIT SHARING PLAN AND SEDCO FOREX
     PROFIT SHARING PLAN FOR CITIZENS OF THE UNITED STATES OF AMERICA EMPLOYED
     ABROAD

          Sedco Forex presently is a participating employer in the Sedco Forex
Resources Savings and Profit Sharing Plan (the "US Plan") and the Sedco Forex
Profit Sharing Plan for Citizens of the United States Employed Abroad (the
"Employed Abroad Plan") (together, the "US Employee Profit Sharing Plans").
Sedco Forex shall continue to be a participating employer in the Employed Abroad
Plan through December 31, 2000.  Effective as of January 1, 2000, Sedco Forex
and Schlumberger, as appropriate, shall cause Sedco Forex to withdraw as a
participating employer in the US Plan and amend the US Plan to provide no future
accruals to Sedco Forex Employees.  Effective as of January 1, 2001, Sedco Forex
and Schlumberger, as appropriate, shall cause Sedco Forex to withdraw as a
participating employer in the Employed

                                       9
<PAGE>

Abroad Plan and amend the Employed Abroad Plan to provide no future accruals to
Sedco Forex Employees. From and after the applicable date of withdrawal, Sedco
Forex shall have no interest in, responsibility for, or Liability with respect
to the US Employee Profit Sharing Plans, except for the contributions and costs
contemplated by Section 2.2(d) that are accrued and unpaid as of the applicable
withdrawal date. Schlumberger agrees to cause each Sedco Forex Employee to have
a fully vested and nonforfeitable interest in each such employee's accrued
benefit or account balance in the US Employee Profit Sharing Plans as of the
applicable withdrawal date. Schlumberger agrees to cause the US Employee Profit
Sharing Plans to permit participants who are employees of Sedco Forex as of the
applicable withdrawal date to elect to receive a distribution of their accrued
benefit in the US Employee Profit Sharing Plans as soon as practicable after
such date. Sedco Forex agrees to permit Sedco Forex Employees to make rollovers
(including direct rollovers) of their account balances in the US Plan to a Sedco
Forex Plan to the extent that the distributions of such account balances
constitute "eligible rollover distributions" as described in Section 402(c) of
the Code.

3.5  QUALIFIED PLANS

          To the extent that Sedco Forex elects to adopt any Schlumberger Plan
that is a pension plan intended to qualify under Section 401(a) of the Code for
calendar year 2000, the provisions of Section 3.3 shall apply equally to such
plan.  Otherwise, the provisions of Section 3.3 (starting with the third
sentence) shall apply to such plan, but substituting the words "the Distribution
Date" for "January 1, 2001" each place such date appears.

3.6  FOREIGN PENSION OR SAVINGS PLANS

          All pension credits and/or account balances (both Liabilities and
related plan assets, if applicable) credited to Sedco Forex Employees under any
pension or savings type employee benefit plan that is not addressed in Section
3.3, 3.4 or 3.5 shall remain in such plan, each of which is listed on Schedule 4
hereto.  The Liability for payment of benefits thereunder shall be (a) a Sedco
Forex Liability if Sedco Forex assumes sponsorship of such plan as contemplated
by Section 2.2(c) and (b) a Schlumberger Liability if Sedco Forex does not
assume sponsorship of such plan as contemplated by Section 2.2(c).

3.7  SCHLUMBERGER INCENTIVE COMPENSATION PLAN FOR 1999

          At the time and on the terms and conditions otherwise applicable under
the Schlumberger Incentive Compensation Plan for 1999, Schlumberger shall make
payments thereunder to Sedco Forex Employees based on (1) the number of days
elapsed in the 1999 performance period as of the Distribution Date (or the date
that the employee transfers to employment by Sedco Forex or one of its
subsidiaries, if later) and (2) the extent to which performance goals are
actually achieved as of December 31, 1999.

                                      10
<PAGE>

                                  ARTICLE IV

                                 STOCK OPTIONS

4.1  VESTED OPTIONS

          Any vested options held by Sedco Forex Employees to purchase common
stock of Schlumberger shall lapse, in accordance with their provisions,
following the Distribution Date.

4.2  NON-VESTED OPTIONS

(a)  At the Distribution Date all nonvested options (the "Nonvested Options")
     held by Sedco Forex Employees to purchase Schlumberger common stock shall
     terminate.

(b)  As of the Effective Time, fully vested options to purchase Transocean
     Ordinary Shares ("New Options") shall be granted to Sedco Forex Employees,
     as follows:

     (i)   The number of Transocean Ordinary Shares for which the New Options
           shall be issued shall be the number of shares of Schlumberger common
           stock subject to the Nonvested Option times a fraction, the numerator
           of which is the closing price of Schlumberger common stock at the
           close of trading on the day immediately prior to the Distribution
           Date (determined without regard to the distribution of Sedco Forex)
           and the denominator of which is the price of a Transocean Ordinary
           Share at the close of trading on the day immediately prior to the
           Distribution Date. Notwithstanding the foregoing, the number of
           Transocean Ordinary Shares that may be purchased upon exercise of a
           New Option shall not include any fractional share and, upon exercise
           of such New Options, a cash payment shall be made in lieu of delivery
           of any fractional share.

     (ii)  The exercise price of each New Option shall be the price of a
           Transocean Ordinary Share at the close of trading on the day
           immediately prior to the Distribution Date times a fraction, the
           numerator of which is the exercise price of the Nonvested Option for
           a share of Schlumberger common stock and the denominator of which is
           the price of Schlumberger common stock at the close of trading on the
           day immediately prior to the Distribution Date (determined without
           regard to the distribution of Sedco Forex).

     (iii) Notwithstanding any other provision of this Article IV to the
           contrary, Sedco Forex Employees who hold outstanding Nonvested
           Options to acquire Schlumberger stock and who are residents of France
           for French income tax purposes ("French Sedco Forex Employees") shall
           receive New Options determined as follows:

           (A)  the outstanding Nonvested Options of each French Sedco Forex
                Employee shall be valued according to the Black Scholes
                valuation

                                      11
<PAGE>

                method (with respect to Schlumberger common stock, valued as of
                the Distribution Date); and

           (B)  New Options shall be granted to each French Sedco Forex Employee
                which have an equivalent value to the amount determined in (A)
                above, when based on an exercise price equal to the fair market
                value of Transocean Ordinary Shares on the date the New Options
                are granted.

(c)  Each New Option shall be subject generally to the same terms and conditions
     applicable under the Transocean Long-Term Incentive Plan, except that the
     provisions of the Transocean Long-Term Incentive Plan relating to issuance
     of options at a below-market exercise price shall not be applicable and the
     New Options shall have the same remaining term as remained under the
     applicable Nonvested Options.

                                   ARTICLE V

                           ALLOCATION OF LIABILITIES

5.1  LIABILITIES ASSUMED BY SEDCO FOREX

          Sedco Forex hereby assumes, effective on the Distribution Date, and
agrees to pay, perform, fulfill and discharge, in accordance with their
respective terms, all Liabilities to or in respect of Sedco Forex Employees that
are not expressly retained by or allocated to Schlumberger pursuant to Section
5.2, regardless of when or where such Liabilities arose or arise or were or are
incurred (collectively, the "Sedco Forex Liabilities"), including but not
limited to:

(a)  All severance benefits Liability that arises after the Distribution Date
     with respect to Sedco Forex Employees, excluding Liability under the CTI
     Plan or the CSI Plan under Section 2.4(b).

(b)  All Liability related to worker's compensation for Sedco Forex Employees to
     the extent that payments become due after the Distribution Date under
     Section 2.8(c).

(c)  All Liability related to the performance of, or the failure to perform, the
     obligations assigned to Sedco Forex under Section 2.8.

(d)  Liabilities in the form of any contributions required of Sedco Forex under
     Section 2.2(d) or Section 2.4(b) of this Agreement.

(e)  Liabilities assigned to Sedco Forex under Section 3.6 with respect to plans
     it assumes.

(f)  All Liability with respect to New Options.

(g)  Liability assigned to Sedco Forex under Section 2.3 related to the
     Transocean 423 Plan.

                                      12
<PAGE>

5.2  LIABILITIES RETAINED BY SCHLUMBERGER

          The following Liabilities shall be retained by Schlumberger, and
Schlumberger agrees to pay, perform, fulfill and discharge, in accordance with
their respective terms, all of such Liabilities, regardless of when or where
such Liabilities arose or arise or were or are incurred ("Schlumberger
Liabilities"):

(a)  All Liabilities to or in respect of Schlumberger Employees, including
     Liabilities under the Schlumberger Plans.

(b)  All Liabilities under Schlumberger Funded Plans, other than the DM Plan,
     the CTI Plan and the CSI Plan, which are addressed in Section 5.2(d) below,
     with respect to Sedco Forex Employees when:

     (i)    the Liabilities for accrued benefits are calculated based upon
            employment and compensation through the Distribution Date, with
            vesting and eligibility for such benefits calculated based upon
            combined employment with Schlumberger and its Subsidiaries and with
            Transocean and its Subsidiaries, without regard to whether Sedco
            Forex Employees participate in any such Plan after the Distribution
            Date; and

     (ii)   with respect to Schlumberger Plans in which Sedco Forex participates
            after the Distribution Date and as to which Sedco Forex has
            fulfilled its obligations to pay employer contributions and costs as
            provided in Article II, the accrued benefits referred to in
            subsection (i) above are calculated through the earlier of (A) the
            end of the Contribution Period or (B) the date that the Sedco Forex
            Employee terminates employment with Transocean and its Subsidiaries.

(c)  Any Liabilities incurred by Schlumberger or its Subsidiaries with respect
     to Sedco Forex Employees for severance or termination benefits arising as a
     result of actions required to structure Sedco Forex and its Subsidiaries
     prior to the Distribution Date to effectuate the transactions contemplated
     by the Transaction Agreements.

(d)  All Liabilities under the CTI Plan and the CSI Plan, subject to receipt of
     required payments from Sedco Forex as expressly provided for under Section
     2.4(b).

(e)  All Liabilities under the DM Plan.

(f)  Liability for payments under the Schlumberger Incentive Compensation Plan
     for 1999 to the extent provided under Section 3.7.

(g)  Liabilities in the form of accrued and unpaid employer contributions, if
     any, through the Distribution Date with respect to Sedco Forex Employees
     for all Schlumberger Funded Plans.

(h)  All Liability related to workers' compensation for Sedco Forex Employees to
     the extent that payments become due before the Distribution Date.

                                      13
<PAGE>

(i)  Liabilities assigned to Schlumberger under Section 3.6.

(j)  All liability related to the performance of, or the failure to perform, the
     obligations assigned to Schlumberger under Section 2.8.

                                  ARTICLE VI

                                    GENERAL

6.1  COOPERATION

(a)  The parties to this Agreement shall cooperate with each other (and shall
     cause their Subsidiaries and Affiliates to so cooperate) in carrying out
     the terms of this Agreement.  Each party shall exchange such information
     with the other party as may be requested by the other party with respect to
     the matters addressed in this Agreement.  On at least an annual basis,
     Sedco Forex and Transocean shall provide Schlumberger with a written list
     of the Sedco Forex Employees who have separated from service with Sedco
     Forex and Transocean.  Schlumberger and Sedco Forex and their respective
     authorized agents shall, subject to applicable laws on confidentiality, be
     given reasonable and timely access to, and may make copies of, all
     information relating to the subjects of this Agreement in the custody of
     the other party (including, but not limited to, plan documents and
     records), to the extent necessary for administration of the matters
     addressed in this Agreement.  The parties shall endeavor in good faith to
     amend, modify and/or terminate existing Plans, and/or create new Plans, to
     accomplish the successful transition of Sedco Forex Employees as
     contemplated by this Agreement and to accomplish the transactions
     contemplated by the Distribution Agreement and the Merger Agreement in a
     manner consistent with the provisions of this Agreement.

(b)  Schlumberger shall provide employee personnel and employment records for
     all Sedco Forex Employees as defined by this Agreement and those employees
     who were employed by Sedco Forex at the time of their termination.
     Schlumberger shall also provide access to or copies of compensation and
     payroll records of the above-defined Sedco Forex Employees as required in
     the normal course of business.

6.2  PAYMENT OF AND ACCOUNTING TREATMENT FOR BALANCE SHEET AMOUNTS

          The Sedco Forex Liabilities shall be reflected as liabilities on the
Sedco Forex balance sheet in accordance with U.S. generally accepted accounting
principles.

6.3  PLAN AUDITS

(a)  AUDIT RIGHTS WITH RESPECT TO THE ALLOCATION OR TRANSFER OF PLAN ASSETS:
     The allocation of Schlumberger Funded Plan assets and Liabilities, if any,
     pursuant to this Agreement shall, at the election of Sedco Forex, be
     audited on behalf of both Schlumberger and Sedco Forex by such actuarial
     and benefit consulting firm as may be mutually selected by the parties. The
     actuarial and benefit consulting firm shall provide its written report to
     both Schlumberger and Sedco Forex.  Each of Schlumberger and Sedco Forex,
     and their respective advisors and consultants, shall have the right to make

                                      14
<PAGE>

     such presentations and present such information to such actuarial and
     benefit consulting firm as each deems appropriate.  Sedco Forex and
     Schlumberger shall equally pay or shall be responsible for the payment of
     the costs of such audit.  To the extent such audit recommends a change to
     the value of assets allocated to a Plan of Sedco Forex, such recommendation
     shall be conclusive and binding on Sedco Forex and Schlumberger.

(b)  AUDIT RIGHTS WITH RESPECT TO INFORMATION PROVIDED:

     (i)   Each of Schlumberger and Sedco Forex, and their duly authorized
           representatives, shall have the right to conduct audits at any time
           upon reasonable prior notice, at its own expense, with respect to all
           information provided to it or to any Plan record keeper or third
           party administrator by the other party; provided that audits with
           respect to the allocation or transfer of Plan assets and Liabilities
           shall be subject only to Section 6.3(a). The auditing party shall
           have the right to make copies of any records at its expense, subject
           to the confidentiality provisions set forth in the Distribution
           Agreement, which are incorporated by reference herein. The party
           being audited shall provide the auditing party's representatives with
           reasonable access during normal business hours to its operations,
           computer systems and paper and electronic files, and provide work
           space to its representatives. After any audit is completed, the party
           being audited shall have the right to review a draft of the audit
           findings and to comment on those findings in writing within five
           business days after receiving such draft.

     (ii)  The auditing party's audit rights under this Section 6.3(b) shall
           include the right to audit, or participate in an audit facilitated by
           the party being audited, of any Subsidiaries and Affiliates of the
           party being audited and of any benefit providers and third parties
           with whom the party being audited has a relationship, or agents of
           such party, to the extent any such persons are affected by or
           addressed in this Agreement. The party being audited shall, upon
           written request from the auditing party, provide an individual (at
           the auditing party's expense) to supervise any audit of any such
           benefit provider or third party. The auditing party shall be
           responsible for supplying, at its expense, additional personnel
           sufficient to complete the audit in a reasonably timely manner.

6.4  REQUESTS FOR INTERNAL REVENUE SERVICE RULINGS AND UNITED STATES DEPARTMENT
     OF LABOR OPINIONS

          Sedco Forex and Schlumberger shall cooperate on any issue relating to
the transactions contemplated by this Agreement for which Schlumberger or Sedco
Forex elects to seek a determination letter or private letter ruling from the
Internal Revenue Service or an advisory opinion from the United States
Department of Labor.

6.5  CONSENT OF THIRD PARTIES

          If any provision of this Agreement is dependent on the consent of any
third party (such as a union) and such consent is withheld, Schlumberger and
Sedco Forex shall use their reasonable best efforts to implement the applicable
provisions of this Agreement to the full

                                      15
<PAGE>

extent practicable. If any provision of this Agreement cannot be implemented due
to the failure of such third party to consent, Schlumberger and Sedco Forex
shall negotiate in good faith to implement the provision in a mutually
satisfactory manner. The phrase "reasonable best efforts" as used in this
Agreement shall not be construed to require any party to incur any non-routine
or unreasonable expense or liability or the waiver of any right.

6.6  EFFECT IF DISTRIBUTION DOES NOT OCCUR

          If the Distribution does not occur, then all actions and events that
are, under this Agreement, to be taken or occur effective as of the Distribution
Date, immediately after the Distribution Date, or otherwise in connection with
the Distribution, shall not be taken or occur except to the extent specifically
agreed by Sedco Forex and Schlumberger.

6.7  RELATIONSHIP OF PARTIES

          Nothing in this Agreement shall be deemed or construed by the parties
or any third party as creating the relationship of principal and agent,
partnership or joint venture between the parties, it being understood and agreed
that no provision contained herein, and no act of the parties, shall be deemed
to create any relationship between the parties other than the relationship set
forth herein.

6.8  AFFILIATES

          Each of Schlumberger and Sedco Forex shall cause to be performed, and
hereby guarantees the performance of, all actions, agreements and obligations
set forth in this Agreement to be performed by members of the Schlumberger Group
or members of the Sedco Forex Group and their Affiliates, respectively, where
relevant.

6.9  SURVIVAL

          This Agreement shall survive the Distribution Date.

6.10  NOTICES

          Any notice, demand, claim or other communication under this Agreement
shall be deemed to have been duly given and made if in writing and:  (a) if
served by personal delivery upon the party for whom it is intended, on the day
so delivered; (b) if mailed by registered or certified mail, return receipt
requested, on the third Business Day following such mailing; (c) if deposited
for delivery by a reputable courier service, on the business day following
deposit with such courier; or (d) if sent by electronic facsimile transmission,
on the day the facsimile is transmitted electronically, or if not a Business
Day, the next succeeding Business Day; provided that the facsimile transmission
is promptly confirmed by telephone confirmation thereof, to the person at the
address set forth below, or such other address as may be designated in writing
hereafter, in the same manner, by such person:

                                      16
<PAGE>

          if to Schlumberger:
                  Schlumberger
                  277 Park Avenue, 41st Floor
                  New York, NY 10172
                  Attention: General Counsel
                  Facsimile: (212) 350-8127
          with a copy to:
                  Baker & Botts, LLP
                  One Shell Plaza
                  910 Louisiana
                  Houston, TX 77002-4995
                  Attention: J. David Kirkland, Jr., Esq.
                  Facsimile: (713) 229-1522
          if to Transocean:
                  Transocean
                  4 Greenway Plaza
                  Houston, TX 77046
                  Attention: Eric Brown, General Counsel
                  Facsimile: (713) 232-7600
          with a copy to:
                  Weil, Gotshal & Manges, LLP
                  700 Louisiana, Suite 1600
                  Houston, TX 77002
                  Attention: James L. Rice, III, Esq.
                  Facsimile: (713) 224-9511

6.11  INTERPRETATION

          Words in the singular shall be held to include the plural and vice
versa, words of one gender shall be held to include the other gender as the
context requires, and words denoting natural persons shall include corporations
and partnerships and vice versa.  The terms "hereof," "herein," and "herewith"
and words of similar import shall, unless otherwise stated, be construed to
refer to this Agreement as a whole (including all Exhibits hereto) and not to
any particular provision of this Agreement.  The word "including" and words of
similar import when used in this Agreement shall mean "including, without
limitation," unless the context otherwise requires or unless otherwise
specified.  The word "or" shall not be exclusive.

6.12  GOVERNING LAW

          This agreement shall be governed by and construed in accordance with
the laws of the State of New York without regard to its rules of conflict of
laws.

6.13  NO ASSIGNMENT

          This Agreement may not be assigned by either party (except by
operation of law) without the written consent of the other, and shall bind and
inure to the benefit of the parties hereto (including each member of the
Schlumberger Group and the Sedco Forex Group and each

                                      17
<PAGE>

Affiliate of Schlumberger or Sedco Forex) and their respective successors and
permitted assignees.

6.14  NO RIGHT TO CONTINUED EMPLOYMENT

          Nothing contained in this Agreement or the Distribution Agreement
shall confer on any Sedco Forex Employee or Schlumberger Employee any right to
continued employment.

6.15  NO THIRD PARTY BENEFICIARIES; NO AMENDMENT LIMITATION

          No provision in this Agreement or in the Distribution Agreement shall
confer upon any person other than the signatories hereto any rights, remedies,
obligations or liabilities with respect to the employment, compensation,
benefits or other terms or conditions of employment of any persons, or
otherwise.  Nothing herein shall prevent Sedco Forex from amending or
terminating any Plan after the Benefit Maintenance Period or as otherwise
permitted hereunder.

6.16  INDEMNIFICATION

          Indemnification by any party to this Agreement for Schlumberger
Liability or Sedco Forex Liability, as the case may be, shall be in accordance
with the procedure set forth in the Distribution Agreement.

6.17  ENTIRE AGREEMENT

          This Agreement contains the entire agreement between the parties with
respect to the subject matter hereof, and supersedes all prior agreements and
understandings, oral or written, with respect to such matters.

6.18  COUNTERPARTS

          This Agreement may be executed by the Parties hereto in one or more
counterparts, each of which, when so executed and delivered shall be an
original, but all such counterparts shall together constitute one and the same
instrument.  Each counterpart may consist of a number of copies hereof each
signed by less than all, but together signed by all of the Parties hereto.

6.19  HEADINGS

          Headings used in this Agreement are for the convenience of the parties
only and shall be given no substantive or interpretive effect whatsoever.

6.20  SEVERABILITY

          Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining terms of the Agreement or affecting the validity
or enforceability of any of the terms or provisions of this

                                      18
<PAGE>

Agreement in any other jurisdiction. If any provision of this Agreement is so
broad as to be unenforceable, the provision shall be interpreted to be only so
broad as is enforceable.

6.21  AMENDMENT

          The Agreement may not be amended except by a written instrument signed
on behalf of each of the parties hereto.

6.22  WAIVER

          The waiver by any party hereto of a breach of any provision hereunder
shall not operate or be construed as a waiver of any prior or subsequent breach
of the same or any other provision hereunder.

                                  ARTICLE VII

                                  DEFINITIONS

          For purposes of this Agreement, capitalized terms used herein shall
have the following respective meanings:

          AGREEMENT

          means this Employee Matters Agreement and all attachments hereto.

          BENEFITS MAINTENANCE PERIOD

          means a period beginning on the day following the Distribution Date
and ending on December 31, 2000.

          COBRA

          has the meaning given in Section 2.8.

          CONTRIBUTION PERIOD

          means the period following the Distribution Date that Sedco Forex
participates in a Schlumberger Plan pursuant to Article II hereof, but in no
event longer than the Benefits Maintenance Period.

          COVERED COUNTRIES

          has the meaning given in Section 2.3.

          CSI PLAN

          means the Schlumberger International Cash Separation Indemnity Plan,
as in effect on the Distribution Date or as thereafter amended.

                                      19
<PAGE>

          CTI PLAN

          means the Schlumberger International Cash Termination Indemnity Plan,
as in effect on the Distribution Date or as thereafter amended.

          DISTRIBUTION

          means distribution of all issued and outstanding shares of Sedco Forex
Common Stock as contemplated by the Distribution Agreement.

          DISTRIBUTION AGREEMENT

          means the Distribution Agreement related to the Agreement and Plan of
Merger of Schlumberger Limited, Sedco Forex Holdings Limited and Transocean
Offshore, Inc., dated as of July 12, 1999.

          DISTRIBUTION DATE

          means the date and time as of which the Distribution shall be
effected, to be determined by, or under the authority of, the Board of Directors
of Schlumberger consistent with the Distribution Agreement and as provided for
in the Merger Agreement.

          DM PLAN

          means the Schlumberger Deferred Medical Plan, as in effect on the
Distribution Date or as thereafter amended.

          DSPP

          means the Schlumberger Discounted Stock Purchase Plan, as in effect on
the Distribution Date or as thereafter amended.

          EMPLOYED ABROAD PLAN

          has the meaning given in Section 3.4.

          EXCLUDED PLANS

          has the meaning given in Section 2.1.

          FINAL EMPLOYEE LIST

          has the meaning given in Section 1.1.

          FRENCH SEDCO FOREX EMPLOYEES

          has the meaning given in Section 4.2.

                                      20
<PAGE>

          HOME COUNTRY NATIONAL

          means a Sedco Forex Employee who is a citizen of, and employed in, a
country other than the United States of America if Transocean employs no other
citizens of that country in such country on the Distribution Date.

          IS PENSION PLAN

          means the Sedco Forex International Staff Pension Plan.

          IS PLANS

          means the IS Pension Plan and the IS Profit Sharing Plan.

          IS PROFIT SHARING PLAN

          means the Sedco Forex International Staff Profit Sharing Plan.

          LIABILITIES

          means all employment- or benefit-related debts, liabilities and
obligations, whether absolute or contingent, matured or unmatured, liquidated or
unliquidated, accrued or unaccrued, known or unknown, whenever arising, whether
arising under a Plan, an individual employment contract or similar agreement or
otherwise, and whether or not the same would properly be reflected on a balance
sheet.

          NEW OPTIONS

          has the meaning given in Section 4.2(b).

          NON-VESTED OPTIONS

          has the meaning given in Section 4.2(a).

          PLAN

          means any plan, policy, program, payroll practice, ongoing arrangement
contract, trust, insurance policy or other agreement or funding vehicle, whether
written or unwritten, providing compensation or benefits to employees, or former
employees, of the Sedco Forex Group or the Schlumberger Group.

          PROPOSED FINAL EMPLOYEE LIST

          has the meaning given in Section 1.1.

          SCHLUMBERGER

          means Schlumberger Limited, a company organized under the laws of the
Netherlands Antilles.

                                      21
<PAGE>

          SCHLUMBERGER COMMON STOCK

          means the common stock of Schlumberger, par value U.S. $.01 per share.

          SCHLUMBERGER EMPLOYEES

          means all employees and former employees of Schlumberger and its
Subsidiaries other than Sedco Forex Employees.  In addition, any Sedco Forex
Employees who, between the period commencing on the day following the
Distribution Date and ending 120 days following the Distribution Date, are
transferred to Schlumberger pursuant to mutual agreement of Schlumberger and
Sedco Forex shall be considered Schlumberger Employees for all purposes of this
Agreement, except with respect to compensation payable and welfare benefits
incurred with respect to the period of employment with Sedco Forex after the
Distribution Date.

          SCHLUMBERGER FUNDED PLAN

          means any Schlumberger Plan that is funded through employer or
employee contributions and as to which a trust or other funding vehicle is
maintained to provide part or all of the benefits pursuant to such plan, each of
which is listed on Schedule 1 hereto.

          SCHLUMBERGER GROUP

          means Schlumberger and all direct and indirect Subsidiaries of
Schlumberger immediately after the Distribution Date.

          SCHLUMBERGER LIABILITIES

          has the meaning given in Section 5.3.

          SCHLUMBERGER PLANS

          means all benefit and compensation plans, including Schlumberger
Funded Plans, employment and benefit arrangements which cover any Sedco Forex
Employee or former employee of the Sedco Forex Business, as set forth in
Schedule 6.11 of the Sedco Forex Disclosure Letter dated as of July 12, 1999.

          SEDCO FOREX

          means Sedco Forex Holdings Limited, a company organized under the laws
of the British Virgin Islands, prior to the Merger, and Transocean Sedco Forex
Inc., a Cayman Islands company, following the Merger.

          SEDCO FOREX EMPLOYEES

          means  all persons who are on the Final Employee List prepared
pursuant to Article I, provided that (i) such persons are employed by Sedco
Forex or its Subsidiaries on the Distribution Date or have taken Special Early
Retirement as described in Section 1.1(b), (ii) each such person who is on an
approved leave of absence or short-term disability on the Distribution

                                      22
<PAGE>

Date shall only be a Sedco Forex Employee if such person returns to the active
employment of the Sedco Forex Business within 120 days following the
Distribution Date and (iii) any such person who is transferred to employment by
Schlumberger after the Distribution Date as contemplated by the definition of
"Schlumberger Employees" shall not be considered a Sedco Forex Employee except
with respect to compensation payable and benefits incurred with respect to the
period of employment with Sedco Forex or a Sedco Forex Subsidiary after the
Distribution Date. In addition, any Schlumberger Employee who, between the
period commencing on the day following the Distribution Date and ending 120 days
following the Distribution Date, is transferred to Sedco Forex pursuant to
mutual agreement of Schlumberger and Sedco Forex shall be considered a Sedco
Forex Employee for all purposes of this Agreement, except with respect to
compensation payable and benefits incurred with respect to the period of
employment with Schlumberger after the Distribution Date. "Sedco Forex
Employees" shall not include any persons who are employees of independent
contractors that provide services for the Sedco Forex Business or that perform
work on any of the drilling units owned or operated by the Sedco Forex Business.

          SEDCO FOREX GROUP

          means Sedco Forex and all direct and indirect Subsidiaries of Sedco
Forex immediately after the Distribution Date.

          SEDCO FOREX LIABILITIES

          has the meaning given in Section 5.2.

          SHARED RESOURCES EMPLOYEES

          has the meaning given in Section 1.1.

          TRANSOCEAN

          means Transocean Offshore Inc., a Cayman Islands company, prior to the
Merger, and Transocean Sedco Forex Inc., a Cayman Islands company, following the
Merger.

          TRANSOCEAN 423 PLAN

          has the meaning given in Section 2.3.

          US EMPLOYEE PROFIT SHARING PLANS

          has the meaning given in Section 3.4.

          US PLAN

          means the Sedco Forex Resources Savings and Profit Sharing Plan.

                                      23
<PAGE>

          VESTED OPTIONS

          means all options to purchase Schlumberger Common Stock held by Sedco
Forex Employees to the extent that such options are exercisable on the
Distribution Date.

          Capitalized terms used and not otherwise defined herein are used with
the meaning given thereto in the Distribution Agreement or the Merger Agreement.

                                      24
<PAGE>

          IN WITNESS WHEREOF, the parties have caused this Employee Matters
Agreement to be duly executed as of the day and year first above written.

                              SCHLUMBERGER LIMITED

                              By /s/ Victor E. Grijalva
                                _______________________________________
                                  Name: Victor E. Grijalva
                                  Title: Vice Chairman

                              SEDCO FOREX HOLDINGS LIMITED

                              By /s/ M.I. Unsworth
                                _______________________________________
                                  Name: Michael Ian Unsworth
                                  Title: President S.F.H.L.

                              TRANSOCEAN OFFSHORE INC.

                              By /s/ Robert L. Long
                                _______________________________________
                                  Name: Robert L. Long
                                  Title: Executive Vice President

                                      25

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