Exhibit 10.1
  Form of Director Restricted Stock Grant Award Letter under the TODCO Long Term
Incentive Plan

[TODCO LETTERHEAD]

                   , 200     

Name of Director
[address]

Dear           :

Effective as of                          (the “Award Date”), TODCO (the
“Company”) hereby grants to you            restricted shares (“Restricted
Stock”) of the Company’s Class A Common Stock (“Common Stock”) in accordance
with the TODCO Long-Term Incentive Plan (the “Plan”). Your award is more fully
described in the attached Appendix A, Terms and Conditions of Non-Employee
Director Restricted Stock Award.

Unless otherwise provided in the attached Appendix A, your Restricted Stock will
become 100% and fully vested on the tenth anniversary of the Award Date (the
“Vesting Date”); provided, however, that you must be in continuous service as a
Director of the Company from the Award Date through the Vesting Date in order
for your Restricted Stock to vest. In the event that the Vesting Date is a
Saturday, Sunday or holiday, you will instead obtain that 100% vested right on
the first business day immediately following the Vesting Date.

Your Restricted Stock is subject to the terms and conditions set forth in the
enclosed Plan, any additional terms and conditions set forth in the attached
Appendix A and the Prospectus for the Plan, and any rules and regulations
adopted by the Company’s Board of Directors.

This award letter and the attachments contain the formal terms and conditions of
your award and accordingly should be retained in your files for future
reference.

Very truly yours,

Jan Rask
President and Chief Executive Officer

Enclosures

 

--------------------------------------------------------------------------------

 

Appendix A
to Award Letter
dated

Terms and Conditions of
Non-Employee Director Restricted Stock Award

The restricted shares (“Restricted Stock”) granted to you by TODCO (the
“Company”) of Class A Common Stock (“Common Stock”) of the Company are subject
to the terms and conditions set forth in the TODCO Long-Term Incentive Plan (the
“Plan”), any rules and regulations adopted by the Company’s Board of Directors
(the “Board”), any additional terms and conditions set forth in this Appendix A
which forms a part of the attached award letter to you (“Award Letter”) and the
Prospectus for the Plan. Any terms used in this Appendix A and not defined in
the Award Letter or this Appendix A have the meanings set forth in the Plan. In
the event there is an inconsistency between the terms of the Plan and this
Appendix A, the terms of the Plan will control.

1.  Vesting of Restricted Stock

Unless vested on an earlier date as provided in this Appendix A, the Restricted
Stock granted pursuant to your Award Letter will vest on the Vesting Date as set
forth in your Award Letter.

In certain circumstances described in paragraphs 4 and 5 below, your Restricted
Stock may vest before the Vesting Date.

2.  Restrictions on the Restricted Stock

Until your Restricted Stock has vested, you may not sell, transfer, assign or
pledge the shares. Stock certificates representing your Restricted Stock will be
registered in your name as of the Award Date, but will be held by the Company on
your behalf until such shares vest. When shares of your Restricted Stock vest, a
certificate representing such shares will be delivered to you (or, in the event
of your death, to your beneficiary under the Plan) as soon as practicable.

3.  Dividends and Voting

You will have the right to vote your Restricted Stock. From the Award Date, all
cash dividends payable with respect to your Restricted Stock will be paid
directly to you at the same time dividends are paid with respect to all other
shares of Common Stock.

 

--------------------------------------------------------------------------------

 

4.  Termination of Service

      (a)  General. The following rules apply to the vesting of your Restricted
Stock in the event of your termination of service as a Director of the Company.

            (i)  Death or Disability. If your service is terminated by reason of
death or disability (as determined by the Board), all of your Restricted Stock
will immediately vest.

            (ii)  Failure to be Re-Elected or Re-Nominated. If your service is
terminated because you fail to be re-elected or re-nominated for service as a
Director, all of your Restricted Stock will immediately vest; provided, however,
that your failure to be re-nominated is not for cause (as determined by the
Board).

            (iii)  At the Board’s Request. If you resign as a Director at the
request of the Board based upon a determination made by the Board, in its sole
discretion, that your resignation would be in the best interests of the Company,
all of your Restricted Stock will immediately vest.

            (iv)  Other Termination of Service. If your service terminates for
any reason other than those provided in clauses (i) through (iii) above, any of
your shares of Restricted Stock which have not vested prior to your termination
of service will be forfeited unless otherwise determined by the Board.

      (b)  Board Determinations. The Board shall have absolute discretion to
determine the date and circumstances of termination of your service, and its
determination shall be final, conclusive and binding upon you.

5.  Change in Control

All of your Restricted Stock will vest immediately upon a Change in Control of
the Company.

6.  Income Tax Withholding

You must make arrangements satisfactory to the Company to satisfy any applicable
federal, state or local withholding tax liability arising from the grant or
vesting of your Restricted Stock. You can either make a cash payment to the
Company of the required amount or, if you do not make a Section 83(b) election,
you can elect to satisfy your withholding obligation by having the Company
retain a certain number of shares of Common Stock having a value equal to the
amount of your minimum statutory withholding obligation from the shares
otherwise deliverable to you upon the vesting of your Restricted Stock. If you
fail to satisfy your withholding obligation in a time and manner satisfactory to
the Company, the Company shall have the right to withhold the required amounts
payable to you.

 

--------------------------------------------------------------------------------

 

7.  Restrictions on Resale

Other than the restrictions referenced in paragraph 2, there are no restrictions
imposed by the Plan on the resale of Common Stock acquired under the Plan.
However, under the provisions of the Securities Act of 1933 (the “Securities
Act”) and the rules and regulations of the Securities and Exchange Commission
(the “SEC”), resales of Common Stock acquired under the Plan by certain
Directors of the Company who may be deemed to be “affiliates” of the Company
must be made pursuant to an appropriate effective registration statement filed
with the SEC, pursuant to the provisions of Rule 144 issued under the Securities
Act, or pursuant to another exemption from registration provided in the
Securities Act. The Company has filed an effective registration statement with
the SEC. There are no restrictions imposed by the SEC of Common Stock acquired
under the Plan by persons who are not affiliates of the Company.

If you have any questions regarding your Restricted Stock award or would like to
obtain additional information about the Plan, please contact the Company’s
General Counsel, TODCO, 2000 W. Sam Houston Parkway South, Suite 800, Houston,
Texas 77042 (telephone (713) 278-6000). Your Award Letter and this Appendix A
contain the formal terms and conditions of your award and accordingly should be
retained in your files for future reference.