Exhibit 10.8h (11)

 

LOGO [g89287global_logo.jpg]  

GlobalSantaFe Corporation

15375 Memorial Drive

Houston, Texas 77079-4101

 

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Notice of Grant

    – Stock-Settled Stock Appreciation Rights

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«First_Name» «Last_Name»

«AddressLine_1»

«AddressLine_2»

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«City», «State» «Zip»

  Employee ID: «Empl_ID»

 

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Plan Name: GlobalSantaFe 2003 Long-Term Incentive Plan

Effective                 , you have been granted «NUMBER» stock appreciation
rights (“SARs”), each of which, subject to the attached terms and conditions,
will allow you to receive ordinary shares of GlobalSantaFe Corporation of a
value equal to any increase in the per-share price of the ordinary shares from
the grant date to the date the SAR is exercised. The grant date price is $
             per share.

Your SARs will vest over a three-year period on the dates indicated below:

 

Number

of SARs

  Date Vested   Date SARs Expire       «SAR1»   ______________   ______________
      «SAR2»   ______________   ______________       «SAR3»   ______________  
______________          

The SARs are granted under and governed by the terms and conditions of the
GlobalSantaFe 2003 Long-Term Incentive Plan and the attached terms and
conditions, all of which are made a part of this document.

Attachment

 

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LOGO [g89287global_logo.jpg]

GLOBALSANTAFE CORPORATION

TERMS AND CONDITIONS

OF

STOCK-SETTLED STOCK APPRECIATION RIGHTS

GlobalSantaFe Corporation (the “Company”), desiring to afford you an opportunity
to acquire ordinary shares of the Company, $.01 par value (“Ordinary Shares”),
and to provide you with an added incentive as an employee of, consultant to, or
other person providing key services to the Company or of one or more of its
Related Companies, has established the following terms and conditions under
which it has granted to you the stock appreciation rights specified on the cover
page of this Notice (the “SARs”) under the GlobalSantaFe 2003 Long-Term
Incentive Plan. Each SAR will allow you to receive a number of Ordinary Shares
during a specified term, all as set forth on the cover page of this Notice of
Grant (“Notice”), subject to and upon the terms and conditions set forth on the
cover page and below.

You are urged to consult your tax advisor prior to exercising any of the SARs
and prior to disposing of any shares acquired upon such exercise.

 

1. Specification of Date, Number of SARs, Grant Date Price, and Term.

 

  (a) The grant date of the SARs is the effective date set forth in the first
paragraph on the cover page of this Notice.

 

  (b) The number of SARs granted to you hereby is the number of SARs set forth
in the first paragraph on the cover page of this Notice, subject to adjustments
under Section 8.

 

  (c) Subject to adjustments under Sections 6 and 7, the SARs first become
exercisable in three annual installments as set forth in the table on the cover
page of this Notice (“Vesting Table”), each installment first becoming
exercisable at the date set forth for that installment under “Date Vested” in
said table.

 

  (d) The grant date price per share applicable to the SARs (the “Grant Date
Price”) is the price set forth in the first paragraph on the cover page of this
Notice, subject to adjustments under Section 8.

 

  (e) The term of the SARs is ten years beginning on their grant date and
expiring on the date set forth under “Date SARs Expire” in the table on the
cover page of this Notice. Upon the expiration of such term, the SARs shall
expire and terminate and may not be exercised.

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2. Agreement. By accepting the SARs and the benefits thereof, you represent and
agree that (i) you will abide by the terms of the Plan and such other terms and
conditions as may be imposed by the committee appointed by the board of
directors to administer the Plan (the “Committee”), (ii) you will not induce or
solicit, directly or indirectly, any employee of the Company or a Related
Company to terminate such employee’s employment with the Company or such Related
Company and (iii) during the course of employment with or service to the Company
or a Related Company and at all times thereafter, you will not disclose to
others or use, whether directly or indirectly, any Confidential Information.
“Confidential Information” shall mean the information about the Company or a
Related Company that you learned in the course of performing your duties with
the Company or a Related Company, including, without limitation, any proprietary
knowledge, trade secrets, data, information and customer lists unless such
disclosure is required by law or authorized by the Company or a Related Company.

 

3. Installment Provisions and Acceleration. The SARs are not exercisable in any
part until the earliest of the dates specified in this Section and in Sections 6
and 7 below.

 

   The installments set forth in the table on the cover page of this Notice and
referred to in Section 1(c) are cumulative, so that each matured installment or
any portion thereof may be exercised at any time until the expiration or prior
termination of the SARs.

 

   Nothing contained in this section shall be interpreted in a way that permits
you to exercise a number of SARs in excess of the number of SARs granted hereby
and referred to in Section 1(b).

 

4. Method of Exercise. The SARs may be exercised from time to time, in
accordance with their terms, by written notice thereof signed and delivered by
you or another person entitled to exercise the SARs to the Secretary of the
Company at its principal executive office in Houston, Texas, or as it may
hereafter be located, or to such brokerage firm, third-party agent or other
person as may be designated by the Secretary from time to time. Such notice
shall state the number of SARs being exercised and the grant date of the SARs
being exercised.

 

  

No later than 14 days after receipt of such notice, the Company shall issue and
deliver to you whole Ordinary Shares equal in number to the product of A
multiplied by B and then divided by C, where A is the number of vested SARs
exercised, B is the result of subtracting the Grant Date Price from the
per-share Fair Market Value of the Ordinary Shares prevailing at the time of
exercise as

 

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defined by the Plan, and C is the per-share Fair Market Value of the Ordinary
Shares prevailing at the time of exercise as defined by the Plan. Any fractional
shares resulting from this calculation shall be valued at the per-share Fair
Market Value of the Ordinary Shares prevailing at the time of exercise as
defined by the Plan and paid to you in cash if there is no withholding
requirement as a result of the exercise; if there is a withholding requirement,
said cash amount will be applied toward satisfying the withholding requirement.

 

   Upon exercise of any of the SARs, the Company will withhold from the shares
to be delivered shares with a Fair Market Value (as prescribed by the Plan)
sufficient to satisfy all or a portion of any Federal, state and local tax
withholding requirements, or the person exercising the SARs may deliver to the
Company Ordinary Shares with a Fair Market Value sufficient to satisfy all or a
portion of such tax withholding requirements, excluding any shares deemed
unacceptable for any reason by the Committee of the Company’s board of directors
administering the GlobalSantaFe 2003 Long-Term Incentive Plan.

 

   Automatic Exercise – Notwithstanding anything to the contrary in these Terms
and Conditions, any of the SARs that have not theretofore been exercised will be
automatically exercised on your behalf, and without any permission or other
action on your part, on the last day during the period when the SARs could
otherwise be exercised if the Grant Date Price is then less than the prevailing
per-share Fair Market Value of the Ordinary Shares as defined by the Plan;
provided, however, that neither the Company nor any officer of the Company, Plan
administrator, member of the Committee or any agent of any of the foregoing
shall have any liability for any delay in the delivery of anything received upon
such automatic exercise, including any change in the value of securities
received or any interest, and the Company shall be entitled to deliver to the
holder the proceeds of exercise when it determines to do so.

 

5.

Transferability. You may not transfer any of the SARs other than by will or by
the laws of descent and distribution or, if applicable, as authorized by the
following sentence, and the SARs shall be exercisable during your lifetime only
by you or, if applicable, by a transferee authorized by the following sentence.
The SARs or any portion thereof may be transferred by you to (i) your spouse,
children or grandchildren (“Immediate Family Members”), (ii) a trust or trusts
for your exclusive benefit and/or the exclusive benefit of Immediate Family
Members, (iii) a partnership in which you and/or Immediate Family Members are
the only partners, (iv) a transferee pursuant to a judgment, decree or order
relating to child support, alimony or marital property rights that is made
pursuant to a domestic relations law of a state or country with competent
jurisdiction (a “Domestic Relations Order”), or (v) such other transferee as may
be approved by the Committee of the board of directors in its sole and absolute
discretion; provided, however, that (x) the board of directors and its Committee
each reserves the right to prohibit any transfer with or without cause in its
sole and absolute discretion, and (y) subsequent transfers of the SARs or any
portion

 

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thereof are prohibited except those to or by you in accordance with this
Section, by will or the laws of descent and distribution, or pursuant to a
Domestic Relations Order. Following any transfer, the SARs shall continue to be
subject to the same terms and conditions as were applicable immediately prior to
transfer, and any and all references to you in this Notice shall be deemed to
refer to the transferee; provided, however, that any and all references to
employment or service or events of termination of employment or service shall
continue to mean your employment or service or events of termination of your
employment or service, and following any such event the SARs shall be
exercisable by the transferee only to the extent and for the periods specified
in this Notice. In addition, notwithstanding any transfer of the SARs or any
portion thereof, you will continue to be subject to withholding in connection
with any exercise, if applicable, as provided for in the GlobalSantaFe 2003
Long-Term Incentive Plan. Each transfer shall be effected by written notice
thereof duly signed and delivered by the transferor to the Secretary of the
Company at its principal executive office in Houston, Texas, or as it may
hereafter be located, or to such other person as may be designated by the
Secretary from time to time. Such notice shall state the name and address of the
transferee, the number of SARs being transferred, and such other information as
may be requested by the Secretary or his or her designee. The person or persons
entitled to exercise the SARs shall be that person or those persons appearing on
the registry books of the Company as the owner or owners of the SARs, and the
Company may treat the person or persons in whose name or names the SARs are
registered as the owner or owners of the SARs for all purposes. The Company
shall have no obligation to, or liability for any failure to, notify you or any
transferee of any termination of the SARs at or prior to their normal expiration
date or of any event that will or might result in such termination.

 

6. Termination of Employment or Service.

 

  (a)

Involuntary Termination Without Cause. If your employment with the Company or a
Related Company is terminated by the Company or any such Related Company without
Cause (as hereinafter defined) after the first vesting date, the SARs shall vest
and thereby become exercisable with respect to a number of previously
unexercisable SARs, prorated for the number of months (and partial months) you
were employed from the most recent vesting date until the end of the full
vesting period, and all of the SARs other than the SARs that can be exercised at
the time of or as a result of such termination shall expire and terminate in all
respects. All vested SARs not previously exercised, regardless whether vested as
a result of your termination of employment or vested prior thereto, shall remain
exercisable for the longer of (i) one year following your termination date or
(ii) the period during which you are entitled to receive salary continuation
under any agreement, policy, plan or other arrangement with the Company or any
of its Related Companies; provided, however, that (x) in no event shall the
period under clause (ii) extend beyond the

 

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maximum period permitted under Section 409A of the U.S. Internal Revenue Code of
1986 as amended and in effect at such time (the “Code”) and applicable
authorities, and (y) in no event shall any SAR remain exercisable beyond the
term of the SAR. Upon expiration of the foregoing period, each of the SARs shall
expire and terminate in all respects.

 

  (b) Voluntary Termination or Termination With Cause. If either you voluntarily
terminate your employment with the Company or a Related Company or your
employment with the Company or a Related Company is terminated with Cause, the
SARs, to the extent previously vested and not previously exercised, shall remain
exercisable for three months following your termination date and, thereafter,
shall expire and terminate; provided, however, that no SAR shall in any event
remain exercisable beyond the term of the SAR. At the time of such termination
of employment, all of the SARs other than the SARs that can be exercised at the
time of such termination shall expire and terminate in all respects.

 

  (c) Retirement. If your employment with the Company and its Related Companies
terminates for any reason other than Cause, death or disability and you have
attained your “early retirement date” as defined in the GlobalSantaFe Retirement
Plan for Employees (or would have attained such “early retirement date” based on
your age and service had you been eligible to participate in such plan), the
SARs will continue to become exercisable in accordance with the Vesting Table on
the cover page of this Notice; provided however that the SARs shall terminate in
any event upon the earlier of (i) the expiration of the five-year period
following the later of your termination of employment with the Company and its
Related Companies or termination of your service as a member of the Company’s
board of directors, or (ii) the expiration of the term of the SARs, or (iii) the
date you go to work for a competitor of the Company or of any Related Company,
including without limitation as an employee of or consultant to the competitor,
as determined by the Committee in its sole discretion. If this subsection
(c) and any other subsection of this Section 6 both apply, this subsection
(c) will prevail.

 

  (d) Termination by Reason of Death or Disability. If your employment with the
Company or a Related Company is terminated as a result of your death or
Disability, the SARs will immediately vest and thereby become exercisable as to
the full number of SARs granted hereby and referred to in Section 1(b), to the
extent not previously exercised, and said full number of SARs will remain
exercisable for the three-year period following the date of death or termination
due to Disability; provided, however, that no SAR shall in any event remain
exercisable beyond the term of the SAR. For purposes of this Section, the term
“Disability” shall mean any complete and permanent Disability as defined in
Section 22(e)(3) (or any successor provision thereto) of the Code and determined
in accordance with the procedures set forth in the regulations thereunder.

 

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   For purposes of this Notice, a termination of your “employment” with the
Company and its Related Companies will be deemed to occur at the close of
business on the earliest of (i) the last day on which you are assigned to a
position with the Company or any of its Related Companies for the purpose of
performing your occupation, in the case of termination by reason of your death,
disability or retirement, (ii) the last day of an approved leave of absence if
you do not resume the performance of your occupation for the Company or any of
its Related Companies on or before the next business day, and (iii) the last day
on which you are assigned to a position with the Company or any of its Related
Companies for the purpose of performing your occupation in any other case. For
purposes of this Notice, you shall not be considered to be an employee or to be
serving the Company or a Related Company for the period during which you are
entitled to receive salary continuation under any agreement, policy, plan or
other arrangement with the Company or any of its Related Companies.

 

   You may be terminated with Cause if you willfully engage in conduct that is
materially injurious to the Company and/or a Related Company, monetarily or
otherwise; provided however that (i) no termination shall be with Cause until
you have been delivered a copy of a written notice setting forth that you were
guilty of the conduct and specifying the particulars thereof in detail and
(ii) termination solely on account of inadequate performance or incompetence
shall not constitute termination with Cause. No act or failure to act shall be
considered “willful” unless you have acted or failed to act without a reasonable
belief that your action or failure to act was in the best interest of the
Company or a Related Company. Notwithstanding anything contained in this Notice
to the contrary, your failure to perform after notice of termination is given
shall not constitute Cause.

 

7. Change in Control. If a Change in Control occurs while you are employed by or
providing services to the Company or a Related Company or if a Change in Control
occurs after your employment terminates in accordance with Section 6(c), the
SARs granted hereby, to the extent not previously exercised, shall become fully
exercisable on the date of such Change in Control, irrespective of the
limitations described in Section 1(c), and shall remain exercisable throughout
the term of the SARs.

 

   A “Change in Control” means the occurrence of any of the following events:

 

  (i)

The acquisition by any individual, entity or group (within the meaning of
Section 13(d) or 14(d) of the U.S. Securities Exchange Act of 1934, as amended
(the “Exchange Act”)) (a “Person”), other than an Excluded Person, of the
beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act)
of 35% or more of either (A) the then outstanding ordinary shares of the Company
or of any affiliate of the Company by which you are employed or which

 

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directly or indirectly owns or controls any affiliate by which you are employed
(the “Outstanding Company Ordinary Shares”) or (B) the combined voting power of
the then outstanding voting securities of the Company or of any affiliate of the
Company by which you are employed or which directly or indirectly owns or
controls any affiliate by which you are employed entitled to vote generally in
the election of directors (the “Outstanding Company Voting Securities”);
provided, however, that neither an acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Company or by any affiliate
controlled by the Company nor an acquisition by an affiliate of the Company that
remains under the Company’s control will constitute a Change in Control; or

 

  (ii) Individuals who, as of the date hereof, constitute the Board (the
“Incumbent Board”) cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a director subsequent to
the date hereof whose election, or nomination for election by the Company’s
equityholders, was approved by a vote of at least two-thirds of the directors
then comprising the Incumbent Board will 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 either an
actual or threatened election contest (meaning a solicitation of the type that
would be subject to Rule 14a-12(c) of Regulation 14A under the Exchange Act) or
other actual or threatened solicitation of proxies or consents by or on behalf
of a Person other than the Board; or

 

  (iii)

Approval by the equityholders of the Company of a reorganization, merger,
consolidation or similar transaction to which the Company or any affiliate is a
party, in each case unless, following such reorganization, merger, consolidation
or similar transaction, (A) more than 50% of, respectively, the then outstanding
ordinary shares or shares of common stock of the corporation or other entity
resulting from such reorganization, merger, consolidation or similar transaction
and the combined voting power of the then outstanding voting securities of such
corporation or other entity entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly, by 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 reorganization, merger,
consolidation or similar transaction in substantially the same proportions as
their ownership, immediately prior to such reorganization, merger, consolidation
or similar transaction, of the Outstanding Company Ordinary Shares and
Outstanding Company Voting Securities, as the case may be, (B) 50% of,
respectively, the then outstanding ordinary shares or shares of common stock of
the parent of the corporation or other entity resulting from such
reorganization, merger, consolidation or similar transaction and the combined
voting power of the then outstanding voting securities of the parent of such
corporation or other entity entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly, by 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

 

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reorganization, merger, consolidation or similar transaction, (C) no Person
(excluding the Company, any affiliate of the Company that remains under the
Company’s control, any employee benefit plan (or related trust) sponsored or
maintained by the Company or by any affiliate controlled by the Company or such
corporation resulting from such reorganization, merger, consolidation or similar
transaction, and any Person beneficially owning, immediately prior to such
reorganization, merger, consolidation or similar transaction, directly or
indirectly, 35% or more of the Outstanding Company Ordinary Shares or
Outstanding Company Voting Securities, as the case may be) beneficially owns,
directly or indirectly, 35% or more of, respectively, the then outstanding
ordinary shares or shares of common stock of the corporation or other entity
resulting from such reorganization, merger, consolidation or similar transaction
or the combined voting power of the then outstanding voting securities of such
corporation or other entity entitled to vote generally in the election of
directors, and (D) at least a majority of the members of the board of directors
of the corporation resulting from such reorganization, merger, consolidation or
similar transaction were members of the Incumbent Board at the time of the
execution of the initial agreement providing for such reorganization, merger,
consolidation or similar transaction; or

 

  (iv)

Approval by the equityholders of the Company of any plan or proposal which would
result directly or indirectly in (A) a complete liquidation or dissolution of
the Company or of any affiliate of the Company by which you are employed, or
(B) any sale or other disposition (or similar transaction) (in a single
transaction or series of related transactions) of (x) 50% or more of the assets
or earnings power of the Company or any affiliate of the Company by which you
are employed or which, directly or indirectly owns or controls any affiliate by
which you are employed or (y) business operations which generated a majority of
the consolidated revenues (determined on the basis of the Company’s four most
recently completed fiscal quarters for which reports have been completed) of the
Company and its affiliates immediately prior thereto, other than to an affiliate
of the Company or to a corporation or other entity with respect to which
following such sale or other disposition (I) more than 50% of, respectively, the
then outstanding ordinary shares or shares of common stock of such corporation
or other entity and the combined voting power of the then outstanding voting
securities of such corporation or other entity entitled to vote generally in the
election of directors is then beneficially owned, directly or indirectly, by 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 sale or other disposition in
substantially the same proportions as their ownership, immediately prior to such
sale or other disposition, of the Outstanding Company Ordinary Shares and
Outstanding Company Voting Securities, as the case may be, (II) no Person
(excluding the Company, any affiliate of the Company that remains under the
Company’s control, any employee benefit plan (or related trust) sponsored or
maintained by the Company or by any affiliate controlled by the Company or such
corporation, and any Person beneficially owning, immediately prior to such sale
or other disposition, directly or indirectly, 35% or more of the Outstanding

 

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Company Ordinary Shares or Outstanding Company Voting Securities, as the case
may be) beneficially owns, directly or indirectly, 35% or more of, respectively,
the then outstanding ordinary shares or shares of common stock of such
corporation or other entity or the combined voting power of the then outstanding
voting securities of such corporation or other entity entitled to vote generally
in the election of directors, and (III) at least a majority of the members of
the board of directors of such corporation were members of the Incumbent Board
at the time of the execution of the initial agreement or action of the Board
providing for such sale or other disposition of assets; or

 

  (v) Approval by the equityholders of the Company of a “merger of equals”
(which for purposes of this Subsection shall mean a merger with another company
of relatively equal size) to which the Company is a party as a result of which
the persons who were equity holders of the Company immediately prior to the
effective date of such merger shall have beneficial ownership of less than 55%
of the combined voting power for election of members of the board (or
equivalent) of the surviving entity or its parent following the effective date
of such merger, provided that the Board shall have authority to increase said
percentage as may in its sole discretion be deemed appropriate to cover a
specific transaction.

 

   For purposes of the preceding sentence, the term “Excluded Person” shall mean
and include (i) any corporation beneficially owned by shareholders of the
Company in substantially the same proportion as their ownership of shares of the
Company and (ii) the Company and any affiliate of the Company. Also, for
purposes of the preceding sentence, the term “Board” shall mean the board of
directors of the Company.

 

8. Adjustments. If outstanding shares of the class then underlying the SARs are
increased, decreased, changed into or exchanged for a different number or kind
of shares or securities of the Company through reorganization, recapitalization,
reclassification, stock dividend, stock split or reverse stock split, then there
shall be substituted for each share then underlying the unexercised portion of
the SARs the number and class of shares or securities into or for which each
outstanding share of the class underlying the SARs shall be so changed or
exchanged, with a corresponding adjustment in the Grant Date Price. Such
adjustments shall become effective on the effective date of any such
transaction; except that in the event of a stock dividend or of a stock split
effected by means of a stock dividend or distribution, such adjustments shall
become effective immediately after the record date therefor.

 

  

Upon a dissolution or liquidation of the Company, or upon a reorganization,
merger or consolidation of the Company with one or more corporations as a result
of which the Company is not the surviving corporation, or upon a sale of
substantially all of the property of the Company (“Terminating Transactions”),
the SARs shall terminate, unless provision be made in writing in connection with
such transaction for the assumption of stock appreciation rights theretofore
granted under the Plan under which the SARs were granted, or the substitution

 

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for such stock appreciation rights of any stock appreciation rights covering the
stock of a successor employer corporation, or a parent or subsidiary thereof,
with appropriate adjustments as to the number and kind of shares and prices, in
which event the SARs shall continue in the manner and under the terms so
provided. If the SARs shall terminate pursuant to the foregoing sentence, the
person or persons then entitled to exercise any unexercised portions of the SARs
shall have the right, at such time immediately prior to the consummation of the
Terminating Transaction as the Company shall designate, to exercise the SARs to
the extent not theretofore exercised.

 

   Adjustments under this Section 8 shall be made by the board of directors or
the Committee, whose determination as to what adjustment shall be made, and the
extent thereof, shall be final, binding and conclusive. No fractional shares of
stock shall be issued under the SARs or in connection with any such adjustment.

 

9. Limitation. You or any other person entitled to exercise the SARs shall be
entitled to the privileges of stock ownership in respect of shares subject to
the SARs only when such shares have been issued and delivered as fully paid
shares upon exercise of the SARs in accordance with their terms.

 

10. Requirements of Law and of Stock Exchanges. The issuance of shares upon the
exercise of the SARs shall be subject to compliance with all of the applicable
requirements of law with respect to the issuance and sale of such shares. In
addition, neither the Company nor any Related Company shall be required to issue
or deliver any certificate or certificates upon exercise of the SARs prior to
the admission of such shares to listing on notice of issuance on any stock
exchange on which shares of the same class are then listed.

 

   By accepting the SARs, you represent and agree for yourself and your
transferees by will or by the laws of descent and distribution or otherwise that
unless a registration statement under the U.S. Securities Act of 1933 is in
effect as to shares issued upon any exercise of the SARs, any and all shares so
issued shall be acquired for investment and not for sale or distribution, and
each notice of the exercise of any portion of the SARs shall be accompanied by a
representation and warranty in writing, signed by the person entitled to
exercise the same, that the shares are being so acquired by good faith for
investment and not for sale or distribution. In the event the Company’s legal
counsel shall, at the Company’s request, advise it that registration under the
U.S. Securities Act of 1933 of the shares as to which the SARs are at the time
being exercised is required prior to issuance thereof, neither the Company nor
any Related Company shall be required to issue or deliver such shares unless and
until such legal counsel shall advise that such registration has been completed
or is not required.

 

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11. Definition of Certain Terms. The term “Related Company” means any affiliate
of the Company and any other business venture in which the Company has a
significant interest as determined in the discretion of the Committee of the
board of directors. The term “you,” and related terms such as “your” used in
this Notice refer to the individual whose name appears first on the cover page
of this Notice.

 

12. Continued Employment and Future Grants. Neither the grant of the SARs nor
the other arrangements outlined herein give you the right to remain in the
employ of or to continue to provide services to the Company or any Related
Company or to be selected to receive similar or identical grants in the future.

 

13. Notices. Notice or other communication to the Company with respect to this
Notice must be made in writing and delivered to: Secretary, GlobalSantaFe
Corporation, at its principal business office, Houston, Texas.

 

14. Governing Law. The SARs and this Notice shall be governed by, and construed
in accordance with, the laws of the state of Texas.

 

15. Section 280G Payments.

 

  (a) General Rule. Notwithstanding any contrary provisions in any plan, program
or policy of the Company or any Related Company and except as provided in
subsection (b), if all or any portion of the benefits payable under this Notice,
either alone or together with other payments and benefits which you receive or
are entitled to receive from the Company or any Related Company, would
constitute a “parachute payment” within the meaning of Section 280G of the Code,
the Company shall reduce your payments and benefits payable under this Notice to
the extent necessary so that no portion thereof shall be subject to the excise
tax imposed by Section 4999 of the Code, but only if, by reason of such
reduction, the net after-tax benefit shall exceed the net after-tax benefit if
such reduction were not made. “Net after-tax benefit” for these purposes shall
mean the sum of (i) the total amount payable to you under this Notice, plus
(ii) all other payments and benefits which you receive or are then entitled to
receive from the Company or any affiliate that, alone or in combination with the
payments and benefits payable under this Notice (after taking into account any
reduction contemplated in subsection (c)), would constitute a “parachute
payment” within the meaning of Section 280G of the Code (each such benefit
hereinafter referred to as an “Additional Parachute Payment”), less (iii) the
amount of federal income taxes payable with respect to the foregoing calculated
at the maximum marginal income tax rate for each year in which the foregoing
shall be paid to you (based upon the rate in effect for such year as set forth
in the Code at the time of the payment under this Notice), less (iv) the amount
of excise taxes imposed with respect to the payments and benefits described in
(i) and (ii) above by Section 4999 of the Code.

 

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  (b) Exception if Gross-Up Applies. If you are entitled to a Gross-Up Payment
with respect to an Additional Parachute Payment paid pursuant to any other plan,
program or policy of the Company or any Related Company, the provisions of
Section 15(a) above shall not apply. A “Gross-Up Payment” means a payment by the
Company or a Related Company to cover the excise tax imposed on an Additional
Parachute Payment by Section 4999 of the Code.

 

  (c) Ordering Rule. Notwithstanding any contrary provisions in any other plan,
program or policy of the Company or any Related Company, if any plan, program or
policy of the Company or any Related Company provides for a reduction designed
to avoid Code Section 4999 excise tax, such reduction shall first be applied to
any Additional Parachute Payment subject to such reduction and, after having
given effect to such reduction, the provisions of Section 15(a) above shall
apply to the benefits payable under this Notice.

 

16. Section 409A of the Code. If any provision of this Notice would result in
the imposition of an excise tax under Section 409A of the Code and related
regulations and Treasury pronouncements (“Section 409A”), that provision will be
reformed to avoid imposition of the excise tax, and no action taken to comply
with Section 409A shall be deemed to impair a benefit under this Notice.

 

17. GlobalSantaFe 2003 Long-Term Incentive Plan. The SARs are subject to, and
the Company and you are bound by, all of the terms and conditions of the
GlobalSantaFe 2003 Long-Term Incentive Plan as the same shall have been amended
from time to time in accordance with the terms thereof, provided that no such
amendment shall deprive you, without your consent, of any of the SARs or any
rights hereunder. Pursuant to such Plan, the board of directors or its Committee
established for such purposes is authorized to adopt rules and regulations not
inconsistent with the Plan and to take such action in the administration of the
Plan as it shall deem proper. A copy of the Plan in its present form is
available for inspection at the Company’s principal office during business hours
by you or any other persons entitled to exercise the SARs.

 

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