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                                                                    EXHIBIT 10.6


                                SECOND AMENDMENT
                                     TO THE
                         DIAMOND OFFSHORE DRILLING, INC.
                            DEFERRED COMPENSATION AND
                     SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN



THE PLAN IS HEREBY AMENDED EFFECTIVE AS OF JANUARY 1, 2003 AS FOLLOWS:

1.       The Plan name is hereby changed to the Diamond Offshore Management
         Company Deferred Compensation and Supplemental Executive Retirement
         Plan.

2.       Paragraph 1 is amended to read as follows:

         The purpose of the Diamond Offshore Management Company Deferred
         Compensation Plan and Supplemental Executive Retirement Plan ("Plan")
         is to provide select management employees of Diamond Offshore
         Management Company ("Corporation," and certain of its Subsidiaries and
         Affiliates, hereinafter, with the Corporation, collectively referred to
         as the "Company") an opportunity, in accordance with the terms and
         conditions set forth herein, to defer, on a non-qualified basis,
         compensation that otherwise would be payable currently and to provide
         supplemental retirement income.

3.       Paragraph 3 is amended to read as follows:

         The Committee shall have the sole and absolute discretion to select
         those employees who shall participate in the Plan ("Participants") and
         shall determine the extent to which Participants can defer base salary
         or any other form of compensation. The Committee's selection may be by
         name, position, salary grade and/or any other designation it deems
         appropriate; provided, however, a Participant must be in Salary Grade
         12 or higher. A Participant shall continue to participate in the Plan
         until the Committee determines otherwise. Notwithstanding the
         foregoing, each Participant in the Plan must be a member of "a select
         group of management or highly compensated employees", as provided in
         Section 201(2), 301(a)(3), and 401(a)(1) or ERISA.

4.       Paragraph 5 is amended by adding the following to the end of
         Paragraph 5:

         Notwithstanding the above, a Participant will not be entitled to a
         benefit under Section (b) of this Paragraph 5 unless the Participant
         has elected the maximum elective deferral contribution otherwise
         available to the Participant for a plan year under the 401(k) Plan.


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5.       Paragraph 8(e) is amended to read as follows:

         Notwithstanding anything in Paragraph 4 or elsewhere in the Plan to the
         contrary, a Participant may not make separate payment elections with
         respect to each separate year's deferrals to his or her Deferred
         Compensation Account. A Participant's payment election made in his or
         her initial deferral shall control the form of payment for all
         subsequent years' deferrals unless and until the Participant
         specifically changes his or her payment election in the manner provided
         by the Committee; provided, however, no change in an elected payment
         form may become effective until at least one full calendar year
         following the date of the election change.

6.       Paragraph 8 is further amended by adding a new subparagraph (f) thereto
         to read as follows:

         (f)      Notwithstanding a Participant's payment election to the
                  contrary, the Corporation, in it sole discretion, may at any
                  time or times accelerate and pay in a lump sum all or any part
                  of a Participant's Deferred Compensation Account for any
                  reason, including, without limitation, a determination that
                  the installment amounts are below a certain threshold level
                  established by the Committee, the termination of the Plan or
                  upon a change of control of the Corporation.

7.       Paragraph 10 is amended to read as follows:

         The Corporation, in its sole and absolute discretion, at any time may
         amend, suspend or terminate the Plan or any portion thereof in any
         manner and to any extent; provided, however, that amendments to the
         Plan which do not have a significant cost impact on the Corporation may
         be made by the President of the Corporation. No such amendment,
         suspension or termination shall alter or impair the rights of a
         Participant with respect to then Deferred Amounts.

Except as amended hereby, the Plan shall continue without change or
interruption.