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                                                                   EXHIBIT 10.40


[LOGO]                                                 GlobalSantaFe Corporation
                                                         777 N. Eldridge Parkway
                                                       Houston, Texas 77079-4493


MEMORANDUM


Date:      March 4, 2002

To:
           -----------------

From:
           -----------------

Subject:   Restricted Units


     Effective March 4, 2002, you have been granted a conditional right to
receive a target award of ________ units representing ordinary shares of
GlobalSantaFe Corporation, subject to the restrictions and other terms and
conditions set forth in the attachment to this memorandum. The number of
restricted units to be awarded will depend on your job performance and the
extent to which the performance objectives described in GlobalSantaFe
Corporation's 2002 Management Annual Incentive Plan have been achieved.



                                                       [Name of signing officer]





            Attachment



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[LOGO]


                            GLOBALSANTAFE CORPORATION

                              TERMS AND CONDITIONS
                                       OF
                  AWARD OF PERFORMANCE - BASED RESTRICTED UNITS

GlobalSantaFe Corporation (the "Company"), desiring to provide you with an added
incentive as an employee of the Company or of one or more of its affiliates,
hereby awards to you, pursuant to the [Name of Plan] (the "Plan"), a conditional
right (the "Performance Award") to receive units ("Restricted Units")
representing ordinary shares of the Company ("Ordinary Shares"), subject to the
restrictions and other terms and conditions outlined herein (the "Terms and
Conditions") and the terms and conditions of the Plan as amended from time to
time in accordance with its terms. Terms used herein and not otherwise defined
shall have the meaning set forth in the Plan.

1.   Calculation of Restricted Units. Effective December 31, 2002 (the "Grant
     Date"), a percentage of the total number of Restricted Units stated on the
     cover page of this memorandum will be credited to you, depending on actual
     performance of the Company and its affiliates and on your performance
     during 2002 as measured against the performance goals used in the Company's
     2002 Management Annual Incentive Plan (the "Annual Incentive Plan"). The
     percentage, which will range from 0% to 200%, will be determined using the
     method for calculating the percentage of your 2002 target bonus payable
     under the Annual Incentive Plan. You will be notified of the number of
     Restricted Units credited to you following the determination of the
     percentage of your 2002 target bonus to be awarded.

2.   Agreement. By accepting this Performance Award and any Restricted Units
     granted hereunder, 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, (ii) you will not induce or solicit, directly or indirectly,
     any employee of the Company and/or an affiliate to terminate such
     employee's employment with the Company and/or such affiliate and (iii)
     during the course of employment with the 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 that you learned in the course of
     performing your duties with the 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
     and/or an affiliate.

3.   Vesting. Except as otherwise provided in Sections 8 and 9, your Restricted
     Units will vest on the third anniversary of the Grant Date; provided that
     you remain continuously employed with the Company or any of its affiliates
     throughout the three-year period following the Grant Date (the "Vesting
     Period"). Restricted Units that do not vest shall be forfeited to the
     Company, and you shall not thereafter have any rights (including rights to
     dividend equivalent payments described in Section 6) with respect to such
     forfeited Restricted Units.

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4.   Restrictions. Except as authorized by Section 5, any Restricted Units
     granted hereunder may not be sold, assigned, pledged or otherwise
     transferred prior to satisfaction of the payment provisions of Section 7.

5.   Transfer. You may transfer Restricted Units to (i) your spouse, children or
     grandchildren ("Immediate Family Members"), (ii) a trust or trusts for your
     exclusive benefit or the exclusive benefit of your Immediate Family
     Members, (iii) a partnership in which you and/or your Immediate Family
     Members are the only partners, (iv) a transferee pursuant to a judgment,
     degree 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 a committee described in the
     Plan (the "Committee") in its sole and absolute discretion; provided,
     however, that (x) the Committee may prohibit any transfer with or without
     cause in its sole and absolute discretion, and (y) subsequent transfers of
     transferred Restricted Units or any portion thereof are prohibited except
     those to or by you in accordance with this Section 5 or pursuant to a
     Domestic Relations Order. Following any transfer, the Restricted Units will
     continue to be subject to the same restrictions described in these Terms
     and Conditions as were applicable immediately prior to the transfer, and
     any and all terms of these Terms and Conditions, other than those in
     Section 2, will apply to the transferee.

     Each transfer permitted in this Section will be effected by written notice
     thereof duly signed and delivered by the transferor to the Secretary of the
     Company at the Company's principal business office. Such notice will state
     the name and address of the transferee, the amount of Restricted Units
     being transferred, and such other information as may be requested by the
     Secretary. The person or persons entitled to receive dividend equivalent
     payments with respect to the Restricted Units and to receive Ordinary
     Shares upon vesting of the Restricted Units will be that person or those
     persons appearing on the Company's registry books as the owner or owners of
     the Restricted Units. The Company will have no obligation to, or liability
     for any failure to, notify you or any transferee of any forfeiture of
     Restricted Units or of any event that will or might result in such
     forfeiture.

6.   Dividend Equivalent Payments. During the period of time between the Grant
     Date and the earlier of the date your Restricted Units vest or are
     forfeited (the "Restricted Period"), your Restricted Units will be
     evidenced by book entry registration. Upon payment during the Restricted
     Period of any dividend with respect to Ordinary Shares, you will be
     entitled to a cash payment equal to the amount of such dividend multiplied
     by the number of Restricted Units you are granted hereunder.

7.   Payment. Upon satisfaction of the vesting conditions set forth in Sections
     3, 8 or 9, your Restricted Units shall be payable to you in the form of a
     number of Ordinary Shares equal to the number of Restricted Units credited
     to you pursuant to Section 1.

8.   Termination of Employment.


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     (a)  Termination Prior to the Grant Date. If your employment with the
          Company and/or an affiliate terminates prior to the Grant Date, no
          Restricted Units will be credited to you.

     (b)  Involuntary Termination Without Cause. If, during the Vesting Period,
          your employment with the Company and/or an affiliate is terminated by
          the Company and/or such affiliate without Cause (as hereinafter
          defined), a portion of your Restricted Units will vest, prorated for
          the nearest number of whole months you were employed during the
          Vesting Period.

     (c)  Voluntary Termination or Termination With Cause. If, during the
          Vesting Period, either you voluntarily terminate your employment with
          the Company and/or an affiliate or your employment with the Company
          and/or an affiliate is terminated for Cause, your Restricted Units are
          forfeited.

     (d)  Retirement. If, during the Vesting Period, you terminate your
          employment (for any reason other than Cause) with the Company and
          immediately commence receiving your pension benefits pursuant to one
          or more of the defined benefit pension plans of the Company and/or any
          affiliate in which you are participating at the time of termination, a
          portion of your Restricted Units will vest, prorated for the nearest
          number of whole months you were employed during the Vesting Period.

     (e)  Termination by Reason of Death or Disability. If, during the Vesting
          Period, your employment with the Company and/or an affiliate is
          terminated as a result of your death or disability, your Restricted
          Units will vest upon your termination of employment. For purposes of
          the preceding sentence, the term "disability" shall mean any complete
          and permanent disability as defined in Section 22(e)(3) of the Code
          and determined in accordance with the procedures set forth in the
          regulations, thereunder.

     For purposes of this Performance Award, a termination of your "employment"
     with the Company and its affiliates 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 affiliates 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 affiliates 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 affiliates for the purpose of performing your occupation in
     any other case. For purposes of this Performance Award, you shall not be
     considered to be an employee 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 affiliates.

     You may be terminated with "Cause" if you willfully engage in conduct which
     is materially injurious to the Company and/or an affiliate, monetarily or
     otherwise; provided, however that (i) no termination of your employment
     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, nor failure to act, shall be considered "willful"
     unless you have acted, or acted or failed to act, without a reasonable
     belief

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     that your action or failure to act was in the best interest of the Company
     and its affiliates. Notwithstanding anything contained in this Plan to the
     contrary, your failure to perform after notice of termination is given
     shall not constitute Cause.

9.   Change in Control. If a Change in Control occurs while you are employed
     with the Company and/or an affiliate, your Restricted Units will vest on
     the date of such Change in Control.

     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 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-11 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

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     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
     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

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     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 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 (iii) 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.

10.  Rights as a Stockholder. Neither you, nor any person claiming through you,
     shall have any rights as a stockholder with respect to the Ordinary Shares
     represented by your Restricted Units unless and until all these Terms and
     Conditions and the terms of the Plan that affect you or such other person
     shall have been complied with as specified herein and Ordinary Shares have
     been transferred to you in accordance with Section 7.

11.  Adjustments. The Restricted Units are subject to adjustment (including,
     without limitation, as to the number and type of shares represented by the
     Restricted Units) in the sole discretion of the Committee and in such
     manner as the Committee may deem equitable and appropriate in connection
     with the occurrence of any of the events described in the adjustment
     provisions of the Plan following the Grant Date.

12.  Limitation. Except as specifically provided herein, neither you, nor any
     person claiming through you, shall have any right or interest in the
     Restricted Units, unless and until all the terms, conditions and provisions
     of these Terms and Conditions and the Plan that affect you or such other
     person shall have been complied with as specified herein.

13.  Requirements of Law and Stock Exchanges. Your right to the Restricted Units
     and the issuance and delivery of the Ordinary Shares are subject to
     compliance with all applicable requirements of law. In addition, the
     Company will not be required to deliver any Ordinary Shares if such
     delivery would violate any rule or regulation of any governmental authority
     or any rule or regulation of, or agreement of the Company with, any
     securities exchange or association upon which the Ordinary Shares are
     listed or quoted.

14.  Wage Withholding and Employment Taxes. No Ordinary Shares shall be
     delivered to or in respect of you by the Company upon the vesting of your
     Restricted Units unless the amount of all

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     federal, state and other governmental withholding tax requirements imposed
     upon the Company with respect to the issuance of such shares has been
     remitted to the Company or unless provisions to pay such withholding
     requirements have been made to the satisfaction of the Committee pursuant
     to the withholding provisions of the Plan. The Committee may make such
     provisions as it may deem appropriate for the withholding of any taxes
     which it determines is required in connection with the issuance. All
     Ordinary Shares withheld or surrendered will be valued at their Fair Market
     Value on the date the withholding obligation arises.

15.  Continued Employment and Future Grants. Neither the grant of Restricted
     Units nor the other arrangements outlined herein give you the right to
     remain in the employ of the Company or any of its affiliates or to be
     selected to receive similar or identical grants in the future.

16.  Company's Rights. The existence of the Performance Award or any Restricted
     Units shall not affect in any way the right or power of the Company or its
     shareholders to undertake or accomplish any corporate act.

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

18.  Governing Law. These Terms and Conditions shall be governed by, and
     construed in accordance with, the laws of the state of Texas.

19.  Section 280G Payments.

     (a)  General Rule. Notwithstanding any contrary provisions in any plan,
          program or policy of the Company or any affiliate and
          except as provided in subsection (b), if all or any portion of the
          benefits payable under this Performance Award, either alone or
          together with other payments and benefits which you receive or are
          entitled to receive from the Company or any affiliate, 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 Performance Award 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
          Performance Award, 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 Performance Award (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 Performance Award), 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 affiliate,
          the provisions of Section 19(a) shall not apply. A "Gross-Up Payment"
          means a payment by the Company or an affiliate 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 affiliate, if any plan,
          program or policy of the Company or any affiliate 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 this Section 19(a) shall apply to the
          benefits payable under this Performance Award.

20.  [Name of Plan], the Board of Directors and the Committee. The conditional
     right to receive Restricted Units is granted to you, and any award of
     Restricted Units is or will be made, under and pursuant to the Plan as the
     same shall have been amended from time to time in accordance with its
     terms. The decision of the board of directors or the Committee on any
     questions concerning the interpretation or administration of the Plan or
     any matters covered in these Terms and Conditions will be final and
     conclusive. No amendment to the Plan or decision of the board of directors
     or the Committee will deprive you, without your consent, of any rights
     hereunder.

     A copy of the Plan in its present form is available at the Company's
     principal office for inspection during business hours by you or other
     persons who may be entitled to any of the Restricted Units as contemplated
     herein.