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                                                                   Exhibit 10.16

                                 GREY WOLF, INC.

                            EXECUTIVE SEVERANCE PLAN

         This Executive Severance Plan (the "Plan") is established by Grey Wolf,
Inc. (the "Employer"), effective as of November 15, 2001.

                                    ARTICLE I
                                     PURPOSE

         The purpose of this Plan is to provide certain executive officers of
the Employer with economic protection in the event of termination of employment
under the circumstances provided for in the Plan within twelve (12) calendar
months after a Change of Control of the Employer.

                                   ARTICLE II
                                   DEFINITIONS

         The following words and phrases when used in this Plan shall have the
respective meanings set forth below unless the context clearly indicates
otherwise:

         2.1 "Administrator" means the Board of Directors of the Employer (the
"Board"), except to the extent that the Board has appointed another person or
persons to serve as the Administrator with respect to the Plan.

         2.2 "Annual Salary" means the total amount of wages payable to the
Participant on an annual basis on the Effective Date of Termination (or, if the
Employer has reduced the Participant's Annual Salary within (12) months after a
Change of Control of the Employer, the Participant's Annual Salary immediately
before such reduction) .

         2.3 "Cause" shall be determined by the Administrator, in exercise of
good faith and reasonable judgment, and shall mean the occurrence of any one or
more of the following: (i) chronic alcoholism or controlled substance abuse as
determined by a doctor mutually acceptable to the Employer and the Participant;
(ii) an act of proven fraud or dishonesty on the part of the Participant with
respect to the Employer or its subsidiaries; (iii) knowing and material failure
by the Participant to comply with material applicable laws and regulations
relating to the business of the Employer or its subsidiaries; (iv) the
Participant's material and continuing failure to perform (as opposed to
unsatisfactory performance) his duties, except where such failure is caused by
the illness or other similar incapacity or disability of the Participant; or (v)
conviction of the Participant of a crime involving moral turpitude or a felony.

         2.4 "Change of Control" means, during the effectiveness of the Plan:
(i) any "Person" (as such term is used in Sections 13(d) and 14(d) of the Act)
is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Act),
directly or indirectly, of securities of the Company representing thirty-five
percent (35%) or more of the combined voting power of the Employer's then
outstanding securities; (ii) there occurs a proxy contest or a consent
solicitation,
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or the Employer is a party to a merger, consolidation, sale of assets, plan of
liquidation or other reorganization, as a consequence of which members of the
Board in office immediately prior to such transaction or event constitute less
than a majority of the Board thereafter; or (iii) during any period of two
consecutive years, other than as a result of an event described in clause (ii)
of this Section 2.4, individuals who at the beginning of such period constituted
the Board (including for this purpose any new director whose election or
nomination for election by the Employer's stockholders was approved by a vote of
at least a majority of the directors then still in office who were directors at
the beginning of such period) cease for any reason to constitute at least a
majority of the Board.

         2.5 "Code" means the Internal Revenue Code of 1986, as amended, and any
successor statute. Reference in the Plan to any section of the Code shall be
deemed to include any amendments or successor provisions to such section and any
Treasury regulations promulgated under such section.

         2.6 "Effective Date of Termination" means the date on which a
Qualifying Termination occurs which triggers the payment of Severance Benefits
hereunder.

         2.7 "Employee" means any person employed by the Employer who is
included on the Federal Insurance Contribution Act rolls of the Employer.

         2.8 "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, and any successor statute. Reference in the Plan to any section of
ERISA shall be deemed to include any amendments or successor provisions to such
section and any regulations promulgated under such section by the Department of
Labor.

         2.9 "Good Reason" means, without the Participant's express written
consent, the failure by the Surviving Company after a Change of Control of the
Employer to immediately elect or reelect or appoint or reappoint the Participant
to a position of employment with the Surviving Company that is at least the same
as the position of employment such Participant held with the Employer prior to
the Change of Control as reflected on Exhibit "A" hereto or a material change by
the Surviving Company in the Participant's salary, functions, duties or
responsibilities, which change would reduce the ranking or level, dignity,
responsibility, importance or scope of Participant's position with the Company
from the position and attributes thereof immediately prior to the Change of
Control of the Employer.

         2.10 "Participant" means an executive officer of the Employer who is
selected by the Board to participate in the Plan whose name, title and Annual
Salary shall be reflected on Exhibit "A" hereto which exhibit may be amended
from time to time to add or delete Participants.

         2.11 "Qualifying Termination" means either (i) termination of
employment by the Participant for Good Reason within twelve (12) calendar months
after a Change of Control of the Employer, or (ii) the Participant's employment
is terminated by the Company or the Surviving Company, as the case may be, for
any reason other than Cause within twelve (12) calendar months after a Change of
Control of the Employer.


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         2.12 "Section" means a section of the Plan unless otherwise stated or
the context requires otherwise.

         2.13 "Severance Benefits" mean benefits payable as a result of the
termination of a Participant's employment with the Employer as described in
Section 4.1.

         2.14 "Surviving Company" means the company in existence immediately
subsequent to the effective date of a Change of Control.

                                   ARTICLE III
                                   ELIGIBILITY

         Severance Benefits are available only to Participants who are
terminated in a Qualifying Termination.

                                   ARTICLE IV
                               SEVERANCE BENEFITS

         4.1 Right to Severance Benefit. In the event of a Participant's
employment is terminated for a reason that constitutes a Qualifying Termination,
such Participant shall be entitled to receive from the Employer a Severance
Benefit equal to one and one-half times (1.5x) an amount equal to the sum of:
(i) the Participant's Annual Salary; plus (ii) a bonus equal to thirty percent
(30%) of the Participant's Annual Salary. The Participant shall not be entitled
to receive a Severance Benefit if his employment with the Employer ends due to
death, disability, retirement (as defined under the then established rules of
the Employer's tax-qualified retirement plan or if none, as defined in the
Employer's policies relating to the retirement of its employees), or due to a
voluntary termination of employment by the Participant without Good Reason.

         4.2 Limitation on Termination Payment. Notwithstanding any other
provision of the Plan, if any portion of the Severance Benefit or any other
payment under any other agreement with or plan of the Employer (in the aggregate
"Total Payments") would constitute an "excess parachute payment," then the
payments to be made to the Participant under the Plan shall be reduced such that
the value of the aggregate Total Payments that the Participant is entitled to
receive shall be one dollar ($1.00) less than the maximum amount which the
Participant may receive without becoming subject to the tax imposed by Section
4999 of the Code, or which the Employer may pay without loss of deduction under
Section 280G(a) of the Code.

         4.3 Form and Timing of Severance Benefit Payment. The Severance
Benefits shall be paid in a single lump sum to the Participant within thirty
(30) days of the Effective Date of Termination.

         4.4 Taxes. All required federal, state and local taxes will be deducted
from the Severance Benefits paid pursuant to the Plan.

         4.5 Notice of Termination. Any termination by the Employer for Cause or
by the Participant for Good Reason shall be communicated by Notice of
Termination to the other party. For purposes of this Agreement, a "Notice of
Termination" shall mean a written notice which


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shall indicate the specific termination provision in the Plan relied upon, and
shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Participant's employment under the
provision so indicated.

         4.6 Successors. The Employer will require any successor (whether direct
or indirect, by purchase, merger, consolidation, or otherwise) of all or
substantially all of the business and/or assets of the Employer or of any
division or subsidiary thereof to expressly assume and agree to perform the
Employer's obligations under the Plan in the same manner and to the same extent
that the Employer would be required to perform them if no such succession had
taken place. Failure of the Employer to obtain such assumption and agreement
prior to the effective date of any such succession shall be a breach of the
Employer's obligations under the Plan and shall entitle the Participant to
compensation from the Employer in the same amount and on the same terms as he
would be entitled to hereunder if he had terminated his employment with the
Employer voluntarily for Good Reason.

         4.7 Termination Before a Change of Control. Upon a termination of the
Participant's employment by the Employer or the Participant or by reason of the
Participant's death, disability, resignation or retirement before the occurrence
of a Change of Control, there shall be no further rights to a Severance Benefit
under the Plan; provided, however, that if the Employer terminates the
Participant's employment for any reason other than Cause within six (6) months
prior to a Change of Control, then the Participant's rights to a Severance
Benefit under the Plan shall be the same as if the termination had occurred
within twelve (12) calendar months after a Change of Control.

                                    ARTICLE V
                               PLAN ADMINISTRATION

         5.1 Authority of the Administrator. The Administrator shall have full
power and authority to interpret, construe and administer the Plan. All
communications from the Administrator to the Participant shall be written in a
manner calculated to be understood by the Participant. In addition, the
Administrator may employ attorneys, accountants, and other professional advisors
to assist the Administrator in the administration of the Plan. The Employer
shall pay the reasonable fees of any such advisor employed by the Administrator.
To the extent permitted by law, no person serving as the Administrator shall be
liable to any person for any action taken or omitted in connection with the
interpretation and administration of the Plan unless attributable to his own
willful misconduct or lack of good faith.

         5.2 Claims Procedure. The Administrator shall be responsible for
administering claims for Severance Benefits under the Plan pursuant to the
procedures contained in this Section 5.2.

               (a) In the event that Severance Benefits are not paid to a
Participant and such Participant believes he is entitled to receive Severance
Benefits, then a written claim must be made to the Administrator within sixty
days from the date payments are refused. The Administrator will review the
written claim, and if the claim is denied in whole or in part, the Administrator
will provide in writing within ninety days of receipt of the claim the specific
reasons for such denial, reference to the pertinent provisions of the Plan upon
which the denial is

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based, and a description of any additional material or information necessary to
perfect the claim. Such written notice will further indicate the additional
steps to be taken by the Participant if a further review of the claim denial is
desired, including a statement that the Participant may (i) request a review
upon written application to the Administrator, (ii) review pertinent Plan
documents, and (iii) submit issues and comments in writing. If notice of the
denial is not furnished in accordance with the above procedure, the claim shall
be deemed denied and the claimant shall be permitted to proceed with the review
procedure described in paragraph (b) below. A claim will be deemed denied if the
Administrator fails to take any action with the said ninety-day period.

               (b) A request by the Participant for a review of the denied claim
must be delivered to the Administrator within sixty days after receipt by such
Participant of written notification of the denial of such claim (or the date
that the claim is deemed denied). The Administrator shall, not later than sixty
(60) days after receipt of a request for a review, make a determination
concerning the claim. A written statement stating the decision on review, the
specific reasons for the decision, and the specific provisions of the Plan on
which the decision is based shall be mailed or delivered to the Participant
within such sixty (60) day period. If the decision on review is not furnished
within the appropriate time, the claim shall be deemed denied on review.

         5.3 Cost of Administration. The cost of this Plan and the expenses of
administering the Plan shall be paid by the Employer.

         5.4 Limitations on Plan Administration. No member of the Administrator
nor any other person to whom discretionary authority is or may be granted
hereunder shall vote or act upon any matter involving his own rights, benefits
or participation in the Plan.

                                   ARTICLE VI
                            AMENDMENT AND TERMINATION

         6.1 Amendment. Prior to a Change of Control, Employer shall have the
right to amend this Plan at any time and from time to time; provided, however,
that (i) any such amendment within six (6) months prior to a Change of Control
shall only be effective as to a particular Participant to the extent that such
Participant consents to the amendment; and (ii) the Plan may not be amended
following the occurrence of a Change of Control except and to the extent that
any such amendment does not adversely change or affect the benefits to which the
Participants are entitled under the Plan.

         6.2 Termination of the Plan. Employer has established this Plan with
the bona fide intention and expectation that from year to year it will deem it
advisable to continue it in effect. However, Employer, in its sole discretion,
reserves the right to terminate the Plan in its entirety at any time; provided,
however, that the Plan may not be terminated following a Change of Control. If
Employer terminates the Plan within six (6) months prior to a Change of Control,
the Participants will have the same rights to a Severance Benefit under the Plan
as if the termination of the Plan had not occurred.


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                                   ARTICLE VII
                               GENERAL PROVISIONS

         7.1 Rights Against Employer. The Plan shall not be deemed to be a
consideration for, or an inducement for, the employment of any Employee by the
Employer. Nothing contained in the Plan shall be deemed to give any Employee the
right to be retained in the service of the Employer or to interfere with the
right of the Employer to discharge any Employee at any time, without regard to
the effect such discharge may have on any rights under the Plan.

         7.2 Action Taken in Good Faith. Unless prohibited by ERISA, the
Administrator and each employee and officer of the Employer who have duties and
responsibilities with respect to the establishment or administration of the Plan
shall be fully protected with respect to any action taken or omitted to be taken
by them in good faith.

         7.3 Indemnification of Employees and Directors. The Employer hereby
indemnifies each person serving as the Administrator and each other employee and
officer of the Employer who are delegated responsibilities under the Plan
against any and all liabilities and expenses, including attorney's fees,
actually and reasonably incurred by them in connection with any threatened,
pending or completed legal action or judicial or administrative proceeding to
which they may be a party, or may be threatened to be made a party, by reason of
membership on the Board or other delegation of responsibilities, except with
regard to any matters as to which they shall be adjudged in such action or
proceeding to be liable for gross negligence or willful misconduct in connection
therewith.

         7.4 Payment Due an Incompetent. If the Administrator shall find that
any person to whom any payment is payable under the Plan is unable to care for
his affairs because of mental or physical illness, accident, or death, or is a
minor, any payment due (unless a prior claim therefor shall have been made by a
duly appointed guardian, committee or other legal representative) may be paid to
the spouse, a child, a parent, a brother or sister or any person deemed by the
Administrator, in its sole discretion, to have incurred expenses for such person
otherwise entitled to payment, in such manner and proportions as the
Administrator may determine. Any such payment shall be a complete discharge of
the liabilities of the Employer under this Plan, and the Employer shall have no
further obligation to see to the application of any money so paid.

         7.5 Spendthrift Clause. No right, title or interest of any kind in the
Plan shall be transferable or assignable by any Participant or Beneficiary or be
subject to alienation, anticipation, encumbrance, garnishment, attachment,
execution or levy of any kind, whether voluntary or involuntary, nor subject to
the debts, contracts, liabilities, engagements, or torts of the Participant or
Beneficiary. Any attempt to alienate, anticipate, encumber, sell, transfer,
assign, pledge, garnish, attach or otherwise subject to legal or equitable
process or encumber or dispose of any interest in the Plan shall be void.

         7.6 Source of Plan Payments. All Severance Benefits paid under the Plan
shall be payable directly to the Participants and shall be paid solely out of
the general assets of the Company. The Company shall not establish a trust or
otherwise fund for the payment of Severance Benefits under the Plan.


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         7.7 Severability. In the event that any provision of this Plan shall be
declared illegal or invalid for any reason, said illegality or invalidity shall
not affect the remaining provisions of this Plan but shall be fully severable
and this Plan shall be construed and enforced as if said illegal or invalid
provision had never been inserted herein.

         7.8 Construction. The article and section headings and numbers are
included only for convenience of reference and are not to be taken as limiting
or extending the meaning of any of the terms and provisions of this Plan.
Whenever appropriate, words used in the singular shall include the plural or the
plural may be read as the singular. When used herein, the masculine gender
includes the feminine gender.

         7.9 Governing Law. The validity and effect of this Plan, and the rights
and obligations of all persons affected hereby, shall be construed and
determined in accordance with the laws of the State of Texas unless superseded
by federal law.

         IN WITNESS WHEREOF, the Employer has caused the Plan to be executed
effective as of the day and year first above written.

                                    GREY WOLF, INC.


                                    By:_______________________________________
                                             Thomas P. Richards,
                                             President and CEO


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                                 GREY WOLF, INC.
                            EXECUTIVE SEVERANCE PLAN
                                   EXHIBIT "A"
                                NOVEMBER 15, 2001
                                 "PARTICIPANTS"



                    NAME                                   TITLE

        Dale M. Love                     Vice President - Gulf Coast
        James M. Reimers                 Vice President - South Texas
        Merrie S. Costley                Vice President and Controller
        Donald J. Guedry, Jr.            Vice President and Treasurer
        Jim G. Winters                   Vice President - Materials Control
        Ronald G. Hale                   Vice President