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                                                                    EXHIBIT 10.1

                    AMENDED AND RESTATED EMPLOYMENT AGREEMENT

         THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this "Agreement") is
entered into as of November 13, 2001 (the "Effective Date"), by and between GREY
WOLF, INC., a Texas corporation (the "Company"), and THOMAS P. RICHARDS (the
"Executive").

         The Company and the Executive desire to amend and restate the existing
Employment Agreement dated as of September 3, 1996, by and between the Company
and the Executive as previously amended on August 26, 1998 and November 10, 1998
on the terms and conditions of this Agreement.

         Accordingly, the parties agree as follows:

         1. Employment, Duties and Acceptance.

                  1.1 Employment by the Company and Duties. The Company hereby
agrees to employ the Executive for a term commencing on the Effective Date and
expiring at the end of the day on December 31, 2004 (such date, or later date to
which this Agreement is extended in accordance with the terms hereof, the
"Termination Date"), unless earlier terminated as provided in Section 4 or
unless extended as provided herein (the "Term"). The Term shall be automatically
extended for one additional year on each anniversary of December 31, 2001 during
the Term (each anniversary being referred to as an "Anniversary") unless either
party notifies the other on or before the date ninety (90) days prior to such
Anniversary that he or it desires to terminate the Agreement (the "Termination
Notice"), in which event the Termination Date shall be the third anniversary of
the date of the Termination Notice. During the Term, the Executive shall serve
in the capacity of President and Chief Executive Officer of the Company, and
shall also serve in those offices and directorships of subsidiary corporations
or entities of the Company to which he may from time to time be appointed or
elected. During the Term, the Executive shall devote all reasonable efforts and
all of his business time and services to the Company, subject to the direction
of the Board of Directors of the Company (the "Board"). Notwithstanding the
foregoing, the Company acknowledges that the Executive has farming and ranching
interests, holds working and royalty interests, owns an interest in a family
corporation which may engage in oil and gas servicing business and may own
working, carried or royalty interests in oil and gas wells, none of which are or
will be in competition with Company Business (as hereinafter defined) and that
the Executive may devote a portion of his business time to these personal
activities without breaching his obligations to the Company under this
Agreement.

                  1.2 Acceptance of Employment by the Executive. The Executive
hereby accepts such employment and shall render the services and perform the
duties described above.

         2. Compensation and Other Benefits.

                  2.1 Annual Salary. The Company shall pay to the Executive an
annual salary at a rate of not less than Four Hundred Twenty-Five Thousand
Dollars ($425,000.00) per year

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(the "Annual Salary"), subject to increase at the sole discretion of the Board.
The Annual Salary shall be payable in accordance with the payroll policies of
the Company as from time to time in effect, but in no event less frequently than
once each month, less such deductions as shall be required to be withheld by
applicable law and regulations.

                  2.2 Bonuses. The Executive shall receive, at the sole
discretion of the Board, an incentive bonus with respect to the fiscal years
ending during the term hereof (the "Incentive Bonus").

                  2.3 Vacation Policy. The Executive shall be entitled to four
(4) weeks of paid vacation during each year of the Term until Executive has been
employed by the Company for twenty (20) years when the Executive shall be
entitled to five (5) weeks paid vacation during each year of the Term.

                  2.4 Participation in Employee Benefit Plans. The Company
agrees to permit the Executive during the Term to participate in any group life,
hospitalization or disability insurance plan, health program, pension plan,
similar benefit plan or other so called "fringe benefits" of the Company
(collectively, "Benefits") which may be available to other executives of the
Company on terms no less favorable to the Executive than the terms offered to
such other executives. The Executive shall cooperate with the Company in
applying for such coverage, including submitting to a physical exam and
providing all relevant health and personal data.

                  2.5 General Business Expenses. The Company shall pay or
reimburse the Executive for all expenses reasonably and necessarily incurred by
the Executive during the Term in the performance of the Executive's services
under this Agreement. Such payment shall be made upon presentation of such
documentation as the Company customarily requires of its senior executive
employees prior to making such payments or reimbursements.

                  2.6 Company Car and Cellular Telephone. The Company shall
provide an automobile, of the Executive's choice, to be used by the Executive
during the Term hereof or until his employment hereunder is terminated. The
purchase price of the automobile shall not exceed $55,000 (the "Auto
Allowance"); provided, however the Auto Allowance shall be increased effective
January 1, 2003 and on January 1 of each year thereafter during the Term by a
percentage equal to the percentage increase in the Consumer Price Index
(Urban-Houston Metropolitan Area) for the previous calendar year. If requested
by the Executive, the Company will replace the automobile with a new automobile
no less frequently than every three (3) years during the Term hereof. The
Company shall, at its expense, pay any and all expenses associated with the
operation of such company car, including, but not limited to, collision and
liability insurance, maintenance and repair costs, replacement parts, tires,
fuel and oil. The Executive may use the automobile for personal purposes and the
value of any such personal use shall be deemed to be additional compensation.
The Company shall also furnish the Executive with a cellular telephone of his
choice and the Company shall pay all charges in connection with the use thereof,
other than charges for calls not related to the Executive's duties hereunder.

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                  2.7 Certain Additional Payments by the Company.

                           2.7.1 Excise Tax; Gross-Up Payment. Anything in this
Agreement to the contrary notwithstanding, in the event it shall be determined
that any payment or distribution by the Company to or for benefit of the
Executive (whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise, but determined without regard to any
additional payments required under this Section 2.7) (a "Payment") would be
subject to the excise tax imposed by Section 4999 of the Internal Revenue Code
of 1986, as amended (the "Code") or any interest or penalties are incurred by
the Executive with respect to such excise tax (such excise tax, together with
any such interest and penalties, are hereinafter collectively referred to as the
"Excise Tax"), then the Executive shall be entitled to receive an additional
payment (a "Gross-Up Payment") in an amount such that after payment by the
Executive of all taxes (including any interest or penalties imposed with respect
to such taxes), including, without limitation, any income taxes (and any
interest and penalties imposed with respect thereto) and Excise Tax imposed upon
the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment
equal to the Excise Tax imposed upon the Payments.

                           2.7.2 Accounting Firm Determinations. Subject to the
provisions of Section 2.7.3, all determinations required to be made under this
Section 2.7, including whether and when Gross-Up Payment is required and the
amount of such Gross-Up Payment and the assumptions to be utilized in arriving
at such determination, shall be made by KPMG, LLP (the "Accounting Firm") which
shall provide detailed supporting calculations both to the Company and the
Executive within fifteen (15) business days of the receipt of notice from the
Executive that there has been a Payment, or such earlier time as is requested by
the Company. In the event that the Accounting Firm is serving as accountant or
auditor for the individual, entity or group effecting a Change of Control, the
Executive shall appoint another nationally recognized accounting firm to make
the determinations required hereunder (which accounting firm shall then be
referred to as the Accounting Firm hereunder). All fees and expenses of the
Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment, as
determined pursuant to this Section 2.7, shall be paid by the Company to the
Executive within five (5) days of the receipt of the Accounting Firm's
determination. If the Accounting Firm determines that no Excise Tax is payable
by the Executive, it shall furnish the Executive with a written opinion that
failure to report the Excise Tax on the Executive's applicable federal income
tax return would not result in the imposition of a negligence or similar
penalty. Any determination by the Accounting Firm shall be binding upon the
Company and the Executive. As a result of the uncertainty in the application of
Section 4999 of the Code at the time of the initial determination by the
Accounting Firm hereunder, it is possible that Gross-Up Payments which will not
have been made by the Company should have been made ("Underpayment"), consistent
with the calculations required to be made hereunder. In the event that the
Company exhausts its remedies pursuant to Section 2.7.3 and the Executive
thereafter is required to make a payment of any Excise Tax, the Accounting Firm
shall determine the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by the Company to or for the benefit of the
Executive.

                           2.7.3 Notification of Claims. The Executive shall
notify the Company in writing of any claims by the Internal Revenue Service
that, if successful, would require the payment by the Company of the Gross-Up
Payment. Such notification shall be given as soon as

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practicable but no later than thirty (30) days after the Executive actually
receives notice in writing of such claim and shall apprise the Company of the
nature of such claim and the date on which such claim is requested to be paid.
The Executive shall not pay such claim prior to the expiration of the thirty
(30) day period following the date on which he gives such notice to the Company
(or such shorter period ending on the date that any payment of taxes with
respect to such claim is due). If the Company notifies the Executive in writing
prior to the expiration of such period that it desires to contest such claim,
the Executive shall:

                  (i) give the Company any information reasonably requested by
         the Company relating to such claim;

                  (ii) take such action in connection with contesting such claim
         as the Company shall reasonably request in writing from time to time,
         including, without limitation, accepting legal representation with
         respect to such claim by an attorney reasonably selected by the
         Company;

                  (iii) cooperate with the Company in good faith in order
         effectively to contest such claim; and

                  (iv) permit the Company to participate in any proceedings
         relating to such claim;

provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation on the foregoing provisions of
this Section 2.7.3, the Company shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or forego any
and all administrative appeals, proceedings, hearings and conferences with the
taxing authority in respect of such claim and may, at its sole option, either
direct the Executive to pay the tax claimed and sue for a refund or contest the
claim in any permissible manner, and the Executive agrees to prosecute such
contest to a determination before any administrative tribunal, in a court of
initial jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs the Executive to pay
such claim and sue for a refund, the Company shall advance the amount of such
payment to the Executive, on an interest-free basis and shall indemnify and hold
the Executive harmless, on an after-tax basis, from any Excise Tax or income tax
(including interest or penalties with respect thereto) imposed with respect to
such advance or with respect to any imputed income with respect to such advance;
and further provided that any extension of the statute of limitations relating
to payment of taxes for the taxable year of the Executive with respect to which
such contested amount is claimed to be due is limited solely to such contested
amount. Furthermore, the Company's control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be payable hereunder and
the Executive shall be entitled to settle or contest, as the case may be, any
other issue raised by the Internal Revenue Service or any other taxing
authority.

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                           2.7.4 If, after the receipt by the Executive of an
amount advanced by the Company pursuant to Section 2.7.3, the Executive becomes
entitled to receive any refund with respect to such claim, the Executive shall
(subject to the Company's complying with the requirements of Section 2.7.3)
promptly pay to the Company the amount of such refund (together with any
interest paid or credited thereon after taxes applicable thereto). If, after the
receipt by the Executive of an amount advanced by the Company pursuant to
Section 2.7.3, a determination is made that the Executive shall not be entitled
to any refund with respect to such claim and the Company does not notify the
Executive in writing of its intent to contest such denial of refund prior to the
expiration of thirty (30) days after such determination, then such advance shall
be forgiven and shall not be required to be repaid and the amount of such
advance shall offset, to the extent thereof, the amount of Gross-Up Payment
required to be paid.

                  2.8 Continuing Medical and Dental Benefits. If Executive's
employment with the Company is terminated for any reason other than Cause (as
defined in Section 4.2 hereof), the Company shall provide medical and dental
insurance coverage ("Medical and Dental Benefits") to Executive and his spouse
from the date of Executive's termination of employment with the Company until
the later of the death of Executive or his spouse. The Company shall pay all
premiums associated with such Medical and Dental Benefits. The Medical and
Dental Benefits provided by the Company under this Section 2.8 shall be without
exclusions for disclosed preexisting conditions and shall provide coverage and
benefits (including, but not limited to, choice of doctor or dentist, covered
procedures, deductible, and co-payment provisions) at a level that in all
respects is not less than the medical and dental coverage available to the
Executive under the Company's group health plan as of the Effective Date. The
Medical and Dental Benefits provided to the Executive and, if applicable, to the
Executive's spouse shall be provided by the Company in a manner such that the
Executive will not be taxable on any reimbursements to or on behalf of the
Executive and, if applicable, to or on behalf of the Executive's spouse. In
addition, such Medical and Dental Benefits shall be provided at no cost to the
Executive; provided, however, that if the Company reasonably determines, based
on the advice of its legal counsel, that the Executive must be taxed on the
Company's actual cost of providing such Medical and Dental Benefits to the
Executive (the "Coverage Cost") to avoid the Executive being taxed on the
reimbursements relating to such coverage, the Company and the Executive agree
that the Company will deliver timely to the Executive appropriate tax
information returns to cause the Executive to include the Coverage Cost in the
Executive's income.

         3. Non-Competition, Confidentiality and Company Property.

                  3.1 Covenants Against Competition. The Executive acknowledges
that (i) the Company is currently engaged in the business of owning, managing
and operating onshore drilling and workover rigs for its own account or for
others which are contracted or hired for the purpose of drilling and/or workover
of oil or natural gas wells (the "Company Business"); (ii) his work for the
Company will give him access to trade secrets of and confidential information
concerning the Company; and (iii) the agreements and covenants contained in this
Agreement are essential to protect the business and goodwill of the Company.
Accordingly, the Executive covenants and agrees as follows:

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                           3.1.1 Non-Compete. The Executive agrees that he shall
not during the Restricted Period (as hereinafter defined) within a two hundred
(200) mile radius of any office maintained by the Company within one year prior
to the end of the Term, including, without limitation, the office address
specified from time to time pursuant to Section 7.2 hereof and any field
offices, directly or indirectly (except in the Executive's capacity as an
officer of the Company) (i) engage or participate in the Company Business; or
(ii) enter the employ of, or render any other services to, any person engaged in
the Company Business except as permitted hereunder. In addition, the Executive
agrees that he shall not during the Restrictive Period (as hereinafter defined)
become interested in any such person in any capacity, including, without
limitation, as an individual, partner, shareholder, lender, officer, director,
principal, agent or trustee except as permitted hereunder; provided, however,
that the Executive may own, directly or indirectly, solely as an investment,
securities of any person traded on any national securities exchange or listed on
the National Association of Securities Dealers Automated Quotation System if the
Executive is not a controlling person of, or a member of a group which controls,
such person and the Executive does not, directly or indirectly, own five percent
(5%) or more of any class of equity securities, or securities convertible into
or exercisable or exchangeable for five percent (5%) or more of any class of
equity securities, of such person. As used herein, the "Restricted Period" shall
mean a period commencing on the date hereof and terminating upon the first to
occur of (a) the date on which the Company terminates or is deemed to terminate
the Executive's employment without Cause (as hereinafter defined), (b) the date
the Executive terminates or is deemed to terminate his employment pursuant to
Section 4.6 hereof, or (c) the date of termination of this Agreement; provided,
however, that if the Company shall have terminated the Executive's employment
for Cause and such Cause in fact exists or if the Executive shall have
terminated his employment with the Company in breach of the terms of this
Agreement, the Restricted Period shall end one (1) year following the
termination of the Executive's employment hereunder.

                           3.1.2 Confidential Information. The Executive
acknowledges that the Company has a legitimate and continuing proprietary
interest in the protection of its confidential information and that it has
invested substantial sums and will continue to invest substantial sums to
develop, maintain and protect confidential information. The Company agrees to
provide the Executive access to confidential information in conjunction with the
Executive's duties, including, without limitation, information of a technical
and business nature regarding the Company's past, current or anticipated
business that may encompass financial information, financial figures, trade
secrets, customer lists, details of client or consultant contracts, pricing
policies, operational methods, marketing plans or strategies, product
development techniques or plans, business acquisition plans, Company employee
information, organizational charts, new personnel acquisition plans, technical
processes, designs and design projects, inventions and research projects, ideas,
discoveries, inventions, improvements, trade secrets, design specifications,
writings and other works of authorship. In exchange, as an independent covenant,
the Executive agrees not to make any unauthorized use, publication, or
disclosure, during or subsequent to his employment by the Company, of any
Intellectual Property of a confidential or trade secret nature, generated or
acquired by him during the course of his employment, except to the extent that
the disclosure of Intellectual Property Information is necessary to fulfill his
responsibilities as an employee of the Company. The Executive understands that
confidential matters and trade secrets include information not generally known
by or available to the public about or belonging to the Company, its divisions,
subsidiaries, and related affiliates, or belonging

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to other companies to whom the Company, its divisions, subsidiaries, and related
affiliates, may have an obligation to maintain information in confidence, and
that authorization for public disclosure may only be obtained through the
Company's written consent.

                           3.1.3 Property of the Company. All memoranda, notes,
lists, records, engineering drawings, technical specifications and related
documents and other documents or papers (and all copies thereof) relating to the
Company, including such items stored in computer memories, microfiche or by any
other means, made or compiled by or on behalf of the Executive after the date
hereof, or made available to the Executive after the date hereof relating to the
Company, its affiliates or any entity which may hereafter become an affiliate
thereof, shall be the property of the Company, and shall be delivered to the
Company promptly upon the termination of the Executive's employment with the
Company or at any other time upon request; provided, however, that the
Executive's address books, diaries, chronological correspondence files and
rolodex files shall be deemed to be property of the Executive.

                           3.1.4 Original Material. The Executive agrees that
any inventions, discoveries, improvements, ideas, concepts or original works of
authorship relating directly to the Company Business, including without
limitation information of a technical or business nature such as ideas,
discoveries, designs, inventions, improvements, trade secrets, know-how,
manufacturing processes, product formulae, design specifications, writings and
other works of authorship, computer programs, financial figures, marketing
plans, customer lists and data, business plans or methods and the like, which
relate in any manner to the actual or anticipated business or the actual or
anticipated areas of research and development of the Company and its divisions,
subsidiaries, affiliates, or related entities, whether or not protectable by
patent or copyright, that have been originated, developed or reduced to practice
by the Executive alone or jointly with others during the Executive's employment
with the Company shall be the property of and belong exclusively to the Company.
The Executive shall promptly and fully disclose to the Company the origination
or development by the Executive of any such material and shall provide the
Company with any information that it may reasonably request about such material.
Either during the subsequent to the Executive's employment, upon the request and
at the expense of the Company or its nominee, and for no remuneration in
addition to that due the Executive pursuant to his employment by the Company,
but at no expense to him, the Executive agrees to execute, acknowledge, and
deliver to the Company or its attorneys any and all instruments which, in the
judgment of the Company or its attorneys, may be necessary or desirable to
secure or maintain for the benefit of the Company adequate patent, copyright,
and other property rights in the United States and foreign countries with
respect to any such inventions, improvements, ideas, concepts, or original works
of authorship embraced within this Agreement.

                           3.1.5 Employees of the Company and its Affiliates.
The Executive agrees to refrain during the Restricted Period from inducing or
attempting to influence any employee of the Company, its divisions, subsidiaries
and/or affiliated entities to terminate his employment.

                           3.1.6 Customers. The Executive also agrees to refrain
during the Restricted Period from diverting, taking, soliciting and/or accepting
on his own behalf or on the behalf of another person, firm, or company, the
business of any past or present customer of the Company, its divisions,
subsidiaries and/or other affiliated entities, or any identified prospective

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or potential customer of the Company, its divisions, subsidiaries and/or
affiliated entities, whose identity became known to the Executive through his
employment by the Company.

                  3.2 Rights and Remedies Upon Breach. If the Executive
breaches, any of the provisions contained in Section 3.1 of this Agreement (the
"Restrictive Covenants"), the Company shall have the following rights and
remedies, each of which rights and remedies shall be independent of the others
and severally enforceable, and each of which is in addition to, and not in lieu
of, any other rights and remedies available to the Company under law or in
equity:

                           3.2.1 Specific Performance. The right and remedy to
have the Restrictive Covenants specifically enforced by any court of competent
jurisdiction, it being agreed that any breach of the Restrictive Covenants would
cause irreparable injury to the Company and that money damages would not provide
an adequate remedy to the Company.

                           3.2.2 Accounting. The right and remedy to require the
Executive to account for and pay over to the Company all compensation, profits,
monies, accruals, increments or other benefits derived or received by the
Executive as the result of any action constituting a breach of the Restrictive
Covenants.

                  3.3 Severability of Covenants. The Executive acknowledges and
agrees that the Restrictive Covenants are reasonable and valid in duration and
geographical scope and in all other respects. If any court determines that any
of the Restrictive Covenants, or any part thereof, is invalid or unenforceable,
the remainder of the Restrictive Covenants shall not thereby be affected and
shall be given full effect without regard to the invalid portions.

                  3.4 Court Review. If any court determines that any of the
Restrictive Covenants, or any part thereof, is unenforceable because of the
duration or geographical scope of, or scope of activities restrained by, such
provision, such court shall have the power to reduce the duration or scope of
such provision, as the case may be, and, in its reduced form, such provision
shall then be enforceable.

                  3.5 Enforceability in Jurisdictions. The Company and the
Executive intend to and hereby confer jurisdiction to enforce the Restrictive
Covenants upon the courts of any jurisdiction within the geographical scope of
such Restrictive Covenants. If the courts of any one or more of such
jurisdictions hold the Restrictive Covenants unenforceable by reason of the
breadth of such scope or otherwise, it is the intention of the Company that such
determination not bar or in any way affect the right of the Company to the
relief provided above in the courts of any other jurisdiction within the
geographical scope of such Restrictive Covenants, as to breaches of such
Restrictive Covenants in such other respective jurisdictions, such Restrictive
Covenants as they relate to each jurisdiction being, for this purpose, severable
into diverse and independent covenants.

         4. Termination.

                  4.1 Termination Upon Death. If the Executive dies during the
Term, this Agreement shall terminate; provided, however, that in any such event,
the Company shall pay to the Executive's estate: (i) any portion of the Annual
Salary and any Incentive Bonus that shall have been earned by the Executive
prior to the termination but not yet paid; (ii) any Benefits that

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have vested in the Executive at the time of such termination as a result of his
participation in any of the Company's benefit plans; and (iii) any expenses with
respect to which the Executive is entitled to reimbursement pursuant to this
Agreement. In addition to the foregoing, if the Executive dies during the term,
his death shall be treated as a Termination Without Cause entitling his estate
to the severance payments described in Section 4.3.1(ii), below. Finally, the
Executive's right to indemnification, payment or reimbursement pursuant to
Section 6 of this Agreement shall not be affected by such termination and shall
continue in full force and effect, both with respect to proceedings that are
threatened, pending or completed at the date of such termination and with
respect to proceedings that are threatened, pending or completed after that
date.

                  4.2 Termination With Cause. The Company has the right, at any
time during the Term, subject to all of the provisions hereof, exercisable by
serving notice, effective on or after the date of service of such notice as
specified therein, to terminate the Executive's employment under this Agreement
and discharge the Executive with Cause. If such right is exercised, the
Company's obligation to the Executive shall be limited solely to the payment of
unpaid Annual Salary accrued, together with earned but unpaid Incentive Bonus,
if any, and Benefits vested up to the effective date specified in the Company's
notice of termination. As used in this Agreement, the term "Cause" shall mean
and include (i) chronic alcoholism or controlled substance abuse as determined
by a doctor mutually acceptable to the Company and the Executive; (ii) an act of
proven fraud or dishonesty on the part of the Executive with respect to the
Company or its subsidiaries; (iii) knowing and material failure by the Executive
to comply with material applicable laws and regulations relating to the business
of the Company or its subsidiaries; (iv) the Executive's material and continuing
failure to perform (as opposed to unsatisfactory performance) his duties
hereunder or a material breach by the Executive of this Agreement except, in
each case, where such failure or breach is caused by the illness or other
similar incapacity or disability of the Executive; or (v) conviction of a crime
involving moral turpitude or a felony. Prior to the effectiveness of termination
for Cause under subclause (i), (ii), (iii) or (iv) above, the Executive shall be
given thirty (30) days prior notice from the Board specifically identifying the
reasons which are alleged to constitute Cause for any termination hereunder and
an opportunity to be heard by the Board in the event the Executive disputes such
allegations.

                  4.3 Termination Without Cause. The Company has the right, at
any time during the Term, subject to all of the provisions hereof, exercisable
by serving notice, effective on or after the date of service of such notice as
specified therein, to terminate the Executive's employment under this Agreement
and discharge the Executive without Cause. If the Executive is terminated during
the Term without Cause (including any termination which is deemed to be a
constructive termination without Cause under Section 4.6 hereof), the Company's
obligation to the Executive shall be limited solely to the following:

                           4.3.1 Severance Payments. The Company shall pay the
Executive, in lump sum within thirty (30) days after the date of termination:

                           (i) the amounts otherwise payable to Executive upon
         his death under Section 4.1 hereof; and

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                           (ii) an amount equal to: 1) in the event such
         termination occurs within two (2) years after a Change of Control, an
         amount equal to three and three quarters times (3.75x) the sum of: (a)
         the Annual Salary of Executive in effect on the date of termination
         (or, if the Company has reduced the Executive's Annual Salary in breach
         of this Agreement, the Executive's Annual Salary immediately before
         such reduction) plus (b) a bonus equal to one-hundred percent (100%) of
         such Annual Salary; or 2) in the event such termination occurs at any
         time other than within two (2) years after a Change of Control, an
         amount equal to three times (3x) the sum of: (a) the Annual Salary of
         the Executive in effect on the date of termination (or, if the Company
         has reduced the Executive's Annual Salary in breach of this Agreement,
         the Executive's Annual Salary immediately before such reduction) plus
         (b) a bonus equal to one-hundred percent (100%) of such Annual Salary;
         and

                           4.3.2 Extension of Medical Benefits. The Company will
continue to provide the Executive and, if the Executive is married, the
Executive's spouse the Medical and Dental Benefits described in Section 2.8
hereof.

                  4.4 Termination by the Executive. Any termination of this
Agreement by the Executive during the Term, except such termination (i) as is
deemed to be a Constructive Termination Without Cause by the Company under
Section 4.6 of this Agreement or (ii) a voluntary resignation or retirement by
Executive within two (2) years after a Change of Control in which event the
Company shall pay the Executive the amounts described in Section 4.3.1 and
4.3.2, above, shall be deemed to be a breach of the terms of this Agreement for
the purposes of Section 3.1.1 hereof and shall entitle the Company to
discontinue payment of all Annual Salary, Incentive Bonus and Benefits (other
than the Medical and Dental Benefits described in Section 2.8 hereof) not earned
and payable prior to the date of such termination.

                  4.5 Termination upon Disability. If during the Term the
Executive becomes physically or mentally disabled, whether totally or partially,
as evidenced by the written statement of a competent physician licensed to
practice medicine in the United States who is mutually acceptable to the Company
and the Executive or his closest relative if he is not then able to make such a
choice, so that the Executive is unable substantially to perform his services
hereunder for (i) a period of four consecutive months, or (ii) for shorter
periods aggregating six months during any twelve (12) month period, the Company
may at any time after the last day of the four consecutive months of disability
or the day on which the shorter periods of disability equal an aggregate of six
months, by written notice to the Executive, terminate the Executive's employment
hereunder and discontinue payments of the Annual Salary, Incentive Bonus and
Benefits accruing from and after the date of such termination. In such event,
the Executive shall be entitled to the full compensation payable to him
hereunder for periods of disability shorter than the periods specified in
clauses (i) and (ii) of the previous sentence. In addition, if the Executive's
employment with the Company is terminated pursuant to this Section 4.5, such
termination shall be treated as a Termination Without Cause entitling Executive
to the severance payments described in Section 4.3 above. Finally, the
Executive's right to indemnification, payment or reimbursement pursuant to
Section 6 of this Agreement shall not be affected by such termination and shall
continue in full force and effect, both with respect to proceedings that are
threatened, pending or completed at the date of such termination and with
respect to proceedings that are threatened, pending or completed after that
date.

                                       10
<PAGE>

                  4.6 Constructive Termination Without Cause. Notwithstanding
any other provision of this Agreement, the Executive's employment under this
Agreement may be terminated during the Term by the Executive, which shall be
deemed to be constructive termination by the Company without Cause, if one of
the following events shall occur without the consent of the Executive: (i) a
failure to elect or reelect or to appoint or reappoint the Executive to the
office of President and Chief Executive Officer of the Company or other material
change by the Company of the Executive's functions, duties or responsibilities
which change would reduce the ranking or level, dignity, responsibility,
importance or scope of the Executive's position with the Company from the
position and attributes thereof described in Section 1 above; (ii) the
assignment or reassignment by the Company of the Executive to a location not
within fifty (50) miles of the Company's current location; (iii) the
liquidation, dissolution, consolidation or merger of the Company, or transfer of
all or substantially all of its assets, other than a transaction in which a
successor corporation with a net worth substantially the same as or greater than
that of the Company assumes this Agreement and all obligations and undertakings
of the Company hereunder; (iv) a reduction in the Executive's fixed salary; (v)
a Change of Control as hereinafter defined; (vi) the failure of the Company to
continue to provide the Executive with office space, related facilities and
secretarial assistance that are commensurate with the Executive's
responsibilities to and position with the Company; (vii) the notification by the
Company of the Company's intention not to observe or perform one or more of the
obligations of the Company under this Agreement; (viii) the failure by the
Company to indemnify, pay or reimburse the Executive at the time and under the
circumstances required by Section 6 of this Agreement; (xi) the occurrence of
any other material breach of this Agreement by the Company or any of its
subsidiaries; or (x) the delivery of notice by the Company in accordance with
Section 1.1 hereof that it desires to terminate this Agreement. Any such
termination shall be made by written notice to the Company specifying the event
relied upon for such termination and given within sixty (60) days after such
event. Any constructive termination shall be effective sixty (60) days after the
date the Company has been given such written notice setting forth the grounds
for such termination with specificity; provided, however, that the Executive
shall not be entitled to terminate this Agreement in respect of any of the
grounds set forth above if within sixty (60) days after such notice the action
constituting such ground for termination has been cured and is no longer
continuing. A constructive termination by the Company without Cause shall
terminate the Restrictive Period hereunder.

                  4.7 Change of Control. For the purposes hereof, a "Change of
Control" of the Company shall be deemed to have occurred if (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 Company's then outstanding
securities; (ii) there occurs a proxy contest or a consent solicitation, or the
Company 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 4.7, 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 Company'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.

                                       11
<PAGE>

         5. Insurance. The Company may, from time to time, apply for and take
out, in its own name and at its own expense, naming itself or one or more of its
affiliates as the designated beneficiary (which it may change from time to
time), policies for life, health, accident, disability or other insurance upon
the Executive in any amount or amounts that it may deem necessary or appropriate
to protect its interest. The Executive agrees to aid the Company in procuring
such insurance by submitting to medical examinations and by completing,
executing and delivering such applications and other instruments in writing as
may reasonably be required by an insurance company or companies to which any
application or applications for insurance may be made by or for the Company.

         6. Indemnification.

                  6.1 The Company shall, to the maximum extent not prohibited by
law, indemnify the Executive if he is made, or threatened to be made, a party to
any threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, including an action by or in the
right of the Company to procure a judgment in its favor (collectively, a
"Proceeding"), by reason of the fact that the Executive is or was a director or
officer of the Company, or is or was serving in any capacity at the request of
the Company for any other corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise, against judgments, fines, penalties,
excise taxes, amounts paid in settlement and costs, charges and expenses
(including attorneys' fees and disbursements) paid or incurred in connection
with any such Proceeding.

                  6.2 The Company shall, from time to time, reimburse or advance
to the Executive the funds necessary for payment of expenses, including
attorneys' fees and disbursements, incurred in connection with any Proceeding in
advance of the final disposition of such Proceeding; provided, however, that, if
required by the Texas Business Corporation Act, such expenses incurred by or on
behalf of the Executive may be paid in advance of the final disposition of a
Proceeding only upon receipt by the Company of an undertaking, by or on behalf
of the Executive, to repay any such amount so advanced if it shall ultimately be
determined by final judicial decision from which there is no further right of
appeal that the Executive is not entitled to be indemnified for such expenses.

                  6.3 The right to indemnification and reimbursement or
advancement of expenses provided by, or granted pursuant to, this Section 6
shall not be deemed exclusive of any other rights which the Executive may now or
hereafter have under any law, by law, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his official capacity
and as to action in another capacity while holding such office.

                  6.4 The right to indemnification and reimbursement or
advancement of expenses provided by, or granted pursuant to, this Section 6
shall continue as to the Executive after he has ceased to be a director, officer
or employee of the Company and shall inure to the benefit of the heirs,
executors and administrators of the Executive's estate.

                  6.5 The Company shall purchase and maintain director and
officer liability insurance on such terms and providing such coverage as the
Board determines is appropriate, and

                                       12
<PAGE>

the Executive shall be covered by such insurance on the same basis as the other
directors and executive officers of the Company.

                  6.6 The right to indemnification and reimbursement or
advancement of expenses provided by, or granted pursuant to, this Section 6
shall be enforceable by the Executive in any court of competent jurisdiction.
The burden of proving that such indemnification or reimbursement or advancement
of expenses is not appropriate shall be on the Company. Neither the failure of
the Company (including its board of directors, independent legal counsel, or its
stockholders) to have made a determination prior to the commencement of such
action that such indemnification or reimbursement or advancement of expenses is
proper in the circumstances nor an actual determination by the Company
(including its board of directors, independent legal counsel, or its
stockholders) that the Executive is not entitled to such indemnification or
reimbursement or advancement of expenses shall constitute a defense to the
action or create a presumption that the Executive is not so entitled. The
Executive shall also be indemnified for any expenses incurred in connection with
successfully establishing his right to such indemnification or reimbursement or
advancement of expenses, in whole or in part, in any such proceeding.

                  6.7 If the Executive serves (i) another corporation of which a
majority of the shares entitled to vote in the election of its directors is held
by the Company, or (ii) any employee benefit plan of the Company or any
corporation referred to in clause (i), in any capacity, then he shall be deemed
to be doing so at the request of the Company.

                  6.8 The right to indemnification or reimbursement or
advancement of expenses shall be interpreted on the basis of the applicable law
in effect at the time of the occurrence of the event or events giving rise to
the applicable Proceeding.

         7. Other Provisions.

                  7.1 Certain Definitions. As used in this Agreement, the
following terms have the following meanings unless the context otherwise
requires:

                           (i) "affiliate" with respect to the Company means any
         other person controlled by or under common control with the Company but
         shall not include any stockholder or director of the Company, as such.

                           (ii) "person" means any individual, corporation,
         partnership, firm, joint Company, association, joint-stock company,
         trust, unincorporated organization, governmental or regulatory body or
         other entity.

                           (iii) "subsidiary" means any corporation 50% or more
         of the voting securities of which are owned directly or indirectly by
         the Company.

                  7.2 Notices. Any notice or other communication required or
permitted hereunder shall be in writing and shall be delivered personally,
telegraphed, telexed, sent by facsimile transmission or sent by certified,
registered or express mail, postage prepaid. Any such notice shall be deemed
given when so delivered personally, telegraphed, telexed or sent by facsimile
transmission or, if mailed, on the date of actual receipt thereof, as follows:

                                       13
<PAGE>

                  (i)      if to the Company, to:

                           Grey Wolf, Inc.
                           10370 Richmond Avenue, Suite 600
                           Houston, Texas 77042

                  (ii)     if to the Executive, to:

                           Thomas P. Richards
                           1318 Forest Brook
                           Sugar Land, Texas 77479

Any party may change its address for notice hereunder by notice to the other
party hereto.

                  7.3 Entire Agreement. This Agreement contains the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior agreements, written or oral, with respect thereto,
including, without limitation, the Employment Agreement dated September 3, 1996,
as previously amended on August 26, 1998 and November 10, 1998 by and between
the Company and the Executive.

                  7.4 Waivers and Amendments. This Agreement may be amended,
superseded, canceled, renewed or extended, and the terms and conditions hereof
may be waived, only by a written instrument signed by the parties or, in the
case of a waiver, by the party waiving compliance. No delay on the part of any
party in exercising any right, power or privilege hereunder shall operate as a
waiver thereof Nor shall any waiver on the part of any party of any such right,
power or privilege hereunder, nor any single or partial exercise of any right,
power or privilege hereunder, preclude any other or further exercise thereof or
the exercise of any other right, power or privilege hereunder.

                  7.5 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas (without giving
effect to the choice of law provisions thereof) where the employment of the
Executive shall be deemed, in part, to be performed and enforcement of this
Agreement or any action taken or held with respect to this Agreement shall be
taken in the courts of appropriate jurisdiction in Houston, Texas.

                  7.6 Assignment. This Agreement, and any rights and obligations
hereunder, may not be assigned by the Executive and may be assigned by the
Company (subject to Section 4.6 (iii) hereof) only to a successor by merger or
purchasers of substantially all of the assets of the Company.

                  7.7 Counterparts. This Agreement may be executed in separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all of which together shall constitute one and the same
instrument.

                  7.8 Headings. The headings in this Agreement are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement.

                                       14
<PAGE>

                  7.9 No Presumption Against Interest. This Agreement has been
negotiated, drafted, edited and reviewed by the respective parties, and
therefore, no provision arising directly or indirectly herefrom shall be
construed against any party as being drafted by said party.

                  7.10 Validity Contest. The Company shall promptly pay any and
all legal fees and expenses incurred by the Executive from time to time as a
direct result of the Company's contesting the due execution, authorization,
validity or enforceability of this Agreement. Executive shall have no obligation
to mitigate damages suffered as a result of termination of his employment with
the Company. The provisions of the Section 7.10 shall survive termination of
this Agreement.

                  7.11 Dispute Resolution. If any dispute arises out of or
relates to this Agreement, or the breach thereof, Executive and the Company
agree to promptly negotiate in good faith to resolve such dispute. If the
dispute cannot be settled by the parties through negotiation, Executive and the
Company agree to try in good faith to settle the dispute by mediation under the
Commercial Mediation Rules of the American Arbitration Association before
resorting to arbitration, litigation or any other dispute resolution procedure.
If the parties are unable to settle the dispute by mediation as provided in the
preceding sentence, any claim, controversy or dispute arising out of or relating
to this Agreement, or the breach thereof, shall be settled by binding
arbitration before a panel of three arbitrators in accordance with the
Commercial Arbitration Rules of the American Arbitration Association. The
arbitration shall be conducted in Houston, Harris County, Texas, or such other
location to which the parties mutually agree. The decision of the arbitrator(s)
shall be final and binding and judgment upon the award rendered may be entered
in any court having jurisdiction thereof.

                  7.12 Binding Agreement. This Agreement shall inure to the
benefit of and be binding upon the Company and its respective successors and
assigns and the Executive and his legal representatives.

      [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK, SIGNATURE PAGE FOLLOWS]

                                       15
<PAGE>

         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.

                                               EXECUTIVE

                                               --------------------------------
                                               THOMAS P. RICHARDS

                                               COMPANY

                                               GREY WOLF, INC.

                                               --------------------------------
                                               STEVEN A. WEBSTER,
                                               Chairman, Compensation Committee
                                               Board of Directors

                                       16<PAGE>

                                                                    EXHIBIT 10.1

                            GLOBALSANTAFE CORPORATION

                          NOTICE OF STOCK OPTION GRANT
                  AND SPECIFICATION OF THE TERMS AND CONDITIONS
                                       OF
                  NON-EMPLOYEE DIRECTOR STOCK OPTION GRANTED TO

                                [NAME OF GRANTEE]

       (Under the GlobalSantaFe Corporation 2001 Long-Term Incentive Plan)

         GLOBALSANTAFE CORPORATION (the "Company"), desiring to afford you an
opportunity to purchase ordinary shares of the Company, $.01 par value
("Ordinary Shares"), and to provide you with an added incentive as a director of
the Company, has established the following terms and conditions under which it
has granted you an option ("Option") under the GlobalSantaFe Corporation 2001
Long-Term Incentive Plan (the "Plan") to purchase Ordinary Shares subject to and
upon the terms and conditions set forth below. This Option is a non-qualified
stock option and is not subject to incentive stock option treatment under the
U.S. federal Internal Revenue Code or applicable rules thereunder. YOU ARE URGED
TO CONSULT YOUR TAX ADVISOR PRIOR TO EXERCISING THIS OPTION AND PRIOR TO
DISPOSING OF ANY SHARES ACQUIRED UPON SUCH EXERCISE.

1.       Specification of Date, Number of Shares, Option Price and Term.

         (a)  The date of this Option is [Date of Grant].

         (b)  The number of Ordinary Shares of the Company optioned hereby is
              8,000.

         (c)  Subject to acceleration under Sections 2 and 5 and to adjustments
              under Section 7, an installment of 4,000 of the 8,000 shares
              optioned hereby first becomes purchasable on [Date One Year From
              Date of Grant], and a second installment consisting of the
              remaining 4,000 shares first becomes purchasable on [Date Two
              Years From Date of Grant].

         (d)  The per share option price under this Option is $_____, subject to
              adjustments under Section 7.

         (e)  The term of this Option commences [Date of Grant], and expires at
              the close of business at the Company's principal executive office
              on [Date of the Business Day Immediately Preceding the 10th
              Anniversary of Date of Grant]; upon the expiration of such term
              this Option shall expire and be cancelled and it may not
              thereafter be exercised.

                                      -1-
<PAGE>

2.       Installment Provisions and Acceleration. This Option is not exercisable
         in any part until the earliest of the dates specified in this Section
         and in Section 5 below.

         The installments set forth 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 this Option.

         If a Change in Control occurs while you are a director of the Company,
         the shares optioned hereby shall become fully purchasable on the date
         of such Change in Control irrespective of the limitations described in
         Section 1(c). Your Option shall remain exercisable throughout the
         Option term.

         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 (the "Outstanding
         Company Ordinary Shares") or (B) the combined voting power of the then
         outstanding voting securities of the Company 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

                                      -2-
<PAGE>

         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 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 (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 (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 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

                                      -3-
<PAGE>

         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.

         Nothing contained in this section shall be interpreted in a way which
         permits you to purchase a number of shares in excess of the number of
         shares optioned hereby as specified in Section 1(b).

3.       Method of Exercise. This Option may be exercised from time to time, in
         accordance with its terms, by written notice thereof signed and
         delivered by you or another person entitled to exercise this Option to
         the Corporate Secretary of the Company at its principal executive
         office in Houston, Texas, or as it may hereafter be located. Such
         notice shall state the number of shares being purchased and shall be
         accompanied by the payment in full in cash of the option price for such
         number of shares. Such payment may also be made, in whole or in part,
         by the surrender of Ordinary Shares of GlobalSantaFe Corporation with a
         Fair Market Value equal to the amount of the required payment;
         provided, however, that you must have held the shares surrendered for
         at least six months, and provided further that the Board of Directors
         of GlobalSantaFe Corporation or its Compensation Committee may reject
         any or all shares so tendered if the shares are deemed by either of
         them in their discretion to be unacceptable. Promptly after receipt of
         such notice and payment, the Company shall issue certificates to you or
         such other person exercising this Option.

4.       Transferability. You may not transfer this Option other than by will or
         by the laws of descent and distribution or, if applicable, as
         authorized by the following sentence, and this Option shall be
         exercisable during your lifetime only by you or, if applicable, by a
         transferee authorized by the following sentence. This Option 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

                                      -4-
<PAGE>

         Order"), or (v) such other transferee as may be approved by the
         Compensation Committee of the Company's Board of Directors in its sole
         and absolute discretion; provided, however, that (x) the Board of
         Directors of the Company and its Compensation Committee each reserves
         the right to prohibit any transfer with or without cause in its sole
         and absolute discretion, and (y) subsequent transfers of this Option or
         any portion 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, this Option 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
         service as a director or events of termination of service as a director
         shall continue to mean your service as a director or events of
         termination of your service as a director, and following any such event
         the options shall be exercisable by the transferee only to the extent
         and for the periods specified in this Notice. Each transfer shall be
         effected by written notice thereof duly signed and delivered by the
         transferor to the Corporate Secretary of the Company at its principal
         executive office in Houston, Texas, or as it may hereafter be located.
         Such notice shall state the name and address of the transferee, the
         amount of this Option being transferred, and such other information as
         may be requested by the Corporate Secretary. The person or persons
         entitled to exercise this Option shall be that person or those persons
         appearing on the registry books of the Company as the owner or owners
         of this Option, and the Company may treat the person or persons in
         whose name or names this Option is registered as the owner or owners of
         this Option 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 this Option at or prior to its normal expiration date or
         of any event that will or might result in such termination.

5.       Termination of Service as a Director. If your service as a director of
         the Company is terminated by reason of your death, disability or
         ineligibility for reelection under the provisions of the Company's
         Articles of Association regarding age ("retirement"), or your service
         as a director of the Company is terminated by the Company's
         shareholders other than for cause (to mean acts of misconduct harmful
         to the Company, inadequate performance or incompetence), or your
         service as a director of the Company is terminated due to a failure to
         nominate you for reelection as a director other than for cause, this
         Option will immediately become exercisable as to the full number of
         shares optioned hereby as specified in Section 1(b), to the extent not
         previously exercised, and will remain exercisable as to said full
         number of shares until the expiration of the term of this Option;
         provided, however, that if the foregoing acceleration provision becomes
         operative during the six-month period immediately following the date of
         this Option, then this Option shall immediately become exercisable as
         to said full number of shares upon the expiration of said six-month
         period and remain exercisable until the expiration of the term of this
         Option. In any other case of termination of your service as a director,
         including without limitation termination by the Company's shareholders
         for cause, or due to a failure to nominate you for reelection for
         cause, or due to your resignation or decision not to stand for
         reelection, this Option shall remain exercisable, only to the extent
         exercisable at the date of such termination, for three months after
         termination of service as a director, said period in any event not to
         extend beyond the expiration of the term of this Option. Upon
         expiration of the foregoing periods, this Option shall expire,
         terminate and be cancelled in all respects. At the time your service as
         a director of the Company terminates, this Option shall expire,
         terminate and be cancelled in all respects as to all shares other than
         the shares as to which this Option can be exercised at the time of or
         as a result of such termination.

                                      -5-
<PAGE>

         Anything to the contrary in these Terms and Conditions notwithstanding,
         if your service as a director of the Company terminates and such
         termination does not and will not result in acceleration of the vesting
         of all unvested installments of this Option, any unvested installment
         of this Option that would have vested within the 15 days following the
         day of such termination will be deemed to have vested on the day
         immediately preceding the day of such termination.

6.       Death, Disability or Retirement. In the event of your death, disability
         or retirement, you or your legal representative or representatives, or
         the person or persons entitled to do so under your last will and
         testament or under applicable intestate laws, shall have the right to
         exercise this Option, to the extent not previously exercised, as to the
         lesser of the full number of shares optioned hereby as specified in
         Section 1(b) hereof or such lesser number of shares as shall have
         resulted from the operation of Section 5. For purposes of Section 5 and
         this Section 6, the term "disability" shall mean a physical or mental
         condition which totally and permanently prevents you from continuing to
         serve as a director, as reasonably determined in good faith by the
         Compensation Committee of the Board of Directors of GlobalSantaFe
         Corporation.

7.       Adjustments. If outstanding shares of the class then subject to this
         Option 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 subject to the unexercised portion of this Option the
         number and class of shares or securities into or for which each
         outstanding share of the class subject to this Option shall be so
         changed or exchanged, all without any change in the aggregate purchase
         price for the shares then subject to the unexercised portion of this
         Option, but with a corresponding adjustment in the purchase price per
         share. 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"), this Option shall terminate,
         unless provision be made in writing in connection with such transaction
         for the assumption of options theretofore granted under the Plan or the
         substitution for such options of any options 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 this Option shall continue in the manner and under the
         terms so provided. If this Option shall terminate pursuant to the
         foregoing sentence, the person then entitled to exercise any
         unexercised portions of this Option shall have the right, at such time
         immediately prior to the consummation of the Terminating Transaction as
         the Company shall designate, to exercise this Option to the extent not
         theretofore exercised.

         Adjustments under this Section 7 shall be made by the Company's Board
         of Directors 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 this Option or in
         connection with any such adjustment.

                                      -6-
<PAGE>

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

9.       Requirements of Law and of Stock Exchanges. The issuance of shares upon
         the exercise of this Option 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, the Company shall not be required to
         issue or deliver any certificate or certificates for such purchase upon
         exercise of this Option 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 this Option, 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 Securities Act
         of 1933 is in effect as to shares purchased upon any exercise of this
         Option, any and all shares so purchased shall be acquired for
         investment and not for sale or distribution and each notice of the
         exercise of any portion of this Option 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 Securities Act of 1933 of the shares as to which
         this Option is at the time being exercised is required prior to
         issuance thereof, the Company shall not 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.

10.      GlobalSantaFe Corporation 2001 Long-Term Incentive Plan. This Option is
         subject to, and the Company and you are bound by, all of the terms and
         conditions of the GlobalSantaFe Corporation 2001 Long-Term Incentive
         Plan as the same may be amended from time to time in accordance with
         the terms thereof, provided that no such amendment shall deprive you,
         without your consent, of this Option or any rights hereunder. The Board
         of Directors of the Company 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 executive office
         during business hours by you or any other persons entitled to exercise
         this Option.

11.      Definition of Certain Terms. Capitalized terms used in this Notice and
         not defined herein are used as they are used in the GlobalSantaFe
         Corporation 2001 Long-Term Incentive Plan as the same shall have been
         amended from time to time. The term "you," and related terms such as
         "your" used in this document refer to the individual whose name appears
         in the heading on the first page of this document.

                                      -7-

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