Document:

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                                                                    EXHIBIT 10.3

                                                                [EXECUTION COPY]

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                             VW CREDIT LEASING, LTD.

                                       AND

                                 VW CREDIT, INC.

                    AMENDED AND RESTATED SERVICING AGREEMENT

                          Dated As of December 21, 2000

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                                TABLE OF CONTENTS

                                                                            PAGE

RECITALS           ............................................................1
ARTICLE I          DEFINITIONS

     Section 1.1.     Definitions..............................................1

ARTICLE II         ADMINISTRATION AND SERVICING OF USER LEASES

     Section 2.1.     Servicer to Act as Servicer..............................5
     Section 2.2.     Collection of Monthly Lease Payments and Remittances;
                      Application of Proceeds..................................6
     Section 2.3.     Records..................................................7
     Section 2.4.     Collection and Application of Security Deposits..........7
     Section 2.5.     Servicing Compensation; Fees, Costs and Expenses.........8
     Section 2.6.     Enforcement of User Leases; Repossession and Sale
                      of Leased Vehicles.......................................8
     Section 2.7.     Servicer to Act on Behalf of Trust.......................9
     Section 2.8.     Third Party Claims.......................................9
     Section 2.9.     Insurance Policies......................................10
     Section 2.10.    Servicer Not to Resign; Assignment......................10

ARTICLE III        SERVICER TERMINATION WITH RESPECT TO UTI

     Section 3.1.     Termination of Servicer By UTI Holder With Respect
                      to UTI..................................................11

ARTICLE IV         MISCELLANEOUS

     Section 4.1.     Termination of Agreement................................11
     Section 4.2.     Amendment...............................................11
     Section 4.3.     Governing Law...........................................12
     Section 4.4.     Notices.................................................12
     Section 4.5.     Severability............................................12
     Section 4.6.     Binding Effect..........................................12
     Section 4.7.     Article and Section Headings............................13
     Section 4.8.     Execution in Counterparts...............................13
     Section 4.9.     Rights Cumulative.......................................13
     Section 4.10.    Further Assurances......................................13
     Section 4.11.    Third-Party Beneficiaries...............................13
     Section 4.12.    No Waiver...............................................13
     Section 4.13.    Non-Petition Covenant...................................14
     Section 4.14.    Series Liabilities......................................14
     Section 4.15.    Limitation of Liability.................................14

                                        i

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                    AMENDED AND RESTATED SERVICING AGREEMENT

     AMENDED AND RESTATED SERVICING AGREEMENT, dated as of December 21, 2000 (as
it may be further amended, supplemented or modified, the "Agreement"), between
VW CREDIT LEASING, LTD., a Delaware business trust (the "Trust"), and VW CREDIT,
INC., a Delaware corporation (hereinafter, together with its successors and
assigns, "VCI" or, in its capacity as servicer hereunder, the "Servicer").

                                    RECITALS

     A. This Agreement is being entered into to amend and restate that certain
Servicing Agreement, dated as of June 22, 1999, between the Trust and VCI.

     B. VCI, as Settlor and Initial Beneficiary (the "Settlor" and the "Initial
Beneficiary", respectively), U.S. Bank Trust National Association, a national
banking association with its principal place of business in Chicago, Illinois,
as UTI Trustee and Administrative Trustee (the "UTI Trustee" and the
"Administrative Trustee", respectively), and Wilmington Trust Company, as
Delaware Trustee (the "Delaware Trustee"), have entered into that certain Trust
Agreement dated as of June 2, 1999 (the same, as amended, supplemented or
modified and in effect from time to time, the "Trust Agreement"), pursuant to
which VCI and the Trustees formed the Trust for the purpose of taking
assignments and conveyances of and holding and dealing in various Trust Assets
in accordance with the Trust Agreement.

     C. The Trustees, on behalf of the Trust and at the direction of VCI, which
also is the initial beneficiary of the Trust, intend to create and issue from
time to time to or upon the order of VCI various special units of beneficial
interest in the Trust ("SUBIs"), whose beneficiaries generally will be entitled
to certain specified components of the net cash flow arising from designated
portfolios of Trust Assets owned by the Trust, and which SUBIs may be used in
connection with various Financings (as defined in the Trust Agreement).

     D. The parties desire to enter into this Agreement to provide for, among
other things, the servicing of the Trust Assets (including those evidenced by
the SUBIs) by the Servicer.

     E. The parties acknowledge that, in connection with one or more Financings,
it may be necessary or desirable to enter into supplemental agreements hereto,
including one or more SUBI Servicing Agreement Supplements, providing for
further specific servicing obligations with respect to each Financing.

     NOW THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto agree as follows:

                                                             Servicing Agreement

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                                   ARTICLE I.
                                   DEFINITIONS

     SECTION 1.1. DEFINITIONS.

     For all purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires, (a) unless otherwise defined herein,
all capitalized terms shall have the meanings attributed to them in the Trust
Agreement, (b) the capitalized terms defined in this Article have the meanings
assigned to them in this Article and include (i) all genders and (ii) the plural
as well as the singular, (c) all references to words such as "herein", "hereof"
and the like shall refer to this Agreement as whole and not to any particular
article or section within this Agreement, (d) the term "include" and all
variations thereon shall mean "include without limitation", (e) the term "or"
shall include "and/or", and (f) any reference herein to a "Trustee, acting on
behalf of the Trust," or words of similar import, shall be deemed to mean the
applicable Trustee, acting on behalf of the Trust and all applicable
beneficiaries of the Trust.

     "Administrative Trustee" has the meaning set forth in the Recitals.

     "Business Trust Statute" has the meaning set forth in the Trust Agreement.

     "Certificate of Title" has the meaning set forth in the Trust Agreement.

     "Charged-off Lease" means a User Lease which has been written off by the
Servicer in accordance with its Customary Servicing Practices for writing off
lease contracts.

     "Collections" means all monthly lease payments on any User Lease,
Liquidation Proceeds in respect of any Vehicle and any other payments, receipts
or Recoveries (including any residual value insurance proceeds and other
insurance proceeds) by or on behalf of any End User or otherwise with respect to
any User Lease or Leased Vehicle other than (i) Supplemental Servicing Fees,
(ii) payments allocable to sales, use or other taxes (which shall be collected
by the Servicer and remitted to the applicable governmental authority or used to
reimburse the Servicer for payment of such amounts in accordance with Customary
Servicing Practices), (iii) payments allocable to premiums for force-placed
insurance policies purchased by the Servicer on behalf of any End User (which
shall be collected by the Servicer and remitted to the applicable insurance
company (or if such amounts were paid by the Servicer, to the Servicer) in
accordance with the Customary Servicing Practices), (iv) payments allocable to
fines for parking violations incurred by any End User but assessed to the Trust
as the owner of the related Leased Vehicle (which shall be collected by the
Servicer and remitted to the applicable governmental authority (or if such
amounts were paid by the Servicer, to the Servicer) in accordance with Customary
Servicing Practices), and (v) rebates of insurance premiums with respect to the
cancellation of any insurance policy.

     "Customary Servicing Practices" means the customary practices of the
Servicer with respect to Leased Vehicles and User Leases held by the Origination
Trust, without regard to whether such Leased Vehicles and User Leases have been
identified and allocated into a SUBI Portfolio, as such practices may be amended
from time to time.

     "Dealer" has the meaning set forth in the Trust Agreement.

                                       2                     Servicing Agreement

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     "Dealer Agreement" means a Dealer Agreement as amended, modified or
supplemented from time to time, entered into between VCI or the Trust and a
Dealer providing for the Dealer, (i) to arrange retail vehicle leases that will
be entered into by the Trustee, or (ii) acting as the originator of retail
vehicle leases that will be acquired by the Trust, and in accordance with which,
the title to the related leased vehicles will in either case be acquired by the
Trust at prices determined as provided for in such agreement.

     "Delaware Trustee" has the meaning set forth in the Recitals.

     "End User" means each Person who is the lessee under a User Lease.

     "Filings" has the meaning set forth in Section 2.7.

     "Financing" has the meaning set forth in the Trust Agreement.

     "Initial Beneficiary" has the meaning set forth in the Recitals.

     "Leased Vehicles" has the meaning set forth in the Trust Agreement.

     "Liquidation Proceeds" means, with respect to any Leased Vehicle, the
proceeds received by the Servicer in connection with the sale or other
disposition of such Leased Vehicle, net of any and all out-of-pocket costs and
expenses incurred by the Servicer in connection with such sale or other
disposition, including without limitation, all repossession, auction, painting,
repair, legal and any and all other similar liquidation, collection and
refurbishment costs and expenses.

     "Maturity Date" means, with respect to any User Lease, the date on which
such User Lease is scheduled to terminate, as such date may be extended pursuant
to Section 2.2(b)(ii).

     "Obligee" means each Person who is the lessor under a User Lease or the
assignee thereof, including the Trust.

     "Person" has the meaning set forth in the Trust Agreement.

     "Purchase Price" means, for any Leased Vehicle and related User Lease, the
amount paid by or on behalf of the Trust for such Leased Vehicle and related
User Lease.

     "Recoveries" means, with respect to any User Lease or Leased Vehicle, the
proceeds (other than Liquidation Proceeds) received by the Servicer after any
default under the related User Lease, net of any and all out-of-pocket costs and
expenses incurred by the Servicer in connection with such defaulted User Lease,
including without limitation, all repossession, auction, painting, repair,
legal, bankruptcy and any and all other similar liquidation, collection and
refurbishment costs and expenses.

     "Registrar of Titles" has the meaning set forth in the Trust Agreement.

     "Security Deposit" means, with respect to any User Lease, the refundable
security deposit (if any) specified in such User Lease.

                                       3                     Servicing Agreement

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     "Servicer" has the meaning set forth in the preamble.

     "Servicing Fee" has the meaning specified in Section 2.5.

     "Settlor" has the meaning set forth in the Recitals.

     "SUBI" has the meaning set forth in the Recitals.

     "SUBI Asset" has the meaning set forth in the Trust Agreement.

     "SUBI Portfolio" has the meaning set forth in the Trust Agreement.

     "SUBI Servicing Agreement Supplement" means any supplement or amendment to
this Agreement entered into from time to time to accommodate the creation and
issuance of a particular SUBI and to specify any special responsibilities or
obligations that the Servicer may be required to undertake in connection
therewith.

     "SUBI Supplement" means any supplement or amendment to the Trust Agreement
executed from time to time in connection with the creation and issuance of a
particular SUBI.

     "SUBI Trustee" means, as to each SUBI, the separate trustee appointed by
the Initial Beneficiary for each SUBI.

     "Supplemental Servicing Fees" means any late fees, NSF check fees,
disposition fees, purchase option fees and other administration fees or similar
charges (including any fees payable in connection with or pursuant to an
extension agreement) paid by any End User pursuant to a User Lease.

     "Trust" has the meaning set forth in the preamble.

     "Trust Agreement" has the meaning set forth in the Recitals.

     "Trust Asset" means any asset of any type owned by the Trust.

     "Trustees" means the Delaware Trustee, the UTI Trustee, the Administrative
Trustee and any SUBI Trustee.

     "User Lease" has the meaning set forth in the Trust Agreement.

     "UTI" means the undivided trust interest in the Trust created pursuant to
the Trust Agreement.

     "UTI Certificate" has the meaning set forth in the Trust Agreement.

     "UTI Holder" means initially, VCI and any other registered holder of the
UTI Certificate.

     "UTI Portfolio" means, as to the UTI, that collection of User Leases,
Leased Vehicles and other associated Trust Assets allocated to the UTI from time
to time.

                                       4                     Servicing Agreement

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     "UTI Trustee" has the meaning set forth in the Recitals.

     "VCI" has the meaning set forth in the preamble.

                                   ARTICLE II
                   ADMINISTRATION AND SERVICING OF USER LEASES

     SECTION 2.1. SERVICER TO ACT AS SERVICER.

     (a) As agent for and subject to the supervision, direction and control of
the Trust as set forth in the Trust Agreement, the Servicer shall manage the
Trust and shall service, administer and collect under the User Leases and the
other Trust Assets in accordance with the terms of this Agreement, and shall
have full power and authority, acting alone and subject only to the specific
requirements and prohibitions of this Agreement, to do any and all things in
connection with such servicing, administering and collecting that it may
reasonably deem necessary or desirable. The duties of the Servicer shall
include, among other things, acquiring vehicles and originating leases on behalf
of the Trust, collecting and posting payments, responding to inquiries of End
Users on the User Leases, investigating delinquencies, sending payment
statements and reporting required tax information (if any) to End Users,
disposing of returned vehicles, paying costs of disposition of Leased Vehicles
related to Charged-off Leases, administering the User Leases, including, but not
limited to, executing powers of attorney to be delivered to End Users for the
limited purpose of obtaining license plates and fulfilling other state
requirements for registration of the Leased Vehicles, obtaining a new
Certificate of Title to a Leased Vehicle in another jurisdiction to the extent
required by law, making other modifications to the User Leases (in accordance
with Customary Servicing Practices), approving repairs to Leased Vehicles and
endorsing the related insurance settlement checks for repair work, accounting
for collections and preparing and filing all required tax returns (if any) of
the Trust.

     Without limiting the generality of the foregoing, the Servicer hereby
expressly agrees to perform and carry out on behalf of the Trust, all of the
obligations on the part of the Obligee under the User Leases and is hereby
authorized and empowered by the Trust to execute and deliver, in its own name or
on behalf of the Trust, or both of them, as the case may be, any and all
instruments of satisfaction, extension or cancellation, or of partial or full
release or discharge, and all other comparable instruments, with respect to the
User Leases or the Leased Vehicles.

     The Servicer shall cause the Trust to (i) apply for and maintain (or cause
to be applied for and maintained) all licenses, permits, authorizations and
other governmental items necessary and appropriate for the Trust to acquire,
hold and manage Trust Assets as contemplated by the Trust Agreement in each
jurisdiction where the ownership of its assets or the nature of its operations
would require it to maintain such licenses, permits, authorizations or other
governmental items, (ii) file (or cause to be filed) all notices, reports and
other required filings in each jurisdiction where the location of its assets or
the nature of its operations would require the Trust to make such filing, and
(iii) pay or cause to be paid all applicable taxes and fees properly due and
owing in connection with the Trust's activities.

     If the Servicer shall commence a legal proceeding to enforce a User Lease,
the Trust shall thereupon be deemed to have automatically assigned, solely for
the purpose of collection on

                                       5                     Servicing Agreement

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behalf of the Trust, its interest in such User Lease and the related Leased
Vehicle to the Servicer to the extent necessary for the purposes of
participating in such proceeding. If in any enforcement suit or legal proceeding
it is held that the Servicer may not enforce a User Lease on the grounds that it
is not the real party in interest or a holder entitled to enforce such User
Lease, the Trust shall, at the expense and direction of the Servicer, take steps
to enforce the User Lease, including bringing suit in the Trust's name. The
Trust shall furnish the Servicer with any powers of attorney and other documents
necessary or appropriate to enable the Servicer to carry out its servicing and
administrative duties hereunder.

     The Servicer shall acquire or enter into on behalf of the Trust, in its
ordinary course of business, User Leases with End Users approved by the
Servicer. The Servicer agrees that its origination, underwriting and servicing
of the User Leases for the benefit of the Trust shall be carried out in
accordance with Customary Servicing Practices with respect to similar types of
vehicles.

     (b) (i) The Servicer shall continue to maintain or enter into on behalf of
the Trust, in the ordinary course of its business, Dealer Agreements with
Dealers selected by the Servicer from time to time in its reasonable discretion
(together with such supplemental agreements as shall be necessary to permit the
Trust to enforce any rights against the Dealers). The Servicer shall execute on
behalf of the Trust all approved User Leases arranged by the Dealer. The
Servicer shall take such action as is necessary for each Certificate of Title
for each Leased Vehicle to show the owner of such Leased Vehicle as "VW Credit
Leasing, Ltd." or the name of a Trustee (other than the Delaware Trustee) using
the quoted phrase or such other similar phrase as will satisfy the Registrar of
Titles in each relevant jurisdiction, or such other designation(s) as the
Servicer shall determine. The obligations of the Servicer pursuant to this
Section 2.1(b)(i) shall survive any partial or complete termination of the
Servicer pursuant hereto for any User Lease entered into prior to the
termination of this Agreement.

     (ii) Upon the satisfaction by the Dealer of any requirements entitling the
Dealer to payment with respect to the Leased Vehicle (and the related User
Lease, if originated by the Dealer)(including without limitation the execution
and delivery thereby of all instruments of assignment of such User Lease and
Leased Vehicle to the Trust), the Servicer shall remit to such Dealer the
Purchase Price.

     Any payment by VCI to a Dealer to acquire a Leased Vehicle or a related
User Lease shall constitute a contribution by VCI to the Trust in respect of
VCI's ownership interest in the UTI followed by the purchase by the Trust of
each Leased Vehicle, related User Lease and the related Trust Assets from the
Dealer, and the UTI shall immediately thereafter be deemed to represent the
entire beneficial interest in such Leased Vehicle, the related User Lease and
any related Trust Assets (whether such User Lease was originated by a Dealer or
by the Trust).

     SECTION 2.2. COLLECTION OF MONTHLY LEASE PAYMENTS
                  AND REMITTANCES; APPLICATION OF PROCEEDS.

     (a) The Servicer shall use commercially reasonable efforts to (i) collect
all payments required under the terms and provisions of each User Lease; and
(ii) cause each End User to

                                       6                     Servicing Agreement

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make all payments in respect of the User Lease to which such End User is a party
or otherwise obligated.

     (b) Consistent with the foregoing, the Servicer may in its discretion (i)
waive any late payment charge or other charge that would constitute a
Supplemental Servicing Fee, and (ii) extend the Maturity Date of any User Lease
consistent with Customary Servicing Practices.

     (c) As to any other funds received by the Servicer with respect to any
Trust Asset:

          (i) With respect to any such funds relating to a SUBI Asset, the
     Servicer shall deposit such funds as set forth in the appropriate SUBI
     Servicing Agreement Supplement; and

          (ii) With respect to any such funds relating to any Trust Asset other
     than a SUBI Asset, the Servicer shall pay such funds as directed by the UTI
     Holder.

     (d) The Servicer shall, on behalf of the UTI Trustee and at the direction
of the Initial Beneficiary, from time to time, in accordance with the Trust
Agreement or the applicable SUBI Supplement thereto, identify and allocate on
the books and records of the Trust certain User Leases and/or Leased Vehicles
into one or more SUBI Portfolios, either upon the initial creation of such SUBI
or periodically following its creation.

     (e) The Servicer shall account to the applicable Trustee for the UTI
Portfolio and each SUBI Portfolio of Trust Assets separately and in accordance
with any supplement or amendment to this Agreement entered into with respect to
such UTI Portfolio or SUBI Portfolio, as the case may be.

     SECTION 2.3. RECORDS.

     The Servicer shall maintain or cause to be maintained such computer and/or
manual records with respect to Trust Assets and all Collections relating thereto
in accordance with Customary Servicing Practices with respect to similar types
of vehicles.

     SECTION 2.4. COLLECTION AND APPLICATION OF SECURITY DEPOSITS.

     The Servicer shall retain any Security Deposit remitted to it or the Trust
as agent and bailee for the Trust, and shall apply the proceeds of such Security
Deposits in accordance with applicable law, its Customary Servicing Practices
and the User Leases, including but not limited to using the Security Deposit in
respect of any User Lease for the payment of any amount resulting from the
related End User's default or failure to pay all amounts required to be paid
under such User Lease or resulting from excess mileage or excess wear and tear
to the related Leased Vehicle. In the event that any User Lease becomes a
Charged-off Lease or, if earlier, the related Leased Vehicle is repossessed,
then the related Security Deposit, to the extent permitted by such User Lease
and applicable law, shall thereby become a Collection. Each Security Deposit,
after deduction for amounts applied towards the payment of any amount resulting
from the related End User's default or failure to pay any amounts required to be
paid under such User Lease or damage to the related Leased Vehicle, shall be
returned to the related End User by the

                                       7                     Servicing Agreement

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Servicer; provided, however, that the Servicer may retain a Security Deposit
(including any interest thereon) until the End User has repaid all other charges
owed under such User Lease.

     SECTION 2.5. SERVICING COMPENSATION; FEES, COSTS AND EXPENSES.

     (a) As compensation for the performance of its obligations under this
Agreement and subject to the terms of this Section and the terms of any
applicable SUBI Servicing Agreement Supplement, the Servicer shall be entitled
to receive from the Trust, a fee (the "Servicing Fee") equal to:

          (i) With respect to each SUBI Portfolio, the amount set forth in the
     related SUBI Servicing Agreement Supplement.

          (ii) With respect to the UTI Portfolio, such amount as shall be agreed
     from time to time between the holder of the UTI and the Servicer.

          (iii) In addition to the foregoing, the Servicer shall be entitled to
     retain as additional compensation, for each UTI Portfolio or SUBI
     Portfolio, all Supplemental Servicing Fees.

     The Servicer shall pay all expenses of the Trust and all expenses incurred
by it in connection with its servicing activities hereunder, including the costs
of any Trustee, any separate trustee or co-trustee appointed by a Trustee
pursuant to Section 6.6 of the Trust Agreement, and shall not be entitled to
reimbursement of such expenses. Notwithstanding anything contained in the
foregoing sentence to the contrary, the Servicer shall not be liable to pay
losses with respect to Trust Assets.

     (b) As additional servicing compensation, the Servicer also shall be
entitled to the earnings from the investment of Security Deposits retained as
and to the extent permitted by applicable law and the applicable User Leases and
to the extent not required to be paid to the End Users.

     SECTION 2.6. ENFORCEMENT OF USER LEASES;
                  REPOSSESSION AND SALE OF LEASED VEHICLES.

     The Servicer shall use commercially reasonable efforts (consistent with its
Customary Servicing Practices with respect to similar types of vehicles) to
enforce the provisions of the User Leases and to repossess or otherwise take
possession of the Leased Vehicle related to any User Lease that shall have
terminated or expired or that the Servicer shall have determined (in accordance
with its Customary Servicing Practices) to be in default.

     The Servicer shall, in accordance with the standards set forth in the
immediately preceding paragraph:

     (a) follow such practices and procedures as it shall deem necessary or
advisable in accordance with its Customary Servicing Practices in its servicing
of leases for automobiles, sports utility vehicles, light-duty trucks and other
vehicles, which may include reasonable efforts

                                       8                     Servicing Agreement

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to realize upon any recourse to Dealers, consigning a Leased Vehicle to a motor
vehicle dealer for resale or selling a Leased Vehicle at public or private sale;
and

     (b) sell or otherwise dispose of each Leased Vehicle that is so repossessed
and, if the User Lease is in default, shall commence and prosecute any legal
proceedings in respect of such User Lease (and the related Leased Vehicle) in
its own name or in the name of the Trust.

     SECTION 2.7. SERVICER TO ACT ON BEHALF OF TRUST.

     (a) In order to facilitate the servicing of the User Leases by the
Servicer, the Trust hereby appoints the Servicer as its agent and bailee to
retain possession of the User Leases, Certificates of Title and any other
related items that from time to time come into possession of the Servicer, and
the Servicer hereby accepts such appointment.

     (b) The Servicer shall identify from time to time all (i) periodic sales
and use tax or property (real or personal) tax reports, (ii) periodic renewals
of licenses and permits, (iii) periodic renewals of qualification to act as a
trust and a business trust and (iv) other governmental filings, registrations or
approvals (collectively, "Filings") arising with respect to or required of the
Trust, including such licenses, permits, and other Filings as are required for
the Trust to originate and accept assignments of User Leases and to be
identified as the owner of Leased Vehicles on their Certificates of Title, as
contemplated by Section 2.1(a)(i). The Servicer shall also identify any surety
bonds or other ancillary undertakings required of the Trust in respect of any
Filing. The Servicer shall timely prepare and file, or cause to be filed, with
the cooperation of the Trustees, on behalf of the Trust with the appropriate
Person each Filing and each such ancillary undertaking. In connection with this
Section 2.7(b), the Trust grants to the Servicer the authority to, and will,
from time to time, execute and deliver to the Servicer any necessary power of
attorney as the Servicer may require in order to effect each such Filing and
ancillary undertaking. Should the Servicer at any time receive notice, or have
actual knowledge, of any non-compliance with any Filing requirement, it shall
promptly take all required action to rectify such noncompliance.

     (c) The Servicer agrees to indemnify, defend and hold harmless the Trust,
the Trustees and their respective agents (including without limitation any Trust
Agent) for (i) any and all liabilities, losses, damages and expenses that may be
incurred as a result of any negligent act or omission by the Servicer in
connection with any Trust Asset or this Agreement, and (ii) any claims by third
parties against the Trust. The obligations set forth in this Section 2.7(c)
shall survive the termination of this Agreement and the Trust Agreement or the
resignation or removal of the Servicer or any Trustee; provided, however, that
the provisions of this Section 2.7(c) shall not require any successor Servicer
appointed hereunder to indemnify any Person except with respect to the
negligence or misconduct of such successor Servicer in performing its duties
hereunder or the breach by such successor Servicer of this Agreement.

     SECTION 2.8. THIRD PARTY CLAIMS.

     The Servicer shall promptly notify VCI (in the event that VCI is not acting
as the Servicer hereunder) and the Trustees, on behalf of the Trust, upon its
learning that a claim of whatever kind that would be indemnified under Section
2.7.

                                       9                     Servicing Agreement

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     SECTION 2.9. INSURANCE POLICIES.

     (a) The Servicer shall at all times have in effect, maintain and keep in
force for the benefit of the Trust, or cause the Trust to have in effect,
maintain and keep in force, insurance policies (which may be blanket policies
covering the Servicer, the Trust and some or all Affiliates of the Servicer)
with respect to the Trust Assets against such hazards, in such form and in such
amounts as follows:

          (i) Contingent and excess automobile liability insurance policies with
     a nationally recognized insurance company with a rating of at least A- by
     A.M. Best, with limits of no less than $1,000,000 per occurrence, covering
     losses in the event that an End User's primary insurance policy is not
     collectible at the time of loss or that a liability claim exceeds the
     policy limit of the End User's primary insurance.

          (ii) Interim automobile liability insurance coverage with a nationally
     recognized insurance company with a rating of at least A- by A.M. Best,
     with limits of no less than $1,000,000 per occurrence, covering losses (i)
     prior to the time that an End User's primary insurance becomes effective
     and (ii) after a User Lease has terminated.

          (iii) Umbrella excess liability insurance of not less than $25,000,000
     with an insurer that has a rating of at least A- by A.M. Best. Such
     coverage shall be on a per occurrence basis and over and above the coverage
     provided by the policies described in paragraphs (i) and (ii) above. The
     coverages of the umbrella excess liability policies shall be at least as
     broad as the coverages as set forth in paragraphs (i) and (ii) above.

          (iv) All policies of insurance required to be maintained pursuant to
     this section shall name the Trust as an additional insured (the "Additional
     Insured"). Each policy shall expressly provide that all provisions thereof,
     except liability for premiums (which shall be solely a liability of the
     Servicer) and the limits of the insurer's liability under the policy, shall
     operate in the same manner as if there were a separate policy covering the
     Additional Insured.

     SECTION 2.10. SERVICER NOT TO RESIGN; ASSIGNMENT.

     (a) Except as provided in Section 4.1(b), the Servicer shall not resign
from the duties and obligations hereby imposed on it as Servicer except upon
determination by its board of directors that by reason of change in applicable
legal requirements the continued performance by the Servicer of its duties as
Servicer under this Agreement would cause it to be in violation of such legal
requirements in a manner that would result in a material adverse effect on the
Servicer or its financial condition, said determination to be evidenced by
resolutions of the board of directors to such effect accompanied by an opinion
of counsel reasonably satisfactory to the Trustees, to such effect. No such
resignation shall become effective unless and until a new servicer is willing to
service the User Leases and enters into a servicing agreement with the Trust,
such agreement to have substantially the same provisions as this Agreement. The
Trust shall not unreasonably fail to consent to such a servicing agreement.

     (b) Subject to paragraph (c) of this Section, the Servicer may not assign
this Agreement or any of its rights, powers, duties or obligations hereunder;
provided, however, that

                                      10                     Servicing Agreement

<PAGE>

the Servicer may assign this Agreement in connection with a consolidation,
merger, conveyance or transfer of substantially all of its assets without the
consent of any Person.

     (c) The Servicer may, at any time without notice or consent, delegate (i)
any or all duties under this Agreement to any Person more than 50% of the voting
securities of which are owned, directly or indirectly, by Volkswagen AG or any
successor thereto, or (ii) specific duties to sub-contractors who are in the
business of performing such duties; provided, however, that no such delegation
shall relieve the Servicer of its responsibility with respect to such duties and
the Servicer shall remain obligated and liable to the Trustees and the holders
of the UTI and the SUBIs for servicing and administering the Trust Assets in
accordance with this Agreement as if the Servicer alone were performing such
duties.

                                  ARTICLE III
                    SERVICER TERMINATION WITH RESPECT TO UTI

     SECTION 3.1. TERMINATION OF SERVICER BY UTI HOLDER WITH RESPECT TO UTI.

     The UTI Holder may, upon written notice to the Servicer, terminate all or a
portion of the rights and powers of the Servicer with respect to the UTI under
this Agreement.

                                   ARTICLE IV
                                  MISCELLANEOUS

     SECTION 4.1. TERMINATION OF AGREEMENT.

     This Agreement shall, except as otherwise provided herein, terminate upon
the earliest of (a) the termination of the Trust; (b) the discharge of the
Servicer in accordance with the terms hereof; or (c) the mutual written
determination of the parties hereto. Upon termination of this Agreement, the
Servicer shall pay over to the Trust, or any other Person entitled thereto, all
monies held by the Servicer on behalf of the Trust pursuant to this Agreement.

     SECTION 4.2. AMENDMENT.

     (a) This Agreement may be amended from time to time in a writing signed by
the Trustees, on behalf of the Trust, and the Servicer. Any amendment affecting
particular Trust Assets allocated to a SUBI Portfolio need not be signed by any
Trustee which does not administer such particular Trust Assets. The consent of
the holders or pledgees of any SUBI Certificate shall not be required to amend
this Agreement except to the extent the interests of such holder or pledgee
would be adversely affected.

     (b) In particular, but without limiting the foregoing, this Agreement may
be amended by means of one or more SUBI Servicing Agreement Supplements in
connection with any Financings. Such supplemental agreements may provide, among
other things, for further specific servicing obligations relating to SUBI Assets
for the particular benefit of holders of related SUBIs. Such supplemental
agreements may permit the termination of this Agreement insofar as it applies to
such SUBI Assets upon the terms and conditions set forth therein; however, no
such supplemental agreement shall permit the termination of this Agreement
insofar as it applies to other Trust Assets except as provided herein.

                                      11                     Servicing Agreement

<PAGE>

     (c) Any amendment or modification effected contrary to the provisions of
this Section shall be void.

     SECTION 4.3. GOVERNING LAW.

     THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ANY OTHERWISE APPLICABLE
PRINCIPLES OF CONFLICT OF LAWS.

     SECTION 4.4. NOTICES.

     All demands, notices and communications hereunder shall be in writing and
shall be delivered or mailed by registered or certified first-class United
States mail, postage prepaid, hand delivery, any prepaid courier service, or by
telecopier, and addressed in each case as follows: (a) if to the Servicer, VW
Credit, Inc., 3800 Hamlin Road, Auburn Hills, Michigan 48326, Attention:
Secretary; Facsimile: (248) 340-4794 and Attention: Treasurer; Facsimile (298)
340-5360, with copies to Mayer, Brown & Platt, 190 South LaSalle Street,
Chicago, Illinois 60603, Attention: Stuart M. Litwin; Facsimile: (312) 701-7711
(Confirmation Number: (312) 701-7373); (b) if to the UTI Trustee or
Administrative Trustee, U.S. Bank Trust National Association, One Illinois
Center, 111 East Wacker, Suite 3000, Chicago, Illinois 60601 Attention:
Corporate Trust Department; Facsimile: (312) 228-9401 (Confirmation Number:
(312) 228-9416); or (c) if to the Delaware Trustee, 1100 North Market Street,
Wilmington, Delaware 19890 Attention: Corporate Trust Administration; Facsimile:
(302) 651-8882. The Servicer or any Trustee may change its address for notices
hereunder by giving notice of such change to the other parties hereto and to the
parties to the Trust Agreement. All notices and demands shall be deemed to have
been given upon delivery or tender of delivery thereof to any officer of the
Person entitled to receive such notices and demands at the address of such
Person for notices hereunder.

     SECTION 4.5. SEVERABILITY.

     If one or more of the provisions of this Agreement shall be for any reason
whatever held invalid or unenforceable, such provisions shall be deemed
severable from the remaining covenants, agreements and provisions of this
Agreement, and such invalidity or unenforceability shall in no way affect the
validity or enforceability of such remaining covenants, agreements and
provisions, or the rights of any parties hereto. To the extent permitted by law,
the parties hereto waive any provision of law that renders any provision of this
Agreement invalid or unenforceable in any respect.

     SECTION 4.6. BINDING EFFECT.

     The provisions of this Agreement shall be binding upon and inure to the
benefit of the respective successors and permitted assigns of the parties
hereto, and all such provisions shall inure to the benefit of the Trust.

                                      12                     Servicing Agreement

<PAGE>

     SECTION 4.7. ARTICLE AND SECTION HEADINGS.

     The article and section headings herein are for convenience of reference
only, and shall not limit or otherwise affect the meaning hereof.

     SECTION 4.8. EXECUTION IN COUNTERPARTS.

     This Agreement may be executed in any number of counterparts, each of which
so executed and delivered shall be deemed to be an original, but all of which
counterparts shall together constitute but one and the same instrument.

     SECTION 4.9. RIGHTS CUMULATIVE.

     All rights and remedies from time to time conferred upon or reserved to the
Trust, the Trustees (or any of them), on behalf of the Trust, or the Servicer or
to any or all of the foregoing are cumulative, and none is intended to be
exclusive of another. No delay or omission in insisting upon the strict
observance or performance of any provision of this Agreement, or in exercising
any right or remedy, shall be construed as a waiver or relinquishment of such
provision, nor shall it impair such right or remedy. Every right and remedy may
be exercised from time to time and as often as deemed expedient.

     SECTION 4.10. FURTHER ASSURANCES.

     Each party will do such acts, and execute and deliver to any other party
such additional documents or instruments as may be reasonably requested in order
to effect the purposes of this Agreement and to better assure and confirm unto
the requesting party its rights, powers and remedies hereunder.

     SECTION 4.11. THIRD-PARTY BENEFICIARIES.

     This Agreement will inure to the benefit of and be binding upon the parties
hereto and each of the beneficiaries of the Trust (including each pledgee or
assignee of the UTI), who shall be considered to be third-party beneficiaries
hereof. Except as otherwise provided in this Agreement, no other Person will
have any right or obligation hereunder.

     SECTION 4.12. NO WAIVER.

     No waiver by any party hereto of any one or more defaults by any other
party or parties in the performance of any of the provisions of this Agreement
shall operate or be construed as a waiver of any future default or defaults,
whether of a like or different nature. No failure or delay on the part of any
party in exercising any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy. The remedies provided for herein are
cumulative and are not exclusive of any remedies that may be available to any
party hereto at law, in equity or otherwise.

                                      13                     Servicing Agreement

<PAGE>

     SECTION 4.13. NON-PETITION COVENANT.

     The Servicer covenants and agrees that prior to the date which is one year
and one day after the date upon which all obligations under each Financing has
been paid in full, the Servicer will not institute against, or join any other
person in instituting against the Trust, any Special Purpose Entity or any
general partner of a Special Purpose Entity that is a partnership, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding or
other proceedings under any federal or state bankruptcy or similar law. This
Section shall survive the termination of this Agreement or the resignation or
removal of the Servicer under this Agreement.

     SECTION 4.14. SERIES LIABILITIES.

     It is expressly understood and agreed by the Servicer, and all persons
claiming through the Servicer, that the Trust is a series trust pursuant to
Sections 3804 and 3806(b)(2) of the Business Trust Statute. As such, separate
and distinct records shall be maintained for the UTI Portfolio and each SUBI
Portfolio and the Trust Assets associated with the UTI Portfolio and each SUBI
Portfolio shall be held and accounted for separately from the other assets of
the Trust. The debts, liabilities, obligations and expenses incurred, contracted
for or otherwise existing with respect to the UTI and each SUBI shall be
enforceable against the UTI Portfolio or the related SUBI Portfolio only, and
not against the Trust Assets generally or the assets of any other SUBI
Portfolio.

     SECTION 4.15. LIMITATION OF LIABILITY.

     It is expressly understood and agreed by the parties hereto that (a) this
Agreement is executed and delivered by U.S. Bank Trust, National Association,
not individually or personally but solely as Administrative Trustee and UTI
Trustee of the Trust under the Trust Agreement, in the exercise of the powers
and authority conferred and vested in it, (b) each of the representations,
undertakings and agreements herein made on the part of either the Administrative
Trustee, the UTI Trustee or the Trust is made and intended not as personal
representations, undertakings and agreements by U.S. Bank Trust National
Association but is made and intended for the purpose of binding only the Trust,
(c) nothing herein contained shall be construed as creating any liability on
U.S. Bank Trust, National Association, individually or personally, to perform
any covenant either expressed or implied contained herein, all such liability,
if any, being expressly waived by the parties hereto and by any Person claiming
by, through or under the parties hereto and (d) under no circumstances shall
U.S. Bank Trust, National Association be personally liable for the payment of
any indebtedness or expenses of the Trust or be liable for the breach or failure
of any obligation, representation, warranty or covenant made or undertaken by
the Administrative Trustee, UTI Trustee or the Trust under this Agreement.

                                      14                     Servicing Agreement

<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers duly authorized as of the day and
year first above written.

                              VW CREDIT, INC.,
                              as Servicer

                              By:    /s/ Frank Witter
                                     -----------------------------
                              Name:  Frank Witter
                              Title: Treasurer

                              By:    /s/ Kevin Kelly
                                     -----------------------------
                              Name:  Kevin Kelly
                              Title: President

                              VW CREDIT LEASING, LTD.

                              By:    U.S. Bank Trust National Association,
                                     as Administrative Trustee and UTI Trustee

                              By:    /s/ Melissa A. Rosal
                                     -----------------------------
                              Name:  Melissa A. Rosal
                              Title: Vice President

                                      S-1                    Servicing Agreement<PAGE>
                                                                     EXHIBIT 4.1

                             PARKER DRILLING COMPANY
                   THIRD AMENDED AND RESTATED 1997 STOCK PLAN

1.       Preamble.

         Parker Drilling Company, a Delaware corporation (the "Company"), hereby
establishes the Parker Drilling Company 1997 Stock Plan (the "Plan) as a means
whereby the Company may, through awards of stock options and restricted stock:

                  (a) provide employees, directors or consultants who are in a
         position to contribute to the growth, management and success of the
         business of the Company and its Subsidiaries with additional incentive
         to promote the success of the Company and its Subsidiaries; and

                  (b) enable the Company to attract and retain the services of
         employees, directors and consultants upon whose judgment and effort the
         successful conduct of its operations is largely dependent.

         Except as specifically provided herein, the provisions of the Plan do
not apply to or affect any option, stock appreciation right, or stock heretofore
or hereafter granted under any other stock or stock option plan of the Company
or any Subsidiary, and all such options, stock appreciation rights or stock
continue to be governed by and subject to the applicable provisions of the plan
or agreement under which they were granted.

2.       Definitions.

         2.01 "Administrator" shall mean that person designated by the Board
         from time to time to administer the Awards made under the Plan, which
         designation shall be communicated to the Participants in writing.

         2.02 "Award" shall mean a grant of an Option or the award of Restricted
         Stock under the Plan.

         2.03 "Award Agreement" shall mean an agreement between the Company and
         a Participant which evidences the grant of an Option and/or the award
         of Restricted Stock to a Participant and sets forth the terms and
         conditions of such Option and/or Restricted Stock.

         2.04 "Board" or "Board of Directors" means the board of directors of
         the Company.

         2.05 "Change in Control" means the occurrence of any one of the
         following events:

                  (a) Any individual, entity or group (within the meaning of
         Section 13(d)(3) or 14(d)(7) of the Exchange Act, except the
         Participant, his affiliates and associates, the

<PAGE>

         Company, or any corporation, partnership, trust or other entity
         controlled by the Company (a "Subsidiary"), or any employee benefit
         plan of the Company or of any Subsidiary (each such individual, entity
         or group shall hereinafter be referred to as a "Person")) becomes the
         beneficial owner (within the meaning of Rule 13d-3 promulgated under
         the Exchange Act) of 15% or more of either (i) the then outstanding
         shares of common stock of the Company (the "Outstanding Company Common
         Stock") or (ii) the combined voting power of the then outstanding
         voting securities of the Company entitled to vote generally in the
         election of directors (the "Company Voting Securities"), in either
         case, unless the Board in office immediately prior to such entity
         becoming the beneficial owner of such amount of shares or voting power
         determines in writing within five business days of the receipt of
         actual notice of the foregoing change in beneficial ownership that the
         circumstances do not warrant the implementation of the provisions of
         this Agreement; or

                  (b) Individuals who, as of the beginning of any twenty-four
         month period, constitute the Board (the "Incumbent Board") cease for
         any reason to constitute at least a majority of the Board, provided
         that any individual becoming a director subsequent to the beginning of
         such period 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 comprising the Incumbent Board shall 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 is in connection with an actual or threatened election
         contest relating to the election of the directors of the Company (as
         such terms are used in Rule 14a-11 of Regulation 14A promulgated under
         the Exchange Act); or

                  (c) Consummation by the Company of a reorganization, merger or
         consolidation (a "Business Combination"), in each case, with respect to
         which all or substantially all of the individuals and entities who were
         the respective beneficial owners of the outstanding Company Common
         Stock and Company voting securities immediately prior to such Business
         Combination do not, immediately following such Business Combination,
         beneficially own, directly or indirectly, more than 50% of,
         respectively, the then outstanding shares of common stock and the
         combined voting power of the then outstanding voting securities
         entitled to vote generally in the election of directors, as the case
         may be, of the corporation resulting from such Business Combination in
         substantially the same proportion as their ownership immediately prior
         to such Business Combination of the Outstanding Company Common Stock
         and Company Voting Securities, as the case may be; or

                  (d) (i) Consummation of a complete liquidation or dissolution
         of the Company or (ii) sale or other disposition of all or
         substantially all of the assets of the Company other than to a
         corporation with respect to which, following such sale or disposition,
         more than 50% of, respectively, the then outstanding shares of common
         stock and the combined voting power of the then outstanding voting
         securities entitled to vote generally in the election of directors of
         such corporation is then owned beneficially, directly or indirectly, by
         all or substantially all of the individuals and entities who were the
         beneficial owners, respectively,

                                       2
<PAGE>

         of the Outstanding Company Common Stock and Company Voting Securities,
         as the case may be, immediately prior to such sale or disposition.

         2.06 "Change of Control Price" means, with respect to the Common Stock,
         the higher of (a) the arithmetic average of the high and the low
         selling prices of the Common Stock on the new York Stock Exchange
         during the 30 calendar days preceding a Change of Control, or (b) the
         highest price paid or offered in a transaction which either (i) results
         in a Change of Control, or (ii) would be consummated but for another
         transaction which results in a Change of Control and, if it were
         consummated, would result in a Change of Control. With respect to
         clause (b) in the preceding sentence, the "price paid or offered" will
         be equal to the sum of (a) the face amount of any portion of the
         consideration consisting of cash or cash equivalents, and (b) the fair
         market value of any portion of the consideration consisting of real or
         personal property other than cash or cash equivalents, as established
         by an independent appraiser selected by the Compensation Committee.

         2.07 "Code" means the Internal Revenue Code of 1986, as it exists now
         and as it may be amended from time to time.

         2.08 "Compensation Committee" means the Compensation Committee of the
         Board, composed of two or more non-employee directors as determined by
         the Board.

         2.09 "Common Stock" means the common stock of the Company, 16 2/3 cents
         par value per share.

         2.08 "Company" means Parker Drilling Company, a Delaware corporation,
         and any successor thereto.

         2.09 "Director(s)" means a member or members of the Board.

         2.10 "Disability" means being unable to engage in any substantial
         gainful activity by reason of any medically determinable physical or
         mental impairment which can be expected to result in death or which has
         lasted or can be expected to last for a continuous period of not less
         than 12 months.

         2.11 "Exchange Act" means the Securities Exchange Act of 1934, as it
         exists now or from time to time may hereafter be amended.

         2.12 "Fair Market Value" means for the relevant day:

                  (a) If shares of Common Stock are listed or admitted to
         unlisted trading privileges on any national or regional securities
         exchange, the last reported sale price,

                                       3
<PAGE>

         regular way, on the composite tape of that exchange on the day Fair
         Market Value is to be determined;

                  (b) If the Common Stock is not listed or admitted to unlisted
         trading privileges as provided in paragraph (a), and if sales prices
         for shares of Common Stock are reported by the National Market System
         of the National Association of Securities Dealers Automated Quotation
         System ("NASDAQ System"), then the last sale price for Common Stock
         reported as of the close of business on the day Fair Market Value is to
         be determined, or if no such sale takes place on that day, the average
         of the high bid and low asked prices so reported; if Common Stock is
         not traded on that day, the next preceding day on which such stock was
         traded; or

                  (c) If trading of the Common Stock is not reported by the
         NASDAQ System or on a stock exchange, Fair Market Value will be
         determined by the Board in its discretion based upon the best available
         data.

         2.13 "Incentive Stock Option" or "ISO" means an Option that complies
         with the terms and conditions set forth in Section 422 of the Code and
         is designated as an ISO at the time of its grant.

         2.14 "Officer" means a corporate officer of the Company or any
         Subsidiary or Affiliate of the Company.

         2.15 "Option" means the right of a Participant to purchase a specified
         number of shares of Common Stock, subject to the terms and conditions
         of the Plan.

         2.16 "Option Date" means the date upon which an Option is granted, or
         Restricted Stock is awarded, to a Participant under the Plan.

         2.17 "Option Price" means the price per share at which an Option may be
         exercised.

         2.18 "Participant" means an individual, or to the extent permitted as
         contemplated at Section 5 hereof, the account of an individual, to whom
         an Option or Restricted Stock has been granted under the Plan.

         2.19 "Plan" means the Parker Drilling Company 1997 Stock Plan herein as
         from time to time amended.

         2.20 "Restricted Stock" means Common Stock awarded to a Participant
         pursuant to the Plan and subject to the restrictions contained or
         authorized in Section 7 hereof.

         2.21 "Securities Act" means the Securities Act of 1933, as it exists
         now or from time to time may hereinafter be amended.

                                       4
<PAGE>

         2.22 "Subsidiary" means any corporation or other entity of which the
         majority voting power or equity interest is owned directly or
         indirectly by the Company.

         2.23 "Termination of Employment" means:

                  (a) with respect to an employee, when the employee's
         employment relationship with the Company and all of its Subsidiaries is
         terminated, regardless of any severance arrangements. A transfer from
         the Company to a Subsidiary or affiliate of the Company or a
         Subsidiary, or vice versa is not a termination of employment for
         purposes of the Plan; or

                  (b) with respect to a consultant, when the consultant's
         consulting relationship with the Company is terminated either due to
         the termination of any consulting agreement, or otherwise, regardless
         of the fact that no employment relationship exists.

         2.24 Rules of Construction.

                  (a) Governing Law. The construction and operation of the Plan
         are governed by the laws of the State of Oklahoma.

                  (b) Undefined Terms. Unless the context requires another
         meaning, any term not specifically defined in the Plan has the meaning
         given to it by the Code.

                  (c) Headings. All headings in the Plan are for reference only
         and are not to be utilized in construing the Plan.

                  (d) Gender. Unless clearly appropriate, all nouns of either
         gender refer indifferently to persons of either gender.

                  (e) Singular and Plural. Unless clearly inappropriate,
         singular terms refer also to the plural and vice versa.

                  (f) Severability. If any provision of the Plan is determined
         to be illegal or invalid for any reason, the remaining provisions shall
         continue in full force and effect and shall be construed and enforced
         as if the illegal or invalid provision did not exist, unless the
         continuance of the Plan in such circumstances is not consistent with
         its purposes.

3.       Stock Subject to the Plan.

         Except as otherwise provided in Section 11, the total number of shares
of Common Stock reserved and available for distribution pursuant to Awards under
the Plan shall be 8,800,000 shares. Such number of shares may be increased as
contemplated in the last sentence of this Section 3 or by amendment by the
Board. Such shares may consist, in whole or in part, of

                                       5
<PAGE>

authorized and unissued shares or treasury shares. Awards under the Plan may be
of shares of Restricted Stock and/or Options. Options granted hereunder may be:
(a) Incentive Stock Options or (b) non-qualified options. Only employees of the
Company or any Subsidiary thereof shall be eligible to receive Incentive Stock
Options under the Plan. Reserved shares may be either authorized but unissued
shares or treasury shares, in the Board's discretion. If any Awards hereunder
shall terminate or expire, as to any number of shares, or Options are exercised
(and any related withholding tax paid) by the delivery (actual, constructive or
by attestation) of shares of Common Stock, new Options and Restricted Stock may
thereafter be awarded hereunder with respect to such delivered shares or expired
or terminated Awards.

4.       Administration.

         The Plan shall be administered by the Board, or by such Person(s) as
authorized by the Board. In addition to any other powers set forth in the Plan,
the Board or the Compensation Committee has the authority:

                  (a) to construe and interpret the Plan, and to remedy any
         ambiguities or inconsistencies therein;

                  (b) to establish, amend and rescind appropriate rules and
         regulations relating to the Plan;

                  (c) subject to the express provisions of the Plan, to
         determine the individuals who will receive Awards of Options and/or
         Restricted Stock, the times when they will receive them, the number of
         shares to be subject to each Award and the Option Price, payment terms,
         payment method, and expiration date applicable to each Award;

                  (d) to contest on behalf of the Company or Participants, at
         the expense of the Company, any ruling or decision on any matter
         relating to the Plan or to any Awards of Options and/or Restricted
         Stock;

                  (e) generally, to administer the Plan, and to take all such
         steps and make all such determinations in connection with the Plan and
         the Awards of Options and/or Restricted Stock as it may deem necessary
         or advisable;

                  (f) to determine the form in which tax withholding under
         Section 14 of the Plan will be made; and

                  (g) to amend the Plan or any Option or Restricted Stock
         granted or awarded hereunder as may be necessary in order for any
         business combination involving the Company to qualify for
         pooling-of-interest treatment under APB No. 16.

                                       6
<PAGE>

5.       Eligible Participants.

         Subject to the provisions of the Plan, the persons who shall be
eligible to participate in the Plan and be granted Awards shall be those persons
who are employees or directors of the Company or any Subsidiary or consultants
under contract to the Company, who shall be in a position, in the opinion of the
Board or Compensation Committee, to make contributions to the growth, management
and success of the Company or its Subsidiaries. Of those persons described in
the preceding sentence, the Board or Compensation Committee may, from time to
time, select persons to be granted Awards and shall determine the terms and
conditions with respect thereto. In making any such selection and in determining
the form of the Award, the Board or the Compensation Committee may give
consideration to the functions and responsibilities of the person, to the
person's contributions to the Company or its Subsidiaries, the value of the
individual's service to the Company or its Subsidiaries and such other factors
deemed relevant by the Board. In the event and to the extent authorized by the
United States Departments of Treasury and Labor, the Parker Drilling Company
Stock Bonus Plan account of an employee of the Company or a Subsidiary may also
be a Participant, the Board may grant Options to such account and, to the extent
such account is a Participant, the Options in such an account shall be subject
to all of the terms and provisions of the Plan as if the Options had been
granted to the individual for whom the account is maintained.

6.       Terms and Conditions of Options.

         The Board (or the Compensation Committee, which shall have the same
authority throughout this section) may, in its discretion, grant Options to any
Participant under the Plan. Each Option shall be evidenced by an agreement
between the Company and the Participant. Unless the Board at the time of grant
specifically designates Options granted under the Plan as Incentive Stock
Options ("ISO's"), all Options granted under the Plan shall be Non-Qualified
Stock Options ("NQSO's). Each Option agreement, in such form as is approved by
the Board, shall be subject to the following express terms and conditions and to
such other terms and condition, not inconsistent with the Plan as the Board may
deem appropriate:

                  (a) Option Period. Each Option granted under the Plan shall be
         for such period as is established by the Board, except that each ISO
         shall expire no later than ten years after the Option Date. Where
         Options are exercisable in installments, the right to purchase any
         shares shall be cumulative, so that when the right to purchase any
         shares has matured, such shares may be purchased thereafter until the
         expiration of the Option. The Board shall have the power to accelerate
         the exercisability of installments for any Option granted under the
         Plan.

                  (b) Option Price. At the time when the Option is granted, the
         Board will fix the Option Price. In the case of ISO's, the Option Price
         shall be no less than the Fair Market Value on the Option Date and in
         the case of all other Options granted under the Plan, the Option Price
         shall be as determined in the sole discretion of the Board, but in no
         event may the Option Price be less than the par value for a share of
         Common Stock.

                                       7
<PAGE>

                  (c) Other Option Provisions. The form of Option authorized by
         the Plan may contain such other provisions as the Board may from time
         to time determine, including:

                  (i) "Discounted Options" which may be granted to any
                  Participant. A "Discounted Option" is an Option having an
                  Option Price per share less than the Fair Market Value at the
                  Option Date provided such Option Price shall not be less than
                  50% of the Fair Market Value at the Option Date.

                  (ii) "Reload Options" which may be granted only to employees
                  of the Company or a Subsidiary. A "Reload Option" is an Option
                  automatically granted to a Participant pursuant to the terms
                  of an Award Agreement upon the delivery of shares of Common
                  Stock to pay any required withholding tax in respect of the
                  exercise of an Option (the "delivered shares"). Such Reload
                  Option entitles the Participant to purchase (at an option
                  price equal to the Fair Market Value at the time of such
                  delivery) a number of shares of Common Stock equal to the
                  number of delivered shares. Reload Options shall be subject to
                  all of the terms of the Plan and the Award Agreement in
                  respect to which they are granted, including the Option Period
                  for the Option exercised by delivery of the delivered shares,
                  and shall not be exercisable before the earlier of one year
                  after their grant or the day before the expiration of such
                  Option Period. In the discretion of the Board, Reload Options
                  granted on the exercise of ISO's may be ISO's or non-qualified
                  options.

                  (d) Incentive Stock Options. ISO's may only be granted to
         employees of the Company or of a Subsidiary. The aggregate Fair Market
         Value (determined as of the Option Date of the ISO) of the Common Stock
         with respect to which ISO's are first exercisable by a Company or
         Subsidiary employee during any calendar year under all Option plans of
         the Company shall not exceed $100,000. An ISO granted to an employee
         who, at the time the ISO is granted, owns Common Stock possessing more
         than ten percent (10%) of the total combined voting power of all
         classes of capital stock of the Company or a Subsidiary thereof shall
         have an exercise price equal to not less than 110 percent (110%) of the
         Fair Market Value on the Option Date. In addition, no more than
         4,000,000 shares of Common Stock may be issued as ISO's granted under
         the Plan and no ISO may be granted under the Plan after the tenth
         anniversary of the date the Plan is approved by the stockholders of the
         Company. Any Participant who disposes of shares acquired upon the
         exercise of an ISO either (i) within two years after the Option Date of
         the Option under which the shares were acquired or (ii) within one year
         after the acquisition of such shares shall notify the Company of such
         disposition and of the amount realized. Failure by a Participant to so
         notify the Company of such a disposition of shares shall entitle the
         Company to treat the shares of Common Stock issued to such Participant
         as void ab initio or to recover from the Participant the greater of the
         value of the shares disposed of as of the date of disposition or the
         value of the shares disposed of as of the date the Company learns of
         such disposition from either (i) any amounts due to such Participant
         from the Company or a Subsidiary, or (ii) otherwise. The Company may,
         at its discretion, place a legend noting

                                       8
<PAGE>

         the possible consequences of a Participant's failure to provide such
         disposition notice on shares of Common Stock delivered upon the
         exercise of an ISO.

                  (e) No person shall have any rights of a stockholder with
         respect to any shares to be delivered upon the exercise of an Option
         until such time as such Option is validly exercised.

7.       Terms and Conditions of Restricted Stock Awards.

         The Board (or the Compensation Committee which shall have similar
authority throughout this section), in its discretion, may grant Restricted
Stock to any Participant under the Plan, the purchase price of which shall be
established by the Board. Each grant of Restricted Stock shall be evidenced by
an Award Agreement between the Company and the Participant. All shares of Common
Stock awarded to Participants under the Plan as Restricted Stock shall be
subject to the following express terms and conditions and to such other terms
and conditions, not inconsistent with the Plan, as the Board shall deem
appropriate:

                  (a) Restrictions on Transfer. Shares of Restricted Stock
         awarded to Participants shall contain such restrictions on transfer as
         the Board may determine in its sole discretion. Except as permitted
         under Section 12 of the Plan, shares of Restricted Stock awarded to
         Participants may not be sold or transferred before such restrictions on
         transfer lapse, and may only be pledged to the Company or any
         Subsidiary to satisfy any obligations that the Participant may have to
         the Company or the Subsidiary with respect to the acquisition of such
         shares of Restricted Stock. Subject to the provisions of subparagraphs
         (b) and (c) below and any other restrictions imposed by law, the
         certificates for any shares of Restricted Stock the restrictions on
         which have lapsed will be transferred to the Participant or, in the
         event of his death, to the beneficiary or beneficiaries designated by
         writing filed by the Participant with the Board for such purpose or, if
         none, to his estate. Delivery of shares in accordance with the
         preceding sentence shall be made within the 30-day period after such
         restrictions shall lapse.

                  (b) Certificates Deposited With Company. Each certificate
         issued in respect of shares of Restricted Stock awarded under the Plan
         shall be registered in the name of the Participant and deposited with
         the Company. Each such certificate shall bear the following (or a
         similar) legend:

                  "The transferability of this certificate and the shares of
                  stock represented hereby are subject to the terms and
                  conditions (including forfeiture) relating to Restricted Stock
                  contained in the Parker Drilling Company 1997 Stock Plan, as
                  amended (the "Plan"), and an agreement entered into between
                  the registered owner and Parker Drilling Company. Copies of
                  such Plan and agreement are on file at the principal office of
                  Parker Drilling Company."

                                       9
<PAGE>

                  (c) Stockholder Rights. Subject to the foregoing restrictions,
         each Participant shall have all the rights of a stockholder with
         respect to his shares of Restricted Stock including, but not limited
         to, the right to vote such shares.

                  (d) Dividends. On each Common Stock dividend payment date,
         each Participant shall receive an amount equal to the dividend paid on
         that date on a share of Common Stock, multiplied by his number of
         shares of Restricted Stock.

8.       Manner of Exercise of Options

         To exercise an Option in whole or in part, a Participant (or, after his
death, his executor or administrator) or his assignee (as contemplated at
Section 12 hereof) must give written notice to the Administrator, stating the
number of shares with respect to which he intends to exercise the Option. The
Company will issue the shares with respect to which the Option is exercised upon
payment in full of the Option Price. The Option Price may be paid (i) in cash,
(ii) in shares of Common Stock held by the Participant, his executor,
administrator, or assignee, and having an aggregate Fair Market Value, as
determined as of the close of business on the day prior to the day on which such
Option is exercised, equal to the Option Price, (iii) if permitted by the Board
or Compensation Committee, a promissory note in the amount of the Option Price,
which note shall provide for full personal liability of the maker and shall
contain such other terms and provisions as the Board or Compensation Committee
may determine, including without limitation the right to repay the note
partially or wholly with Common Stock, (iv) if authorized in the Award Agreement
for the Option being exercised, by delivery of irrevocable instructions to a
broker to promptly deliver to the Company the amount of sale or loan proceeds
necessary to pay for all Common Stock acquired through such exercise and any tax
withholding obligations resulting from such exercise, (v) if authorized in the
Award Agreement for the Option being exercised, by the withholding by the
Company, pursuant to a written election delivered by the Participant, his
executor, administrator, or assignee, to the Administrator on or prior to the
date of exercise, from the shares of Common Stock issuable upon any exercise of
the Option that number of shares having a Fair Market Value as of the close of
business on the day prior to the day on which such Option is exercised equal to
such Option Price, (vi) by constructive delivery ("attestation") of shares of
Common Stock held by the Participant, his executor, administrator, or assignee,
and having an aggregate Fair Market Value, as determined as of the close of
business on the day of exercise, equal to the Option Price effected through
providing the Company with a notarized statement on or before the day of
exercise attesting to the number of shares owned by the Participant, his
executor, administrator, or assignee, that will serve as the Option Price
payment shares, or (vii) as authorized in the Award Agreement for the Option
being exercised, by a combination of such methods. The Option Price may also be
paid in shares of Common Stock which were received by the Participant, his
executor, administrator, or assignee, upon the exercise of one or more Options
or as an award of Restricted Stock under the Plan and upon which all
restrictions have lapsed.

9.       Vesting.

         A Participant may not exercise an Option until it has become vested.
The portion of an Option Award that is vested depends upon the vesting
restrictions, if any, established by the Board or Compensation Committee for
such Option at the time of its grant and the period that has elapsed since the
Option Date.

                                       10
<PAGE>

10.      Change of Control.

         Notwithstanding the provisions of Sections 6 and 7 or anything
contained in a Participant's agreement to the contrary, upon a Change in
Control, all Options and/or Restricted Stock shall be subject to the following:

                  (a) The restrictions and limitations applicable to any Options
         shall lapse, and such Options shall become free of all restrictions and
         become fully vested to the full extent of the original grant.

                  (b) The Company shall have the right to acquire from
         Participants their vested Options for which the value, as established
         in the Change of Control Price, of the Common Stock issuable upon
         exercise thereof is greater than the Option Price, by payment of the
         amount by which the price per share of Common Stock, as established in
         the Change of Control Price, exceeds the Option Price; and

                  (c) All Restricted Stock shall become free of all restrictions
         and be fully vested and transferable.

11.      Adjustments to Reflect Changes in Capital Structure.

         If there is any change in the corporate structure or shares of the
Company, the Board of Directors may, in its discretion, make any adjustments
necessary to prevent accretion, or to protect against dilution, in the number
and kind of shares authorized by the Plan and, with respect to outstanding
Options and/or Restricted Stock, in the number and kind of shares covered
thereby and in the applicable Option Price. For the purpose of this Section 11,
a change in the corporate structure or shares of the Company includes, without
limitation, any change resulting from a re-capitalization, stock split, stock
dividend, consolidation, rights offering, spin-off, reorganization, or
liquidation and any transaction in which shares of Common Stock are changed into
or exchanged for a different number or kind of shares of stock or other
securities of the Company or another corporation.

12.      Non-Transferability of Options and Restricted Stock; Limited Exception
         to Transfer Restrictions.

                  (a) Unless otherwise expressly provided in this Section 12, by
         applicable law or by any Award Agreement, as the same may be amended,
         evidencing the grant or award of Restricted Stock or Options: Awards
         are non-transferable and shall not be subject in any manner to sale,
         transfer, anticipation, alienation, assignment, pledge, encumbrance or
         charge; Awards shall be exercised only by the person to whom such
         Awards were granted or awarded (a "Recipient"); and amounts payable or
         shares issuable pursuant to Awards shall be delivered only to or for
         the account of a Recipient.

                                       11
<PAGE>

                  (b) Except as precluded by any applicable law, the Board may
         permit Awards to be transferred to and exercised by and paid to certain
         persons or entities related to the Recipient, including, but not
         limited to members of the Recipient's immediate family (parents,
         grandparents, children, grandchildren, spouse, siblings), charitable
         institutions, or trusts or other entities whose beneficiaries or
         beneficial owners are members of the Recipient's immediate family
         and/or charitable institutions, or to such other persons or entities as
         may be approved by the Board, pursuant to such conditions and
         procedures as the Board may establish. Any permitted transfer shall be
         subject to the condition that the Board receive evidence satisfactory
         to it that the transfer is being made for estate and/or tax planning
         purposes on a gratuitous or donative basis and without consideration
         other than nominal consideration.

                  (c) The exercise and transfer restrictions in this Section 12
         shall not apply to:

                           (i) transfers to the Company;

                           (ii) the designation of a beneficiary to receive
                  benefits in the event of the Recipient's death or, if the
                  Recipient has died, transfers to or exercise by the
                  Recipient's beneficiary, or, in the absence of a validly
                  designated beneficiary, transfers by will or the laws of
                  descent and distribution;

                           (iii) transfers pursuant to a domestic relations
                  order;

                           (iv) if the Recipient has suffered a disability,
                  permitted transfers or exercises on behalf of the Recipient by
                  his or her legal representative; or

                           (v) the authorization by the Board of "cashless
                  exercise" procedures with third parties who provide financing
                  for the purpose of (or who otherwise facilitate) the exercise
                  of Awards consistent with applicable laws and the express
                  authorization of the Board.

                  (d) In the event of a transfer of an Award pursuant to
         Subsection (b) or (c) of this Section 12, the Recipient will remain
         liable for any taxes (including withholding and social security taxes)
         due upon or as a consequence of the exercise of or lapse of any
         restrictions in respect of an Award and neither the Company nor the
         Board shall have any obligation to provide notice to a transferee of
         any event or information that has, will or could in any way affect an
         Award or its exercise.

13.      Rights as Stockholder.

         No person shall have any rights of a stockholder as to shares of Common
Stock subject to an Award under the Plan until, after proper exercise of the
Award or other action required, such shares shall have been recorded on the
Company's official stockholder records as having been issued or transferred.
Upon exercise of the Award or any portion thereof, the Company will have thirty
(30) days in which to issue the shares, and the Participant will not be treated
as a stockholder

                                       12
<PAGE>

for any purpose whatsoever prior to such issuance. No adjustment shall be made
for cash dividends or other rights for which the record date is prior to the
date such shares are recorded as issued or transferred in the Company's official
stockholder records, except as provided herein or in an Agreement.

14.      Withholding Tax.

         No later than the date as of which an amount first becomes includible
in the gross income of the Participant for federal income tax purposes with
respect to any Award under the Plan, the Participant shall pay to the Company,
or make arrangements satisfactory to the Company regarding the payment of, any
federal, state, local or foreign taxes of any kind required by law to be
withheld with respect to such amount. Unless otherwise determined by the
Administrator, withholding obligations may be settled with shares of Common
Stock, including Common Stock that is part of the Award that gives rise to the
withholding requirement. The obligations of the Company under the Plan shall be
conditional on such payment or arrangements, and the Company and Subsidiaries
shall, to the extent permitted by law, have the right to deduct any such taxes
from any payment otherwise due to the Participant. The Administrator may
establish such procedures as it deems appropriate, including the making of
irrevocable elections, for the settlement of withholding obligations with shares
of Common Stock.

15.      Termination of Employment.

         (a)      In the event of a Participant's Termination of Employment for
                  any reason other than death or disability any Option or
                  Restricted Stock shall expire forthwith; provided, however,
                  that with the approval of the Board evidenced by a writing
                  signed by an executive officer of the Company other than the
                  Participant, unvested Options may be: (i) allowed to remain in
                  effect and to vest and be exerciseable in accordance with the
                  terms of the Award Agreement evidencing such options, or (ii)
                  accelerated to vest immediately. Any Options exercisable at
                  the time of such termination, or which become exerciseable in
                  accordance with this paragraph may be exercised up to a date
                  after such termination that is determined by the Board, but
                  not exceeding five years from the date of such termination and
                  not beyond the date the Option otherwise would have expired in
                  accordance with the Award Agreement evidencing such Option.
                  The restrictions on Restricted Stock may be eliminated so that
                  such Restricted Stock is free of such restrictions at the time
                  of Termination of Employment and not forfeited upon such
                  Termination of Employment.

         (b)      Upon the death of a Participant, all unvested Options shall
                  vest immediately and all restrictions on Restricted Stock
                  shall lapse. A Participant's estate or beneficiaries shall
                  have a period up to the later of one year after the
                  Participant's death or the expiration date specified in the
                  Award Agreement within which to exercise the Option; provided,
                  however, in the case of ISO's, the Participant's estate or
                  beneficiaries may exercise an Option only until the expiration
                  date specified in the Award Agreement. Any Option may be
                  immediately exercised in full by the Participant's estate or
                  beneficiaries. In the

                                       13
<PAGE>

                  event the Participant's estate is closed with exercisable
                  Options then unexercised, the rights under this paragraph
                  shall pass by will or the laws of descent and distribution. In
                  the case of Restricted Stock, the restrictions on such
                  Restricted Stock shall be deemed to have lapsed immediately
                  before such Participant's death.

         (c)      Upon the disability of a Participant, all unvested Options
                  shall vest immediately and all restrictions on Restricted
                  Stock shall lapse. In the event of a Participant's disability
                  during employment, the Participant, or his or her guardian or
                  legal representative shall have a period up to the expiration
                  date specified in the Award Agreement within which to exercise
                  the Option. In the case of Restricted Stock, the restrictions
                  on such Restricted Stock shall be deemed to have lapsed
                  immediately before the disability of such Participant.

16.      Cancellation of Option Grants and Restricted Stock.

                  (a) After Termination of Employment. If there is a Termination
         of Employment with respect to a Participant for any reason other than
         death, and, pursuant to paragraph (a) or (c) of Section 15, one or more
         Options have not yet expired or the restrictions pertaining to
         Restricted Stock have not lapsed, the Board, in its sole discretion,
         which may be delegated to the Chief Executive Officer of the Company or
         to the Chairman of the Board, may cancel any such Options at any time
         prior to the exercise thereof or declare forfeited any such Restricted
         Stock before the related restrictions lapse unless the following
         conditions are met:

                           (i) The Participant shall not render services for any
                  organization or engage directly or indirectly in any business
                  which, in the judgment of the Chief Executive Officer of the
                  Company, is or becomes competitive with the Company, or which
                  is or becomes otherwise prejudicial to or in conflict with the
                  interests of the Company. The judgment of the Chief Executive
                  Officer shall be based on the Participant's positions and
                  responsibilities while employed by the Company, the
                  Participant's post-employment responsibilities and position
                  with the other organization or business, the extent of past,
                  current and potential competition or conflict between the
                  Company and the other organization or business, the effect on
                  the Company's customers, suppliers and competitors of the
                  Participant's assuming the post-employment position, and such
                  other considerations as are deemed relevant given the
                  applicable facts and circumstances. The Participant shall be
                  free, however, to purchase as an investment or otherwise,
                  stock or other securities of such organization or business so
                  long as such stock or securities are listed upon a recognized
                  securities exchange or traded over-the-counter, and such
                  investment does not represent a substantial investment to the
                  Participant or a greater than five percent (5%) equity
                  interest in the organization or business.

                           (ii) The Participant shall not, without prior written
                  authorization from the Company, disclose to anyone outside the
                  Company, or use in other than the Company's business, any
                  confidential information or material relating to the

                                       14
<PAGE>

                  business of the Company, acquired by the Participant either
                  prior to or after such Participant's Termination of
                  Employment.

                  (b) Before Termination of Employment. The Board, in its sole
         discretion, which may be delegated to the Chief Executive Officer of
         the Company or to the Chairman of the Board, may cancel any Options
         held by a person or reduce the number thereof at any time prior to the
         exercise thereof or declare forfeited a part or all of any shares of
         Restricted Stock awarded to a Participant under the following
         circumstances:

                           (i) The Participant's conduct either in connection
                  with his or her employment by the Company or otherwise is
                  deemed inimical to the interests of the Company.

                           (ii) The Participant's employment responsibilities
                  with the Company are reduced or altered and the Board
                  determines that the Participant would not have been granted
                  the Options or awarded the shares of Restricted Stock, or such
                  number of Options or shares of Restricted Stock, had the
                  Participant's employment responsibilities been at the reduced
                  or altered level at the time of the grant or award of such
                  Options or shares of Restricted Stock.

17.      No Right To Employment.

         Participation in the Plan will not give any Participant a right to be
retained as an employee of the Company or any Subsidiary, or any right or claim
to any benefit under the Plan, unless the right or claim has specifically
accrued under the Plan.

18.      Amendment of the Plan.

         The Board may from time to time amend or revise the terms of the Plan
in whole or in part and may without limitation, adopt any amendment deemed
necessary.

19.      Notice.

         Any written notice to the Company required by any of the provisions of
the Plan shall be addressed to the Administrator, if so required under the Plan,
and otherwise to the Chairman of the Board or to the Chief Executive Officer of
the Company, and shall become effective when it is received by the office of
such Administrator, Chairman or the Chief Executive Officer.

20.      Company Benefit and Compensation Plans.

         Nothing contained in the Plan shall prevent any Participant prior to
death, or the Participant's dependents or beneficiaries after the Participant's
death, from receiving, in addition to any Options or Restricted Stock provided
for under the Plan, any salary, incentive or performance plan Awards, payments
under a Company retirement plan or other benefits that may be otherwise payable
or distributable to such Participant, or to the Participant's dependents or
beneficiaries under

                                       15
<PAGE>

any other plan or policy of the Company or otherwise. To the extent permitted by
law, grants of Options or awards of Restricted Stock under the Plan may be made
in combination with, or as alternatives to, grants, awards or payments under
other Company plans.

21.      Representations and Warranties.

         No person shall at any time have a right to be selected as a
Participant in the Plan, nor having been selected as a Participant for one Award
to be selected as a Participant for any other Award, and no person shall have
any authority to enter into any agreement assuring such selection or making any
warranty or representation with respect thereto. A Participant shall have no
rights to or interest in any Option or Restricted Stock except as set forth
herein.

22.      Unfunded Plan.

         Insofar as it provides for grants of Options and awards of Restricted
Stock, the Plan shall be unfunded. Although bookkeeping accounts may be
established with respect to Participants who are or may become entitled to
Common Stock under the Plan, any such accounts shall be used merely as a
bookkeeping convenience. The Company shall not be required to segregate any
assets that may at any time be represented by Common Stock, nor shall the Plan
be construed as providing for such segregation, nor shall the Company nor the
Board be deemed to be a trustee of any Common Stock issuable or deliverable
under the Plan. Any liability of the Company to an Participant with respect to a
grant of Options or award of Restricted Stock under the Plan shall be based
solely upon any contractual obligations that may be created by the Plan or an
Award Agreement; no such obligation of the Company shall be deemed to be secured
by any pledge or other encumbrance on any property of the Company. Neither the
Company nor the Board shall be required to give any security or bond for the
performance of any obligation that may be created by the Plan.

23.      Conditions Upon Issuance of Shares.

         An Option shall not be exercisable, a share of Common Stock shall not
be issued pursuant to the exercise of an Option, and restrictions on Restricted
Stock awarded shall not lapse until such time as the issuance and delivery of
such share pursuant thereto shall comply with all relevant provisions of law,
including, without limitation, the Securities Act, the Exchange Act, the rules
and regulations promulgated thereunder, and the requirements of any stock
exchange upon which the shares of Common Stock may then be listed (including the
listing requirements for such Common Stock on the Exchange), and shall be
further subject to the approval of counsel for the Company with respect to such
compliance. As a condition to the exercise of an Option, the Company may require
the person exercising such Option to represent and warrant at the time of any
such exercise that the Common Stock is being purchased only for investment and
without any present intention to sell or distribute such shares if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned relevant provisions of law.

24.      Effective Date and Termination of Plan.

         24.1 Effective Date. The Plan is effective as of the of the date of its
adoption by the Board of Directors.

                                       16
<PAGE>

         24.2 Termination of the Plan. The Board may terminate the Plan at any
time with respect to any shares that are not then subject to Options or
Restricted Stock. Termination of the Plan will not affect the rights and
obligations of any Participant with respect to Options or Restricted Stock
awarded before termination.

                                    * * * * *

         The undersigned, being the duly elected Secretary of Parker Drilling
Company, does hereby certify that the foregoing Parker Drilling Company Second
Amended and Restated 1997 Stock Plan was approved and adopted by the Board of
Directors effective as of July 24, 2002.

                                         /s/ Ronald C. Potter
                                         -----------------------------
                                         Ronald C. Potter
                                         Corporate Secretary

                                       17

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