1999 Pool Employee/Director Option Exchange Plan

EXHIBIT 10.20


NABORS INDUSTRIES, INC.
1999 POOL EMPLOYEE/DIRECTOR OPTION EXCHANGE PLAN


1. Purpose.


(a) General. The purpose of the 1999 Pool Employee/Director Option Exchange Plan (the "Plan") is to grant to former employees and non-employee directors of Pool Energy Services Co. ("Pool") or its subsidiaries who hold options to purchase shares of Pool common stock ("Pool Options") pursuant to certain stock option plans of Pool, options to acquire common stock, $.10 par value per share (the "Nabors Common Stock") of Nabors Industries, Inc. ("Nabors" or the "Company) in exchange for their existing Pool Options, upon the terms and conditions of the Plan. The grant of Nabors options shall be effective, and the Pool Options shall terminate and expire, on the date (the "Acquisition Date") the merger (the "Merger") of Starry Acquisition Corp. with and into Pool pursuant to the terms and conditions of the Agreement and Plan of Merger dated as of January 10, 1999, as amended, among Nabors, Starry Acquisition Corp. and Pool (the "Merger Agreement"), becomes effective.


(b) Effective Date. The Plan shall be effective on the Acquisition Date. The Plan shall remain effective until ten years after Acquisition Date, or such earlier date as the Company's Board of Directors (the "Board") shall determine.


2. Administration.


(a) General. The Plan shall be administered by an independent committee (the "Committee") appointed by the Board, as provided below.


(b) Committee Structure and Authority. The Committee shall be appointed from time to time by the Board and shall consist of not fewer than two members. The Board shall designate one of the members of the Committee as the Committee Chairman. The initial members of the Committee shall be Jack Wexler, Chairman, and Myron M. Sheinfeld. All members of the Committee shall be "disinterested persons" as defined by Rule 16b-3 of the Securities Exchange Act of 1934, as amended (the "34 Act") or any successor thereto and "outside directors" as defined in Section 162(m) of the Internal Revenue Code of 1986, as amended ("IRC"), and the regulations issued thereunder. The Committee shall hold its meetings at such times and places as it may determine. A majority of its members shall constitute a quorum. All determinations of the Committee shall be made by a majority of its members. Any decision or determination reduced to writing and signed by all members shall be effective as if made by a majority vote at a meeting duly called and held. The Committee may appoint a secretary (who need not be a member of the Committee). Service on the Committee shall constitute service as a director of Nabors for all purposes.


(c) Committee Discretion. For purposes of administration, the Committee, subject to the terms of the Plan, shall have final authority to establish such rules and regulations, and take such other administrative actions as it deems necessary or advisable. All determinations and interpretations made by the Committee shall be final, conclusive and binding on all persons, including persons awarded options ("Optionees") hereunder, and their legal representatives and beneficiaries.


(d) Committee Liability. No member of the Committee shall be liable for any act or omission with respect to his or her services on the Committee, if he or she acts in good faith and in a manner he or she reasonably believes to be in or not opposed to the best interests of the Company.


3. Eligibility.


The persons who shall be eligible to participate in the Plan shall be those persons (i) who were employed by, or served as non-employee directors of, Pool or any subsidiary; (ii) who, on the Acquisition Date immediately prior to the Merger, held validly granted, unexpired Pool Options, whether vested or


unvested; and (iii) who have elected the Roll-Over Alternative or the Retirement Roll-Over Alternative pursuant to Section 2.5(a) of the Merger Agreement ("Covered Persons").


4. Stock Subject to the Plan.


(a) Stock Authorized. There shall be available for the grant of options under the Plan equal to the aggregate number of such shares issuable to all Covered Persons under the Roll-Over Alternative, not to exceed 1,466,010 shares of Nabors Common Stock.


(b) Adjustment of Shares. The amount of shares that are subject to option grants are subject to the following adjustments.


(i) If any change is made in the Nabors Common Stock whether through
merger, consolidation, reorganization, recapitalization, stock dividend,
stock split, combination of shares, rights offerings, change in corporate
structure of the Company, or otherwise, appropriate adjustments will be
made (A) to the number or type of securities subject to and reserved for
issuance under the Plan; and (B) in order to prevent dilution or
enlargement of the rights of Optionees, to the number or type of option
grants and the exercise price subject to outstanding options.


(ii) The provisions of this paragraph 4(b) shall apply to any
unexercised options.


(c) Registration, Listing and Qualification of Shares of Nabors Common Stock. Each option grant shall be subject to the requirements that, if at any time the Nabors Common Stock covered thereby is not registered, listed or qualified with or by any securities exchange or under any federal or state law, and (i) if the Committee shall determine that such registration, listing, qualification, consent or approval, of any governmental regulatory body is necessary or desirable as a condition of, or in connection with, the option grant or the purchase of shares of Nabors Common Stock thereunder, no such option may be exercised, unless and, until such registration, listing, qualification, consent or approval shall have been obtained or (ii) if the Board shall determine that such registration, listing, qualification, consent or approval of any governmental regulatory body is not necessary and/or not desirable as a condition of, or in connection with, the option grant or the purchase of shares of Nabors Common Stock thereunder, the Board may impose any conditions upon the exercise of such options as it shall deem necessary or desirable in view of such determination and no such option may be exercised, unless and until such conditions have been satisfied. Without limiting the foregoing, the Company may require that any person exercising an option grant shall make such representations and agreements and furnish such information as it deems appropriate to assure compliance with the foregoing or any ot ...