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                                                                   EXHIBIT 10.21


                             NABORS INDUSTRIES, INC.

                             1999 STOCK OPTION PLAN
                           FOR NON-EMPLOYEE DIRECTORS


         1.  PURPOSE

The purpose of the Nabors Industries, Inc. 1999 Stock Option Plan for
Non-employee Directors (the "Plan") is to promote the interests of the Nabors
Industries, Inc. (the "Company") and its stockholders by strengthening the
Company's ability to attract and retain the services of experienced and
knowledgeable non-employee directors and by encouraging such directors to
acquire an increased proprietary interest in the Company.

         2.  SHARES SUBJECT TO THE PLAN

Subject to adjustment as provided in Article 7, the total number of shares of
common stock, $.10 par value (the "Common Stock") of the Company for which
options may be granted under the Plan shall be 500,000 Shares of Common Stock
(the "Shares"). The Shares shall be shares currently authorized but unissued or
currently held or subsequently acquired by the Company as treasury shares,
including shares purchased in the open market or in private transactions. If any
option granted under the Plan expires or terminates for any reason without
having been exercised in full, the Shares subject to, but not delivered under,
such option may become available for the grant of other options under the Plan.
To the extent that Shares are delivered to pay the exercise price of an option,
the number of Shares so delivered shall again be available for grant under the
Plan.

         3.  ADMINISTRATION OF THE PLAN

The Plan shall be administered, subject to Articles 10 and 11, by the Company's
Board of Directors provided that the Board may appoint a committee (the
"Committee") to administer the Plan. In no event, shall an Eligible Director (as
defined herein) consider or vote on the administration of this Plan or serve as
a member of the Committee. The Board of Directors or, if applicable, the
Committee shall be referred to herein as the "Administrator". Subject to the
terms of the Plan, the Administrator shall have the power to construe the
provisions of the Plan, to determine the resolution of all questions arising
thereunder, and to adopt and amend such rules and regulations for administering
the Plan as the Administrator deems desirable. Any and all decisions of the
Administrator in the administration of the Plan shall be final and conclusive,
including decisions concerning capital adjustments contemplated by Article 7
hereof. No member of the Administrator shall be liable for anything done or
omitted to be done by such member in connection with the Plan, except in
circumstances involving actual bad faith.




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         4.  PARTICIPATION IN THE PLAN

Each member of the Company's Board of Directors (a "Director") who is not
otherwise an employee of the Company or any subsidiary of the Company on the
date of grant and who qualifies as a "non-employee director" pursuant to Rule
16b-3 of the Securities Exchange Act of 1934, as amended ("Rule 16b-3") and as
an "outside director" pursuant to Section 162(m) of the Internal Revenue Code of
1986, as amended and the rules promulgated thereunder ("Section 162(m)") on the
date of the grant (an "Eligible Director") shall be eligible to participate in
the Plan.

         5.  NON STATUTORY STOCK OPTIONS

All options granted under the Plan shall be non-statutory options not intended
to qualify under Section 422 of the Internal Revenue Code of 1986, as amended.

         6.  OPTION TERMS

Each option granted to an Eligible Director under the Plan and the issuance of
Shares thereunder shall be subject to the following terms:

         6.1      Option Agreements. Each option granted under the Plan shall be
                  evidenced by an option agreement (an "Agreement") duly
                  executed on behalf of the Company and by the Eligible Director
                  to whom such option is granted and dated as of the applicable
                  date of grant. Each Agreement shall be signed on behalf of the
                  Company by an officer or officers delegated such authority by
                  the Administrator using either manual or facsimile signature.
                  Each Agreement shall comply with and be subject to the terms
                  and conditions of the Plan. Any Agreement may contain such
                  other terms, provisions and conditions not inconsistent with
                  the Plan as may be determined by the Administrator. The terms
                  and provisions of any particular Agreement may differ from the
                  terms and provisions of any other Agreement.

         6.2      Grants. Options shall be granted by the Administrator to
                  Eligible Directors.

         6.3      Option Exercise Price. Each Agreement shall state the exercise
                  price per share of each share of Common Stock to which it
                  relates. The exercise price per share of Common Stock subject
                  to an option shall not be less than 100% of the Fair Market
                  Value on the date of grant. For purposes of the Plan, the Fair
                  Market Value per share of Common Stock shall be the last sale
                  price regular way on the date of reference, or, in the case no
                  sale takes place on such date, the average of the closing high
                  bid and low ask prices regular way, in either case on the
                  principal national securities exchange on which the Common
                  Stock is listed or admitted to trading or, if the Common Stock
                  is not listed or admitted to trading on any national
                  securities exchange, the last sale price reported on the
                  National Market System of the National Association of
                  Securities Dealers Automated Quotation System ("NASDAQ") on
                  such date, or the average of the closing high bid and low ask
                  prices of the Common Stock in the over-the-counter market
                  reported on NASDAQ on such date, whichever is applicable or,
                  if there are not such prices reported on NASDAQ on such date,
                  then


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                  as furnished to the Administrator by any New York Stock
                  Exchange member selected from time to time by the
                  Administrator for such purpose. If there is no sale, bid or
                  asked price reported on any such date, the market value shall
                  be determined by any other appropriate method selected by the
                  Administrator.

         6.4      Vesting; Exercisability. Options shall vest and become
                  non-forfeitable on the first year anniversary of the day on
                  which such option was granted, if the optionee has continued
                  to serve as a Director until that day, unless otherwise
                  provided. An option shall on that day and thereafter be
                  exercisable, subject only to Section 6.7.

         6.5      Time and Manner of Option Exercise. Any vested and exercisable
                  option is exercisable in whole or in part at any time or from
                  time to time during the option period by giving written
                  notice, signed by the person exercising the option, to the
                  Company stating the number of Shares with respect to which the
                  option is being exercised, accompanied by payment in full of
                  the option exercise price for the number of Shares to be
                  purchased and by the payment or making provision satisfactory
                  to the Company for the payment of any taxes which the Company
                  is obligated to collect with respect to the issue or transfer
                  of the Shares upon such exercise. The date both such notice
                  and payment are received by the office of the Secretary of the
                  Company shall be the date of exercise of the stock option as
                  to such number of Shares. No option may at any time be
                  exercised with respect to a fractional Share.

         6.6      Payment of Exercise Price. Payment of the option exercise
                  price may be in cash or by bank-certified, cashier's, or
                  personal check or payment may be in whole or part by

                  a.    transfer to the Company of shares of Common Stock having
                        a Fair Market Value equal to the option exercise price
                        at the time of such exercise, or

                  b.    delivery of instructions to the Company to withhold
                        Shares, that would otherwise be issued on such exercise
                        of the option, having a Fair Market Value at the time of
                        such exercise equal to the total option exercise price
                        of the options being exercised.

If the Fair Market Value of the number of whole shares transferred or the number
of whole option Shares surrendered is less than the total exercise price of the
option being exercised, the shortfall must be made up in cash or other form of
payment as permitted under this Section 6.6.

         6.7      Term of Options. Each option shall expire ten years from its
                  date of grant, but shall be subject to earlier termination as
                  follows:

                  a.    In the event of the termination of an optionee's service
                        as a Director by reason of voluntary retirement,
                        declining to stand for re-election or becoming a full
                        time employee of the Company or a subsidiary of the
                        Company, all unvested, options granted pursuant to this
                        Plan shall automatically expire and shall not be



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                        exercisable and all options vested but unexercised shall
                        continue to be exercisable until the stated expiration
                        date of such options.

                  b.    In the event of the death or disablement of an optionee
                        while the optionee is a Director, the then-outstanding
                        options of such optionee shall be exercisable for two
                        years from the date of the death or disablement of the
                        optionee or until the stated grant expiration date,
                        whichever is earlier, by the optionee or by his/her
                        successors in interest, in accordance with the paragraph
                        below. All unvested options shall automatically vest and
                        become non-forfeitable as of the date of death or
                        disablement and shall be exercisable for two years from
                        the date of the death of the optionee or until the
                        stated grant expiration date, whichever is earlier, by
                        the optionee or by his/her successors in interest, in
                        accordance with the paragraph below.

                  c.    In the event of the termination of an optionee's service
                        as a Director by the Board of Directors for cause or the
                        failure of such Director to be re-elected (other than
                        for the reasons set forth in Section 6.7(a) or (b)), the
                        Administrator in its sole discretion can cancel the
                        then-outstanding options of such optionee, including
                        those options which have vested pursuant to Section 6.4,
                        and such options shall automatically expire and become
                        non-exercisable on the effective date of such
                        termination.

Exercise of a deceased optionee's exercisable options shall be by the estate of
such optionee or by a person or persons whom the optionee has designated in
writing filed with the Company, or, if no such designation has been made, by the
person or persons to whom the optionee's rights have passed by will or the laws
of descent and distribution.

         6.8      Transferability. No options granted hereunder may be
                  transferred, pledged, assigned or otherwise encumbered by an
                  optionee except:

                  (a)   by will;

                  (b)   by the laws of descent and distribution;

                  (c)   to charities or other not-for-profit organizations; or

                  (d)   if permitted by the Administrator and so provided in the
                        Agreement or an amendment thereto, (i) pursuant to a
                        domestic relations order, as defined in the Internal
                        Revenue Code of 1986, as amended, (ii) to Immediate
                        Family Members (as defined below), (iii) to a
                        partnership in which Immediate Family Members, or
                        entities in which Immediate Family Members are the
                        owners, members or beneficiaries, as appropriate, are
                        the partners, (iv) to a limited liability company in
                        which Immediate Family Members, or entities in which
                        Immediate Family Members are the owners, members or
                        beneficiaries, as appropriate, are the members, or (v)
                        to a trust for the benefit of Immediate Family Members;
                        provided, however, that no more than a de minimus
                        beneficial interest in a 


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                        partnership, limited liability company or trust
                        described in (iii), (iv) or (v) above may be owned by a
                        person who is not an Immediate Family Member or by an
                        entity that is not beneficially owned solely by
                        Immediate Family Members. "Immediate Family Members"
                        shall be defined as the spouse and natural or adopted
                        children or grandchildren of the optionee and their
                        spouses.

                  Except as set forth above, an optionee's rights and interest
                  under the Plan may not be assigned or transferred in whole or
                  in part either directly or by operation of law or otherwise,
                  including, but not limited to, execution, levy, garnishment,
                  attachment, pledge, bankruptcy or in any other manner, and no
                  such right or interest or any participant in the Plan shall be
                  subject to any obligation or liability of such participant.

         6.9      Limitation of Rights.

         6.9.1    Limitation as to Shares. Neither the recipient of an option
                  under the Plan nor an optionee's successor or successors in
                  interest shall have any rights as a stockholder of the Company
                  with respect to any Shares subject to an option granted to
                  such person until the date of issuance of a stock certificate
                  for such Shares.

         6.9.2    Limitation as to Directorship. Neither the Plan, nor the
                  granting of an option, nor any other action taken pursuant to
                  the Plan shall constitute or be evidence of any agreement or
                  understanding, express or implied, that an Eligible Director
                  has a right to continue as a Director for any period of time
                  or at any particular rate of compensation.

         6.10     Regulatory Approval and Compliance. The Company shall not be
                  required to issue any certificate or certificates for Shares
                  upon the exercise of an option granted under the Plan or to
                  record as a holder of record of Shares the name of the
                  individual exercising an option under the Plan, without
                  obtaining to the complete satisfaction of the Administrator
                  the approval of all regulatory bodies deemed necessary by the
                  Administrator and without complying, to the Administrator's
                  complete satisfaction, with all rules and regulations under
                  federal, state, or local law deemed applicable by the
                  Administrator.

         6.11     Tax Withholding. Eligible Directors participating in the Plan,
                  upon exercise of any options pursuant to the Plan, may
                  instruct the Company to withhold option Shares, that would
                  otherwise be issuable upon such exercise, to cover withholding
                  taxes.

         6.12     Cashing Out of Stock Option. On receipt of written notice of
                  exercise, the Administrator may elect to cash out all or part
                  of the portion of the shares of Common Stock for which an
                  option is being exercised by paying the optionee an amount, in
                  cash or Common Stock, as determined by the Administrator,
                  equal to the excess of the Fair Market Value of the Common
                  Stock over the option price multiplied by the number of shares
                  of Common Stock for which the option is being exercised on the
                  effective date of such cash-out.



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         6.13     Deferral of Option Shares. The Administrator may from time to
                  time establish procedures pursuant to which an optionee may
                  elect to defer, until a time or times later than the exercise
                  of an option, receipt of all or a portion of the shares
                  subject to such option and/or to receive cash at such later
                  time or times in lieu of such deferred shares, all on such
                  terms and conditions as the Administrator shall determine. If
                  any such deferrals are permitted, an optionee who elects such
                  deferral shall not have any rights as a stockholder with
                  respect to such deferred shares unless and until certificates
                  representing such shares are actually delivered to the
                  optionee with respect thereto, except to the extent otherwise
                  permitted by the Administrator.

         7.  CAPITAL ADJUSTMENTS

If any change is made to the Common Stock subject to the Plan, through merger,
consolidation, reorganization, recapitalization, stock dividend, spin-off, stock
split, combination of shares, rights offerings, change in corporate structure of
the Company, or otherwise, appropriate adjustments as conclusively determined by
the Administrator will be made (A) to the number or type of securities or other
property subject to and reserved for issuance or transfer under the Plan and,
(B) in order to prevent dilution or enlargement of the rights of Optionees, to
the number of Stock Options, securities or other property underlying the Options
and Option price of securities subject to outstanding Options.

         8.  EXPENSES OF THE PLAN

All costs and expenses of the adoption and administration of the Plan shall be
borne by the Company, and none of such expenses shall be charged to any
optionee.


         9.  EFFECTIVE DATE AND DURATION OF THE PLAN

The Plan shall be effective December 30, 1998 (the "Effective Date"). The Plan
shall continue in effect until it is terminated by action of the Company's Board
of Directors but such termination shall not affect the terms of any
then-outstanding options.



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         10.  TERMINATION AND AMENDMENT OF THE PLAN

The Company's Board of Directors may at any time terminate or from time to time
amend, modify or suspend this Plan; provided, however, that no such amendment or
modification shall be made which would cause the participants to fail to qualify
as "outside directors" for purposes of Section 162(m) or as "non-employee
directors" for purposes of Rule 16b-3 or which would cause the grants not to be
exempt from Section 16 of the Securities Exchange Act of 1934, as amended. No
amendment of the Plan shall materially and adversely affect any right of any
optionee with respect to any option theretofore granted without such optionee's
written consent.

         11.  OTHER

It is intended that the participants in the Plan shall qualify as "outside
directors" for purposes of Section 162(m) and as "non-employee directors" for
purposes of Rule 16b-3 and that grants under the Plan shall be exempt from
Section 16 of the Securities Exchange Act of 1934, as amended and this Plan
shall be construed and interpreted in a manner not inconsistent with this
intent.