exv10w2






FOURTH AMENDMENT TO AMENDED AND RESTATED

EMPLOYMENT AGREEMENT




     This Fourth Amendment to Amended and Restated Employment Agreement (this “Amendment”), dated
as of the 31st day of December, 2008, is entered into by and among Nabors Industries, Inc.
(“Nabors Delaware”), Nabors Industries Ltd. (“Nabors Bermuda” and together with Nabors Delaware,
“Nabors”), and Anthony G. Petrello (“Executive”). Each of Nabors Delaware, Nabors Bermuda and
Executive are referred to herein individually as a “Party” and collectively as the “Parties.”
Capitalized terms not otherwise defined in this Amendment shall have the meaning set forth in the
Employment Agreement (as defined below).



     WHEREAS, Executive and Nabors Delaware entered into that certain Employment Agreement
effective as of October 1, 1996 (as amended on June 24, 2002, July 17, 2002, and December 29, 2005
collectively, the “Employment Agreement”); and Nabors Bermuda became a party to the Employment
Agreement pursuant to the amendment dated June 24, 2002; and



     WHEREAS, Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) has made
it necessary to amend the Employment Agreement in certain respects and, in connection therewith,
the Parties desire to enter into this Amendment;



     NOW, THEREFORE, in consideration of the premises and mutual promises contained herein and
other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties hereby agree as follows:



     1. The last sentence of Section 5(a) of the Employment Agreement shall be deleted and the
following shall be substituted therefor:




“The portion of the Annual Bonus which comprises the $700,000 guaranteed minimum
payment shall be paid no earlier than the first day following the end of the fiscal
year and no later than 135 days following the end of such fiscal year. Any
remainder of the Annual Bonus shall be paid at any time no later than the
15th day of the third month following the end of such fiscal year.”



     2. The following provisions shall be added at the end of paragraph 4 of Schedule 9(c) to the
Employment Agreement:



“Any moving expenses for which Executive seeks reimbursement pursuant to this
paragraph must be incurred not later than the last day of the second full calendar
year following the calendar year in which Executive’s employment is terminated.
Subject to the In-Kind Benefit Rule and the Delayed Payment Restriction, any sale by
Executive of his Houston residence to the Company pursuant to the provisions of this
paragraph shall occur not later than the last day of the third full calendar year
following the calendar year in which Executive’s employment was terminated.”



     3. The following provisions shall be added at the end of Schedule 9(c) to the Employment
Agreement:



 









 






“5. Any reimbursement for loss on the sale of Executive’s home pursuant to paragraph
3 above or for moving expenses pursuant to paragraph 4 above for which Executive is
eligible shall be made not later than the last day of the third full calendar year
following the calendar year in which Executive’s employment was terminated.”



     4. The following provision shall be added at the end of Section 9(c) of the Employment
Agreement:




“Notwithstanding anything to the contrary herein, any gross up payment to be paid to
the Executive pursuant to this paragraph shall be paid no later than the end of the
next full calendar year following the year in which the applicable tax payment is
remitted by or on behalf of the Executive.”



     5. The following provision shall be added at the end of Section 12(b)(v) of the Employment
Agreement:




“; provided, however, that (A) continued participation in any retirement plan of the
Company that is intended to be qualified under Section 401(a) of the Code shall not
be provided following the termination of Executive’s employment, (B) continued
participation in medical, dental and life insurance benefits shall be as provided in
Section 12(b)(vi), and (C) notwithstanding the Fair Market Value Payment Requirement
(as defined in Section 35(f)), if the cost of the provision of any benefit required
to be continued pursuant to this paragraph following the termination of the
Executive’s employment could otherwise be deducted by Executive under Section 162 or
167 of the Code (ignoring any applicable limitation based on adjusted gross income),
then, to the extent of the cost of such deductible benefit, for the period beginning
on the termination of Executive’s employment and ending on the last day of the
second calendar year following the calendar year in which Executive’s termination of
employment occurred, no such costs shall be subject to the Fair Market Value Payment
Requirement and the Delayed Payment Restriction shall not apply.”



     6. Section 12(b)(vi) of the Employment Agreement shall be deleted and the following shall be
substituted therefor:




     “(vi) continued participation in medical, dental and life insurance coverage
until the Executive receives equivalent coverage and benefits under the plans and
programs of a subsequent employer (such coverage and benefits to be determined on a
coverage-by-coverage or benefit-by-benefit basis) or death of the later of Executive
or his spouse; provided, however, that costs related to such continued participation
shall be subject to the Fair Market Value Payment Requirement set forth in Section
35(f) below;”



2









 





     7. The second and third sentences of Section 12(b)(viii) of the Employment Agreement shall be
deleted. The fifth sentence of Section 12(b)(viii) is deleted and the following shall be
substituted therefor:




“In addition, immediately prior to the termination of his employment, Executive
shall be entitled to be granted additional options that are exercisable during the
period beginning immediately (or, if the grant of such options is subject to the
Delayed Payment Restriction, beginning on the Section 409A Payment Date) and ending
on the date that is five years after the date of grant, to acquire a number of
shares of common stock equal to the highest number of options granted during any
fiscal year during the period comprising the then current fiscal year, and the three
fiscal years preceding such termination at an exercise price per share equal to the
fair market value of a share of Stock on the date of grant.”


For the sake of clarity, the entirety of the applicable language added to Section
12(b)(viii) by the Third Amendment to the Employment Agreement remain in full force and
effect notwithstanding this Amendment.




     8. The final sentence of Section 12(c)(ii) of the Employment Agreement shall be deleted and
the following shall be substituted therefor:




“Any additional amounts due in future years shall be paid in cash during the first
calendar year in which the calculation of such amount is administratively
practicable, but in no event more than ninety (90) days after the respective fiscal
year-end.”



     9. The following provision shall be added at the end of Section 12(d) of the Employment
Agreement:




     “Notwithstanding anything to the contrary herein, any amount paid to the
Executive pursuant to this Section 12(d) shall be paid not later than the end of the
next full calendar year following the year in which the Excise Tax is remitted to
the taxing authority by or on behalf of the Executive.”



     10. The Employment Agreement shall be revised to add the following new Section 35:



     “35. Application of Section 409A of the Code.




     (a) General. To the extent applicable, it is intended that this
Agreement comply with the provisions of Section 409A of the Code, so as to prevent
inclusion in gross income of any amounts payable or benefits provided hereunder in a
taxable year that is prior to the taxable year or years in which such amounts or
benefits would otherwise actually be distributed, provided or otherwise made
available to the Executive. This Agreement shall be construed, administered, and
governed in a manner consistent with this intent and the following provisions of
this Section 35 shall, with respect to timing of payments owed under this Agreement,
control over any contrary provisions of the Agreement. Nothing in this Section 35 shall reduce or diminish the amounts otherwise owed under this
Agreement.



3









 









     (b) Delayed Payment Restriction. Notwithstanding any provision in this
Agreement to the contrary, if any payment or benefit provided for herein or pursuant
to any other agreement or plan of the Company to which Executive is entitled to any
payment or benefit would be subject to additional taxes and interest under Section
409A of the Code if the Executive’s receipt of such payment or benefit is not
delayed until the Section 409A Payment Date, then such payment or benefit shall not
be provided to Executive (or Executive’s estate, if applicable) until the Section
409A Payment Date (and, at that time, Executive shall also receive interest thereon
from the date such payment or benefit would have been provided in the absence of
this paragraph until the date of receipt of such payment or benefit at the short
term applicable federal rate as in effect as of the termination date). The payment
and benefit delay requirement described in this paragraph (the “Delayed Payment
Restriction”) shall not apply to any payment or benefit otherwise described in the
first sentence of this paragraph if another provision of this Agreement is intended
to cause the Executive’s receipt of such payment or benefit to satisfy the
requirements of Section 409A(a)(2)(B)(i) of the Code. For purposes of this
Agreement, “Section 409A Payment Date” shall mean the earlier of (1) the date of the
Executive’s death or (2) the date which is six months after the date of termination
of the Executive’s employment with the Company.




     (c) Separation from Service. Amounts payable hereunder upon the
Executive’s termination or severance of employment with Nabors that constitute
deferred compensation under Section 409A of the Code shall be paid upon Executive’s
“separation from service” within the meaning of Section 409A of the Code.




     (d) Separate Payments and Benefits. For purposes of Section 409A of
the Code, any right to a series of installment payments under this Agreement shall
be treated as a right to a series of separate payments so that each payment is
designated as a separate payment for purposes of Section 409A of the Code.




     (e) Reimbursements and In-Kind Benefits. All reimbursements and
in-kind benefits provided under this Agreement that constitute nonqualified deferred
compensation under Section 409A of the Code, including, without limitation, benefits
and reimbursements to be provided under Sections 5(e) (relating to stock option
assignment assistance), Schedule 9(c)(4) (relating to the repurchase of Executive’s
residence), 12(b)(v) (relating to continued Executive benefits), 12(b)(vi) (relating
to continued medical, dental and life coverages), 14 (relating to indemnification
rights, but only to the extent such rights exceed the indemnification rights that
are exempt from Section 409A of the Code), 15 (relating to Company advance of any
non-indemnifiable expenses), 16 (relating to Company-paid Independent Counsel), 18
(relating to expenses of adjudication of indemnification and reimbursement rights
disputes), 30 (relating to expenses for
resolution of disputes) shall be made or provided in accordance with the
requirements of Section 409A of the Code, including, where applicable, the
requirements that:




4









 










	 	(i)	 	any reimbursement for expenses incurred or
provision of in-kind benefits is during the lifetime of the
Executive and/or the lifetime of the Executive’s spouse, if
applicable or such shorter period of time as is provided with
respect to each particular right to reimbursement in-kind benefits
pursuant to the preceding provisions of this Agreement;
	 
	 	(ii)	 	the amount of expenses eligible for
reimbursement, or in-kind benefits provided, during a calendar year
may not affect the expenses eligible for reimbursement, or in-kind
benefits to be provided, in any other calendar year (except as
otherwise permitted under the regulations promulgated pursuant to
Section 409A of the Code for reimbursement arrangements that are
subject to Section 105(b) of the Code (relating to medical care
reimbursements));
	 
	 	(iii)	 	the reimbursement of an eligible expense will
be made on or before the last day of the next full calendar year
following the year in which the expense is incurred; and
	 
	 	(iv)	 	the right to reimbursement or in-kind benefits
is not subject to liquidation or exchange for another benefit.






With respect to any rights to reimbursements or in-kind benefits that are triggered
by Executive’s separation from service and are subject to Section 409A of the Code,
except any in-kind benefits to which the Fair Market Value Payment Requirement
applies, such reimbursements or in-kind benefits shall also be subject to the
Delayed Payment Restriction to the extent applicable under Section 35(b).




     (f) Fair Market Value Payment Requirement. To the extent that any
benefits required to be continued pursuant to Section 12(b)(v) or Section 12(b)(vi)
and any other miscellaneous separation pay benefits subject to Section 409A of the
Code that are provided to Executive during the first six-month period following
Executive’s termination of employment (other than a termination of employment due to
Executive’s death) have an aggregate value in excess of the applicable dollar amount
under Section 402(g)(1)(B) of the Code for the year in which such termination
occurs, Executive shall pay to the Company, at the time such benefits are provided,
the fair market value of such excess benefits (such payment obligation of the
Executive, the “Fair Market Value Payment Requirement”) and the Company shall
reimburse Executive (with interest thereon at the short term applicable federal rate
in effect as of the termination date) for any such payment(s) not later than the fifth day following the expiration of
such six-month period. 




5









 









     (g) Period of Payment. In the event that a payment under this
Agreement is due within a period of time following a stated event, the Executive
shall not be permitted, directly or indirectly, to designate the taxable year of
payment.




     (h) Restricted Stock Dividends. Notwithstanding anything to the
contrary in any agreement relating to awards of restricted Stock, any dividends
relating to shares of restricted Stock that are subject to vesting requirements
shall be paid by the 15th day of the third month following the date that
the right to such dividends vests.




     (i) References to Section 409A. References in this Agreement to
Section 409A of the Code include both that section of the Code itself and any
regulations and authoritative guidance promulgated thereunder.



     11. This Amendment may be executed in two or more counterparts each of which shall be deemed
an original but which taken together shall constitute one and the same instrument.



(signature page follows)




6









 








     IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the date first written
above.



	 	 	 	 	 
	 	NABORS INDUSTRIES LTD.

 	 
	 	/s/ Martin J. Whitman	 	 
	 	By:  	  Martin
J. Whitman	 
	 	 	Its: 	  Lead
Director	 
	 	 	 	 
	 
	 	NABORS INDUSTRIES, INC.

 	 
	 	/s/
Laura W. Doerre	 	 
	 	By:  	  Laura
W. Doerre	 
	 	 	Its: 	  Secretary	 
	 	 	 	 
	 
	 	 	 
	 	/s/ Anthony
G. Petrello	 
	 	Anthony G. Petrello 	 
	 	 	 
	 




7