Document:

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                                                                     EXHIBIT 4.4

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                            NABORS INDUSTRIES, INC.,

                                   as Issuer,

                                       and

                             NABORS INDUSTRIES LTD.,

                                  as Guarantor,

                             ZERO COUPON CONVERTIBLE

                           SENIOR DEBENTURES DUE 2021

                          FIRST SUPPLEMENTAL INDENTURE

                            DATED AS OF JUNE 21, 2002

                                 Bank One, N.A.,

                                   as Trustee

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                  This FIRST SUPPLEMENTAL INDENTURE (this "First Supplemental
Indenture"), dated as of June 21, 2002, is among Nabors Industries, Inc., a
Delaware corporation, as issuer (the "COMPANY"), Nabors Industries, Ltd., a
Bermuda exempted company, as guarantor (the "GUARANTOR"), and Bank One, N.A., a
national banking association, as trustee (the "TRUSTEE").

                             RECITALS OF THE COMPANY

                  WHEREAS, the Company and the Trustee entered into an
Indenture, dated as of June 20, 2000, as amended and supplemented by the First
Supplemental Indenture thereto, dated as of July 5, 2000 (as so amended and
supplemented, the "Indenture"), pursuant to which the Company issued
$1,381,200,000 in aggregate principal amount at maturity of Zero Coupon
Convertible Senior Debentures due 2021 (each a "Security", collectively the
"Securities");

                  WHEREAS, the Company is party to an Agreement and Plan of
Merger, dated as of January 2, 2002, by and among the Company, the Guarantor,
Nabors US Holdings Inc., a corporation duly organized and existing under the
laws of the State of Delaware (herein called "US Holdings") and Nabors
Acquisition Corp. VIII, a corporation duly organized and existing under the laws
of the State of Delaware (herein called "NAC8") (such agreement is herein called
the "Merger Agreement");

                  WHEREAS, US Holdings assigned all of its right, title and
interest, in, to and under the Merger Agreement to Nabors International Finance
Ltd., an exempted company duly organized and existing under the laws of the
Islands of Bermuda, and NAC8 assigned all of its right, title and interest, in,
to and under the Merger Agreement to Nabors Acquisition Corp. IX, a corporation
duly organized and existing under the laws of the State of Delaware (herein
called "NAC9");

                  WHEREAS, pursuant to the terms and conditions of the Merger
Agreement, the Company will merge with and into NAC9, with the Company being the
surviving corporation (herein called the "Merger" and the date on which the
Merger becomes effective by filing a Certificate of Merger with the Secretary of
State of the State of Delaware is herein called the "Merger Date");

                  WHEREAS, as a result of the Merger the Company will be an
indirect, wholly owned subsidiary of the Guarantor and each share of Common
Stock shall convert into the right to receive one common share, par value $.001
per share, of the Guarantor ("Guarantor Common Shares");

                  WHEREAS, pursuant to Section 11.14 of the Indenture, the
Company and the Guarantor desire to execute this First Supplemental Indenture to
provide, among other

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things, that each Security (as defined in the Indenture) shall, from and after
the Merger Date, be convertible into such number of Guarantor Common Shares as
would be received by a holder of a number of shares of Common Stock issuable
upon conversion of such Security immediately prior to the Merger;

                  WHEREAS, the Guarantor desires to issue a guarantee to the
Holders of the Securities as provided in this First Supplemental Indenture;

                  WHEREAS, Section 9.01(4) provides that the Company may enter
into one or more supplemental indentures without the written consent of any
Holders to make any change that does not adversely affect the right of any
Holder;

                  WHEREAS, the respective Board of Directors of the Company and
of the Guarantor (or a duly authorized committee thereof) has duly adopted
resolutions authorizing the Company and the Guarantor, respectively, to execute
and deliver this First Supplemental Indenture; and

                  WHEREAS, all the conditions and requirements necessary to make
this First Supplemental Indenture, when duly executed and delivered, a valid and
binding agreement in accordance with its terms for the purposes herein
expressed, have been performed and fulfilled.

         NOW, THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE WITNESSETH:

                  For and in consideration of the premises provided for herein
by the Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Securities, as follows:

                                   ARTICLE 1

                             RELATION TO INDENTURE

         SECTION 1.1 RELATION TO INDENTURE.

         This First Supplemental Indenture constitutes an integral part of the
Indenture.

         SECTION 1.2 DEFINITIONS.

         For all purposes of this First Supplemental Indenture, except as
expressly provided for or unless the context otherwise requires:

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                  (1) Capitalized terms used but not defined in this First
Supplemental Indenture shall have the respective meanings assigned to them in
the Indenture; and

                  (2) All references in this First Supplemental Indenture to
Articles and Sections, unless otherwise specified, refer to the corresponding
Articles and Sections of this First Supplemental Indenture.

                  "Guarantor" means Nabors Industries Ltd., an exempted company
duly organized and existing under the laws of the Islands of Bermuda.

                  "Guarantee" means any of the unconditional and unsubordinated
guarantees by the Guarantor of the due and punctual payment of Principal Amount,
Issue Price, accrued Original Discount, Redemption Price, Purchase Price,
Fundamental Change Purchase Price, Liquidated Damages, if any, and interest, if
any on the Securities and all other obligations of the Company pursuant to this
Indenture when and as the same shall become due and payable, whether at stated
maturity, by acceleration, call for redemption, upon a repurchase date or
otherwise in accordance with the terms of the Securities and this Indenture.

         SECTION 1.3 AMENDMENT OF DEFINITIONS IN THE INDENTURE.

         The following definitions in the Indenture are hereby amended by
deleting such definitions in their entirety and substituting in place thereof
the following:

                  "BOARD OF DIRECTORS" means either the board of directors of
         each of the Company and the Guarantor or any duly authorized committee
         of such board.

                  "COMMON STOCK" means any stock of any class of the Guarantor
         which has no preference in respect of dividends or of amounts payable
         in the event of a voluntary or involuntary liquidation, dissolution or
         winding up of the Guarantor and which is not subject to redemption by
         the Guarantor. Subject to the provisions of Section 11.14 hereof,
         however, shares issuable upon conversion of the Securities shall
         include only Common Shares, par value $.001 per share, of the Guarantor
         as such shares exist on the date of this Indenture or on the date of
         any Supplemental Indenture hereto or shares of any class or classes
         resulting from any reclassification or reclassifications thereof and
         which have no preference in respect of dividends or of amounts payable
         in the event of any voluntary or involuntary liquidation, dissolution
         or winding up of the Guarantor and which are not subject to redemption
         by the Guarantor; PROVIDED that if at any time there shall be more than
         one such resulting class, the shares of each such class then so
         issuable pursuant to the terms hereof shall be substantially in the
         proportion which the total number of shares of

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         such class resulting from all such reclassifications bears to the total
         number of shares of all such classes resulting from all such
         reclassifications.

                  "OFFICER" means the Chairman of the Board, any Vice Chairman,
         the President, any Vice President, the Treasurer or the Secretary or
         any Assistant Secretary of the Company or the Guarantor, as applicable.

                  "OFFICERS' CERTIFICATE" means a written certificate containing
         the information specified in Sections 13.04 and 13.05, signed in the
         name of the Company or the Guarantor, as applicable, by its Chairman of
         the Board, a Vice Chairman, its President or a Vice President, and by
         its Treasurer, an Assistant Treasurer, its Controller, an Assistant
         Controller, its Corporate Secretary or an Assistant Corporate
         Secretary, and delivered to the Trustee.

                  "OPINION OF COUNSEL" means a written opinion containing the
         information specified in Sections 13.04 and 13.05 from legal counsel
         who is acceptable to the Trustee. The counsel may be an employee of, or
         counsel to, the Company, the Guarantor or the Trustee.

                                    ARTICLE 2

               EXCHANGE AND REGISTRATION; CONVERSION ARRANGEMENT;
                                REPURCHASE RIGHTS

         SECTION 2.1 EXCHANGE AND REGISTRATION.

         The third paragraph of Section 2.06(a) of the Indenture is hereby
amended by deleting it in its entirety and substituting in place thereof the
following:

                  All Securities presented for registration of transfer or for
         exchange into like Securities, repurchase, redemption or conversion
         into Common Stock or payment shall (if so required by the Company, the
         Guarantor, the Trustee, the Registrar or any co-registrar) be duly
         endorsed by, or be accompanied by a written instrument or instruments
         of transfer in form satisfactory to the Company, the Guarantor and the
         Trustee, duly executed by the Holder or such Holder's attorney duly
         authorized in writing.

         The fifth paragraph of Section 2.06(a) of the Indenture is hereby
amended by deleting it in its entirety and substituting in place thereof the
following:

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                  None of the Company, the Guarantor, the Trustee, the Registrar
         or any co-registrar shall be required to exchange for like Securities
         or register a transfer of (a) any Securities for a period of 15 days
         next preceding the mailing of notice of Securities to be redeemed, or
         (b) any Securities or portions thereof selected or called for
         redemption, or (c) any Securities or portion thereof surrendered for
         conversion into Common Stock, or (d) any Securities or portion thereof
         surrendered for repurchase or redemption (and not withdrawn) pursuant
         to Section 3.08 or 3.09 hereof, respectively.

         SECTION 2.2 CONVERSION ARRANGEMENT ON CALL FOR REDEMPTION.

         The right of the Company to arrange for the purchase and conversion
into Common Stock of any Securities called for redemption by an agreement with
one or more investment bankers or other purchasers set forth in Section 3.07 of
the Indenture shall also be exercisable by the Guarantor.

         SECTION 2.3 REPURCHASE OF SECURITIES AT OPTION OF THE HOLDER.

         In the event the Company elects, pursuant to Section 3.08 of the
Indenture and pursuant to a Company Notice, to pay the Purchase Price to be paid
as of such Repurchase Date, in whole or in part, in Common Stock, the Guarantor
shall cooperate with the Company in making such election, including, without
limitation, making available such number of shares of Common Stock as are
necessary to permit the Company to consummate such purchases pursuant to such
election.

         SECTION 2.4 COVENANT TO COMPLY WITH SECURITIES LAWS UPON REPURCHASE.

         Section 3.13 of the Indenture is hereby amended by deleting it in its
entirety and substituting in place thereof the following:

                   SECTION 3.13 COVENANT TO COMPLY WITH SECURITIES LAWS UPON
         REPURCHASE OF SECURITIES

                  In connection with any repurchase of Securities under Section
         3.08 or 3.09 hereof, the Company and the Guarantor, as applicable,
         shall (i) comply with Rule 13e-4 (which term, as used herein, includes
         any successor provision thereto) under the Exchange Act, if applicable,
         (ii) file the related Schedule 13E-4 (or any successor schedule, form
         or report) under the Exchange Act, if applicable, and (iii) otherwise
         comply with all Federal and state securities laws so as to permit the
         rights and obligations under Sections 3.08 and 3.09 to be exercised in
         the time and in the manner specified in Sections 3.08 and 3.09.

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         SECTION 2.5 REPAYMENT TO THE COMPANY AND THE GUARANTOR.

         Section 3.14 of the Indenture is hereby amended by deleting it in its
entirety and substituting in place thereof the following:

                  SECTION 3.14. REPAYMENT TO THE COMPANY AND THE GUARANTOR.

                  The Trustee and the Paying Agent shall return to the Company
         and the Guarantor, as applicable, any cash or shares of Common Stock
         that remain unclaimed as provided in paragraph 14 of the Securities,
         together with interest or dividends, if any, thereon, held by them for
         the payment of a Purchase Price or Fundamental Change Purchase Price,
         as the case may be, together with Liquidated Damages, if any; PROVIDED,
         HOWEVER, that to the extent that the aggregate amount of cash or shares
         of Common Stock deposited by the Company or the Guarantor pursuant to
         Section 3.11 hereof exceeds the aggregate Purchase Price or Fundamental
         Change Purchase Price, as the case may be, of the Securities or
         portions thereof which the Company is obligated to repurchase as of the
         Repurchase Date or Fundamental Change Repurchase Date, as the case may
         be, together with Liquidated Damages, if any, then promptly after the
         Business Day following the Repurchase Date or Fundamental Change
         Repurchase Date, as the case may be, the Trustee and the Paying Agent
         shall return any such excess to the Company or the Guarantor, as
         applicable, together with interest or dividends, if any, thereon.

                                    ARTICLE 3

                              REPORTS BY GUARANTOR

         SECTION 3.1 FINANCIAL INFORMATION; SEC REPORTS.

         Section 4.02 of the Indenture is hereby amended by deleting it in its
entirety and substituting in place thereof the following:

         SECTION 4.02.     FINANCIAL INFORMATION; SEC REPORTS.

                  The Company and the Guarantor will each deliver to the Trustee
         (a) as soon as available and in any event within 120 days after the end
         of each fiscal year of the Company or the Guarantor, as applicable (i)
         a consolidated balance sheet of the Company and its Subsidiaries and
         the Guarantor and its Subsidiaries, as applicable, as of the end of
         such fiscal year and the related consolidated statements of operations,
         stockholders' equity and cash flows for such fiscal year, all reported
         on by an

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         independent public accountant of nationally recognized standing and
         (ii) a report containing a management's discussion and analysis of the
         financial condition and results of operations and a description of the
         business and properties of the Company or the Guarantor, as applicable,
         and (b) as soon as available and in any event within 60 days after the
         end of each of the first three quarters of each fiscal year of the
         Company or the Guarantor, as applicable (i) an unaudited consolidated
         financial report for such quarter and (ii) a report containing a
         management's discussion and analysis of the financial condition and
         results of operations of the Company or the Guarantor, as applicable;
         PROVIDED that the foregoing shall not be required for either the
         Company or the Guarantor for any fiscal year or quarter, as the case
         may be, with respect to which either the Company or the Guarantor files
         or expects to file with the Trustee an annual or quarterly report, as
         the case may be, pursuant to the third paragraph of this Section 4.02.

                  At any time the Guarantor is not subject to either Section 13
         or 15(d) of the Exchange Act, the Guarantor shall at the request of any
         Holder (or holders of Common Stock issued upon conversion of the
         Securities) provide to such Holder (or holders of such Common Stock)
         and any prospective purchaser designated by such Holders (or holders of
         such Common Stock), as the case may be, such information, if any,
         required by Rule 144A(d)(4) under the Securities Act.

                  Each of the Company and the Guarantor, as applicable, shall
         file with the Trustee, within 15 days after it files such annual and
         quarterly reports, information, documents and other reports with the
         SEC, copies of its annual reports and of the information, documents and
         other reports (or copies of such portions of any of the foregoing as
         the SEC may by rules and regulations prescribe) which each of the
         Company and the Guarantor, as applicable, is required to file with the
         SEC pursuant to Section 13 or 15(d) of the Exchange Act.

                  Delivery of such reports, information and documents to the
         Trustee is for informational purposes only and the Trustee's receipt of
         such shall not constitute constructive notice of any information
         contained therein or determinable from the information contained
         therein, including the Company's compliance with any of its covenants
         hereunder (as to which the Trustee is entitled to rely exclusively on
         Officers' Certificates).

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                                    ARTICLE 4

                            CERTIFICATE OF COMPLIANCE

         SECTION 4.1 COMPLIANCE CERTIFICATE.

         Section 4.03 of the Indenture is hereby amended by deleting it in its
entirety and substituting in place thereof the following:

                  SECTION 4.03. COMPLIANCE CERTIFICATE.

                  The Company and the Guarantor will each deliver to the Trustee
         within 120 days after the end of each fiscal year of the Company and
         the Guarantor, an Officers' Certificate in which one of the two
         Officers signing such certificate is either the principal executive
         officer, principal financial officer or principal accounting officer of
         the Company or the Guarantor, as applicable, stating whether or not to
         the knowledge of the signers thereof the Company or the Guarantor, as
         applicable, is in default in the performance and observance of any of
         the terms, provisions and conditions of this Indenture (without regard
         to any period of grace or requirement of notice provided hereunder) and
         if Company or the Guarantor, as applicable, shall be in default,
         specifying all such defaults and the nature and status thereof of which
         the signers may have knowledge.

                  The Company and the Guarantor will each deliver to the
         Trustee, as soon as possible and in any event within five days, upon
         becoming aware of any default or any Event of Default, an Officers'
         Certificate specifying with particularity such Default or Event of
         Default and further stating what action the Company or the Guarantor,
         as applicable, has taken, is taking or proposes to take with respect
         thereto.

                  Any notice required to be given under this Section 4.03 shall
         be delivered to the Trustee at its Corporate Trust Office.

                                    ARTICLE 5

                               REGISTRATION RIGHTS

         SECTION 5.1 REGISTRATION RIGHTS.

         Section 4.08 of the Indenture is hereby amended by deleting it in its
entirety and substituting in place thereof the following:

                  SECTION 4.08 REGISTRATION RIGHTS.

                  (a) The Company and the Guarantor agree that the Holders (and
         any Person that has a beneficial interest in a Security) from time to
         time of Registrable Securities (as such term is defined in the
         Registration Rights Agreement) are entitled

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         to the benefits of the Registration Rights Agreement. Pursuant to the
         Registration Rights Agreement, the Company has agreed for the benefit
         of the Holders from time to time of Registrable Securities, at the
         Company's expense, to use all reasonable best efforts (i) to file
         within 90 days after the first date of original issuance of the
         Securities, a shelf registration statement (the "Shelf Registration
         Statement") with the Commission with respect to resales of the
         Restricted Securities, (ii) to cause such Shelf Registration Statement
         to be declared effective by the Commission not later than 180 days
         after the first date of original issuance of the Securities, and (iii)
         to maintain such Shelf Registration Statement continuously effective
         under the Securities Act subject to and in accordance with the terms of
         the Registration Rights Agreement. Liquidated damages ("LIQUIDATED
         DAMAGES") with respect to the Securities shall be assessed if a
         Registration Default (as defined in the Registration Rights Agreement)
         occurs.

                  (b) The Company shall pay Liquidated Damages due pursuant to
         clause (a) of this Section 4.08 to the Holders in cash in the amounts
         and on the dates specified in the Registration Rights Agreement and in
         this Indenture.

                  Whenever in this Indenture there is mentioned, in any context,
         any payment in respect of any Security, such mention shall be deemed to
         include mention of the payment of Liquidated Damages provided for in
         this Section to the extent that, in such context, Liquidated Damages
         are, were or would be payable in respect thereof pursuant to the
         provisions of this Section 4.08, and express mention of the payment of
         Liquidated Damages (if applicable) in any provisions hereof shall not
         be construed as excluding Liquidated Damages in those provisions hereof
         where such express mention is not made.

                  If Liquidated Damages become payable to the Holders pursuant
         to the Registration Rights Agreement, at least five Business Days prior
         to the date on which such Liquidated Damages are payable, the Company
         shall deliver to the Trustee a certificate to that effect stating (i)
         the amount of such Liquidated Damages that is payable and (ii) the date
         on which such amount is payable. Unless and until a Trust Officer
         receives at the Corporate Trust Office such a certificate, the Trustee
         may assume without inquiry that no such amount is payable.

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                                    ARTICLE 6

                  EFFECT OF THE MERGER ON CONVERSION PRIVILEGE

         SECTION 6.1 CONVERSION PRIVILEGE.

         The Company and the Guarantor covenant and agree for the benefit of
each Holder that each Security shall be convertible into such number of shares
of Common Stock (as such term is defined in this First Supplemental Indenture)
as would have been received by a holder of a number of shares of Common Stock
(as such term was defined prior to the execution of this First Supplemental
Indenture) issuable upon conversion of such Securities immediately prior to the
Merger. The obligations of the Company to issue shares of Common Stock set forth
in Article 11 of the Indenture, and all obligations set forth in Article 11
related thereto, shall be binding upon the Guarantor with respect to the Common
Stock and the Guarantor shall comply with such provisions as set forth in
Article 11.

         SECTION 6.2 ADJUSTMENTS TO CONVERSION RATE.

         From and after the Merger Date, the provisions providing for, and
relating to, adjustments to the Conversion Rate set forth in Sections 11.06,
11.07, 11.08, 11.09, 11.10, 11.12, 11.15, 11.16, 11.17, 11.18, 11.19 and 11.20
shall continue to apply with the same force and effect as such provisions had
prior to the Merger Date and shall be binding on the Guarantor. The Guarantor
shall comply with such provisions as set forth in Article 11.

         SECTION 6.3 NOTICES.

         The Guarantor shall provide notice to the Holders and the Trustee of
the events set forth in Sections 11.11 and 11.13 in accordance with the terms of
such sections.

         SECTION 6.4 EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER OR
TRANSFER.

         The obligation set forth in Section 11.14 to execute a supplemental
indenture with respect to the Indenture and the Securities upon the occurrence
of any of the events set forth in Section 11.14 shall be binding on the
Guarantor and the Guarantor shall comply with the terms and conditions set forth
in Section 11.14

                                    ARTICLE 7

                                    GUARANTEE

         SECTION 7.1 GUARANTEE. The Indenture is hereby amended by adding a new
Article 14 as follows:

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                                   ARTICLE 14
                                   GUARANTEE

                  SECTION 14.01. GUARANTEE.

                  The Guarantor hereby irrevocably and unconditionally
         Guarantees to each Holder of a Security authenticated and delivered by
         the Trustee that: (i) the Principal Amount, Issue Price, accrued
         Original Discount, Redemption Price, Purchase Price, Fundamental Change
         Purchase Price, Liquidated Damages, if any, and interest, if any, on
         the Securities as required under the Indenture and the Securities, to
         the extent lawful, and all other obligations of the Company to the
         Holders or the Trustee under this Indenture and the Securities will be
         promptly paid in full, all in accordance with the terms of this
         Indenture and the Securities; and (ii) in case of any extension of time
         of payment or renewal of any Securities or any of such other
         obligations, that the Securities will be promptly paid in full when due
         in accordance with the terms of such extension or renewal, whether at
         stated maturity, by acceleration or otherwise.

                  The Guarantor hereby further agrees that its obligations under
         this Indenture and the Securities shall be unconditional, regardless of
         the validity, legality or enforceability of this Indenture or the
         Securities, the absence of any action to enforce this Indenture or the
         Securities, any waiver or consent by any Holder with respect to any
         provisions this Indenture or the Securities, any modification or
         amendment of, or supplement of, this Indenture or the Securities. The
         Guarantor hereby waives diligence, presentment, demand of payment,
         filing of claims with a court in the event of insolvency or bankruptcy
         of the Company, any right to require a proceeding first against the
         Company, protest, notice and all demands whatsoever and covenants that
         its Guarantee will not be discharged except by complete performance by
         the Company of its obligations under the Indenture.

                  Upon making any payment with respect to the Company hereunder,
         the Guarantor shall be subrogated to the rights of the payee against
         the Company with respect to such payment; provided that the Guarantor
         shall not enforce any payment by way of subrogation or contribution
         until all obligations of the Company under this Indenture have been
         paid in full.

                  SECTION 14.02. RELEASE OF GUARANTEE.

                  Notwithstanding anything in this Article 14 to the contrary,
         concurrently with the payment in full of (i) the Principal Amount at
         Stated Maturity or such other amounts as cause the Indenture to cease
         to be of further effect pursuant to Section 8.01 of the Indenture and
         (ii) all other obligations of the Company under this Indenture, the
         Guarantor shall be released from and relieved of its obligations under
         this Article 14. Upon the delivery by the Company to the Trustee of an
         Officers' Certificate and an Opinion of Counsel to the effect that the
         transaction giving rise to

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         the release of this Guarantee was made by the Company in accordance
         with the provisions of this Indenture and the Securities, the Trustee
         shall execute any documents reasonably required in order to evidence
         the release of the Guarantor from its obligations under this Guarantee.
         If any of the obligations to pay the Principal Amount, Issue Price,
         accrued Original Discount, Redemption Price, Purchase Price,
         Fundamental Change Purchase Price, Liquidated Damages, if any, and
         interest, if any on the Securities and all other obligations of the
         Company are revived and reinstated after the termination of this
         Guarantee, then all of the obligations of the Guarantor under this
         Guarantee shall be revived and reinstated as if this Guarantee had not
         been terminated until such time as such amounts on the Securities and
         all other obligations of the Company under the Indenture are paid in
         full, and the Guarantor shall enter into an amendment to this
         Guarantee, reasonably satisfactory to the Trustee, evidencing such
         revival and reinstatement.

                                    ARTICLE 8

                            MISCELLANEOUS PROVISIONS

         SECTION 8.1 RATIFICATION OF INDENTURE.

         Except as expressly modified or amended hereby, the Indenture continues
in full force and effect and is in all respects confirmed and preserved.

         SECTION 8.2 EFFECTIVENESS.

         This First Supplemental Indenture shall be effective as of the date
first written above, provided, however, that the provisions contained in
Articles 1 through 7 (inclusive) hereof shall become effective as of the Merger
Date. In the event that the Merger Agreement is terminated in accordance with
its terms, this First Supplemental Indenture shall automatically become null and
void and the Company and Trustee shall continue to comply with the Indenture. On
or promptly following the Merger Date, the Company shall furnish to the Trustee
an Officer's Certificate certifying that the Merger has occurred and that
Articles 1 through 7 (inclusive) hereof have become effective.

         SECTION 8.3 CONFLICT WITH THE TRUST INDENTURE ACT.

         If any provision of this First Supplemental Indenture modifies or
excludes any provision of the Trust Indenture Act that is required under such
Act to be part of and govern this First Supplemental Indenture, the latter
provision of the Trust Indenture Act shall control.

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If any provision hereof modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, the latter provision of the
Trust Indenture Act shall be deemed to apply to this First Supplemental
Indenture, as so modified or excluded, as the case may be.

         SECTION 8.4 SECURITIES DEEMED CONFORMED.

         As of the date hereof, the provisions of each Security then outstanding
shall be deemed to be conformed, without the necessity for any reissuance or
exchange of such Security or any other action on the part of the Holders, the
Company, the Guarantor or the Trustee, so as to reflect this First Supplemental
Indenture.

         SECTION 8.5 NO ADDITIONAL TRUSTEE OBLIGATIONS.

         No duties, responsibilities or liabilities are assumed, or shall be
construed to be assumed, by the Trustee by reason of this First Supplemental
Indenture. This First Supplemental Indenture is executed and accepted by the
Trustee subject to all the terms and conditions set forth in the Indenture with
the same force and effect as if those terms and conditions set forth in the
Indenture with the same force and effect as if those terms and conditions were
repeated at length herein and made applicable to the Trustee with respect
hereto.

         SECTION 8.6 SUCCESSORS.

         All agreements of the Company, the Guarantor and the Trustee in this
First Supplemental Indenture and in the Indenture shall bind their respective
successors.

         SECTION 8.7 BENEFITS OF FIRST SUPPLEMENTAL INDENTURE.

         Nothing in this First Supplemental Indenture, express of implied, shall
give to any Person, other than the parties hereto and their successors hereunder
and the Holders, any benefit or any legal or equitable right, remedy or claim
under this First Supplemental Indenture.

         SECTION 8.8 GOVERNING LAW.

         THE LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE
AND ENFORCE THIS FIRST SUPPLEMENTAL INDENTURE.

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         SECTION 8.9 COUNTERPARTS.

         This First Supplemental Indenture may be executed in any number of
counterparts, each of which shall be an original, but all such counterparts
shall together constitute but one and the same instrument.

         SECTION 8.10 TRUSTEE.

         The Trustee is not responsible in any manner whatsoever for or in
respect of the validity or sufficiency of this First Supplemental Indenture or
for or in respect of the recitals contained herein, which are made solely by the
Company and the Guarantor.

                            [SIGNATURE PAGE FOLLOWS]

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         IN WITNESS WHEREOF, the parties hereto have cause this First
Supplemental Indenture to be duly executed as of the first day and year first
written above.

                                    ISSUER:

                                    NABORS INDUSTRIES, INC.

                                    By: /s/ Anthony G. Petrello
                                        ---------------------------------------
                                        Anthony G. Petrello
                                        President and Chief Operating Officer

                                    GUARANTOR:

                                    NABORS INDUSTRIES LTD.

                                    By: /s/ Daniel McLachlin
                                        ---------------------------------------
                                        Daniel McLachlin
                                        Vice President - Administration

                                    TRUSTEE:

                                    BANK ONE, N.A., as Trustee

                                    By: /s/ Jeffery L. Eubank
                                        ---------------------------------------
                                        Name:  Jeffery L. Eubank
                                        Title:  Authorized Person

                                       15<PAGE>
                                                                    EXHIBIT 10.2

                       1999 NON-QUALIFIED STOCK AWARD PLAN

                 (AS AMENDED AND RESTATED THROUGH JUNE 15, 2002)

     1. Purpose. The purpose of this 1999 Non-Qualified Stock Award Plan (the
"Plan") is to motivate key personnel to produce a superior return to the
shareholders of Computer Network Technology Corporation by offering such
personnel an opportunity to realize Stock appreciation, by facilitating Stock
ownership, and by rewarding them for achieving a high level of corporate
performance. This Plan is also intended to facilitate recruiting and retaining
key personnel of outstanding ability by providing an attractive capital
accumulation opportunity.

     2.  Definitions.

     2.1 The terms defined in this section are used (and capitalized) elsewhere
in this Plan.

         (a) "Affiliate" means any corporation that is a "parent corporation" or
"subsidiary corporation" of the Company, as those terms are defined in Section
424(e) and (f) of the Code, or any successor provision.

         (b) "Agreement" means a written contract entered into between the
Company or an Affiliate and a Participant containing the terms and conditions of
an Award in such form (not inconsistent with this Plan) as the Committee
approves from time to time, together with all amendments thereto, which
amendments may be unilaterally made by the Company (with the approval of the
Committee) unless such amendments are deemed by the Committee to be materially
adverse to the Participant and are not required as a matter of law.

         (c) "Award" means a grant made under this Plan in the form of Options,
Restricted Stock, Stock, or any other Stock-based Award.

         (d) "Board" means the Board of Directors of the Company.

         (e) "Code" means the Internal Revenue Code of 1986, as amended from
time to time.

         (f) "Committee" means two or more Disinterested Persons designated by
the Board to administer this Plan under Section 3 hereof.

         (g) "Company" means Computer Network Technology Corporation, a
Minnesota corporation, or any successor to substantially all of its businesses.

         (h) "Disinterested Person" means a member of the Board who is
considered a disinterested person within the meaning of Exchange Act Rule 16b-3
or any successor definition.

         (i) "Effective Date" means the date specified in Section 8.1 hereof.

         (j) "Employee" means any employee (excluding an officer or director) of
the Company or an Affiliate. "Employee" shall also include other individuals and
entities who are not "employees" of the Company or an Affiliate but who provide
services to the Company or an Affiliate in the capacity of an advisor or
consultant (other than as a director). References herein to "employment" and
similar terms shall include the providing of services in any such capacity.
Employee shall also include any other person not previously employed by the
Company or an Affiliate who is issued an Award as an inducement essential to the
person's entering into an employment contract with the Company (including
employment as an officer), but only if issuance of the Award would not require
shareholder approval of the Plan or the Award under the rules of the National
Association of Securities Dealers, Inc.

<PAGE>

              (k) "Event" means any of the following:

              (i) The acquisition by an individual, entity, or group (within the
         meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) of
         beneficial ownership (within the meaning of Exchange Act Rule 13d-3) of
         40% or more of either (A) the then outstanding shares of common stock
         of the Company (the "Outstanding Company Common Stock") or (B) the
         combined voting power of the then outstanding voting securities of the
         Company entitled to vote generally in the election of the Board (the
         "Outstanding Company Voting Securities"); provided, however, that the
         following acquisitions shall not constitute an Event:

                      (1)  any acquisition of voting securities of the Company
         directly from the Company,

                      (2)  any acquisition of voting securities of the Company
         by the Company or any of its wholly owned Subsidiaries,

                      (3) any acquisition of voting securities of the Company by
         any employee benefit plan (or related trust) sponsored or maintained by
         the Company or any of its Subsidiaries, or

                      (4) any acquisition by any corporation with respect to
         which, immediately following such acquisition, more than 60% of,
         respectively, the then outstanding shares of common stock of such
         corporation and the combined voting power of the then outstanding
         voting securities of such corporation entitled to vote generally in the
         election of directors is then beneficially owned, directly or
         indirectly, by all or substantially all of the individuals and entities
         who were the beneficial owners, respectively, of the Outstanding
         Company Common Stock and Outstanding Company Voting Securities
         immediately prior to such acquisition in substantially the same
         proportions as was their ownership, immediately prior to such
         acquisition, of the Outstanding Company Common Stock and Outstanding
         Company Voting Securities, as the case may be;

              (ii) Individuals who, as of the Effective Date, constitute the
         Board (the "Incumbent Board") cease for any reason to constitute at
         least a majority of the Board; provided, however, that any individual
         becoming a director subsequent to the Effective Date whose election, or
         nomination for election by the Company's shareholders, was approved by
         a vote of at least a majority of the directors then comprising the
         Incumbent Board shall be considered a member of the Incumbent Board,
         but excluding, for this purpose, any such individual whose initial
         assumption of office occurs as a result of an actual or threatened
         election contest which was (or, if threatened, would have been) subject
         to Exchange Act Rule 14a-l l;

              (iii) Approval by the shareholders of the Company of a
         reorganization, merger, consolidation, or statutory exchange of
         Outstanding Company Voting Securities, unless immediately following
         such reorganization, merger, consolidation, or exchange, all or
         substantially all of the individuals and entities who were the

<PAGE>

beneficial owners, respectively, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such reorganization,
merger, consolidation, owned, directly or indirectly, more than 60% 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 reorganization, merger, consolidation, or exchange in
substantially the same proportions as was their ownership, immediately prior to
such reorganization, merger, consolidation, or exchange, of the Outstanding
Company Common Stock and Outstanding Company Voting Securities, as the case may
be; or

                 (iv) Approval by the shareholders of the Company of (A) a
complete liquidation or dissolution of the Company or (B) the sale or other
disposition of all or substantially all of the assets of the Company, other than
to a corporation with respect to which, immediately following such sale or other
disposition, more than 60% of, respectively, the then outstanding shares of
common stock of such corporation and the combined voting power of the then
outstanding voting securities of such corporation entitled to vote generally in
the election of directors is then beneficially owned, directly or indirectly, by
all or substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such sale or other disposition in
substantially the same proportion as was their ownership, immediately prior to
such sale or other disposition, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may be.

                 (v) Notwithstanding the above, an Event shall not be deemed to
occur with respect to an employee if the acquisition of the 40% or greater
interest referred to in subsection (i) is by a group, acting in concert, that
includes that recipient or if at least 40% of the then outstanding common stock
or combined voting power of the then outstanding voting securities (or voting
equity interests) of the surviving corporation or of any corporation (or other
entity) acquiring all or substantially all of the assets of the Company shall be
beneficially owned, directly or indirectly, immediately after a reorganization,
merger, consolidation, statutory share exchange or disposition of assets
referred to in subsections (iii) or (iv) by a group, acting in concert, that
includes that Participant.

         (l) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

         (m) "Fair Market Value" as of any date means, unless otherwise
expressly provided in this Plan:

                 (i) the closing sale price of a Share on the date immediately
preceding that date or, if no sale of Shares shall have occurred on that date,
on the next preceding day on which a sale occurred of Shares on the National
Association of Securities Dealers, Inc. Automated Quotations National Market
System ("NMS"), or

                 (ii) if the Shares are not quoted on the NMS, what the
Committee determines in good faith to be 100% of the fair market value of a
Share on that date.

     Provided, however, if the NMS has closed for the day at the time the event
occurs that triggers a determination of Fair Market Value, whether the grant of
an Award, the exercise of an Option or otherwise, all references in this Section
2.1(m) to the "date immediately preceding that date" shall be deemed to be
references to "that date." The determination of Fair Market Value shall be
subject to adjustment as provided in Section 12 hereof.

<PAGE>

         (n) "Fundamental Change" means a dissolution or liquidation of the
Company, a sale of substantially all of the assets of the Company, a merger or
consolidation of the Company with or into any other corporation, regardless of
whether the Company is the surviving corporation, or a statutory share exchange
involving capital stock of the Company.

         (o) "Non-Qualified Stock Option" means an Option that is not an
incentive stock option granted in accordance with the requirements of Code
Section 422 or any successor to said section.

         (p) "Option" means a right to purchase Stock. All Options under the
Plan shall be Non-Qualified Stock Options.

         (q) "Performance Cycle" means the period of time as specified in an
Agreement over which Performance Units are to be earned.

         (r) "Performance Units" means an Award made under Section 7.2 hereof.

         (s) "Plan" means this 1999 Non-Qualified Stock Award Plan, as amended
from time to time.

         (t) "Restricted Stock" means Stock granted under Plan Section 7.3 so
long as such Stock remains subject to one or more restrictions.

         (u) "Retirement" of an Employee means termination of employment with
the Company or an Affiliate on or after the date the Employee attains age 55.

         (v) "Share" means a share of Stock.

         (w) "Stock" means the common stock, $.01 par value per share (as such
par value may be adjusted from time to time), of the Company.

         (x) "Subsidiary" means a subsidiary corporation, as that term is
defined in Section 424(f) of the Code, or any successor provision.

         (y) "Successor" means the legal representative of the estate of a
deceased Participant or the person or persons who may, by bequest or
inheritance, or under the terms of an Award or of forms submitted by the
Participant to the Committee under Section 16 hereof, acquire the right to
exercise an Option or receive cash or Shares issuable in satisfaction of an
Award in the event of an employee's death.

         (z) "Term" means the period during which an Option may be exercised or
the period during which the restrictions or terms and conditions placed on
Restricted Stock are in effect.

         (aa) "Transferee" means any member of the Participant's immediate
family (i.e., his or her children, step-children, grandchildren and spouse) or
one or more trusts for the benefit of such family members or partnerships in
which such family members are the only partners.

     2.2 Number. Except when otherwise indicated by context, any term used in
the singular shall also include the plural.

     3.  Administration.

     3.1 Authority of Committee. The Committee shall administer this Plan. The
Committee may delegate all or any portion of its authority under this Plan to
persons who are not Disinterested Persons solely for purposes of determining and
administering Awards to Employees who are not then subject to the reporting
requirements of Section 16 of the Exchange Act. The Committee shall have
exclusive power to make Awards, to determine when and to whom Awards will be
granted, the form of each Award, the amount of each Award, and any other terms
or conditions of each Award. Each Award shall be subject to an Agreement
authorized by the Committee. The Committee's interpretation of this Plan and of
any Awards made under this Plan shall be final and binding on all persons. The
Committee shall have the power to establish regulations to administer this Plan
and to change such regulations.

<PAGE>

     3.2 Indemnification. To the full extent permitted by law, (a) no member of
the Board or of the Committee or any person to whom the Committee delegates
authority under this Plan shall be liable for any action or determination taken
or made in good faith with respect to this Plan or any Award made under this
Plan and (b) the members of the Board and of the Committee and each person to
whom the Committee delegates authority under this Plan shall be entitled to
indemnification by the Company with regard to such actions and determinations.

     4. Shares Available Under this Plan. The number of Shares available for
distribution under this Plan shall not exceed 3,730,000 (subject to adjustment
as provided in this Section 4 and under Section 12 hereof). Any Shares subject
to the terms and conditions of an Award under this Plan that are not used
because the terms and conditions of the Award are not met may again be used for
an Award under this Plan. In addition, if, in accordance with this Plan, an
employee uses shares of Common Stock of the Company to (i) pay a purchase or
exercise price, including an Option exercise price, or (ii) satisfy tax
withholdings, only the number of shares issued net of the shares tendered in
payment of such purchase or exercise price and tax withholdings shall be deemed
to be issued for purposes of determining the maximum number of Shares available
under the Plan. Further, the maximum number of Shares available for distribution
under this Plan shall be increased to take into account any Awards granted under
Section 17 of this Plan.

     5. Eligibility. Awards may be granted under this Plan to Employees, and
such Awards shall have the terms and conditions specified in Sections 6 and 7
hereof and elsewhere in this Plan. The granting of Awards to Employees is solely
at the discretion of the Committee.

     6.  General Terms of Awards.

         6.1 Amount of Award. Each Agreement with an Employee shall set forth
the number of Shares to which the Option subject to such Agreement applies or
the number of Shares of Restricted Stock, Stock or Performance Units subject to
such Agreement, as the case may be.

         6.2 Term. Each Agreement, other than those relating solely to Awards of
Shares without restrictions, shall set forth the Term of the Option or
Restricted Stock or the Performance Cycle for the Performance Units, as the case
may be. An Agreement may permit an acceleration of the expiration of the
applicable Term upon such terms and conditions as shall be set forth in the
Agreement, which may, but need not, include without limitation acceleration
resulting from the occurrence of an Event or in the event of the Employee's
death or Retirement. Acceleration of the Performance Cycle of Performance Units
shall be subject to Section 7.2(b) hereof.

         6.3 Agreements. Each Award under this Plan shall be evidenced by an
Agreement setting forth the terms and conditions, as determined by the
Committee, which shall apply to such Award, in addition to the terms and
conditions specified in this Plan.

         6.4 Transferability. Except as provided in this Section 6.4, during the
lifetime of an employee to whom an Award is granted, only that Participant (or
that Participant's legal representative) may exercise an Option or receive
payment with respect to Performance Units or any other Award. No Award of
Restricted Stock (prior to the expiration of the restrictions), Options or
Performance Units or other Award may be sold, assigned, transferred, exchanged
or otherwise encumbered other than pursuant to a domestic relations order as
defined in the Code or Title I of the Employee Retirement Income Security Act
("ERISA") or the rules thereunder; any attempted transfer in violation of this
Section 6.4 shall be of no effect. Notwithstanding the immediately preceding
sentence, the Committee, in an Agreement or otherwise at its discretion, may
provide (i) that the Award subject to the Agreement shall be transferable to a
Successor in the event of an employee's death, or (ii) that the Award may be
transferable to a Transferee if the Participant receives no consideration for
the transfer. Any Award held by a Transferee shall continue to be subject to the

<PAGE>

same terms and conditions that were applicable to such Award immediately prior
to its transfer. By way of example and not limitation, (i) an Option may be
exercised by a Transferee as and to the extent that such Option has become
exercisable and has not terminated in accordance with the provisions of the Plan
and the applicable Agreement and (ii) for purposes of any provision of this Plan
relating to notice to an optionee or to vesting or termination of an Option upon
the death, disability or termination of employment of an optionee, the
references to "optionee" shall mean the original grantee of an option and not
any Transferee.

     7.  Terms and Conditions of Specific Awards.

         7.1 Stock Options. Each Option shall be granted as a Non-Qualified
Stock Option and not as an incentive stock option under Code Section 422 or any
other successor to said section. The purchase price of each Share subject to an
Option shall be determined by the Committee and set forth in the Agreement, but
shall not be less than 100% of the Fair Market Value of a Share as of the date
the Option is granted. The purchase price of the Shares with respect to which an
Option is exercised shall be payable in full at the time of exercise, provided
that to the extent permitted by law, the Agreement may permit some or all
Participants simultaneously to exercise Options and sell the Shares thereby
acquired pursuant to a brokerage or similar relationship and use the proceeds
from such sale as payment of the purchase price of such Shares. The purchase
price may be payable in cash, in Stock having a Fair Market Value as of the date
the Option is exercised equal to the purchase price of the Stock being purchased
pursuant to the Option, or a combination thereof as determined by the Committee
and provided in the Agreement. Each Option shall be exercisable in whole or in
part on the terms provided in the Agreement. In no event shall any Option be
exercisable at any time after its expiration date. When an Option is no longer
exercisable, it shall be deemed to have lapsed or terminated. The Committee may
provide, in an Agreement or otherwise, that an employee who exercises an Option
and pays the Option price in whole or in part with Shares then owned by the
Participant will be entitled to receive another Option covering the same number
of shares tendered and with a price of no less than Fair Market Value on the
date of grant of such additional Option ("Reload Option").

         7.2 Performance Units.

                 (a) Initial Award. An Award of Performance Units shall entitle
such Participant (or a Successor) to future payments of cash, Stock, or a
combination of cash and Stock, as determined by the Committee and provided in
the Agreement, based upon the achievement of performance targets established by
the Committee. Such performance targets may, but need not, include without
limitation targets relating to one or more of corporate, group, unit, Affiliate,
or individual performance. The Agreement may establish that a portion of a full
or maximum amount of an employee's Award will be paid for performance, which
exceeds the minimum target but falls below the maximum target applicable to such
Award. The Agreement shall also provide for the timing of such payment.
Following the conclusion or acceleration of each Performance Cycle, the
Committee shall determine the extent to which (i) performance targets have been
attained, (ii) any other terms and conditions with respect to an Award relating
to such Performance Cycle have been satisfied, and (iii) payment is due with
respect to an Award of Performance Units.

                 (b) Acceleration and Adjustment. The Agreement may permit an
acceleration of the Performance Cycle and an adjustment of performance targets
and payments with respect to some or all of the Performance Units awarded to an
employee upon such terms and conditions as shall be set forth in the Agreement,
upon the occurrence of certain events, which may, but need not include without
limitation an Event, a Fundamental Change, the Participant's death or Retirement
or, with respect to payments in Stock with respect to Performance Units, a
reclassification, stock dividend, stock split, or stock combination as provided
in Section 12 hereof.
<PAGE>

     7.3 Restricted Stock Awards

              (a) The Committee is authorized to grant, either alone or in
conjunction with other Awards, stock and stock-based Awards. The Committee shall
determine the persons to whom such Awards are made, the timing and amount of
such Awards, and all other terms and conditions. Company Common Stock granted to
recipients may be unrestricted or may contain such restrictions, including
provisions requiring forfeiture and imposing restrictions upon stock transfer,
as the Committee may determine. Unless forfeited, the recipient of restricted
Common Stock will have all other rights of a shareholder, including without
limitation, voting and dividend rights.

              (b) An Award of Restricted Stock under the Plan shall consist of
Shares subject to restrictions on transfer and conditions of forfeiture, which
restrictions and conditions shall be included in the applicable Agreement. The
Committee may provide for the lapse or waiver of any such restriction or
condition based on such factors or criteria as the Committee, in its sole
discretion, may determine.

              (c) Except as otherwise provided in the applicable Agreement, each
Stock certificate issued with respect to an Award of Restricted Stock shall
either be deposited with the Company or its designee, together with an
assignment separate from the certificate, in blank, signed by the Participant,
or bear such legends with respect to the restricted nature of the Restricted
Stock evidenced thereby as shall be provided for in the applicable Agreement.

              (d) The Agreement shall describe the terms and conditions by which
the restrictions and conditions of forfeiture upon awarded Restricted Stock
shall lapse. Upon the lapse of the restrictions and conditions, Shares free of
restrictive legends, if any, relating to such restrictions shall be issued to
the Participant or a Successor or Transferee.

              (e) An employee or a Successor or Transferee with a Restricted
Stock Award shall have all the other rights of a shareholder including, but not
limited to, the right to receive dividends and the right to vote the Shares of
Restricted Stock.

          7.4 Other Awards. The Committee may from time to time grant Stock and
other Awards under the Plan including without limitations those Awards pursuant
to which Shares are or may in the future be acquired, Awards denominated in
Stock units, securities convertible into Stock and Phantom securities. The
Committee, in its sole discretion, shall determine the terms and conditions of
such Awards provided that such Awards shall not be inconsistent with the terms
and purposes of this Plan. The Committee may, at its sole discretion, direct the
Company to issue Shares subject to restrictive legends and/or stop transfer
instructions that are consistent with the terms and conditions of the Award to
which the Shares relate. Furthermore, the Committee may use stock available
under this Plan as payment for compensation, grants or rights and earned or due
under any other compensation plans or arrangements of the Company.

     8.  Effective Date of this Plan.

          8.1 Effective Date. This Plan shall become effective as of July 15,
1999, the date of adoption of this Plan by the Board.

          8.2 Duration of this Plan. This Plan shall remain in effect until all
Stock subject to it shall be distributed or all Awards have expired or lapsed,
whichever is latest to occur, or this Plan is terminated pursuant to Section 11
hereof. The date and time of approval by the Committee of the granting of an
Award (or such other time as the Committee shall designate) shall be considered
the date and time at which such Award is made or granted, notwithstanding the
date of any Agreement with respect to such Award.

     9. Right to Terminate Employment. Nothing in this Plan or in any Agreement
shall confer upon any Employee the right to continue in the employment of the
Company or any Affiliate or affect any right which the Company or any Affiliate
may have to terminate the employment of the Employee with or without cause.

<PAGE>

     10. Tax Withholding. The Company may withhold from any cash payment under
this Plan to an employee or other person (including a Successor or a Transferee)
an amount sufficient to cover any withholding taxes required or permitted to be
withheld from the employee or other person. The Company shall have the right to
require an employee or other person receiving Stock under this Plan to pay to
the Company a cash amount sufficient to cover any withholding taxes, including
any income tax, social security tax, national insurance contribution, or other
kind or type of tax for which the employee, the Company or any Affiliate may be
liable as a consequence of the employee or other person exercising an Option or
receiving Stock. In lieu of all or any part of such a cash payment from a person
receiving Stock under this Plan, the Committee may permit the individual to
elect to cover all or any part of the withholdings, and to cover any additional
withholdings up to the amount needed to cover the full amount of federal, state,
and local tax with respect to income arising from payment of the Award, through
a reduction of the number of Shares delivered to such individual or a subsequent
return to the Company of Shares held by the employee or other person, in each
case valued in the same manner as used in computing the withholding taxes under
the applicable laws. The Company or the relevant Affiliate may in accordance
with and to the extent it is able under the laws of the jurisdiction with
respect to which a tax is owed, deduct the relevant amount from subsequent
earnings payable to the employee. To the extent that the Company or the relevant
Affiliate cannot (or does not) make the relevant deductions, the employee or
person receiving the Stock shall enter into such other arrangements for the
individual to reimburse the Company or the Affiliate for the amount of the tax
liability as the Company shall require, and the Company may make the
individual's agreement to such arrangements a condition of the exercise of any
Stock Option or the receipt of any Award under the Plan.

     11. Amendment, Modification and Termination of this Plan.

         (a) The Board may at any time and from time to time terminate, suspend
or modify the Plan. Except as limited in (b) below, the Committee may at any
time alter or amend any or all Agreements under the Plan to the extent permitted
by law.

         (b) No termination, suspension, or modification of the Plan will
materially and adversely affect any right acquired by any Participant or
Successor or Transferee under an Award granted before the date of termination,
suspension, or modification, unless otherwise agreed to by the Participant in
the Agreement or otherwise, or required as a matter of law; but it will be
conclusively presumed that any adjustment for changes in capitalization provided
for in Plan Section 7.2 or 12 does not adversely affect these rights.

     12. Adjustment for Changes in Capitalization. Appropriate adjustments in
the aggregate number and type of Shares available for Awards under this Plan and
in the number and type of Shares and amount of cash subject to Awards then
outstanding, in the Option price as to any outstanding Options and, subject to
Section 7.2(b) hereof, in outstanding Performance Units and payments with
respect to outstanding Performance Units may be made by the Committee in its
sole discretion to give effect to adjustments made in the number or type of
Shares of the Company through a Fundamental Change (subject to Section 13
hereof), recapitalization, reclassification, stock dividend, stock split, stock
combination, or other relevant change, provided that fractional Shares shall be
rounded to the nearest whole share.

     13. Fundamental Change. In the event of a proposed Fundamental Change: (a)
involving a merger, consolidation, or statutory share exchange, unless
appropriate provision shall be made for the protection of the outstanding
Options by the substitution of options and appropriate voting common stock of
the corporation surviving any such merger or consolidation or, if appropriate,
the parent corporation of the Company or such surviving corporation, to be
issuable upon the exercise of options in lieu of Options and capital stock of
the Company, or (b) involving the dissolution or liquidation of the Company, the
Committee shall declare, at least 20 days prior to the occurrence of the
Fundamental Change, and provide written notice to each holder of an Option of
the declaration, that each outstanding Option, whether or not then exercisable,

<PAGE>

shall be canceled at the time of, or immediately prior to the occurrence of the
Fundamental Change in exchange for payment to each holder of an Option, within
ten days after the Fundamental Change, of cash equal to the amount, if any, for
each Share covered by the canceled Option, by which the Fair Market Value (as
defined in this Section) per Share exceeds the exercise price per Share covered
by such Option. At the time of the declaration provided for in the immediately
preceding sentence, each Option shall immediately become exercisable in full and
each person holding an Option shall have the right, during the period preceding
the time of cancellation of the Option, to exercise the Option as to all or any
part of the Shares covered thereby; provided, however, that if such Fundamental
Change does not become effective, then the declaration pursuant to this Section
13(b) shall be rescinded, the acceleration of the exercisibility of the Option
pursuant to this Section 13(b) shall be void, and the Option shall be
exercisable in accordance with its terms. In the event of a declaration pursuant
to this Section 13, each outstanding Option that shall not have been exercised
prior to the Fundamental Change shall be canceled at the time of, or immediately
prior to, the Fundamental Change, as provided in the declaration.
Notwithstanding the foregoing, no person holding an Option shall be entitled to
the payment provided for in this Section 13 if such Option shall have expired
pursuant to an Agreement. For purposes of this Section only, "Fair Market Value"
per Share means the cash plus the fair market value, as determined in good faith
by the Committee, of the non-cash consideration to be received per Share by the
shareholders of the Company upon the occurrence of the Fundamental Change,
notwithstanding anything to the contrary provided in this Plan.

     14. Unfunded Plan. This Plan shall be unfunded and the Company shall not be
required to segregate any assets that may at any time be represented by Awards
under this Plan.

     15. Other Benefit and Compensation Programs. Payments and other benefits
received by an employee under an Award shall not be deemed a part of an
employee's regular, recurring compensation for purposes of any termination,
indemnity, or severance pay laws and shall not be included in, nor have any
effect on, the determination of benefits under any other employee benefit plan,
contract, or similar arrangement provided by the Company or an Affiliate, unless
expressly so provided by such other plan, contract, or arrangement or the
Committee determines that an Award or portion of an Award should be included to
reflect competitive compensation practices or to recognize that an Award has
been made in lieu of a portion of competitive cash compensation.

     16. Beneficiary Upon Employee's Death. To the extent that the transfer of
an employee's Award at death is permitted under an Agreement, (a) an employee's
Award shall be transferable to the beneficiary, if any, designated on forms
prescribed by and filed with the Committee and (b) upon the death of the
Employee, such beneficiary shall succeed to the rights of the Employee to the
extent permitted by law and this Plan. If no such designation of a beneficiary
has been made, the Participant's legal representative shall succeed to the
Awards, which shall be transferable by will or pursuant to laws of descent and
distribution to the extent permitted under an Agreement.

     17. Corporate Mergers, Acquisitions, Etc. The Committee may also grant
Options, Restricted Stock or other Awards under the Plan having terms,
conditions and provisions that vary from those specified in this Plan provided
that any such awards are granted in substitution for, or in connection with the
assumption of, existing options, stock appreciation rights, restricted stock or
other awards granted, awarded or issued by another corporation and assumed or
otherwise agreed to be provided for by the Company pursuant to or by reason of a
transaction involving a corporate merger, consolidation, acquisition of property
or stock, separation, reorganization or liquidation to which the Company or a
subsidiary is a party.

<PAGE>

     18. Deferrals and Settlements. The Committee may require or permit
Employees to elect to defer the issuance of Shares or the settlement of Awards
in cash under such rules and procedures as it may establish under the Plan. It
may also provide that deferred settlements include the payment or crediting of
interest on the deferral amounts.

     19. Governing Law. To the extent that federal laws do not otherwise
control, this Plan and all determinations made and actions taken pursuant to
this Plan shall be governed by the laws of Minnesota and construed accordingly.

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