First Amendment to Employment Agreement by and among Nabors Industries, Inc., Nabors Industries Ltd., and Richard A. Stratton

Summary

This amendment, dated June 24, 2002, modifies the employment agreement between Nabors Industries, Inc. (Nabors Delaware) and Richard A. Stratton to address the company's corporate reorganization, in which Nabors Delaware becomes a subsidiary of Nabors Industries Ltd. (Nabors Bermuda). The amendment clarifies that this reorganization will not be considered a "Change in Control" under the original employment agreement and adds Nabors Bermuda as a party to ensure continued employment and fulfillment of obligations. The amendment takes effect only if the reorganization is completed.

EX-10.5 11 h98563exv10w5.txt 1ST AMEND. TO EMP. AGMT. - RICHARD A. STRATTON EXHIBIT 10.5 FIRST AMENDMENT TO EMPLOYMENT AGREEMENT This Amendment, dated as of June 24, 2002, by and among Nabors Industries, Inc. ("Nabors Delaware"), Nabors Industries Ltd. ("Nabors Bermuda") and Richard A. Stratton (the "Employee" and, collectively with Nabors Delaware and Nabors Bermuda, the "Parties"). WHEREAS, Nabors Delaware and the Employee have entered into an Employment Agreement effective as of October 1, 1996 (the "Employment Agreement"); WHEREAS, Nabors Delaware, Nabors Bermuda, Nabors US Holding Inc. and Nabors Acquisition Corp. VII have entered into an Agreement and Plan of Merger dated as of January 2, 2002 (the "Merger Agreement"), pursuant to which Nabors Delaware will become an indirect wholly-owned subsidiary of Nabors Bermuda (the "Inversion"); WHEREAS, the Employment Agreement makes certain provisions in respect of a "Change in Control" of Nabors Delaware (as defined in the Employment Agreement); WHEREAS, because of the risk that the definition of "Change in Control" in the Employment Agreement could be read to include the Inversion; WHEREAS, pursuant to Section 17(d) of the Employment Agreement, Nabors Delaware and the Employee may amend or waive any provision of the Employment Agreement by writing signed by the Employee and Nabors Delaware; WHEREAS, the Parties wish to provide that the Inversion shall not be treated as a "Change in Control" within the meaning of the Employment Agreement; and WHEREAS, the Parties wish to provide that, effective as of the consummation of the Inversion, Nabors Delaware shall continue to employ the Employee on the terms and subject to the conditions of the Employment Agreement, as amended in accordance herewith, and to provide that Nabors Bermuda shall become a party to the Employment Agreement for the purpose of facilitating and further ensuring the performance of the obligations of Nabors Delaware under the Employment Agreement as amended in accordance herewith. NOW, THEREFORE, in consideration of the foregoing, subject to the consummation of the Inversion, the Employment Agreement is amended by adding a new Section 18 immediately following Section 17 thereof to read in its entirety as follows, effective as of the consummation of the Inversion: "18. Reincorporation in Bermuda. (a) Background. On January 2, 2002, Nabors Industries, Inc. (for purposes of this Section 34, "Nabors Delaware"), Nabors Industries Ltd. ("Nabors Bermuda"), Nabors US Holding Inc. and Nabors Acquisition Corp. VII entered into an Agreement and Plan of Merger (the "Merger Agreement"), pursuant to which Nabors Delaware will become an indirect wholly-owned subsidiary of Nabors Bermuda (the "Inversion"). The purpose of this Section 18 is to provide special rules that shall apply under this Agreement upon and after the consummation of the Inversion. No provision in this Section 18 shall become effective unless and until the Inversion is consummated. (b) Change in Control. Neither the Inversion nor any of the other transactions contemplated by the Merger Agreement shall be treated as a Change in Control (as defined in Section 11(a)(i)) for purposes of this Agreement. Upon and after the Inversion, whether a Change in Control has occurred will be determined by reference to Nabors Bermuda and not Nabors Delaware. (c) References to the Nabors Delaware. Except as otherwise provided below in this subsection (c) or as manifestly required under the terms of the Agreement in light of the nature and purposes of the Inversion, upon and after the Inversion, references in the Agreement to the "Corporation" or the "Company" shall continue to refer to Nabors Delaware (and its successors and assigns permitted under the Agreement): (i) References to a "Party" or the "Parties" shall mean each of the Executive, Nabors Bermuda and Nabors Delaware, and references to "both Parties" or "either Party" and the like shall be deemed a reference to any of the Executive, Nabors Bermuda and Nabors Delaware. (ii) The term "Board" as defined in Section 2 shall continue to mean the Board of Directors of Nabors Delaware, except that the term shall mean the Board of Directors of Nabors Bermuda for purposes of determining whether there has been a "Change in Control" as defined in Section 11(a)(i) and for such other purposes described in this subsection (c). (iii) For purposes of the penultimate paragraph of Section 2, "Board" shall be deemed to refer to the Board of Directors of both Nabors Bermuda and Nabors Delaware, and for purposes of the final two paragraphs of Section 2, "Corporation" shall be deemed to refer to both Nabors Delaware and Nabors Bermuda. (iv) The reference in Section 3(a) to the "Board of Directors or its Compensation Committee" shall be a reference to the Board of Directors or the Compensation Committee of the Board of Directors of Nabors Bermuda, and the reference in Section 3(b) to the "Compensation Committee" shall be a reference to the Compensation Committee of the Board of Directors of Nabors Bermuda. (v) The reference in Section 4(a)(v)(C) to the "Board" shall be a reference to the Board of Directors of both Nabors Bermuda and Nabors Delaware, and the reference in Section 4(a)(v)(D) shall be a reference to each of Nabors Delaware, Nabors Bermuda and their subsidiaries. (vi) The references to the Corporation in Section 10 shall be references to both Nabors Delaware and Nabors Bermuda. 2 (vii) The term "Corporation" shall mean Nabors Bermuda for purposes of determining whether a Change in Control has occurred as defined in Section 11(a)(i), except that the term "Corporation" as used in Section 11(a)(i)(A) shall refer to each of Nabors Delaware, Nabors Bermuda and their subsidiaries. (viii) For purposes of Sections 11 through 16, the Employee shall be deemed to act in a Corporate Status when acting as a director, officer or fiduciary of Nabors Bermuda, and the term "Enterprise" shall be deemed to include Nabors Bermuda. (ix) The provisions of Section 11(d) shall apply to any Proceeding brought by or in the right of either Nabors Delaware or Nabors Bermuda. (d) Miscellaneous. (i) This Agreement, including this Section 18, shall be binding upon and inure to the benefit of the successors and assigns of Nabors Bermuda. No rights or obligations of Nabors Bermuda under this Agreement may be assigned or transferred except that such rights or obligations may be assigned or transferred pursuant to a merger or consolidation in which Nabors Bermuda is not the continuing entity, or the sale or liquidation of all or substantially all of the assets of Nabors Bermuda, provided that the assignee or transferee is the successor to all or substantially all of the assets of Nabors Bermuda and such assignee or transferee assumes the liabilities, obligations and duties of Nabors Bermuda, as contained in this Agreement, by written contract. Nabors Bermuda further agrees that, in the event of a sale of assets or liquidation as described in the preceding sentence, it shall take whatever action it legally can in order to cause such assignee or transferee to expressly assume the liabilities, obligations and duties of Nabors Bermuda hereunder. (ii) Notwithstanding the provisions of Section 17(d), no provision in this Agreement may be amended unless such amendment is agreed to in writing and signed by the Employee and an authorized officer of each of Nabors Delaware and Nabors Bermuda. Any waiver of any provision of this Agreement must be in writing and signed by the Employee, an authorized officer of Nabors Delaware, and an authorized officer of Nabors Bermuda, as the case may be. (iii) Nabors Bermuda agrees to take, and agrees to cause Nabors Delaware to take, any and all actions required of either Nabors Bermuda or Nabors Delaware to carry out the provisions of this Agreement, including this Section 18." The Parties further agree that this Amendment may be executed in several counterparts, each of which shall be deemed an original but which together shall constitute one and the same instrument. [The remainder of this page is intentionally left blank] 3 IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the date first above written. NABORS INDUSTRIES, INC. By: /s/ Anthony G. Petrello ----------------------------------- Anthony G. Petrello President & Chief Operating Officer NABORS INDUSTRIES LTD. By: /s/ Daniel McLachlin ----------------------------------- Daniel McLachlin Vice President RICHARD A. STRATTON /s/ Richard A. Stratton -------------------------------------------- 4