<PAGE>
                                                                  EXHIBIT 10.35


                              EMPLOYMENT AGREEMENT


         This Employment Agreement (this "Agreement") is entered into and
effective as of September 27, 2002 (the "Effective Date"), by and between
Weatherford International Ltd., a Bermuda exempted company (the "Company"), and
Stuart E. Ferguson (the "Employee").

                              W I T N E S S E T H:
                               - - - - - - - - - -

         WHEREAS, the Company desires to employ the Employee on the terms set
forth below to provide services to the Company and its affiliated companies, and
the Employee is willing to accept such employment and provide such services on
the terms set forth in this Agreement;

         NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the parties hereto do hereby agree:

         NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

         1.  Certain Definitions.

             (a)  "Cause" shall mean:

                  (i)   the willful and continued failure of the Employee
         to perform substantially the Employee's duties with the Company or one
         of its affiliates (other than any such failure resulting from
         incapacity due to physical or mental illness), after a written demand
         for substantial performance is delivered to the Employee by the Board
         or the Chief Executive Officer of the Company which specifically
         identifies the manner in which the Employee has not substantially
         performed the Employee's duties, or

                  (ii)  the willful engaging by the Employee in illegal
         conduct or gross misconduct which is materially and demonstrably
         injurious to the Company.

             No act, or failure to act, on the part of the Employee shall be
considered "willful" unless it is done, or omitted to be done, by the Employee
in bad faith or without reasonable belief that the Employee's action or omission
was in the best interests of the Company. Any act, or failure to act, based upon
authority given pursuant to a resolution duly adopted by the Board or upon the
instructions of the Chief Executive Officer or of a senior officer of the
Company or based upon the advice of counsel for the Company shall be
conclusively presumed to be done, or omitted to be done, by the Employee in good
faith and in the best interests of the Company. The cessation of employment of
the Employee shall not be deemed to be for Cause unless and until there shall
have been delivered to the Employee a copy of a resolution duly adopted by the
affirmative vote of not less than three-quarters of the entire membership of the
Board at a meeting of the Board called and held for such purpose (after
reasonable notice is provided to the Employee, and the Employee is given an
opportunity, together with counsel, to be heard before the Board), finding that,
in the good faith opinion of the Board, the Employee is guilty of the conduct
described in subparagraph (i) or (ii) above, and specifying the particulars
thereof in detail.

             (b)  "Change of Control" shall mean:

                  (i) The acquisition by any individual, entity or group
         (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
         Exchange Act of 1934, as amended (the "Exchange Act")) (a "Person") of
         beneficial ownership (within the meaning of Rule 13d-3 promulgated

<PAGE>

         under the Exchange Act) of 20 percent or more of either (A) the then
         outstanding common shares 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 directors (the "Outstanding Company Voting Securities");
         provided, however, that for purposes of this subsection (i), the
         following acquisitions shall not constitute a Change of Control:

                      (A)  any acquisition directly from the Company,

                      (B)  any acquisition by the Company,

                      (C)  any acquisition by any employee benefit plan (or
                  related trust)  sponsored or maintained by the Company or any
                  corporation controlled by the Company, or

                      (D) any acquisition by any corporation pursuant to a
                  transaction which complies with clauses (A), (B) and (C) of
                  subsection (iii) of this Section 1(b); or

                  (ii)  Individuals, who, as of the date hereof, 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 date hereof 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 as though such individual was 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 with respect to the
         election or removal of directors or other actual or threatened
         solicitation of proxies or consents by or on behalf of a Person other
         than the Board; or

                  (iii) Consummation of a reorganization, merger, amalgamation
         or consolidation or sale, transfer or other disposition of all or
         substantially all of the assets of the Company (a "Corporate
         Transaction"), unless, following such Corporate Transaction or series
         of related Corporate Transactions, as the case may be, (A) 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 Corporate Transaction beneficially own, directly or indirectly,
         more than 60 percent of, respectively, the then outstanding common
         shares 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 Corporate
         Transaction (including, without limitation, a corporation which as a
         result of such transaction owns the Company or all or substantially all
         of the Company's assets either directly or through one or more
         subsidiaries) in substantially the same proportions as their ownership,
         immediately prior to such Corporate Transaction, of the Outstanding
         Company Common Stock and the Outstanding Company Voting Securities, as
         the case may be, (B) no Person (excluding any corporation resulting
         from such Corporate Transaction or any employee benefit plan (or
         related trust) of the Company or such corporation resulting from such
         Corporate Transaction) beneficially owns, directly or indirectly, 20
         percent or more of, respectively, the then outstanding shares of common
         stock of the corporation resulting from such Corporate Transaction or
         the combined voting power of the then outstanding voting securities of
         such corporation except to the extent that such ownership existed prior
         to the Corporate Transaction and (C) at least a majority of the members
         of the board of directors of the corporation resulting from such
         Corporate Transaction were members of the Incumbent Board at the time
         of the approval of such Corporate Transaction; or


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                  (iv)  Approval by the shareholders of the Company of a
         complete liquidation or dissolution of the Company.

             (c)  "Good Reason" shall mean the occurrence of any of the
 following:

                  (i)  the assignment to the Employee of any duties inconsistent
         in any material respect with the Employee's position (including status,
         offices, titles and reporting requirements), authority, duties or
         responsibilities as contemplated by Section 3(a) of this Agreement, or
         any other action by the Company which results in a diminution in such
         position, authority, duties or responsibilities, excluding for this
         purpose an isolated, insubstantial and inadvertent action not taken in
         bad faith and which is remedied by the Company promptly after receipt
         of notice thereof given by the Employee;

                  (ii)  any failure by the Company to comply with any of
         the provisions of Section 3(b) of this Agreement, other than an
         isolated, insubstantial and inadvertent failure not occurring in bad
         faith and which is remedied by the Company promptly after receipt of
         notice thereof given by the Employee;

                  (iii) the Company's requiring the Employee to be based at any
         office or location other than as provided in Section 3(a) hereof or the
         Company's requiring the Employee to travel on Company business to a
         substantially greater extent than required immediately prior to the
         date hereof;

                  (iv) any purported termination by the Company of the
         Employee's employment (including, without limitation, any secondment of
         the Employee without the Employee's prior express agreement) otherwise
         than as expressly permitted by this Agreement;

                  (v)  any failure by the Company to comply with and satisfy
         Section 10(c) of this Agreement; or

                  (vi) in the event of a Change of Control or merger,
         consolidation or other business combination of the Company in which the
         Company's securities cease to be publicly traded, the assignment to the
         Employee of any position (including status, offices, titles and
         reporting requirements), authority, duties or responsibilities that are
         not (A) at or with the ultimate parent company of the entity surviving
         or resulting from such merger, consolidation or other business
         combination and (B) substantially similar to the Employee's position
         (including status, offices, titles and reporting requirements),
         authority, duties and responsibilities as contemplated by Section 3(a);

        (d)  "Board" shall mean the Board of Directors of the Company.

         For purposes of this Agreement, any good faith determination of "Good
Reason" made by the Employee shall be conclusive.

         2.  Employment Period.  The Company hereby agrees that the Company will
continue the Employee in its employ, and the Employee hereby agrees to remain in
the employ of the Company subject to the terms and conditions of this Agreement
during the Employment Period (as defined below). During


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the Employment Period, the Employee, with his/her prior express agreement, may
be seconded to the employment of Weatherford U.S., L.P. (or such other
affiliated company as specifically agreed by the Employee) (the "Seconded
Affiliate Company"), but without prejudice to the Company's obligations or the
Employee's rights under this Agreement. The Employee shall carry out his/her
duties as if they were duties to be performed on behalf of the Company. Each
Seconded Affiliate Company shall be subject to all of the obligations and
agreements of the Company under this Agreement and the Company shall be
responsible for actions and inactions of the Seconded Affiliate Company. Any
breach or failure to abide by the terms and conditions of this Agreement by a
Seconded Affiliate Company shall be deemed to constitute a breach or failure to
abide by the Company. The Employee has the right, in his/her sole discretion, to
revoke his/her agreement to be seconded to the employment of any Seconded
Affiliate Company at any time. The "Employment Period" shall mean the period
commencing on the Effective Date and ending on the third anniversary of the
Effective Date; provided, however, that commencing on the date one year after
the Effective Date, and on each annual anniversary of such date (such date and
each annual anniversary thereof shall be hereinafter referred to as the "Renewal
Date"), unless previously terminated, the Employment Period shall be
automatically extended so as to terminate three years after such Renewal Date,
unless at least 60 days prior to the Renewal Date the Company shall give notice
to the Employee that the Employment Period shall not be so extended.

         3.  Terms of Employment.

             (a)  Position and Duties. During the Employment Period, (A) the
Employee's position (including status, offices, titles and reporting
requirements, authority, duties and responsibilities) shall be Senior Vice
President and President - Completion Systems of the Company, (B) the Employee's
services shall be performed at the Company's office in Houston, Texas or other
locations less than 35 miles from such location and (C) the Employee will report
directly to the Company's Chief Executive Officer.

             (b)  Compensation.

                  (i) Base Salary. During the Employment Period, the
         Employee shall receive an annual base salary equal to the current base
         salary being received by the Employee ("Annual Base Salary"), which
         shall be paid at a monthly rate. During the Employment Period, the
         Annual Base Salary shall be reviewed no more than 12 months after the
         last salary increase awarded to the Employee prior to the date hereof
         and thereafter at least annually; provided, however, that a salary
         increase shall not necessarily be awarded as a result of such review.
         Any increase in Annual Base Salary may not serve to limit or reduce any
         other obligation to the Employee under this Agreement. Annual Base
         Salary shall not be reduced after any such increase. The term Annual
         Base Salary as utilized in this Agreement shall refer to Annual Base
         Salary as so increased.

                  (ii) Annual Bonus. The Employee shall be eligible for
         an annual bonus for each fiscal year ending during the Employment
         Period on the same basis as other executive officers under the
         Company's executive officer annual incentive program. Each such Annual
         Bonus shall be paid no later than the end of the third month of the
         fiscal year next following the fiscal year for which the Annual Bonus
         is awarded.

                  (iii) Incentive, Savings and Retirement Plans. During the
         Employment Period, the Employee shall be entitled to participate in
         all incentive, savings and retirement plans, practices, policies and
         programs applicable generally to all executive officers of the Company
         and its affiliated companies, but in no event shall such plans,
         practices, policies and programs provide the Employee with incentive
         opportunities (measured with respect to both regular and special
         incentive opportunities, to the extent, if any, that such distinction
         is applicable), savings opportunities and retirement benefit
         opportunities, in each case, less favorable, in the aggregate, than the
         most favorable of those provided by the Company and its affiliated
         companies for the Employee under such plans, practices, policies and
         programs as in effect on the date hereof. As used in this Agreement,
         the term "affiliated companies" shall include any company controlled
         by, controlling or under common control with the Company.


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                  (iv)  Welfare Benefit Plans. During the Employment Period, the
         Employee and/or the Employee's family, as the case may be, shall be
         eligible to participate in and shall receive all benefits under welfare
         benefit and retirement plans, practices, policies and programs provided
         by the Company and its affiliated companies (including, without
         limitation, medical, prescription, dental, disability, salary
         continuance, employee life, group life, accidental death and travel
         accident insurance plans and programs) to the extent applicable
         generally to all executive officers of the Company and its affiliated
         companies, but in no event shall such plans, practices, policies and
         programs provide the Employee with benefits which are less favorable,
         in the aggregate, than such plans, practices, policies and programs in
         effect for the Employee on the date hereof.

                  (v)   Fringe Benefits. During the Employment Period, the
         Employee shall be entitled to (A) a $600 per month car allowance, (B) a
         $1,500 per month housing allowance and (C) such other fringe benefits
         (including, without limitation, payment of club dues, payment of
         professional fees and taxes and payment of related expenses, as
         appropriate) in accordance with the most favorable plans, practices,
         programs and policies of the Company in effect on the date hereof.

                  (vi)  Vacation. During the Employment Period, the Employee
         shall be entitled to at least four weeks paid vacation or such greater
         amount of paid vacation as may be applicable to the executive officers
         of the Company and its affiliated companies.

                  (vii) Deferred Compensation Plan. During the Employment
         Period, the Employee shall be entitled to continue to participate in
         any deferred compensation or similar plans in which executive officers
         of the Company participate.

         (c)  Termination of Prior Agreement.  The Employee acknowledges and
agrees that this Agreement is being executed in replacement of the Employment
Agreement dated September 25, 2001, between the Employee and Weatherford U.S.,
L.P. (the "Prior Agreement"). As a result, the Employee and the Company agree
that the Prior Agreement is hereby terminated and of no further force and
effect.

         4.  Termination of Employment.

             (a) Death or Disability. The Employee's employment shall
terminate automatically upon the Employee's death during the Employment Period.
If the Company determines in good faith that the Disability of the Employee has
occurred during the Employment Period (pursuant to the definition of Disability
set forth below), it may give to the Employee written notice in accordance with
Section 11(b) of this Agreement of its intention to terminate the Employee's
employment. In such event, the Employee's employment with the Company shall
terminate effective 30 days after receipt of such notice by the Employee (the
"Disability Effective Date"), provided that within the 30-day period after such
receipt, the Employee shall not have returned to full-time performance of the
Employee's duties. For purposes of this Agreement, "Disability" shall mean the
absence of the Employee from the Employee's duties with the Company on a full-
time basis for 180 calendar days as a result of incapacity due to mental or
physical illness which is determined to be total and permanent by a physician
selected by the Company or its insurers and acceptable to the Employee or the
Employee's legal representative.

             (b)  Cause.  The Company may terminate the Employee's employment
         during the Employment Period for Cause.

             (c)  Good Reason. The Employee's employment may be terminated by
         the Employee during the Employment Period for Good Reason.


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             (d) Notice of Termination. Any termination during the
Employment Period by the Company for Cause, or by the Employee for Good Reason,
shall be communicated by Notice of Termination to the other party hereto given
in accordance with Section 11(b) of the Agreement. For purposes of this
Agreement, a "Notice of Termination" means a written notice which (i) indicates
the specific termination provision in this Agreement relied upon, (ii) to the
extent applicable, sets forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Employee's employment under
the provision so indicated and (iii) if the Date of Termination (as defined
below) is other than the date of receipt of such notice, specifies the
termination date (which date, in the case of a notice by the Company, shall be
not more than 30 days after the giving of such notice). The failure by the
Employee or the Company to set forth in the Notice of Termination any fact or
circumstance which contributes to a showing of Good Reason or Cause shall not
waive any right of the Employee or the Company, respectively, from asserting
such fact or circumstance in enforcing the Employee's or the Company's rights
hereunder.

             (e)  Date of Termination.  "Date of Termination" shall mean:

                  (i)   if the Employee's employment is terminated by the
         Company for Cause, or by the Employee for Good Reason, the date of
         receipt of the Notice of Termination or any later date specified
         therein, as the case may be;

                  (ii)  if the Employee's employment is terminated by
         the Company other than for Cause, death or Disability, the Date of
         Termination shall be the date on which the Company notifies the
         Employee of such termination; and

                  (iii) if the Employee's employment is terminated by reason of
         death or Disability, the Date of Termination shall be the date of death
         of the Employee or the Disability Effective Date, as the case may be.

         5.  Obligations of the Company Upon Termination.

             (a)  Death, Disability, Good Reason or Other than For Cause.
If, during the Employment Period, the Employee's employment is terminated by
reason of the Employee's death or Disability, by the Company for any reason
other than for Cause or by the Employee for Good Reason:

                  (i)  The Company shall pay to the Employee (or
         Employee's heirs or beneficiaries as applicable) in a lump sum in cash
         within 30 days after the Date of Termination the aggregate of the
         following amounts:

                       (A) the sum of (1) the Employee's Annual Base Salary
                  through the Date of Termination to the extent not theretofore
                  paid, (2) the product of (x) the higher of (I) the highest
                  Annual Bonus received by the Employee over the preceding five
                  year period and (II) the Annual Bonus that would be payable in
                  respect of the current fiscal year (and annualized for any
                  fiscal year consisting of less than 12 months) (such higher
                  amount being referred to as the "Highest Annual Bonus") and
                  (y) a fraction, the numerator of which is the number of days
                  in the current fiscal year through the Date of Termination,
                  and the denominator of which is 365, and (3) any compensation
                  previously deferred by the Employee under a plan sponsored by
                  the Company (together with any accrued interest or earnings
                  thereon), and any accrued vacation pay, in each case to the
                  extent not theretofore paid (the sum of the amounts described
                  in clauses (1), (2) and (3) shall be hereinafter referred to
                  as the "Accrued Obligations");


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                       (B)  an amount equal to two times the sum of (i) the then
                  current Annual Base Salary of the Employee and (ii) the
                  Highest Annual Bonus;

                       (C) an amount equal to the total of the employer basic
                  and matching contributions credited to the Employee under the
                  Company's 401(k) Savings Plan (the "401(k) Plan") and any
                  other deferred compensation plan during the 12-month period
                  immediately preceding the month of the Employee's Date of
                  Termination multiplied by multiplied by two, such amount to be
                  grossed up so that the amount the Employee actually receives
                  after payment of any federal or state taxes payable thereon
                  equals the amount first described above; and

                       (D) the total amount of all fringe benefits received by
                  the Employee on an annualized basis multiplied by two.

                  (ii)  For a period of two years from the Employee's Date of
         Termination, or such longer period as may be provided by the terms of
         the appropriate plan, program, practice or policy, the Company shall
         continue benefits to the Employee and the Employee's family equal to
         those which would have been provided to them in accordance with the
         plans, programs, practices and policies described in Section 3(b)(iv)
         of this Agreement if the Employee's employment had not been terminated;
         provided, however, that with respect to any of such plans, programs,
         practices or policies requiring an employee contribution, the Employee
         (or Employee's heirs or beneficiaries as applicable) shall continue to
         pay the monthly employee contribution for same, and provided further,
         that if the Employee becomes re-employed by another employer and is
         eligible to receive medical or other welfare benefits under another
         employer provided plan, the medical and other welfare benefits
         described herein shall be secondary to those provided under such other
         plan during such applicable period of eligibility.

                  (iii) All benefits and amounts under the Company's deferred
         compensation plan, 401(k) Plan, retirement plans and all other benefit
         plans, including all stock options, restricted stock or other
         stock-based awards held by the Employee, not already vested shall be
         100% vested.

                  (iv)  To the extent not theretofore paid or provided, the
         Company shall timely pay or provide to the Employee any other amounts
         or benefits required to be paid or provided or which the Employee is
         eligible to receive under any plan, program, policy or practice or
         contract or agreement of the Company and its affiliated companies
         (collectively, the "Other Benefits").

                  (v)   The Company shall pay the reasonable moving and
         transportation costs and expenses to move the Employee and his family
         back to the United Kingdom.

                  (vi)  If the Employee's employment is terminated by reason of
         the Employee's death, then Other Benefits (as defined in this Section)
         shall also include, without limitation, and the Employee's estate
         and/or beneficiaries shall be entitled to receive, benefits at least
         equal to the most favorable benefits provided by the Company and
         affiliated companies to the estates and beneficiaries of the executive
         officers of the Company and such affiliated companies under such plans,
         programs, practices and policies relating to death benefits, if any, in
         effect on the date hereof or, if more favorable, those in effect on the
         date of the Employee's death.

                  (vii) If the Employee's employment is terminated by reason of
         the Employee's Disability, then Other Benefits (as defined in this
         Section) shall also include, without limitation, and the Employee shall
         be entitled after the Disability Effective Date to receive, disability
         and other


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         benefits at least equal to the most favorable benefits generally
         provided by the Company and its affiliated companies to the Employee's
         disabled executive officers and/or their families in accordance with
         such plans, programs, practices and policies relating to disability, if
         any, in effect generally on the date hereof or, if more favorable,
         those in effect at the time of the Disability.

            (b) Cause; Other Than for Good Reason. If the Employee's employment
is terminated for Cause during the Employment Period, this Agreement shall
terminate without further obligations to the Employee, other than the obligation
to pay to the Employee (x) his Annual Base Salary through the Date of
Termination, (y) the amount of any compensation previously deferred by the
Employee and (z) Other Benefits, in each case to the extent theretofore unpaid.

            (c) Termination by Employee. If the Employee voluntarily terminates
his employment during the Employment Period for any reason other than for Good
Reason, the Employee's employment shall terminate without further obligations to
the Employee, other than for payment of Accrued Obligations and Other Benefits
and the rights provided in Section 6. In such case, all Accrued Obligations
shall be paid to the Employee in a lump sum in cash within 30 days after the
Date of Termination subject to such other options or restrictions as provided
by law.

         6. Other Rights. Except as provided herein, nothing in this Agreement
shall prevent or limit the Employee's continuing or future participation in any
plan, program, policy or practice provided by the Company or any of its
affiliated companies and for which the Employee may qualify, nor shall anything
herein limit or otherwise affect such rights as the Employee may have under any
contract or agreement with the Company or any of its affiliated companies.
Except as provided hereinafter, amounts which are vested benefits, which vest
according to the terms of this Agreement or which the Employee is otherwise
entitled to receive under any plan, policy, practice or program of or any
contract or agreement with the Company or any of its affiliated companies at or
subsequent to the Date of Termination shall be payable in accordance with such
plan, policy, practice or program or contract or agreement. If the Employee has
any other employment or similar agreement with the Company at the Date of
Termination, the Employee agrees that he shall have the right to receive all of
the benefits provided under this Agreement or such other agreement, whichever
one, in its entirety, the Employee chooses, but not both agreements, and when
the Employee has made such election, the other agreement shall be superseded in
its entirety and shall be of no further force and effect. The Employee also
agrees that to the extent he may be eligible for any severance pay or similar
benefit under any laws providing for severance or termination benefits, such
other severance pay or similar benefit shall be coordinated with the benefits
owed hereunder, such that the Employee shall not receive duplicate benefits.

         7.  Full Settlement.

             (a) No Rights of Offset. The Company's obligation to make the
payments provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against the
Employee or others.

             (b) No Mitigation Required. In no event shall the Employee be
obligated to seek other employment or take any other action by way of mitigation
of the amounts payable to the Employee under any of the provisions of this
Agreement and such amounts shall not be reduced whether or not the Employee
obtains other employment.

             (c) Legal Fees. The Company agrees to pay as incurred, to the
full extent permitted by law, all legal fees and expenses which the Employee may
reasonably incur as a result of any contest


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(regardless  of the  outcome  thereof)  by the  Company or the  Employee  of the
validity  or  enforceability  of, or  liability  under,  any  provision  of this
Agreement or any guarantee of performance  thereto (including as a result of any
contest  by the  Employee  about the  amount  of any  payment  pursuant  to this
Agreement),  plus in each case interest on any delayed payment at the applicable
Federal rate provided for in Section  7872(f)(2)(A) of the Internal Revenue Code
of 1986, as amended (the "Code").

         8.  Certain Additional Payments by the Company.

             (a) Anything in this Agreement to the contrary notwithstanding
and except as set forth below, in the event it shall be determined that any
payment or distribution by the Company to or for the benefit of the Employee
(whether paid or payable or distributed or distributable pursuant to the terms
of this Agreement or otherwise, but determined without regard to any additional
payments required under this Section 8) (a "Payment") would be subject to the
excise tax imposed by Section 4999 of the Code or any interest or penalties are
incurred by the Employee with respect to such excise tax (such excise tax,
together with any such interest and penalties, are hereinafter collectively
referred to as the "Excise Tax"), then the Employee shall be entitled to receive
an additional payment (a "Gross-Up Payment") in an amount such that after
payment by the Employee of all taxes (including any interest or penalties
imposed with respect to such taxes), including without limitation, any income
taxes (and any interest and penalties imposed with respect thereto) and Excise
Tax imposed upon the Gross-Up Payment, the Employee retains an amount of the
Gross- Up Payment equal to the Excise Tax imposed upon the Payments.
Notwithstanding the foregoing provisions of this Section 8(a), if it shall be
determined that the Employee is entitled to a Gross-Up Payment, but that the
Employee, after taking into account the Payments and the Gross-Up Payment, would
not receive a net after-tax benefit of at least $1,000 (taking into account both
income taxes and any Excise Tax) as compared to the net after-tax proceeds to
the Employee resulting from an elimination of the Gross-Up Payment and a
reduction of the Payments, in the aggregate, to an amount (the "Reduced Amount")
such that the receipt of Payments would not give rise to any Excise Tax, then no
Gross-Up Payment shall be made to the Employee and the Payments, in the
aggregate, shall be reduced to the Reduced Amount.

             (b) Subject to the provisions of Section 8(c), all determinations
required to be made under this Section 8, including  whether and when a Gross-Up
Payment is required and the amount of such Gross-Up  Payment and the assumptions
to  be  utilized  in   arriving   at  such   determination   shall  be  made  by
PricewaterhouseCoopers  or, as  provided  below,  such  other  certified  public
accounting  firm as may be designated by the Employee  (the  "Accounting  Firm")
which shall provide detailed supporting calculations both to the Company and the
Employee  within 15 business  days after the receipt of notice from the Employee
that there has been a  Payment,  or such  earlier  time as is  requested  by the
Company.  In the event that the  Accounting  Firm is serving  as  accountant  or
auditor for the individual, entity or group effecting the Change of Control, the
Employee shall appoint another nationally recognized accounting firm to make the
determinations  required hereunder (which accounting firm shall then be referred
to as the Accounting  Firm  hereunder).  All fees and expenses of the Accounting
Firm shall be borne solely by the Company.  Any Gross-Up Payment,  as determined
pursuant to this Section 8, shall be paid by the Company to the Employee  within
five  days  after  the  receipt  of the  Accounting  Firm's  determination.  Any
determination  by the Accounting  Firm shall be binding upon the Company and the
Employee.  As a result of the  uncertainty in the application of Section 4999 of
the  Code at the  time  of the  initial  determination  by the  Accounting  Firm
hereunder,  it is possible that Gross-Up  Payments which will not have been made
by the  Company  should  have been made  ("Underpayment"),  consistent  with the
calculations  required  to be made  hereunder.  In the  event  that the  Company
exhausts its remedies  pursuant to Section 8(c) and the Employee  thereafter  is
required  to make a  payment  of any  Excise  Tax,  the  Accounting  Firm  shall
determine  the  amount  of the  Underpayment  that  has  occurred  and any  such
Underpayment  shall be promptly paid by the Company to or for the benefit of the
Employee.


                                       9

<PAGE>

             (c) The Employee shall notify the Company in writing of any
claim by the Internal Revenue Service (the "IRS") that, if successful, would
require the payment by the Company of the Gross-Up Payment (or an additional
Gross-Up Payment) in the event the IRS seeks higher payment. Such notification
shall be given as soon as practicable, but no later than ten business days after
the Employee is informed in writing of such claim, and shall apprise the Company
of the nature of such claim and the date on which such claim is requested to be
paid. The Employee shall not pay such claim prior to the expiration of the
30-day period following the date on which he gives such notice to the Company
(or such shorter period ending on the date that any payment of taxes with
respect to such claim is due). If the Company notifies the Employee in writing
prior to the expiration of such period that it desires to contest such claim,
the Employee shall:

                 (i)   give the Company any information reasonably requested by
         the Company relating to such claim,

                 (ii)  take such action in connection with contesting such claim
         as the Company shall reasonably request in writing from time to time,
         including without limitation, accepting legal representation with
         respect to such claim by an attorney reasonably selected by the
         Company,

                 (iii) cooperate with the Company in good faith in order to
         effectively contest such claim, and

                 (iv) permit the Company to participate in any proceedings
         relating to such claims; provided, however, that the Company shall bear
         and pay directly all costs and expenses (including additional interest
         and penalties) incurred in connection with such costs and shall
         indemnify and hold the Employee harmless, on an after-tax basis, for
         any Excise Tax or income tax (including interest and penalties with
         respect thereto) imposed as a result of such representation and payment
         of costs and expenses. Without limitation on the foregoing provisions
         of this Section 8(c), the Company shall control all proceedings taken
         in connection with such contest and, at its sole option, may pursue or
         forego any and all administrative appeals, proceedings, hearings and
         conferences with the taxing authority in respect of such claim and may,
         at its sole option, either direct the Employee to pay the tax claimed
         and sue for a refund or contest the claim in any permissible manner,
         and the Employee agrees to prosecute such contest to determination
         before any administrative tribunal, in a court of initial jurisdiction
         and in one or more appellate courts, as the Company shall determine;
         provided, however, that if the Company directs the Employee to pay such
         claim and sue for a refund, the Company shall advance the amount of
         such payment to the Employee, on an interest-free basis and shall
         indemnify and hold the Employee harmless, on an after-tax basis, from
         any Excise Tax or income tax (including interest or penalties with
         respect thereto) imposed with respect to such advance or with respect
         to any imputed income with respect to such advance; and further
         provided that any extension of the statute of limitations relating to
         payment of taxes for the taxable year of the Employee with respect to
         which such contested amount is claimed to be due is limited solely to
         such contested amount. Furthermore, the Company's control of the
         contest shall be limited to issues with respect to which a Gross-Up
         Payment would be payable hereunder and the Employee shall be entitled
         to settle or contest, as the case may be, any other issues raised by
         the IRS or any other taxing authority.

         (d) If, after the receipt by the Employee of an amount advanced by the
Company pursuant to Section 8(c), the Employee becomes entitled to receive any
refund with respect to such claim, the Employee shall (subject to the Company's
complying with the requirements of Section 8(c)) promptly pay to the Company the
amount of such refund (together with any interest paid or credited thereon after
taxes applicable thereto). If, after the receipt by the Employee of an amount
advanced by the Company pursuant to Section 8(c), a determination is made that
the Employee shall not be entitled to any refund with respect


                                       10

<PAGE>

to such claim and the Company does not notify the Employee in writing of its
intent to contest such denial of refund prior to the expiration of 30 days after
such determination, then such advance shall be forgiven and shall not be
required to be repaid and the amount of such advance shall offset, to the extent
thereof, the amount of Gross-Up Payment required to be paid.

         9. Confidential Information. The Employee shall hold in a fiduciary
capacity for the benefit of the Company all secret or confidential information,
knowledge or data relating to the Company or any of its affiliated companies,
and their respective businesses, which shall have been obtained by the Employee
during the Employee's employment by the Company or any of its affiliated
companies, provided that it shall not apply to information which is or shall
become public knowledge (other than by acts by the Employee or representatives
of the Employee in violation of this Agreement), information that is developed
by the Employee independently of such information, or knowledge or data or
information that is disclosed to the Employee by a third party under no
obligation of confidentiality to the Company. After termination of the
Employee's employment with the Company, the Employee shall not, without the
prior written consent of the Company or as may otherwise be required by law or
legal process, communicate or divulge any such information, knowledge or data to
anyone other than the Company and those designated by it. In no event shall an
asserted violation of the provision of this Section 9 constitute a basis for
deferring or withholding any amounts otherwise payable to the Employee under
this Agreement.

         10. Successors.

             (a) This Agreement is personal to the Employee and shall not
be assignable by the Employee otherwise than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be enforceable by
the Employee's legal representatives.

             (b) This Agreement shall inure to the benefit of and be binding
upon the Company and its successors and assigns.

             (c) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation, amalgamation, operation of law or
otherwise (including any purchase, merger, amalgamation or other transaction
involving the Company), and including any entity resulting from a Corporate
Transaction) to all or substantially all of the business and/or assets of the
Company to expressly assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform it
if no such succession had taken place. As used in this Agreement, "Company"
shall mean the Company as hereinbefore defined and any successor to its business
and/or assets as aforesaid.

         11.  Miscellaneous.

              (a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT REFERENCE TO PRINCIPLES
OF CONFLICT OF LAWS. The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect. This Agreement may not be
amended or modified otherwise than
by a written agreement executed by the parties hereto or their respective
successors and legal representatives.

                  (b) All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:


                                       11

<PAGE>

              If to the Employee:     Stuart E. Ferguson
                                      515 Post Oak Blvd., Suite 600
                                      Houston, Texas 77027

              If to the Company:      Weatherford International Ltd.
                                      515 Post Oak Blvd., Suite 600
                                      Houston, Texas 77027
                                      Attention: General Counsel

or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notices and communications shall be effective
when actually received by the addressee.

                  (c) The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.

                  (d) The Company may withhold from any amounts payable under
this Agreement such Federal, state, local or foreign taxes as shall be required
to be withheld pursuant to any applicable law or regulation.

                  (e) The Employee's or the Company's failure to insist upon
strict compliance with any provision of this Agreement or the failure to assert
any right to the Employee or the Company may have hereunder, including without
limitation, the right of the Employee to terminate employment for Good Reason
shall not be deemed to be a waiver of such provision or right or any other
provision or right of this Agreement.

                  (f) This Agreement constitutes the entire agreement and
understanding between the parties relating to the subject matter hereof and
supersedes all prior agreements between the parties relating to the subject
matter hereof, including, without limitation, the Prior Agreement.


                                       12

<PAGE>

         IN WITNESS WHEREOF, the Employee has hereunto set the Employee's hand
and, pursuant to the authorization from its Board of Directors, the Company has
caused these presents to be executed in its name and on its behalf, all as of
the day and year first above written.



                                             /s/ Stuart E. Ferguson
                                       ---------------------------------------
                                               Stuart E. Ferguson


                                       WEATHERFORD INTERNATIONAL LTD.



                                       By: /s/ Burt M. Martin
                                           ------------------------------------
                                                    Burt M. Martin
                                       Senior Vice President & General Counsel


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