Document:

<PAGE>
                                                                   Exhibit 10.34

** CERTAIN CONFIDENTIAL MATERIAL CONTAINED IN THIS DOCUMENT HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO 17
C.F.R., SUBSECTION 200.80 (B)(4), 200.83 AND 240.24 B-2. **

                                    AGREEMENT

This agreement (the "Agreement") is entered into as of the last date on the
signature page hereof (the "Effective Date") by and among Schering Corporation,
having offices at 2000 Galloping Hill Road, Kenilworth, New Jersey 07033 U.S.A.
and Schering-Plough Ltd., having offices at Toepferstrasse 5, CH6004 Lucerne,
Switzerland (hereinafter collectively referred to as "Schering"), and ICN
Pharmaceuticals, Inc., having offices at ICN Plaza, 3300 Hyland Avenue, Costa
Mesa, California 92626 (hereinafter "ICN") and RibaPharm Inc., having offices at
3300 Hyland Avenue, Costa Mesa, California 92626 (hereinafter "RibaPharm"). (ICN
and RibaPharm are individually and collectively referred to herein as "ICN-RP".)
All references in this Agreement to ICN, RibaPharm and/or ICN-RP shall include
all of their respective Affiliates (as defined below).

                             ARTICLE 1 - DEFINITIONS

The following capitalized terms as used in this Agreement, whether in the
singular or plural, shall have the meanings set forth below:

1.1   "Affiliate" shall mean any individual or entity directly or indirectly
      controlling, controlled by or under common control with, a party to this
      Agreement. For purposes of this Agreement, the direct or indirect
      ownership of fifty percent (50%) or more of the outstanding voting
      securities of an entity, or the right to receive fifty percent (50%) or
      more of the profits or earnings of an entity shall be deemed to constitute
      control. Such other relationship as in fact results in actual control over
      the management, business and affairs of an entity shall also be deemed to
      constitute control. In the case of ICN-RP, Affiliates shall also include,
      without limitation, all subsidiaries, affiliates, joint ventures,
      partnerships, as well as the successors and assigns of any of the
      foregoing, as well as any third party (including but not limited to
      contractors or collaborators) to which ICN-RP is providing ICN-RP Know-How
      and/or funding for use in research and development programs in the Field
      and/or the Option Field.

1.2   "Combination Product" shall mean a single Product which contains two (2)
      or more active ingredients at least one (1) of which is a Compound.

1.3   "Compound" shall mean any and all compounds having potential utility in
      the Field or the Option Field which are discovered or developed by or on
      behalf of ICN-RP or their respective Affiliates (including, without
      limitation, therapeutic proteins, antibodies and small molecules), but
      excluding Ribavirin which is the subject of the 1995 Agreement between ICN
      and Schering-Plough Ltd.

1.4   "Derivative" shall mean, with respect to a compound having potential
      utility in the Field or the Option Field which is discovered or developed
      by or on behalf of ICN-RP or their respective Affiliates, (i) any and all
      structurally related compounds having potential utility in the Field or
      the Option Field which are owned or controlled by ICN-RP or their
      respective Affiliates and which are derived by [REDACTED], and (ii) all
      [REDACTED] of such compound or structurally related compounds.
<PAGE>

1.5   "Field" shall mean the treatment or prevention of hepatitis C in humans or
      animals, including, without limitation, through the use of gene therapy,
      gene therapy vaccines, therapeutic proteins or other drug substances;
      provided, however that the compounds Levovirin and Viramidine are excluded
      from the Field.

1.6   "ICN-RP Know-How" shall mean any and all of ICN-RP's or their respective
      Affiliates' information and materials, relating to the research,
      development, registration, manufacture, marketing, use or sale of any
      Compound and/or Product, and which prior to or during the term of this
      Agreement are (i) developed by or on behalf of ICN-RP or their respective
      Affiliates, or (ii) in ICN-RP's or their respective Affiliates' possession
      or control through license or otherwise (provided that ICN-RP is permitted
      to make disclosure thereof to Schering without violating the terms of any
      third party agreement), and which are not generally known.

1.7   "License Patent Rights" shall mean any and all Patent Rights relating to
      Compounds, Derivatives and/or Products which are subject to an exclusive
      license granted to Schering and/or its Affiliates pursuant to Article 2 of
      this Agreement.

1.8   "Net Sales" shall mean with respect to each country in the Territory, the
      amounts actually received by Schering or its Affiliates, or their
      respective sublicensees, from third parties (whether an end-user, a
      distributor or otherwise) for the sale of Compounds and/or Products, and
      exclusive of intercompany transfers or sales among Schering, its
      Affiliates and/or sublicensees in the Territory, less the reasonable and
      customary deductions from such gross amounts including:

      (i)   normal and customary trade, cash and quantity
            discounts, allowances and credits;

      (ii)  credits or allowances actually granted for damaged
            goods, returns or rejections of Product and
            retroactive price reductions;

      (iii) sales or similar taxes (including duties or other governmental
            charges levied on, absorbed or otherwise imposed on the sale of
            Product including, without limitation, value added taxes or other
            governmental charges otherwise measured by the billing amount, when
            included in billing);

                                       2
<PAGE>

      (iv)  freight, postage, shipping, customs duties and
            insurance charges, when included in billing;

      (v)   charge back payments and rebates granted to managed health care
            organizations or their agencies, and purchasers and reimbursers or
            to trade customers, including but not limited to, wholesalers and
            chain and pharmacy buying groups;

      (vi)  commissions paid to third parties other than sales
            personnel and sale representatives or sales agents;
            and

      (vii) rebates (or equivalents thereof) granted to or charged by national,
            state or local governmental authorities in a country in the
            Territory.

      In the event that a Product is sold in the form of a Combination Product,
      Net Sales for such Combination Product will be calculated by [REDACTED].

1.9   "Option Field" shall mean the treatment or prevention of viral, fungal or
      bacterial infectious diseases or cancer, or other oncology indications, in
      humans or animals, outside of the Field, including, without limitation,
      through the use of gene therapy, gene therapy vaccines, therapeutic
      proteins or other drug substances. The compounds Levovirin and Viramidine
      are specifically included in the Option Field.

1.10  "Patent Rights" shall mean any and all patent applications and/or patents
      in the Territory which are owned or controlled by ICN-RP and/or their
      respective Affiliates, including any and all substitutions, divisions,
      continuations, continuations-in-part, reissues, renewals, registrations,
      confirmations, re-examinations, extensions, supplementary protection
      certificates or any like filing thereof, and provisional applications of
      any such patents and patent applications and any international equivalent
      of any of the foregoing.

1.11  "Product" shall mean any form or dosage of pharmaceutical composition or
      preparation in final form for sale by prescription, over-the-counter or
      any other method, which is owned or controlled by ICN-RP and/or their
      respective Affiliates and which contains as an active ingredient one or
      more Compounds or Derivatives thereof.

1.12  "Territory" shall mean all of the countries and territories in the world.

                           ARTICLE 2 - GRANT OF RIGHTS

2.1   ICN-RP hereby grants to Schering an exclusive option to obtain an
      exclusive (even as to ICN-RP), worldwide license to use the ICN-RP
      Know-How and under the Patent Rights to make, have made, import, export,
      use, offer for sale and sell Compounds and/or Products in the Field in the
      Territory on and subject to the terms of this Agreement. Any such license
      shall include the right to grant sublicenses and shall include the rights
      to all Derivatives of the licensed Compounds. Schering's exclusive option
      rights under this Section 2.1 shall remain in full force and effect until
      such time as Schering has agreed to acquire exclusive licenses to three
      (3) Compounds/Products in the Field under this Agreement, whereupon such
      option rights shall be exhausted. Effective upon the

                                       3
<PAGE>

      exhaustion of Schering's option rights, ICN-RP shall have no further
      obligations under Article 2 or Section 3.1 with respect to Compounds
      and/or Products in the Field. Furthermore, upon the exercise of each such
      option right, ICN-RP's obligations under Sections 3.6 and 3.7 shall be
      transferred to and assumed by Schering in accordance with the terms of
      Sections 3.6 and 3.8.

2.2   The option rights granted to Schering under Section 2.1 with respect to
      any given Compound and/or Product shall be exercisable, in its sole
      discretion, at any time prior to the start of Phase II clinical studies
      for the Compound and/or Product [REDACTED] by providing written notice to
      ICN-RP. ICN-RP shall notify Schering in writing at least [REDACTED] days
      prior to the start of Phase II studies with respect to each Compound
      and/or Product being developed by ICN-RP and/or their respective
      Affiliates in the Field. Promptly after such notice, ICN-RP and/or their
      respective Affiliates (as applicable) shall provide Schering copies of
      and/or direct access to all preclinical and clinical data with respect to
      the Compound and/or Product, and all other information and data in
      ICN-RP's or their respective Affiliates' possession or control relating to
      the Compound and/or Product, including but not limited to all information
      relating to the safety and efficacy of the Compound and/or Product. ICN-RP
      shall cooperate fully with Schering during its due diligence review of
      such data by providing Schering in a timely manner with all information
      necessary to conduct a thorough scientific and commercial evaluation of
      the Compound and/or Product. Following receipt of all information
      reasonably necessary to complete its due diligence review, Schering shall
      have a period of [REDACTED] days in which to notify ICN that it intends to
      exercise its option rights with respect to the Compound and/or Product. In
      the event that ICN-RP fails to provide such information to Schering,
      Schering will notify ICN-RP of any information that has not been provided
      and ICN-RP shall have [REDACTED] days to provide such information;
      provided that Schering's [REDACTED] day due diligence period shall be
      tolled until the later of (i) the expiration of that [REDACTED] day period
      or (ii) the date on which ICN-RP has provided to Schering all such
      information requested by Schering. In the event that Schering does not
      notify ICN-RP that it intends to exercise its option, then Schering's
      option with respect to such Compound and/or Product shall expire upon the
      expiration of the [REDACTED] day period and ICN-RP shall thereafter be
      entitled to develop and commercialize the Compound and/or Product itself
      or to license the Compound and/or Product to a third party.

2.3   Effective upon written notice by Schering to ICN-RP that it is exercising
      its option under Section 2.1 with respect to a given Compound and/or
      Product, ICN-RP shall grant to Schering and/or its designated Affiliate(s)
      an exclusive (even as to ICN-RP), worldwide license to use the ICN-RP
      Know-How and under the Patent Rights to make, have made, import, export,
      use, offer for sale and sell the Compound, Derivatives and/or Products in
      the Territory.

2.4   In the event that any time after exercising its option on any Compound
      and/or Product, Schering decides to grant a sublicense to, or to enter
      into a co-marketing agreement with, a third party (other than a Schering
      Affiliate) in one or more countries in the Territory with respect to the
      Compound and/or Product, ICN-RP shall have the right of first refusal to
      sub-license and/or co-market the Compound and/or Product in such
      country(ies) on

                                       4
<PAGE>

      commercially reasonable terms; provided that ICN-RP has in place an
      existing sales force and marketing organization which is determined by
      Schering, in its reasonable discretion, to be of sufficient size, training
      and experience to enable ICN-RP to fulfill the obligations of the proposed
      sublicense or co-marketing agreement in such country(ies). Following such
      notice, ICN-RP shall have a period of [REDACTED] days in which to notify
      Schering of its intent to exercise its right of first refusal. If ICN-RP
      exercises its right of first refusal, the parties shall in good faith
      negotiate and enter into a mutually acceptable license or co-marketing
      agreement, as applicable. If ICN-RP does not exercise its right of first
      refusal within such [REDACTED] day period, then Schering shall be free to
      enter into such an agreement with a third party. If the parties are unable
      to reach agreement on the commercial terms for the license or co-marketing
      agreement within [REDACTED] days of ICN-RP exercising its right of first
      refusal, then Schering shall be free to negotiate and enter into an
      agreement with any third party on substantially similar terms to those
      offered to ICN-RP.

2.5   Nothing in this Agreement, or any license agreements or other agreements
      to be entered into by the parties pursuant to this Agreement, shall be
      construed as conveying to ICN-RP, expressly, by implication, estoppel or
      otherwise, any license or other right or interest in or to any
      information, data, know-how, materials, patent applications, patents or
      other forms of intellectual property owned or controlled by Schering
      and/or its Affiliates.

                              ARTICLE 3 - DILIGENCE

3.1   During the term of this Agreement, ICN-RP shall use commercially
      reasonable efforts, in the exercise of its good faith business judgment,
      to conduct research and development to discover and develop Compounds
      and/or Products in the Field. Such efforts shall be comparable to the
      efforts expended by ICN-RP in the discovery and development of
      pharmaceutical products in other fields in their internal research and
      development programs.

3.2   ICN-RP and their respective Affiliates shall maintain complete and
      accurate records of its research and development activities in the Field
      and the Option Field. ICN-RP shall send to Schering (at the address and to
      the individuals indicated in Section 10.1) reasonably detailed written
      [REDACTED]reports of all research and development activities in the Field
      and the Option Field. Such reports shall be provided to Schering under a
      mutually agreed upon confidentiality agreement (attached hereto as Exhibit
      A). Each such report shall contain sufficient data and information to
      enable Schering to understand in all material respects the nature, scope
      and status of all research projects and other research and development
      activities being performed by ICN-RP and/or their respective Affiliates in
      the Field and the Option Field (including, without limitation, any
      Compounds and/or Products discovered and/or developed by ICN-RP in the
      Field).

3.3   Promptly after the exercise of its option rights with respect to a given
      Compound and/or Product in the Field, Schering shall assume sole
      responsibility, at its expense, for all aspects of the development and
      commercialization of such Compound and/or Product. ICN-RP and their
      respective Affiliates shall transfer to Schering, under mutually agreed
      upon confidentiality provisions, all ICN-RP Know-How related to such
      Compound

                                       5
<PAGE>

      and/or Product. Schering shall thereafter use commercially reasonable
      efforts, in the exercise of its good faith business judgment, to develop
      and commercialize the Compound and/or Product, such efforts to be
      comparable to those expended by Schering in the development and
      commercialization of its own products that have similar commercial value,
      status and potential to the Compound and/or Product. All business
      decisions relating to the development and commercialization of the
      Compound and/or Product, including, without limitation, decisions relating
      to the manufacture, sale, design, price, distribution, marketing and
      promotion of the Compound and/or Product, shall be within the sole
      discretion of Schering. Schering shall promptly notify ICN-RP of any
      abandonment of or decision by Schering to abandon or otherwise cease to
      actively pursue such efforts with respect to a Compound and/or Product. In
      any such event, all rights licensed to Schering hereunder with respect to
      such Compound and/or Product shall terminate and revert to ICN-RP;
      provided that nothing herein shall be construed as obligating Schering to
      license, transfer, assign or otherwise convey to ICN-RP any rights, title
      or interest in or to any of Schering's or its Affiliates data,
      information, know-how, trademarks, patents, copyrights or other
      intellectual property or assets in the Field.

3.4   Schering shall be solely responsible, at its expense, for obtaining and
      maintaining regulatory approval to market and sell those Compounds and/or
      Products which are exclusively licensed to Schering pursuant to this
      Agreement. All such regulatory approvals shall be in Schering's or its
      Affiliate's name and Schering shall be solely responsible for all
      communications and meetings with regulatory authorities in the Territory
      with respect thereto. Except as may be specifically requested by Schering,
      in its sole discretion, ICN-RP shall not have any right to participate in
      any such communications and/or meetings with regulatory authorities.

3.5   The obligations of Schering under Sections 3.3 and 3.4 with respect to a
      Compound and/or Product are expressly conditioned upon the continuing
      absence of any significant adverse condition or event which warrants, in
      Schering's reasonable discretion, a delay in the development or
      commercialization of the Compound and/or Product, including, but not
      limited to, an adverse condition or event relating to safety or efficacy,
      or unfavorable pricing, pricing reimbursement, labeling or lack of
      regulatory approval. The obligation of Schering to develop or
      commercialize any such Compound and/or Product shall be delayed or
      suspended so long as (i) in Schering's opinion any such condition or event
      exists, and (ii) such delay or suspension is consistent with the usual
      practice followed by Schering in pursuing the development and
      commercialization of its other pharmaceutical products of similar
      potential value and status.

3.6   ICN-RP shall be primarily responsible, at their expense, for the filing,
      maintenance, prosecution and defense of the Patent Rights in the
      Territory. ICN-RP shall at all times use diligent efforts to fulfill its
      responsibility with respect to the Patent Rights in all countries in the
      Territory. ICN-RP shall consult with Schering with respect to the filing,
      maintenance, prosecution and defense of any and all Patent Rights relating
      to Compounds, Derivatives and/or Products which are subject to the option
      rights, and rights of first and last refusal, granted to Schering or its
      Affiliates under Articles 2 and 5 of this Agreement, and will use its best
      efforts to obtain, maintain and defend such Patent Rights in the U.S.,
      Canada, Mexico, Europe, Japan, China and Australia. ICN-RP shall give
      written notice to Schering of any desire

                                       6
<PAGE>

      to cease prosecution and/or maintenance of any of the Patent Rights and,
      in such case, shall permit Schering, at Schering's sole discretion, to
      continue prosecution or maintenance at its own expense. If Schering elects
      to continue prosecution or maintenance, ICN-RP, as applicable, shall
      execute such documents and perform such acts, at Schering's expense, as
      may be reasonably necessary to effect an assignment of such Patent Rights
      to Schering. Any such assignment shall be completed in a timely manner to
      allow Schering to continue such prosecution or maintenance. In addition,
      with respect to each Compound and/or Product licensed to Schering pursuant
      to Article 2 and effective as of the date on which Schering exercises its
      option rights in accordance with Section 2.1 with respect thereto,
      Schering shall assume all of ICN-RP's obligations under this Section 3.6
      with regard to any and all Licensed Patent Rights relating to the
      Compounds, Derivatives and/or Products licensed to Schering pursuant to
      Article 2. At such time, ICN-RP shall promptly transfer and assign such
      Licensed Patent Rights to Schering, shall execute and/or cause to be
      executed all documents necessary to perfect Schering's interests therein,
      and thereafter shall, upon request and at Schering's expense, reasonably
      cooperate with Schering to enable Schering to file, prosecute, maintain
      and defend such Licensed Patent Rights.

3.7   In the event that either party becomes aware of any alleged or threatened
      infringement in the Territory of any issued patent within the Patent
      Rights, it will notify the other party in writing to that effect. ICN-RP,
      as applicable, shall be responsible, at its expense, for obtaining a
      discontinuance of such infringement or bringing suit against the third
      party infringer. Schering shall have the right, prior to commencement of
      the trial, suit or action brought by ICN-RP, to join any such suit or
      action, and in such event shall pay one-half of the costs of such suit or
      action. In the event that Schering has joined in the action and shared in
      the costs thereof as set forth above, no settlement, consent judgment or
      other voluntary final disposition of the suit may be entered into without
      the prior consent of Schering. In the event that Schering has not joined
      the suit or action, Schering will reasonably cooperate with ICN-RP in any
      such suit or action and shall have the right to consult with ICN-RP and be
      represented by its own counsel at its own expense; provided that ICN-RP
      shall periodically reimburse Schering for its out-of-pocket costs
      (excluding the costs of retaining its own outside counsel) incurred in
      cooperating with ICN-RP. Any recovery or damages derived from a suit which
      Schering has joined and shared costs shall be used first to reimburse each
      of ICN-RP and Schering for its documented out-of-pocket legal expenses
      relating to the suit, with any remaining amounts to be shared equally by
      the parties. Any recovery or damages derived from a suit which Schering
      has not joined shall be retained by ICN-RP.

3.8   With respect to each Compound and/or Product licensed to Schering pursuant
      to Article 2 and effective as of the date on which Schering exercises its
      option rights in accordance with Section 2.1 with respect thereto, ICN-RP
      shall transfer to Schering and Schering shall assume all of ICN-RP's
      obligations under Section 3.7 with regard to enforcement of any and all
      Licensed Patent Rights relating to the Compounds, Derivatives and/or
      Products licensed to Schering pursuant to Article 2, including with
      respect to any then ongoing litigation or other actions. ICN-RP shall
      thereafter have no right to initiate, control, defend, settle or otherwise
      participate in any suit or other action relating to the infringement,
      validity, enforceability or defense of any such Licensed Patent Rights, or
      any recovery or damages derived therefrom. ICN-RP shall promptly transfer
      and assign such rights to Schering, shall execute and/or cause to be
      executed all documents

                                       7
<PAGE>

      necessary to perfect Schering's interests therein, and thereafter shall,
      upon request and at Schering's expense, reasonably cooperate with Schering
      to enable Schering to enforce and defend such Licensed Patent Rights.

3.9   Any license agreement with respect to Compounds and/or Products in the
      Option Field which is entered into by the parties pursuant to Article 5 of
      this Agreement shall include provisions obligating ICN to transfer to
      Schering, and obligating Schering to assume, all of ICN-RP's obligations
      under Sections 3.6 and 3.7 of this Agreement with regard to filing,
      prosecution, maintenance, defense or enforcement of any and all Patent
      Rights relating to such licensed Compounds and/or Products.

                            ARTICLE 4 - CONSIDERATION

4.1   The parties acknowledge and agree that Schering shall not incur any
      royalties, license fees, milestone payments or reimbursement obligations
      to ICN-RP or their respective Affiliates in connection with the rights
      granted to Schering hereunder or under any exclusive licenses granted
      pursuant to Article 2 except for those expressly set forth herein.
      Schering's sole financial obligation with respect thereto will be the
      payment of the earned royalty on Net Sales of each Compound and/or Product
      exclusively licensed to Schering pursuant to this Article 2 of this
      Agreement and, as applicable, the milestone payments described below. Such
      royalties and milestone payments shall be payable on Schering's and its
      Affiliates' worldwide annual Net Sales of the Compound and/or Product as
      follows:

      As to the [REDACTED] exclusively licensed pursuant to Article 2:

      (i)   [REDACTED] of worldwide annual Net Sales up to [REDACTED]; and

      (ii)  [REDACTED] of worldwide annual Net Sales in excess of [REDACTED], up
            to [REDACTED]; and

      (iii) [REDACTED] of worldwide annual Net Sales in excess of [REDACTED].

      As to the [REDACTED] exclusively licensed pursuant to Article 2:

      (ii)  [REDACTED] of worldwide annual Net Sales up to [REDACTED]; and

      (iii) [REDACTED] of worldwide annual Net Sales in excess of [REDACTED], up
            to [REDACTED]; and

      (iv)  [REDACTED] of worldwide annual Net Sales in excess of [REDACTED].

      As to the [REDACTED] exclusively licensed pursuant to Article 2:

      (i)   [REDACTED] of worldwide annual Net Sales up to [REDACTED]; and

                                       8
<PAGE>

      (ii)  [REDACTED] of worldwide annual Net Sales in excess of [REDACTED], up
            to [REDACTED]; and

      (iii) [REDACTED] of worldwide annual Net Sales in excess of [REDACTED];
            and

      (iv)  milestone payments (including, if applicable, up-front payments) in
            an amount equal to [REDACTED].

      With respect to each country in the Territory, upon the expiration of the
      last to expire of the Patent Rights in such country incorporating a Valid
      Claim which covers the Compound and/or Product, Schering's royalty
      obligation to ICN-RP under this Section 4.1 with respect to sales of the
      Compound and/or Product in such country shall be reduced by [REDACTED].
      For purposes of this Agreement, the term "Valid Claim" shall mean a
      composition-of-matter or method-of-use claim of an issued and unexpired
      patent included within the Patent Rights, which has not been revoked or
      held unenforceable or invalid by a decision of a court or other
      governmental agency of competent jurisdiction, unappealable or unappealed
      within the time allowed for appeal, and which has not been disclaimed,
      denied or admitted to be invalid or unenforceable through reissue,
      disclaimer or estoppel.

      In addition, all of Schering's royalty obligations under this Article 4
      shall expire with respect to a given Compound and/or Product in any
      country in the Territory at such time as a product containing the same
      active ingredient as the Compound and/or Product being marketed by
      Schering hereunder is being sold by any third party in such country.

4.2   Royalties shall be paid quarterly within [REDACTED] days after the close
      of each calendar quarter. Concurrently with such payments, Schering shall
      provide ICN-RP, as applicable, with a written report for the calendar
      quarter showing the Net Sales of Product(s) and/or Compound(s) sold by
      Schering, its Affiliates and its sublicensees in the Territory during such
      calendar quarter and the royalties payable for such calendar quarter All
      royalty payments shall be paid in U.S. dollars (to the extent that free
      conversions to United States dollars is permitted) by bank wire transfer
      in immediately available funds to an account designated by ICN-RP.
      Royalties shall be deemed payable by the entity making the Net Sales from
      the country in which earned in local currency and subject to foreign
      exchange regulations then prevailing. The rate of exchange to be used in
      any such conversion from the currency in the country where such Net Sales
      are made shall be the rate of exchange used by Schering Corporation for
      reporting such sales for United States financial statement purposes. If,
      due to restrictions or prohibitions imposed by national or international
      authority, payments cannot be made as aforesaid, the parties shall consult
      with a view to finding a prompt and acceptable solution, and Schering will
      deal with such monies as ICN-RP may lawfully direct at no additional
      out-of-pocket expense to Schering. Notwithstanding the foregoing, if
      royalties in any country cannot be remitted to ICN-RP for any reason
      within [REDACTED] months after the end of the calendar quarter during
      which they are earned, then Schering shall be obligated to deposit the
      royalties in a bank account in such country in the name of ICN-RP, as
      applicable.

                                       9
<PAGE>

4.3   Schering and its Affiliates shall keep complete and accurate records in
      sufficient detail to enable the royalties payable hereunder to be
      determined. Upon [REDACTED] days prior written notice from ICN-RP,
      Schering shall permit an independent certified public accounting firm of
      nationally recognized standing selected by ICN-RP, at ICN-RP's expense, to
      have access during normal business hours to examine pertinent books and
      records of Schering and/or its Affiliates as may be reasonably necessary
      to verify the accuracy of the royalty reports hereunder. The examination
      shall be limited to pertinent books and records for any year ending not
      more than [REDACTED] months prior to the date of such request. An
      examination under this Section 4.3 shall not occur more than [REDACTED] in
      any calendar year. Schering may designate competitively sensitive
      information, which such auditor may not disclose to ICN-RP; provided,
      however, that such designation shall not encompass the auditor's
      conclusions. The accounting firm shall disclose to ICN-RP only whether the
      royalty reports are correct or incorrect and the specific details
      concerning any discrepancies. No other information shall be provided to
      ICN-RP. All such accounting firms shall sign a confidentiality agreement
      (in form and substance reasonably acceptable to Schering) as to any of
      Schering's or its Affiliates' confidential information which they are
      provided, or to which they have access, while conducting any audit
      pursuant to this Section 4.3.

4.4   Schering shall include in each sublicense granted by it pursuant to this
      Agreement a provision requiring the sublicensee to make reports to
      Schering, to keep and maintain records of sales made pursuant to such
      sublicense and to grant access to such records by ICN-RP's independent
      accountant to the same extent required of Schering under this Agreement.

4.5   Upon the expiration of [REDACTED] months following the end of any calendar
      year, the calculation of royalties payable under this Agreement with
      respect to such year shall be binding and conclusive upon the parties, and
      Schering, its Affiliates and its sublicensees shall be released from any
      liability or accountability with respect to royalties for such calendar
      year; provided that expiration of such [REDACTED] month period shall not
      affect any claim which is already in dispute between the parties with
      respect to royalties during such calendar year.

4.6   If at any time, any jurisdiction within the Territory requires the
      withholding of income taxes or other taxes imposed upon payments set forth
      in this Article 4, Schering shall make such withholding payments as
      required and subtract such withholding payments from the payments set
      forth in this Article 4, or if applicable, ICN-RP will promptly reimburse
      Schering or its designee(s) of the amount of such payments. Schering shall
      provide ICN-RP, as applicable, with documentation of such withholding and
      payment in a manner that is satisfactory for purposes of the U.S. Internal
      Revenue Service. Any withholdings paid when due hereunder shall be for the
      account of ICN-RP, as applicable, and shall not be included in the
      calculation of Net Sales. Payments of withholding taxes made by Schering
      pursuant to this Section 4.6 will be made based upon financial information
      to be provided to Schering by ICN-RP and, to the extent that such
      information is incorrect or incomplete, ICN-RP shall be liable for any
      fine, assessment or penalty, or any deficiency, imposed by any taxing
      authority in the Territory for any deficiency in the amount of any such
      withholding or the failure to make such withholding

                                       10
<PAGE>

      payment. If Schering is required to pay any such deficiency, or any such
      fine, assessment or penalty for any such deficiency, ICN-RP shall promptly
      reimburse Schering for such payments, which shall not be included in the
      calculation of Net Sales.

                   ARTICLE 5 - RIGHT OF FIRST AND LAST REFUSAL

5.1   In addition to the rights granted to Schering in Article 2, ICN-RP hereby
      grants to Schering the right of first refusal to obtain an exclusive (even
      as to ICN-RP), worldwide license and/or other worldwide rights to use the
      ICN-RP Know-How and under the Patent Rights to Compounds and/or Products
      in the Option Field in the Territory as and to the extent provided in this
      Article 5. If at any time during the term of this Agreement (i) Schering
      wishes to license from ICN-RP a Compound/Product in the Option Field as
      described in the semi-annual report referred to as Section 3.2 herein; or
      (ii) ICN-RP intends to offer a license of any kind or to assign, transfer
      or otherwise convey any other rights (e.g., distributorship, co-marketing,
      co-promotion, etc.) to a Compound and/or Product in the Option Field in
      any or all countries in the Territory worldwide, each party shall notify
      the other in writing to that effect. Where ICN-RP notifies Schering of its
      intent to offer a license or other rights to a Compound/Product, ICN-RP
      shall provide Schering a detailed summary of all information with regard
      to preclinical and clinical development of the Compound and/or Product,
      including but not limited to all information relating to the safety and
      efficacy of the Compound and/or Product. Similarly, where Schering
      notifies ICN-RP in writing of its intent to exclusively license worldwide
      or obtain other worldwide rights to use the ICN-RP Know-How and under
      Patent Rights to Compounds/Products in the Option Field, ICN-RP shall
      provide Schering a detailed summary of all information with regard to
      preclinical and clinical development of the Compound and/or Product,
      including but not limited to all information relating to the safety and
      efficacy of the Compound and/or Product. In either instance, Schering
      shall have a period of the [REDACTED] days (the "Evaluation Period") in
      which to evaluate such information and to notify ICN-RP of its intent to
      exercise its right of first refusal by providing written notice to that
      effect. During the Evaluation Period, ICN-RP shall upon request and at
      Schering's expense, provide Schering with reasonable access, in a timely
      manner (i.e., within [REDACTED] days of such written notice) to all other
      information and data in its or its Affiliates' possession or control
      relating to the Compound and/or Product to enable Schering to complete a
      due diligence review of the Compound and/or Product. In the event that
      ICN-RP fails to provide such information to Schering, Schering will notify
      ICN-RP of the information that has not been provided and ICN-RP shall have
      [REDACTED] days to provide such information; provided that the Evaluation
      Period shall be tolled until the later of (i) the expiration of that
      [REDACTED] day period or (ii) the date on which ICN-RP has provided to
      Schering all such information requested by Schering. Nothing contained
      herein shall be construed as providing any right of first refusal or right
      of last refusal to Schering with respect to any Compound and/or Product
      that ICN-RP, in its sole discretion, decides to develop and commercialize
      the Compound and/or Product itself, utilizing its own personnel and
      resources.

5.2   In the event that Schering exercises its right of first refusal with
      respect to a given Compound and/or Product, then the parties shall in good
      faith exclusively negotiate the

                                       11
<PAGE>

      terms of a mutually acceptable exclusive (even as to ICN-RP), worldwide
      license or other form of agreement on commercial terms to be agreed upon
      by the parties. If the parties are unable to reach agreement on the
      commercial terms for the agreement within [REDACTED] days of Schering's
      exercising its right of first refusal, then ICN-RP shall be free to enter
      into negotiations with respect to such Compound and/or Product with a bona
      fide pharmaceutical and/or biotechnology company (not affiliated with
      ICN-RP or their respective officers, directors or employees) having
      sufficient resources to develop and commercialize the Compound and/or
      Product. ICN-RP shall not disclose to such pharmaceutical/biotechnology
      company any information relating to the Compound and/or Product which has
      not been previously disclosed to Schering. In the event that ICN-RP and
      the pharmaceutical/biotechnology company agree upon the commercial terms
      for licensing the Compound and/or Product, then ICN-RP shall disclose to
      Schering the full and complete agreement between itself and the
      pharmaceutical/biotechnology company, and offer substantially similar
      commercial terms to Schering. The commercial terms presented to Schering
      shall reflect in all respects a genuine offer made by such
      pharmaceutical/biotechnology company in good faith with the intent of
      developing such Compound and/or Product for commercialization. Schering
      shall have [REDACTED] days in which to accept or reject such terms. If
      Schering does not accept the terms offered by ICN-RP within such
      [REDACTED] day period, then ICN-RP shall be free enter into an agreement
      with the pharmaceutical/biotechnology company on substantially similar
      terms that were offered to Schering. ICN-RP shall not offer to license the
      Compound and/or the Product to any such pharmaceutical/biotechnology
      company on commercial terms which are in the aggregate more favorable to
      the pharmaceutical/biotechnology company than those last offered to
      Schering without first offering Schering the rights on such terms.

                        ARTICLE 6 - TERM AND TERMINATION

6.1   This Agreement shall begin on the Effective Date and remain in full force
      and effect, unless earlier terminated in accordance with Section 6.2,
      until the later of (i) twelve (12) years from the Effective Date, or (ii)
      the expiration of the Exclusive License and Supply Agreement between ICN
      and Schering-Plough Ltd., dated July 28, 1995, as amended.

6.2   This Agreement may be terminated, in whole or in part, by Schering or by
      ICN-RP upon written notice to the other parties in the event of a material
      breach of this Agreement by the other party that is continuing [REDACTED]
      days after the non-breaching party gives the breaching party notice of
      such breach specifying in reasonable detail the particulars of the alleged
      breach; provided, however, that if the breach is limited to a specific
      Compound and/or Product, then such termination right shall only apply with
      respect to that Compound and/or Product.

6.3   In the event of termination by ICN-RP under Section 6.2 with respect to a
      given Compound and/or Product due to a failure by Schering to fulfill its
      diligence obligations under Sections 3.3, 3.4 and 3.5 in one or more
      countries in the Territory, all licenses granted to Schering with respect
      to such Compound and/or Product in such country(ies) shall terminate and
      revert to ICN-RP; provided that nothing herein shall be construed as
      obligating Schering to license, transfer, assign or otherwise convey to
      ICN-RP any rights,

                                       12
<PAGE>

      title or interest in or to any of Schering's or its Affiliates data,
      information, know-how, trademarks, patents, copyrights or other
      intellectual property or assets in the Field.

6.4   All exclusive licenses to Compounds and/or Products which are granted to
      Schering pursuant to Section 2.3 of this Agreement shall survive the
      expiration of this Agreement under Section 6.1 and, unless earlier
      terminated pursuant to Sections 6.2 and 6.3, shall continue in full-force
      and effect on a product-by-product and country-by-country basis on the
      terms and conditions set forth herein until such time as Schering's
      royalty obligations with respect to such Compound and/or Product expires
      in the country. Upon expiration of each such license in a given country,
      the license shall become a paid-up, irrevocable, royalty-free
      non-exclusive license in the country.

                             ARTICLE 7 - INSOLVENCY

7.1   All rights and licenses granted under or pursuant to this Agreement by
      ICN-RP to Schering are, for all purposes of Section 365(n) of Title 11 of
      the United States Code ("Title 11"), licenses of rights to "intellectual
      property" as defined in Title 11. ICN-RP agree during the term of this
      Agreement to create and maintain current copies or, if not amenable to
      copying, detailed descriptions or other appropriate embodiments, to the
      extent feasible, of all such intellectual property. If a case is commenced
      by or against ICN-RP under Title 11, then ICN-RP (in any capacity,
      including debtor-in-possession) and its successors and assigns (including,
      without limitation, a Title 11 Trustee) shall,

      (1)   as Schering may elect in a written request,
            immediately upon such request:

            (i)   perform all of the obligations provided in this Agreement to
                  be performed by ICN-RP including, where applicable and without
                  limitation, providing to Schering portions of such
                  intellectual property (including embodiments thereof) held by
                  ICN-RP and such successors and assigns or otherwise available
                  to them; or

            (ii)  provide to Schering all such intellectual property (including
                  all embodiments thereof) held by ICN-RP and such successors
                  and assigns or otherwise available to them; and

      (2)   not interfere with the rights of Schering under this Agreement, or
            any agreement supplemental hereto, to such intellectual property
            (including such embodiments), including any right to obtain such
            intellectual property (or such embodiments) from another entity.

      If a Title 11 case is commenced by or against ICN-RP, and this Agreement
      is rejected as provided in Title 11, and Schering elects to retain its
      rights hereunder as provided in Title 11, then ICN-RP (in any capacity,
      including debtor-in-possession) and its successors and assigns (including,
      without limitation, a Title 11 Trustee) shall provide to Schering all such
      intellectual property (including all embodiments thereof) held by ICN-RP
      and such successors and assigns, or otherwise available to them,
      immediately upon Schering's written request. Whenever ICN-RP, or any of
      their successors or assigns provides to Schering any of the intellectual
      property licensed hereunder (or any embodiment thereof)

                                       13
<PAGE>

      pursuant to this Section 11.8, Schering shall have the right to perform
      the obligations of ICN-RP hereunder with respect to such intellectual
      property, but neither such provision nor such performance by Schering
      shall release ICN-RP from any such obligation or liability for failing to
      perform it.

      All rights, powers and remedies of Schering provided herein are in
      addition to and not in substitution for any and all other rights, powers
      and remedies now or hereafter existing at law or in equity (including,
      without limitation, Title 11) in the event of the commencement of a Title
      11 case by or against ICN-RP. Schering, in addition to the rights, power
      and remedies expressly provided herein, shall be entitled to exercise all
      other such rights and powers and resort to all other such remedies as may
      now or hereafter exist at law or in equity (including, without limitation,
      Title 11) in such event. The parties agree that they intend the foregoing
      Schering rights to extend to the maximum extent permitted by law,
      including, without limitation, for purposes of Title 11:

      (1)   the right of access to any intellectual property (including all
            embodiments thereof) of ICN-RP, or any third party with whom ICN-RP
            contracts to perform an obligation of ICN-RP under this Agreement,
            and, in the case of the third party, which is necessary for the
            development, registration, manufacture and marketing of Licensed
            Compounds and/or Licensed Products; and

      (2)   the right to contract directly with any third party described in (i)
            to complete the contracted work.

      In the event of any insolvency of ICN-RP and if any statute and/or
      regulation in any country in the Territory requires that there be a
      specific grant or specific clause(s) in order for Schering to obtain the
      rights and benefits as licenses under this Agreement which are analogous
      to those rights under Section 365(n) of Title 11 of the United States
      Code, then this Agreement shall be deemed to include any and all such
      required grant(s), clause(s) and/or requirements.

                              ARTICLE 8 - WARRANTY

8.1   Each of Schering and ICN-RP hereby represents and warrants to the other
      parties that as of the Effective Date:

      (a)   it is a corporation or entity duly organized and validly existing
            under the laws of the state or other jurisdiction of its
            incorporation or formation;

      (b)   the execution, delivery and performance of this Agreement by such
            party has been duly authorized by all requisite corporate action;

      (c)   it has the power and authority to execute and deliver this Agreement
            and to perform its obligations hereunder;

                                       14
<PAGE>

      (d)   the execution, delivery and performance by such party of this
            Agreement and its compliance with the terms and provisions hereof
            does not and will not conflict with or result in a breach of any of
            the terms and provisions of or constitute a default under (i) a loan
            agreement, guaranty, financing agreement, agreement affecting a
            product or other agreement or instrument binding or affecting it or
            its property; (ii) the provisions of its charter or operative
            documents or bylaws; or (iii) any order, writ, injunction or decree
            of any court or governmental authority entered against it or by
            which any of its property is bound;

      (e)   this Agreement has been duly authorized, executed and delivered and
            constitutes such party's legal, valid and binding obligation
            enforceable against it in accordance with its terms subject, as to
            enforcement, to bankruptcy, insolvency, reorganization and other
            laws of general applicability relating to or affecting creditors'
            rights and to the availability of particular remedies under general
            equity principles; and

      (f)   it shall comply with all applicable material laws and regulations
            relating to its activities under this Agreement.

8.2   ICN-RP hereby represents, warrants and covenants to Schering that:

      (a)   as of the Effective Date, ICN-RP has not within the twelve (12)
            month period immediately preceding the Effective Date of this
            Agreement, assigned, transferred conveyed or otherwise encumbered or
            disposed of (other than to an Affiliate as defined herein) any of
            the know-how, patent applications, patents and other intellectual
            property and assets arising in connection with research and
            development in the Field and the Option Field which has been
            conducted by or on behalf of ICN-RP (the "Existing Intellectual
            Property");

      (b)   as of the Effective Date it has the full right, power and authority
            to grant all of the right, title and interest in the option rights
            granted under Articles 2 and 5 hereof;

      (c)   during the term of this Agreement and except as expressly permitted
            under Sections 2.2 and 5.2, ICN-RP shall not take any action which
            would (i) assign, transfer or otherwise convey to any third party
            any right, title or other interest in or to the Existing
            Intellectual Property; (ii) create any liens, charges or
            encumbrances with respect to the Existing Intellectual Property or
            (iii) give rise to any third party claim of ownership with respect
            to the Existing Intellectual Property, whatsoever; and

      (d)   during the term of this Agreement, ICN-RP shall not commit any
            actions or omissions which would diminish or otherwise be
            inconsistent with the option rights granted to Schering hereunder.

8.3   With respect to each exclusive license obtained by Schering under Article
      2 of this Agreement, ICN-RP shall represent, warrant and covenant that, as
      of the date such license becomes effective pursuant to Section 2.3:

                                       15
<PAGE>

      (a)   to the best of ICN-RP's knowledge, the relevant Licensed Patent
            Rights are subsisting and are not invalid or unenforceable, in whole
            or in part;

      (b)   it has the full right, power and authority to grant all of the
            right, title and interest in the licenses granted under Article 2
            hereof;

      (c)   it has not assigned, transferred, conveyed or otherwise encumbered,
            and during the term of this Agreement will not assign, transfer,
            convey of otherwise encumber, its right, title and interest in the
            relevant Licensed Patent Rights or ICN-RP Know-How (except in
            accordance with this Agreement);

      (d)   to the best of ICN-RP's knowledge, it is the sole and exclusive
            owner of the relevant Licensed Patent Rights and ICN-RP Know-How,
            all of which is free and clear of any liens, charges and
            encumbrances, and no other person, corporate or other private
            entity, or governmental entity or subdivision thereof, has or shall
            have any claim of ownership with respect to such Licensed Patent
            Rights and ICN-RP Know-How, whatsoever;

      (e)   during the term of this Agreement, ICN-RP shall not take any action
            which would (i) create any liens, charges or encumbrances with
            respect to the relevant Licensed Patent Rights and ICN-RP Know-How
            whatsoever, or (ii) give rise to any third party claim of ownership
            with respect to such Licensed Patent Rights and ICN Know How,
            whatsoever;

      (f)   to the best of ICN-RP's knowledge, the relevant Licensed Patent
            Rights and ICN-RP Know-How, and the development, manufacture, use,
            distribution, marketing, promotion and sale of the Compound and/or
            Product do not interfere or infringe on any intellectual property
            rights owned or possessed by any third party;

      (g)   to the best of ICN-RP's knowledge, there are no third party pending
            patent applications which, if issued, may cover the development,
            manufacture, use, distribution, marketing, promotion or sale of the
            Compound and/or Product; and

      (h)   it has disclosed to Schering all ICN-RP Know-How and other relevant
            information required to be disclosed hereunder, including, without
            limitation, information relating to the relevant Licensed Patent
            Rights, and the Compound and/or Product.

8.4   Any license agreement entered into by the parties pursuant to Article 5
      shall contain essentially the same representations, warranties and
      covenants with respect to the Compounds and/or Products licensed
      thereunder as are set forth in this Article 8.

                           ARTICLE 9 - INDEMNIFICATION

9.1   ICN-RP shall indemnify, defend and hold harmless Schering, its Affiliates,
      and their respective directors, officers, employees and agents, and the
      successors and assigns of any

                                       16
<PAGE>

      of the foregoing from and against any and all liability, damages, losses,
      claims, actions, judgments and costs (including, without limitation,
      reasonable legal fees) arising from or related to: (i) any negligent act
      or omission or willful misconduct of ICN-RP (or their respective
      Affiliates) in connection with any Compound and/or Product (including,
      without limitation, product liability claims); and/or (ii) a material
      breach of any of the representations or warranties ICN-RP hereunder.
      Notwithstanding the foregoing, ICN-RP shall have no indemnification
      obligations under this Agreement with respect to claims, demands, costs or
      judgments to the extent caused by the gross negligence or willful
      misconduct of Schering.

9.2   Schering shall indemnify, defend and hold harmless ICN-RP, their
      respective Affiliates, and their respective directors, officers, employees
      and agents, and the successors and assigns of any of the foregoing from
      and against any and all liability, damages, losses, claims, actions,
      judgments and costs (including without limitation, reasonable legal fees)
      arising from or related to: (i) any negligent act or omission or willful
      misconduct of Schering (or its Affiliates) in the development,
      manufacture, distribution, sale, use or other exploitation of any Compound
      and/or Product (including, without limitation, product liability claims);
      and/or (ii) a material breach of any of the representations or warranties
      of Schering hereunder.

9.3   Each party acknowledges and agrees that during the term of this Agreement
      it shall maintain adequate insurance or self-insurance program for
      liability purposes, including products liability and contractual liability
      insurance, to cover such party's obligations under this Agreement. Each
      party shall provide the other party with evidence of such insurance and/or
      self-insurance program, upon request.

                      ARTICLE 10 - MODIFICATION AND WAIVER

10.1  No cancellation, modification, amendment, deletion, addition or other
      change in this Agreement or any provision herein, or waiver of any right
      or remedy herein provided, shall be effective for any purpose unless
      specifically set forth in writing and signed by the party to be bound
      thereby. No waiver of any right or remedy in respect of any occurrence or
      event shall be deemed a waiver of such right or remedy in respect of such
      occurrence or event on any other occasion.

                               ARTICLE 11 - NOTICE

11.1  Any notice required or permitted hereunder shall be communicated in
      writing and shall be sent by registered mail, prepaid courier or facsimile
      transmission to the addresses set out below or to such other address as
      may be specified, in writing, by the party who changes its address.

      To ICN:           ICN Pharmaceutical Inc.
                        ICN Plaza
                        3300 Hyland Avenue
                        Costa Mesa, California  92626
                        Attention: President

                                       17
<PAGE>

                        Facsimile:  714-641-7276

      To RibaPharm:     RibaPharm Inc.
                        3300 Hyland Avenue
                        Costa Mesa, California  92626
                        Attention: President
                        Facsimile:

      To Schering:      Schering Corporation
                        2000 Galloping Hill Road
                        Kenilworth, New Jersey 07033
                        Attention: Vice President, Business
                        Development
                        Facsimile: 908-298-7366

                  with copies to:

                        Attention: Legal Dept. - Staff Vice President, Licensing
                        Facsimile: 908-298-2739

      All written communications shall be deemed to be received by the
      addressees as follows: (i) by registered mail: five (5) business days
      after dispatch by notifying party; (ii) by prepaid courier: two (2)
      business days after dispatch by notifying party; or (iii) by facsimile
      transmission: one (1) business day after dispatch by notifying party. A
      copy of any notice sent by facsimile transmission shall thereafter be
      dispatched by registered mail.

                             ARTICLE 12 - PUBLICITY

12.1  Neither party shall use the name of the other party nor the name of the
      other party's Affiliates for any promotional purposes without the prior
      written consent of the party whose name is proposed to be used. No news
      release, publicity or other public announcement, either written or oral,
      regarding the terms or existence of this Agreement or performance
      hereunder, shall be made by either party without the prior written
      agreement of the other party. Each of the parties further agrees not to
      disclose to any third party the existence or terms of this Agreement
      without the prior written consent of the other party hereto. Nothing in
      the foregoing, however, shall prohibit a party from making such
      disclosures to the extent required under applicable federal or state
      securities laws or any rule or regulation of any nationally recognized
      securities exchange; provided that in such event the disclosing party
      shall notify and consult with the other party prior to such disclosure
      and, where applicable, shall diligently seek confidential treatment to the
      extent available.

                         ARTICLE 13 - GENERAL PROVISIONS

13.1  The relationship between ICN-RP and Schering established by this Agreement
      is that of independent contractors. Nothing in this Agreement shall be
      construed to create any other relationship between ICN-RP and Schering,
      and neither party shall have any right,

                                       18
<PAGE>

      power or authority to assume, create or incur any expense, liability or
      obligation, express or implied, on behalf of the other.

13.2  This Agreement shall be governed by and construed according to the laws of
      New Jersey, without regard to conflicts of laws principles. In the event
      of any dispute between the parties arising from or relating to this
      Agreement, the parties agree to submit themselves, for the purpose of
      resolving such dispute, to the exclusive jurisdiction of either the
      Federal or State courts of New Jersey.

13.3  This Agreement shall be deemed to be jointly prepared by the Parties, and
      any ambiguity herein shall not be construed for or against either party.

13.4  No account of the headings to the paragraphs of this Agreement shall be
      taken when interpreting the meaning of this Agreement.

13.5  This Agreement may be executed in multiple counterparts, each of which
      shall be deemed to be an original, and all such counterparts shall
      constitute but one instrument.

13.6  This Agreement and each and every one of its provisions shall be binding
      upon the executors, administrators, successors and permitted assigns of
      the Parties hereto. Without limiting the foregoing, and for the avoidance
      of doubt, ICN may, without the consent of Schering or any Affiliate of
      Schering, assign to RibaPharm any of ICN's rights to receive payments
      under this Agreement.

13.7  All terms and conditions of this Agreement are severable, and the
      invalidity, illegality or unenforceability of any term or condition shall
      not affect the validity, legality or enforceability of the remaining terms
      and conditions.

13.8  This Agreement constitutes the entire agreement between the Parties hereto
      respecting the subject matter herein and supersedes all prior or
      contemporaneous negotiations, agreements and understandings, whether
      written or oral. Neither party has relied upon any statements, promises,
      representations or claims of the other party, other than those expressly
      set forth in this Agreement, in agreeing to enter into and be bound by the
      terms of this Agreement.

                                       19
<PAGE>

IN WITNESS WHEREOF, the parties have caused their duly authorized
representatives to execute this Agreement.

SCHERING  CORPORATION

By:   /s/ David Poorvin
      ------------------------------
      (authorized representative)

Name:   David Poorvin, Ph.D.
      ------------------------------
Title:     Vice President
      ------------------------------

ICN PHARMACEUTICALS, INC.

By:  /s/ Jack L. Scholl
     ---------------------------------
    (authorized representative)

Name:    Jack L. Scholl
     ---------------------------------
Title:   Executive Vice President
     ---------------------------------

SCHERING-PLOUGH LTD.

By:   /s/ David Poorvin
      ------------------------------
      (authorized representative)

Name:     David Poorvin, Ph.D.
      ------------------------------
Title:     Prokurist
      ------------------------------

 RIBAPHARM INC.

 By:  /s/ Bill A. MacDonald
      ---------------------------------
     (authorized representative)

 Name:    Bill A. MacDonald
      ---------------------------------
 Title:   Chief Financial Officer
      ---------------------------------

                                       20
<PAGE>

                                    EXHIBIT A

                                SECRECY AGREEMENT

EFFECTIVE DATE:   The last date on the signature page hereof ("Effective Date")

BY AND BETWEEN:   SCHERING CORPORATION, 2000 Galloping Hill Road, Kenilworth,
                  New Jersey 07033 ("SCHERING")
AND

DISCLOSING PARTY'S
NAME:

DISCLOSING PARTY'S
ADDRESS:                                                            ("COMPANY")

DISCLOSURE:       Certain written technical data, materials, and/or information
                  provided by COMPANY to SCHERING which is (i) disclosed
                  pursuant to this Agreement and (ii) clearly identified in
                  writing as "Confidential" when disclosed; and which relates to
                                    (the "Disclosure"). In the event the
                  Disclosure is in a manner other than in writing, it shall be
                  reduced to written form, marked "Confidential" and transmitted
                  to SCHERING within ten (10) business days of the Disclosure to
                  SCHERING.

      In consideration for said Disclosure and the economic importance thereof
to COMPANY, such Disclosure shall be made on the following basis:

      1. SCHERING agrees, for a period of five (5) years following the Effective
Date, to retain the Disclosure made to it by or on behalf of Company, in
confidence. SCHERING further agrees that it will not, without the written
consent of COMPANY, use the Disclosure for any purpose other than that indicated
herein. These restrictions shall not apply to information which:

      (i)   is or becomes public knowledge (through no fault of SCHERING), or

      (ii)  is made lawfully available to SCHERING by an independent third
            party, or

      (iii) is already in SCHERING's possession at the time of receipt from
            COMPANY, or

      (iv)  is independently developed by employees of SCHERING or its parent
            corporation or their respective affiliates and/or subsidiaries (and
            such independent development can be properly demonstrated without
            the aid or use of the Disclosure), or

      (v)   is required by law, regulation, rule, act, or order of any
            governmental authority or agency to be disclosed.

<PAGE>

      2. SCHERING shall only provide the Disclosure to those of its, its parent
corporation's, and their respective affiliates' and subsidiaries' officers and
employees who are directly concerned with the Disclosure.

      3. COMPANY shall neither disclose to SCHERING nor induce SCHERING to use
any secret or confidential information or material belonging to others,
including former employers, if any.

      4. SCHERING agrees to promptly return the Disclosure upon request;
provided, however, that SCHERING's legal counsel may retain one copy of the
Disclosure in a secure location for purposes of identifying SCHERING's
obligations under this Agreement.

      5. This Agreement shall be construed in accordance with New Jersey law
without regard to the conflict of laws rules or principles thereof. It is
understood and agreed that both parties submit to the jurisdiction of New Jersey
state and federal courts.

      6.  This Agreement may only be amended by a written
instrument signed by both parties hereto.

      IN WITNESS WHEREOF, the parties have caused this Agreement to be executed,
by duly authorized representatives, as of the last date written below.

[Company Name]

By:
      ----------------------------

Name:
      ----------------------------

Title:
      ----------------------------

Date:
      ----------------------------

SCHERING CORPORATION

By:
      ----------------------------

Name:
      ----------------------------

Title:
      ----------------------------

Date:
      ----------------------------

                                       2<PAGE>
                                                                    EXHIBIT 10.3

                              EMPLOYMENT AGREEMENT

     This Employment Agreement (this "Agreement") is entered into and effective
as of August 1, 2001, by and between Weatherford International, Inc., a Delaware
corporation (the "Company"), and Gary L. Warren (the "Employee").

                                   WITNESSETH:

     WHEREAS, the Company desires to employ the Employee on the terms set forth
below to provide services to the Company, 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

<PAGE>

     Act")) (a "Person") of beneficial ownership (within the meaning of Rule
     13d-3 promulgated under the Exchange Act) of 20 percent 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 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 stockholders, 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 or consolidation
     or sale or other disposition of all or substantially all of the assets of
     the Company (a "Corporate Transaction") in each case, unless, following
     such Corporate Transaction, (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
     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
     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

                                       2
<PAGE>

     of the Incumbent Board at the time of the execution of the initial
     agreement, or of the action of the Board, providing for such Corporate
     Transaction; or

               (iv) Approval by the stockholders 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 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 or an
affiliated company will continue the Employee in its employ, and the Employee
hereby agrees to remain in the employ of the Company or an affiliate subject to
the terms and conditions of this Agreement during the Employment

                                       3
<PAGE>

Period (as defined below). The "Employment Period" shall mean the period
commencing on the Effective Date (as defined below) 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. The Effective Date shall be August 1, 2001.

     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 of the Company and President of the Company's Drilling and
Intervention Services division, (B) the Employee's services shall be performed
at the Company's principal executive offices 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 of $300,000 ("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.

                                       4
<PAGE>

               (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 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 and (B) 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 3 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 Employee's
existing Employment Agreement dated October 4, 1999 (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.

                                       5
<PAGE>

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

         (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. If the Employee's employment is terminated by reason of the
Employee's death during the Employment Period, the Employee's employment shall
terminate automatically without further obligations to the Employee's legal
representatives under this Agreement, other than for payment of Accrued
Obligations and Other Benefits (as defined below) and the rights provided in
Section 6. Accrued Obligations shall be paid to the Employee's estate or
beneficiaries, as applicable, in a lump sum in cash within 30 days after the
Date of Termination. With respect to the provision of Other Benefits, the term
Other Benefits as utilized in this Section 5(a) shall 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.

         (b) Disability. If the Employee's employment is terminated by reason of
the Employee's Disability during the Employment Period, the Employee's
employment shall terminate without further obligations to the Employee under
this Agreement, other than for payment of Accrued Obligations

                                       6
<PAGE>

and Other Benefits and the rights provided in Section 6. Accrued Obligations
shall be paid to the Employee in a lump sum in cash within 30 days after the
Date of Termination. With respect to the provision of Other Benefits, the term
Other Benefits as utilized in this Section 5(b) shall include, without
limitation, and the Employee shall be entitled after the Disability Effective
Date to receive, disability and other 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.

         (c) 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.

         (d) 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.

         (e) Good Reason or Other than For Cause, Death or Disability. If,
during the Employment Period, the Company terminates the Employee's employment
other than for Cause, death or Disability, or the Employee terminates employment
for Good Reason:

               (i) The Company shall pay to the Employee 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 three 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");

                    (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

                                       7
<PAGE>

         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
         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/or 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 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 and the 401(k) Plan and any other similar 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").

     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 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. It is expressly agreed by the Employee that the Employee shall have
no right to receive, and hereby waives any entitlement to, any severance pay or
similar benefit under any other plan, policy, practice or program of the
Company. In addition, 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.

                                       8
<PAGE>

         (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 (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 Arthur
Andersen LLP 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

                                       9
<PAGE>

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.

         (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

                                       10
<PAGE>

     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 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 or otherwise) to all or substantially all of
the business and/or assets of the Company to assume expressly 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

                                       11
<PAGE>

Agreement, "Company" shall mean the Company as hereinbefore defined and any
successor to its business and/or assets as aforesaid which assumes and agrees to
perform this Agreement by operation of law, or otherwise.

     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:

         If to the Employee: Gary L. Warren
                             1903 Valleria Ct.
                             Sugar Land, TX 77479

         If to the Company:  Weatherford International, Inc.
                             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/ GARY L. WARREN
                                    -------------------------------------------
                                                   Gary L. Warren

                                    WEATHERFORD INTERNATIONAL, INC.

                                    By:       /s/ JON R. NICHOLSON
                                        ---------------------------------------
                                                  Jon R. Nicholson
                                        Senior Vice President - Human Resources

                                       13
<PAGE>

                              EMPLOYMENT AGREEMENT

     This Employment Agreement (this "Agreement") is entered into and effective
as of August 1, 2001, by and between Weatherford International, Inc., a Delaware
corporation (the "Company"), and Mark E. Hopmann (the "Employee").

                                   WITNESSETH:

     WHEREAS, the Company desires to employ the Employee on the terms set forth
below to provide services to the Company, 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

<PAGE>

     Act")) (a "Person") of beneficial ownership (within the meaning of Rule
     13d-3 promulgated under the Exchange Act) of 20 percent 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 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 stockholders, 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 or consolidation
     or sale or other disposition of all or substantially all of the assets of
     the Company (a "Corporate Transaction") in each case, unless, following
     such Corporate Transaction, (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
     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
     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

                                       2
<PAGE>

     of the Incumbent Board at the time of the execution of the initial
     agreement, or of the action of the Board, providing for such Corporate
     Transaction; or

               (iv) Approval by the stockholders 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 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 or an
affiliated company will continue the Employee in its employ, and the Employee
hereby agrees to remain in the employ of the Company or an affiliate subject to
the terms and conditions of this Agreement during the Employment

                                       3
<PAGE>

Period (as defined below). The "Employment Period" shall mean the period
commencing on the Effective Date (as defined below) 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. The Effective Date shall be August 1, 2001.

     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 of the Company and President of the Company's Completion Systems
division, (B) the Employee's services shall be performed at the Company's
principal executive offices 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 of $250,008 ("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.

                                       4
<PAGE>

               (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 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 and (B) 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 3 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 Employee's
existing Employment Agreement dated October 4, 1999 (the "Prior Agreement"). As
a result, the Employee and the Company agree that 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.

                                       5
<PAGE>

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

         (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. If the Employee's employment is terminated by reason of the
Employee's death during the Employment Period, the Employee's employment shall
terminate automatically without further obligations to the Employee's legal
representatives under this Agreement, other than for payment of Accrued
Obligations and Other Benefits (as defined below) and the rights provided in
Section 6. Accrued Obligations shall be paid to the Employee's estate or
beneficiaries, as applicable, in a lump sum in cash within 30 days after the
Date of Termination. With respect to the provision of Other Benefits, the term
Other Benefits as utilized in this Section 5(a) shall 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.

         (b) Disability. If the Employee's employment is terminated by reason of
the Employee's Disability during the Employment Period, the Employee's
employment shall terminate without further obligations to the Employee under
this Agreement, other than for payment of Accrued Obligations

                                       6
<PAGE>

and Other Benefits and the rights provided in Section 6. Accrued Obligations
shall be paid to the Employee in a lump sum in cash within 30 days after the
Date of Termination. With respect to the provision of Other Benefits, the term
Other Benefits as utilized in this Section 5(b) shall include, without
limitation, and the Employee shall be entitled after the Disability Effective
Date to receive, disability and other 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.

         (c) 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.

         (d) 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.

         (e) Good Reason or Other than For Cause, Death or Disability. If,
during the Employment Period, the Company terminates the Employee's employment
other than for Cause, death or Disability, or the Employee terminates employment
for Good Reason:

               (i) The Company shall pay to the Employee 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 three 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");

                    (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

                                       7
<PAGE>

         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
         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/or 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 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 and the 401(k) Plan and any other similar 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").

     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 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. It is expressly agreed by the Employee that the Employee shall have
no right to receive, and hereby waives any entitlement to, any severance pay or
similar benefit under any other plan, policy, practice or program of the
Company. In addition, 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.

                                       8
<PAGE>

         (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 (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 Arthur
Andersen LLP 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

                                        9
<PAGE>

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.

         (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

                                       10
<PAGE>

     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 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 or otherwise) to all or substantially all of
the business and/or assets of the Company to assume expressly 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

                                       11
<PAGE>
Agreement, "Company" shall mean the Company as hereinbefore defined and any
successor to its business and/or assets as aforesaid which assumes and agrees to
perform this Agreement by operation of law, or otherwise.

     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:

         If to the Employee: Mark E. Hopmann
                             Rt. 1, Box 258
                             Alvin, Texas 77511

         If to the Company:  Weatherford International, Inc.
                             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/ MARK E. HOPMANN
                                    -------------------------------------------
                                                Mark E. Hopmann

                                    WEATHERFORD INTERNATIONAL, INC.

                                    By:        /s/ JON R. NICHOLSON
                                        ---------------------------------------
                                                   Jon R. Nicholson
                                        Senior Vice President - Human Resources

                                       13
<PAGE>

                              EMPLOYMENT AGREEMENT

         This Employment Agreement (this "Agreement") is entered into and
effective as of August 1, 2001, by and between Weatherford International, Inc.,
a Delaware corporation (the "Company"), and Burt M. Martin (the "Employee").

                                   WITNESSETH:

         WHEREAS, the Company desires to employ the Employee on the terms set
forth below to provide services to the Company, 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:

<PAGE>

                           (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 under the Exchange Act) of 20 percent 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 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 stockholders, 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 or
         consolidation or sale or other disposition of all or substantially all
         of the assets of the Company (a "Corporate Transaction") in each case,
         unless, following such Corporate Transaction, (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 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 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

                                       2
<PAGE>

         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 execution of the initial agreement, or of the
         action of the Board, providing for such Corporate Transaction; or

                           (iv) Approval by the stockholders 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 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.

                                       3
<PAGE>

         2. Employment Period. The Company hereby agrees that the Company or an
affiliated company will continue the Employee in its employ, and the Employee
hereby agrees to remain in the employ of the Company or an affiliate subject to
the terms and conditions of this Agreement during the Employment Period (as
defined below). The "Employment Period" shall mean the period commencing on the
Effective Date (as defined below) 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. The
Effective Date shall be August 1, 2001.

         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 Vice President,
General Counsel and Secretary of the Company, (B) the Employee's services shall
be performed at the Company's principal executive offices 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 of $200,000 ("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

                                       4
<PAGE>

         Agreement, the term "affiliated companies" shall include any company
         controlled by, controlling or under common control with the Company.

                           (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 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
         and (B) 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 3 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
Employee's existing Change of Control Agreement dated June 10, 1998 (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.

                                       5
<PAGE>

                  (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.

                  (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. If the Employee's employment is terminated by
reason of the Employee's death during the Employment Period, the Employee's
employment shall terminate automatically without further obligations to the
Employee's legal representatives under this Agreement, other than for payment of
Accrued Obligations and Other Benefits (as defined below) and the rights
provided in Section 6. Accrued Obligations shall be paid to the Employee's
estate or beneficiaries, as applicable, in a lump sum in cash within 30 days
after the Date of Termination. With respect to the provision of Other Benefits,
the term Other Benefits as utilized in this Section 5(a) shall 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.

                                       6
<PAGE>

                  (b) Disability. If the Employee's employment is terminated by
reason of the Employee's Disability during the Employment Period, the Employee's
employment shall terminate without further obligations to the Employee under
this Agreement, other than for payment of Accrued Obligations and Other Benefits
and the rights provided in Section 6. Accrued Obligations shall be paid to the
Employee in a lump sum in cash within 30 days after the Date of Termination.
With respect to the provision of Other Benefits, the term Other Benefits as
utilized in this Section 5(b) shall include, without limitation, and the
Employee shall be entitled after the Disability Effective Date to receive,
disability and other 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.

                  (c) 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.

                  (d) 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.

                  (e) Good Reason or Other than For Cause, Death or Disability.
If, during the Employment Period, the Company terminates the Employee's
employment other than for Cause, death or Disability, or the Employee terminates
employment for Good Reason:

                           (i) The Company shall pay to the Employee 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 three 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");

                                    (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;

                                       7
<PAGE>

                                    (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 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/or 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 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 and the 401(k) Plan and any other similar
         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").

         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 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. It is expressly agreed by the Employee that the Employee shall have
no right to receive, and hereby waives any entitlement to, any severance pay or
similar benefit under any other plan, policy, practice or program of the
Company. In addition, 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

                                       8
<PAGE>

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 (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

                                       9
<PAGE>

Arthur Andersen LLP 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.

                  (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

                                       10
<PAGE>

         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 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.

                                       11
<PAGE>

                  (c) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly 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 which assumes and agrees to perform this Agreement by operation of
law, or otherwise.

         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:

                  If to the Employee:     Burt M. Martin
                                          4817 Wellford
                                          Bellaire, Texas 77401

                  If to the Company:      Weatherford International, Inc.
                                          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.

                                       12
<PAGE>

                  (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.

                                       13
<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/ BURT M. MARTIN
                                   ---------------------------------------------
                                                   Burt M. Martin

                                   WEATHERFORD INTERNATIONAL, INC.

                                   By:        /s/ JON R. NICHOLSON
                                      ------------------------------------------
                                                   Jon R. Nicholson
                                      Senior Vice President - Human Resources

                                       14
<PAGE>

                              EMPLOYMENT AGREEMENT

         This Employment Agreement (this "Agreement") is entered into and
effective as of August 1, 2001, by and between Weatherford International, Inc.,
a Delaware corporation (the "Company"), and Lisa W. Rodriguez (the "Employee").

                                   WITNESSETH:

         WHEREAS, the Company desires to employ the Employee on the terms set
forth below to provide services to the Company, 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

<PAGE>

         Act") (a "Person") of beneficial ownership (within the meaning of Rule
         13d-3 promulgated under the Exchange Act) of 20 percent 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 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 stockholders, 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 or
         consolidation or sale or other disposition of all or substantially all
         of the assets of the Company (a "Corporate Transaction") in each case,
         unless, following such Corporate Transaction, (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 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 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

                                       2
<PAGE>

         of the Incumbent Board at the time of the execution of the initial
         agreement, or of the action of the Board, providing for such Corporate
         Transaction; or

                           (iv) Approval by the stockholders 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 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 or an
affiliated company will continue the Employee in its employ, and the Employee
hereby agrees to remain in the employ of the Company or an affiliate subject to
the terms and conditions of this Agreement during the Employment

                                       3
<PAGE>

Period (as defined below). The "Employment Period" shall mean the period
commencing on the Effective Date (as defined below) 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. The Effective Date shall be August 1, 2001.

         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 Vice President -
Finance and Accounting and Controller of the Company, (B) the Employee's
services shall be performed at the Company's principal executive offices 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 of $200,004 ("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.

                                       4
<PAGE>

                           (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 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
         and (B) 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 3 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.

         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.

                  (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

                                       5
<PAGE>

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. If the Employee's employment is terminated by
reason of the Employee's death during the Employment Period, the Employee's
employment shall terminate automatically without further obligations to the
Employee's legal representatives under this Agreement, other than for payment of
Accrued Obligations and Other Benefits (as defined below) and the rights
provided in Section 6. Accrued Obligations shall be paid to the Employee's
estate or beneficiaries, as applicable, in a lump sum in cash within 30 days
after the Date of Termination. With respect to the provision of Other Benefits,
the term Other Benefits as utilized in this Section 5(a) shall 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.

                  (b) Disability. If the Employee's employment is terminated by
reason of the Employee's Disability during the Employment Period, the Employee's
employment shall terminate without further obligations to the Employee under
this Agreement, other than for payment of Accrued Obligations and Other Benefits
and the rights provided in Section 6. Accrued Obligations shall be paid to the
Employee in a lump sum in cash within 30 days after the Date of Termination.
With respect to the provision of Other Benefits, the term Other Benefits as
utilized in this Section 5(b) shall include, without limitation, and the
Employee shall be entitled after the Disability Effective Date to receive,
disability and other 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,

                                       6
<PAGE>

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.

                  (c) 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.

                  (d) 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.

                  (e) Good Reason or Other than For Cause, Death or Disability.
If, during the Employment Period, the Company terminates the Employee's
employment other than for Cause, death or Disability, or the Employee terminates
employment for Good Reason:

                           (i) The Company shall pay to the Employee 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 three 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");

                                    (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 Employee on an annualized basis multiplied by two.

                                       7
<PAGE>

                           (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/or 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 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 and the 401(k) Plan and any other similar
         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").

         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 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. It is expressly agreed by the Employee that the Employee shall have
no right to receive, and hereby waives any entitlement to, any severance pay or
similar benefit under any other plan, policy, practice or program of the
Company. In addition, 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.

                                       8
<PAGE>

                  (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 (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 Arthur Andersen LLP 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

                                       9
<PAGE>

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.

                  (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

                                       10
<PAGE>

         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 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 or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly 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 which assumes and agrees to perform this Agreement by operation of
law, or otherwise.

                                       11
<PAGE>

         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:

                  If to the Employee:     Lisa W. Rodriguez
                                          3106 Greenridge Drive
                                          Missouri City, TX 77459

                  If to the Company:      Weatherford International, Inc.
                                          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.

                                       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/ LISA W. RODRIGUEZ
                                   ---------------------------------------------
                                                   Lisa W. Rodriguez

                                   WEATHERFORD INTERNATIONAL, INC.

                                   By:        /s/ JON R. NICHOLSON
                                      ------------------------------------------
                                                   Jon R. Nicholson
                                       Senior Vice President - Human Resources

                                       13
<PAGE>

                              EMPLOYMENT AGREEMENT

         This Employment Agreement (this "Agreement") is entered into and
effective as of August 1, 2001, by and between Weatherford International, Inc.,
a Delaware corporation (the "Company"), and James N. Parmigiano (the
"Employee").

                                   WITNESSETH:

         WHEREAS, the Company desires to employ the Employee on the terms set
forth below to provide services to the Company, 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

<PAGE>

         Act")) (a "Person") of beneficial ownership (within the meaning of Rule
         13d-3 promulgated under the Exchange Act) of 20 percent 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 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 stockholders, 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 or
         consolidation or sale or other disposition of all or substantially all
         of the assets of the Company (a "Corporate Transaction") in each case,
         unless, following such Corporate Transaction, (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 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 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

                                       2
<PAGE>

         of the Incumbent Board at the time of the execution of the initial
         agreement, or of the action of the Board, providing for such Corporate
         Transaction; or

                           (iv) Approval by the stockholders 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 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 or an
affiliated company will continue the Employee in its employ, and the Employee
hereby agrees to remain in the employ of the Company or an affiliate subject to
the terms and conditions of this Agreement during the Employment

                                       3
<PAGE>

Period (as defined below). The "Employment Period" shall mean the period
commencing on the Effective Date (as defined below) 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. The Effective Date shall be August 1, 2001.

         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 Vice President -
Operational Controller of the Company, (B) the Employee's services shall be
performed at the Company's principal executive offices in Houston, Texas or
other locations less than 35 miles from such location and (C) the Employee will
report directly to the Presidents of the Company's Completion Systems and
Drilling and Intervention Services divisions.

                  (b) Compensation.

                           (i) Base Salary. During the Employment Period, the
         Employee shall receive an annual base salary of $185,004 ("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.

                                       4
<PAGE>

                           (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 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
         and (B) 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 3 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.

         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.

                  (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

                                       5
<PAGE>

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. If the Employee's employment is terminated by
reason of the Employee's death during the Employment Period, the Employee's
employment shall terminate automatically without further obligations to the
Employee's legal representatives under this Agreement, other than for payment of
Accrued Obligations and Other Benefits (as defined below) and the rights
provided in Section 6. Accrued Obligations shall be paid to the Employee's
estate or beneficiaries, as applicable, in a lump sum in cash within 30 days
after the Date of Termination. With respect to the provision of Other Benefits,
the term Other Benefits as utilized in this Section 5(a) shall 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.

                  (b) Disability. If the Employee's employment is terminated by
reason of the Employee's Disability during the Employment Period, the Employee's
employment shall terminate without further obligations to the Employee under
this Agreement, other than for payment of Accrued Obligations and Other Benefits
and the rights provided in Section 6. Accrued Obligations shall be paid to the
Employee in a lump sum in cash within 30 days after the Date of Termination.
With respect to the provision of Other Benefits, the term Other Benefits as
utilized in this Section 5(b) shall include, without limitation, and the
Employee shall be entitled after the Disability Effective Date to receive,
disability and other 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,

                                       6
<PAGE>

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.

                  (c) 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.

                  (d) 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.

                  (e) Good Reason or Other than For Cause, Death or Disability.
If, during the Employment Period, the Company terminates the Employee's
employment other than for Cause, death or Disability, or the Employee terminates
employment for Good Reason:

                           (i) The Company shall pay to the Employee 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 three 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");

                                    (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 Employee on an annualized basis multiplied by two.

                                       7
<PAGE>

                           (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/or 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 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 and the 401(k) Plan and any other similar
         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").

         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 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. It is expressly agreed by the Employee that the Employee shall have
no right to receive, and hereby waives any entitlement to, any severance pay or
similar benefit under any other plan, policy, practice or program of the
Company. In addition, 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.

                                       8
<PAGE>

                  (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 (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 Arthur Andersen LLP 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

                                       9
<PAGE>

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.

                  (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

                                       10
<PAGE>

         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 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 or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly 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 which assumes and agrees to perform this Agreement by operation of
law, or otherwise.

                                       11
<PAGE>

         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:

                  If to the Employee:      James N. Parmigiano

                                           --------------------------

                                           --------------------------

                  If to the Company:       Weatherford International, Inc.
                                           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.

                                       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/ JAMES N. PARMIGIANO
                                    --------------------------------------------
                                            James N. Parmigiano

                                    WEATHERFORD INTERNATIONAL, INC.

                                    By:         /s/ JON R. NICHOLSON
                                       -----------------------------------------
                                                    Jon R. Nicholson
                                        Senior Vice President - Human Resources

                                       13

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00030-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00030-of-00352.parquet"}]]