Annual Incentive Compensation Plan - Halliburton Co.



                              HALLIBURTON COMPANY

                       ANNUAL INCENTIVE COMPENSATION PLAN

                    As Amended and Restated December 9, 1994





                                   ARTICLE I.

1.1      Purpose                                                            1

                                  ARTICLE II.

2.1      Definitions                                                        1

                                  ARTICLE III.

3.1      Participation                                                      3
3.2      Changes in Participants During Plan Year                           3

                                  ARTICLE IV.

4.1      Administration                                                     3

                                   ARTICLE V.

5.1      Performance Requirements                                           4

                                  ARTICLE VI.

6.1      a.       Awards                                                    4
                  1.       Awards for Category I and
                             Category II Participants                       4
                  2.       Individual Performance Awards for
                             Category II Participants                       5
                  3.       Discretionary Awards                             5
                  4.       Termination of Service During Plan Year          5
         b.       Payment of Awards                                         5
         c.       Tax Withholding                                           5

                                  ARTICLE VII.

7.1      Rights of Participants and Beneficiaries                           5
7.2      Governing Law                                                      6
7.3      Amendment and Termination of Plan and Awards                       6
7.4      Effective Date                                                     6


             HALLIBURTON COMPANY ANNUAL INCENTIVE COMPENSATION PLAN

                                   ARTICLE I.

1.1      Purpose.  The Halliburton  Company Annual Incentive  Compensation  Plan
         serves to  attract,  motivate,  reward,  and retain  senior  management
         talent   required  to  achieve   corporate   objectives   and  increase
         shareholder  value.  The Plan  provides a means to link the annual cash
         compensation of members of the Executive Committee,  corporate officers
         and other key managers of corporate support groups with the achievement
         of  financial  goals  and,  for  corporate  support   management,   the
         organizational  objectives  of the Company as a whole.  Under the Plan,
         participants   are  afforded  the   opportunity   to  earn   additional
         compensation  above  base  pay  contingent  on  the  achievement  of  a
         threshold  level  of  business  results,   the  measure  for  which  is
         established  at the  beginning  of each  annual  performance  period in
         connection  with  the  annual  planning  and  budgeting  process.   The
         additional  compensation  opportunity  afforded  participants under the
         Plan increases  proportionately with improved business results, subject
         to a predefined maximum incentive compensation level.

                  A  portion  of  the  incentive  compensation  opportunity  for
         corporate   support   management  can  be  earned  through   individual
         performance,  with the  measure of  performance  predefined  in certain
         qualitative  terms  associated  with  organizational  processes  deemed
         important to the  achievement of the long term business  strategies and
         objectives of the Company.


                                  ARTICLE II.


2.1      Definitions.        Except where the context otherwise indicates, the
         following definitions shall apply:

         a.    'Award' shall  mean  the dollar amount of incentive  compensation
               payable to a Participant under the Plan for a Plan Year.

         b.    Subject to the exceptions hereinafter set forth, 'Base Pay' shall
               be the base salary  of the Participant for a specified  period in
               effect  on  January  1  of a Plan Year without  giving  effect to
               amounts which are paid or accrued on behalf of  such  Participant
               under  deferred  compensation  (other  than compensation deferred
               at the Participant's election pursuant to the Company's  Elective
               Deferral Plan), retirement or other benefit plans or arrangements
               of  the  Company  or a Subsidiary.  In the event that during  the
               course  of a  Plan  Year  a  Participant receives a  promotion or
               demotion or an employee of the Company or a Subsidiary  becomes a
               Participant under the Plan pursuant to the  provisions of Section
               3.2  hereof, the Company's  Chief  Executive Officer, in his sole
               and absolute discretion, may specify that the base salary of such
               Participant for a specified period in effect on a date other than
               January 1  of  the Plan Year shall be such Participant's Base Pay
               for purposes of determinations  made for the Plan Year.

         c.    'Beneficiary'  shall mean the  person,  persons,  trust or trusts
               entitled  by Will or the  laws of  descent  and  distribution  to
               receive the benefits specified under the Plan in the event of the
               Participant's death prior to the payment of an Award.

         d.    'Board of Directors'  shall  mean  the  Board of Directors of the
               Company.

         e.    'Category I Participants'  shall be all Participants who are so
               categorized under Article III hereof.

         f.    'Category II Participants'  shall  be all  Participants  who  are
               so categorized under Article III hereof.

         g.    'Chief Executive Officer' shall mean  the Chief Executive Officer
               of the Company.

         h.    'Compensation Committee' shall mean the Compensation Committee of
               Directors  of the  Company,  appointed  by the Board of Directors
               from among its  members,  no member of which shall be an employee
               of the Company or a Subsidiary.

         i.    'Company' shall mean Halliburton Company and its successors.

         j.    'Corporate  Target' shall mean the level of  performance  for the
               Company and its  Subsidiaries  for a Plan Year on a  consolidated
               basis  which  the  Compensation   Committee  determines  must  be
               attained for a Participant to receive a Maximum Incentive Payout.

         k.    'Corporate  Threshold' shall mean a minimum level of performance,
               determined for the Company and its  Subsidiaries  for a Plan Year
               on a  consolidated  basis,  which must be attained for any Awards
               for such Plan Year to be made pursuant to the Plan.

         l.    'Executive  Committee' shall mean the Executive Committee  of the
               Company.

         m.    'Incentive Compensation Spread' shall be the difference  obtained
               by  subtracting  the  Minimum  Incentive  Payout from the Maximum
               Incentive  Payout.

         n.    'Individual Performance Award'  shall be equal to one (1) month's
               Base  Pay  for  a  Participant  or such part thereof as the Chief
               Executive  Officer,  in his absolute discretion, shall determine.
               Notwithstanding the preceding sentence or any other provisions of
               this Plan which provide that certain determinations  with respect
               to Individual  Performance  Awards  shall  be  made  by the Chief
               Executive  Officer  (including,  but  not  limited  to,  defining
               qualitative  performance  criteria  and  the extent to which each
               Participant   shall   have   satisfied   his  or  her  individual
               performance criteria), such  determinations  may be made by those
               to   whom   the   Chief  Executive  Officer  has  delegated  such
               responsibility and authority in writing.  Any determinations made
               pursuant  to  such  a  delegation  shall  have the same force and
               effect as if made by the Chief Executive Officer.

         o.    'Maximum  Incentive  Payout' shall mean the maximum  amount of an
               Award payable to a Participant.  The Maximum Incentive Payout for
               a  Category  I  Participant  shall be an amount  equal to six (6)
               month's  Base Pay.  For  Categor  II  Participants,  the  Maximum
               Incentive  Payout  shall be an amount  equal to three (3) month's
               Base Pay  (without  giving  effect to an  Individual  Performance
               Award).

         p.    'Minimum  Incentive  Payout' shall mean the minimum  amount of an
               Award  payable  to a  Participant.  The  amount  of  the  Minimum
               Incentive  Payout for Category I Participants  is an amount equal
               to one (1) month's Base Pay. For  Category II  Participants,  the
               Minimum  Incentive  Payout  shall be an amount  equal to one half
               month's Base Pay.

         q.    'Participant'  shall  mean  any  employee  of  the  Company  or a
               Subsidiary  who   participates  in   the  Plan  pursuant  to  the
               provisions of Article III hereof.

         r.    'Performance Target Range' shall mean the Corporate Target  minus
               the  Corporate  Threshold.

         s.    'Plan'   shall  mean  the  Halliburton  Company  Annual Incentive
               Compensation Plan, as the same may be from time to time amended.

         t.    'Plan Year' shall mean the calendar year ending December 31, 1991
               and each subsequent calendar year thereafter.

         u.    'Subsidiary'  shall  mean  any  corporation 50 percent or more of
               whose  voting  power  is  owned  directly  or  indirectly  by the
               Company.

         v.    'Termination  of   Service'  shall   mean  the   cessation  of  a
               Participant's employment with the Company or a Subsidiary for any
               reason.

         w.    'Total   Incentive   Compensation  Opportunity'  shall  mean  the
               aggregate  amount of  compensation which may be received annually
               by a Participant under the Plan.


                                  ARTICLE III.


3.1      Participation.  Members of the Executive Committee and Company officers
         (other than  officers of the Energy  Services  Division  and  assistant
         officers)  shall be  Participants  annually.  In  addition,  such other
         management  employees as may be annually  designated as Participants by
         the Company's Chief Executive  Officer shall be Participants  under the
         Plan.   Members  of  the  Executive   Committee  shall  be  Category  I
         Participants. All other Participants shall be Category II Participants.
         The  provisions  of this Section are subject to the  provisions  of the
         next succeeding Section.

3.2      Changes in  Participants  During  Plan Year.  If during the course of a
         Plan Year an  employee  of the  Company or a  Subsidiary,  by reason of
         having been newly elected to the  Executive  Committee or as an officer
         of the Company,  would otherwise have been a Participant or a different
         category of Participant had such employee's status been the same at the
         beginning of the Plan Year, the Chief  Executive  Officer  (except with
         respect to any actions or status changes  involving  himself,  in which
         case the determination shall be made by the Compensation Committee), in
         his sole and absolute discretion, may determine (i) in the case of such
         newly  elected  member of the Executive  Committee or Company  officer,
         whether  participation or a change in category should be effective with
         such  election or delayed until the inception of the next Plan Year and
         (ii) where applicable,  appropriate and equitable  modifications in the
         Total  Incentive  Compensation   Opportunity  and  in  the  qualitative
         performance   criteria  the  attainment  of  which  may  result  in  an
         Individual  Performance  Award.  In the event that during the course of
         the Plan  Year,  a person is newly  hired by, or  transferred  to,  the
         Company in a management  position and the Chief Executive Officer feels
         such  employee's  participation  in the  Plan  is  merited,  the  Chief
         Executive  Officer  shall  designate  in  writing  such  employee  as a
         Participant   in  the  Plan  for  such   Plan   Year  and  make   those
         determinations  which he deems  appropriate  of the type  specified  in
         clause (ii) of the preceding sentence.

                                  ARTICLE IV.

4.1      Administration.  Performance  requirements,  as more fully discussed in
         Article V hereof, shall be set by the Compensation Committee and, where
         applicable, the Chief Executive Officer. As to Category I Participants,
         the Compensation  Committee shall have the  responsibility  to construe
         and  interpret  the Plan;  to  prescribe,  amend and rescind  rules and
         regulations  relating to the administration of the Plan and to make all
         other  determinations  necessary or advisable for administration of the
         Plan. With respect to Category II Participants, the Executive Committee
         shall  have the  duties  with  respect  to the  Plan  set  forth in the
         preceding  sentence  unless it shall  delegate such duties to the Chief
         Executive  Officer.   Subject  only  to  compliance  with  the  express
         provisions hereof, the Compensation Committee,  the Executive Committee
         and the Chief  Executive  Officer  may act in their  sole and  absolute
         discretion with respect to the Plan.


                                   ARTICLE V.


5.1      Performance  Requirements.  Prior to the last day of  February  of each
         Plan Year, the Compensation Committee will approve the Corporate Target
         for the  Plan  Year  taking  into  consideration  the  benefits  to the
         Company's  shareholders  upon  achievement  of  such  Corporate  Target
         relative to the aggregate cost of the Awards  potentially  payable as a
         result thereof,  and will approve the Corporate Threshold for such Plan
         Year which must be achieved in order for any Award under the Plan to be
         payable.  The  Corporate  Target  may be  based  on such  measurements,
         financial or otherwise,  as the Compensation Committee may from time to
         time deem appropriate.  If the Compensation Committee deems a change in
         the Company's business, operations, corporate or capital structure, the
         manner  in  which  it  conducts  business  or any  other  change  to be
         extraordinary  and material and  determines  that,  as a result of such
         change, the established  Corporate Target or Corporate  Threshold is no
         longer  appropriate,  it may modify the  Corporate  Target or Corporate
         Threshold as deemed  appropriate and equitable in its sole and absolute
         discretion.

         Prior  to the last  day of  February  of each  Plan  Year,  qualitative
         performance  criteria  shall  also be defined  by the  Company's  Chief
         Executive  Officer for each Category II Participant,  the attainment of
         which  shall  result  in an  Individual  Performance  Award,  if  other
         conditions  precedent  to the  payment of such Award under the terms of
         the Plan are satisfied.

         As soon as practicable,  after the end of a Plan Year, the Compensation
         Committee  will  determine  whether  the  Corporate  Threshold  and the
         Corporate  Target were attained and the Chief Executive  Officer of the
         Company  shall  determine  the  extent to which  each  Participant  has
         satisfied his or her individual  performance  requirements for purposes
         of receiving an Individual  Performance  Award.  Determinations  of the
         Compensation  Committee  and  the  Chief  Executive  Officer  shall  be
         conclusive and binding on all Participants and Beneficiaries.

                                  ARTICLE VI.


6.1      a.    Awards.  Participants,  depending  upon whether they are Category
               I Participants  or  Category  II  Participants,   shall  have  a
               Total  Incentive Compensation  Opportunity  through  Awards
               under  the Plan  for a Plan  Year as follows:

               1.   Awards for Category I and Category II Participants.  Subject
                    to the provisions of  Section 6.1.a.4. below, the amount  of
                    an Award to a Participant shall be determined as follows:

                    (a)  If the Corporate Threshold is achieved, the Participant
                         shall receive the Minimum  Incentive Payout  applicable
                         to such Participant's category.
                    (b)  If the Corporate  Target is achieved,  the  Participant
                         shall receive the Maximum  Incentive Payout  applicable
                         to such Participant's category.
                    (c)  If  the  level  of  performance  achieved  exceeds  the
                         Corporate Threshold  but  is  less  than  the Corporate
                         Target, a  Participant shall receive an amount equal to
                         the   Minimum  Incentive  Payment  applicable  to  such
                         Participant's  category  plus  that  percentage  of the
                         Incentive  Compensation  Spread  which  is equal to the
                         percentage  of  the Performance  Target  Range  that is
                         actually earned or achieved, not to exceed 100 percent.

               2. Individual  Performance  Awards for Category II  Participants.
               Subject to the  provisions of Section  6.1.a.4 below and provided
               that such Participant attains the prescribed level of achievement
               of   qualitative   performance   requirements,   a  Category   II
               Participant shall receive an Individual Performance Award.

               3. Discretionary  Awards.  Notwithstanding  any  other  provision
               contained herein to the contrary, the Compensation Committee may,
               in  its sole discretion,  make such other or additional Awards to
               a Participant as it shall deem  appropriate.

               4.  Termination  of Service During Plan Year. If a Termination of
               Service occurs with respect to a Participant  prior to the end of
               a Plan Year, following the end of the Plan Year and provided that
               an Award  would have been  payable to the  Participant  under the
               terms of the Plan had a Termination of Service not occurred prior
               to the end of the Plan Year,  the  Compensation  Committee or the
               Chief Executive Officer (depending on whether the Participant was
               a  Category  I or  Category  II  Participant)  in its or his sole
               discretion may  determine,  through  proration or otherwise,  the
               amount which s uch Participant or Beneficiary should receive.  In
               the  case of a  Category  II  Participant,  the  Chief  Executive
               Officer in determining  whether an Individual  Performance  Award
               should be made to the  Participant or Beneficiary  shall estimate
               in his sole and absolute  discretion  the level of achievement of
               qualitative performance  requirements by the Participant prior to
               his or her Termination of Service.  Notwithstanding the preceding
               provisions of this subsection, in the event that the Compensation
               Committee,  Executive  Committee or Chief Executive  Officer,  as
               applicable, determines in its or his sole and absolute discretion
               that  such  Participant  has  entered  or  plans  to  enter  into
               competition  with the Company or a Subsidiary,  the  Compensation
               Committee,  Executive  Committee or Chief Executive  Officer,  as
               applicable,  may direct  that no Award  payment  shall be made to
               such terminated Participant.

          b.   Payment of Awards.

               1.   Except  as  otherwise  provided  in  Section 6.1.b.2. below,
                    each Participant shall receive payment,  in a cash lump sum,
                    of his or  her Award as soon as  practicable  following  the
                    determinations with respect thereto made pursuant to Section
                    6.1.a.  hereof.

               2.   With respect to  a  Participant who is a 'covered  employee'
                    for purposes of Section 162(m) of the Internal  Revenue Code
                    of 1986, as  amended,  payment  of  that portion of an Award
                    which would  otherwise cause such Participant's compensation
                    to  exceed  the  limitation  on  the  amount of compensation
                    deductible  by the Company in any taxable  year  pursuant to
                    such  Section  162(m),   shall   be   deferred   until  such
                    Participant is no longer a 'covered employee.'

          c.   Tax  Withholding.  The Company or  employing  Subsidiary  through
               which  payment  of an Award is to be made shall have the right to
               deduct  from any payment  hereunder  any  amounts  that  Federal,
               state,  local or foreign tax law  requires  with  respect to such
               payment.


                                  ARTICLE VII.

7.1      Rights of Participants and Beneficiaries

         a.    Neither status as a Participant or Beneficiary shall be construed
               as a commitment  that any Award will be made under the Plan.

         b.    Nothing contained in the Plan or in any  document  related to the
               Plan or to any Award shall confer upon any Participant  any right
               to continue as an employee or in the employ of the  Company  or a
               Subsidiary   or   constitute   any   contract   or  agreement  of
               employment or interfere in any way with  the right of the Company
               or a  Subsidiary  to  reduce such persons compensation, to change
               the position held by  such person or to terminate the  employment
               of such person,  with or without  cause.

          c.   No  benefit  payable  under,  or  interest in, this Plan shall be
               subject   in   any  manner  to  anticipation,  alienation,  sale,
               transfer, assignment,  pledge, incumbrance or charge and any such
               attempted  action  shall  be void and no such benefit or interest
               shall be,  in  any  manner,  liable  for,  or  subject  to debts,
               contracts,   liabilities   or   torts   of   any  Participant  or
               Beneficiary.  Any  a ttempt  at  transfer,  assignment  or  other
               alienation   prohibited  by  the  preceding   sentence  shall  be
               disregarded and  all amounts payable hereunder shall be paid only
               in accordance with the provisions of the Plan.

          d.   No Participant, Beneficiary or other person shall have any right,
               title or interest in any  fund or in any specific asset of the
               Company or any Subsidiary by reason of any Award hereunder. There
               shall be  no  funding  of  any  benefits which may become payable
               hereunder.  Nothing  contained  in  the  Plan (or in any document
               related  thereto), nor the creation or adoption of the Plan,  nor
               any  action  taken  pursuant  to the provisions of the Plan shall
               create,  or be  construed  to  create, a trust of any  kind  or a
               fiduciary relationship   between  the  Company  or  a  Subsidiary
               and  any Participant, Beneficiary or other person.  To the extent
               that a Participant, Beneficiary or other person acquires  a right
               to  receive  payment  with  respect to an Award  hereunder,  such
               right  shall be  no  greater  than  the  right of  any  unsecured
               general creditor of the Company or  any Subsidiary.  All  amounts
               payable under the Plan shall be paid  from the general  assets of
               the Company or a  Subsidiary,  as  applicable,  and no special or
               separate fund or deposit shall be established and no  segregation
               of assets  shall  be  made to  assure  payment  of such  amounts.
               Nothing  in  the  Plan  shall  be  deemed  to give  any  employee
               any  right  to  participate in  the  Plan  except  in  accordance
               herewith.

7.2      Governing Law. The Plan and all related documents shall be governed by,
         and construed in accordance  with,  the laws of the State of Texas.  If
         any provision hereof shall be held by a court of competent jurisdiction
         to be invalid and unenforceable,  the remaining  provisions of the Plan
         shall continue to be fully effective.

7.3      Amendment and Termination of Plan and Awards.  Notwithstanding anything
         herein to the contrary,  the  Compensation  Committee may, at any time,
         terminate  or, from time to time amend,  modify or suspend the Plan. No
         Award  may be made  during  any  suspension  of the Plan or  after  its
         termination.

7.4      Effective Date. The Plan shall become  effective as of January 1, 1991,
         for Plan Years  beginning on or after January 1, 1991, and shall remain
         in effect until such time as it may be  terminated  pursuant to Section
         7.3.