Retirement Agreement - Halliburton Co. and Dale P. Jones


                               September 29, 1998



Mr. Dale P. Jones
Vice Chairman
Halliburton Company
500 North Akard Street
3600 Lincoln Plaza
Dallas, TX   75201

Dear Dale:

         You have  announced your  intention to take early  retirement  from the
employ of the  Company on  October  2, 1998 and to resign as a  Director  of the
Company on the earlier of October 2, 1998 or the  effective  date of the Dresser
merger.  We appreciate your more than 33 years of loyal and dedicated service to
the Company.  I especially  appreciate the counsel and support you have given to
me over the past three years since I joined the Company.

         Our discussions have included the terms of certain consulting  services
to be performed by you  following  your  retirement  and your  forbearance  from
taking certain  actions,  all as more  particularly  set forth below. As used in
succeeding  paragraphs  of  this  agreement,  the  'Company'  means  Halliburton
Company.  It is our  mutual  understanding  that the terms of  agreement  are as
hereinafter set forth.

                                        I

                                EARLY RETIREMENT

         A. Retirement.  On October 2, 1998, you will retire from the service of
the  Company and will  voluntarily  resign as an officer of the Company and from
all other positions,  posts,  offices and assignments with the Company or any of
the  Company's  affiliates,  including,  but not limited  to, your  service as a
member  of  the  Executive  Committee  and  as  a  Trustee  of  the  Halliburton
Foundation,  Inc. You will also voluntarily  resign as a member of the Company's
Board of  Directors  on the  earlier to occur of October 2, 1998 or the  closing
date of the merger transaction with Dresser Industries, Inc.

         Your salary will continue  through your  retirement date at the present
rate per month, payable twice monthly following performance of service. You will
also be paid your accrued vacation through such date. All such payments shall be
less customary  withholding  for taxes and applicable  deductions,  and shall be
subject to any  elections  under the  Halliburton  Elective  Deferral  Plan (the


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'Elective  Deferral  Plan').  You agree that,  within 5 business days after your
retirement date, you will vacate your office space at 3600 Lincoln Plaza.

         B. Senior Executives' Deferred  Compensation Plan. On December 31, 1998
your Deferred  Compensation  Account ('SERP Account') in the Senior  Executives'
Deferred  Compensation Plan (the 'Deferred  Compensation Plan') will be credited
with $500,000 in  supplemental  retirement  benefits for the 1998 plan year. The
applicable  accounts  under such Plan will also be credited for such period with
amounts equal to (i) reductions in  contributions to which you would be entitled
under  the  Halliburton  Profit  Sharing  and  Savings  Plan  by  reason  of the
limitations  imposed  under the  Internal  Revenue Code or by reason of elective
deferrals under the Elective  Deferral Plan,  ('ERISA Offset  Account') and (ii)
interest  earned on account  balances in accordance  with the provisions of such
Plan. Upon approval of the administrative  committee appointed to administer the
Deferred  Compensation  Plan,  you will receive the amounts in your  accounts in
monthly   installments   over  a  24-month  period  commencing  after  the  1998
allocations to your SERP and ERISA Offset Accounts have been made.

         C. Annual  Performance  Pay Plan. The amount of any Reward earned under
the Halliburton  Annual  Performance Pay Plan  ('Performance  Pay Plan') for the
1998 Plan Year shall be prorated through the date of your retirement and paid in
accordance with the applicable  provisions of such Plan. Any adjustments made by
the  Compensation  Committee of Directors to the  performance  goals  previously
established  by such  Committee for the 1998 Plan Year will be applicable to the
calculation  of your Reward for such Plan Year. You will also receive the unpaid
amounts of any Rewards for prior Plan Years which will be paid as provided under
the Plan.  Such  payments  will be subject to any  elections  under the Elective
Deferral Plan and customary withholding for taxes.

         D. Vesting of Restricted  Stock.  Effective with your retirement and on
such  date,  restrictions  on  shares of  Common  Stock  issued to you under the
Halliburton  Company Career  Executive  Incentive Stock Plan and the Halliburton
Company 1993 Stock and Long-Term Incentive Plan (the '1993 Plan') which have not
theretofore lapsed will lapse in their entirety.

         E. Vesting of Stock Options.  Your stock options granted under the 1993
Plan will vest in  accordance  with the terms of your  respective  stock  option
agreements.  To the  extent  that,  after  the  date  of  your  retirement,  the
Compensation  Committee of Directors  approves any changes to outstanding  stock
options  applicable  to your stock  option  grants  such  option  grants will be
amended to reflect any such changes or, if  amendment  thereof is not legally or
administratively  feasible,  you  will  receive  a  cash  payment  in an  amount
reasonably  determined  to be the present  value of such change as it relates to
your outstanding stock options.

         F. Retiree Medical Plan.  You will be eligible  to  participate  in the
Halliburton  Retiree  Medical Plan  under the same terms and conditions as other
Company early retirees.

         G. Other Benefit  Programs.  Payments,  benefits  or accruals set forth
in paragraphs A through F above are in addition  to any  payments,  benefits  or

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accruals  to  which  you may be  entitled  under  the Halliburton Profit Sharing
and  Savings Plan, the Halliburton  Retirement Plan, the Elective  Deferral Plan
and any welfare benefit plans in accordance with their respective terms.

                                       II

             CONSULTING SERVICES FOR THE COMPANY AND ITS AFFILIATES

         A. Consultation  and Business  Promotion.  During  the period beginning
October 2, 1998 through  September 30, 2000 ('Consulting  Period'),  you will be
retained as a consultant to the Company and its affiliates. You will, during the
Consulting  Period,  fulfill  all of your prior  customer  commitments  and,  as
reasonably  requested  by the Chief  Executive  Officer of the  Company,  aid in
business promotion, cooperate in customer entertainment,  assist with respect to
special  problems or projects  and consult  with and advise the Chief  Executive
Officer of the  Company or other  members of  management  of the Company and its
business units in your particular  areas of expertise.  In assisting the Company
and the aforesaid  units, you will not be required to devote more than one-third
of your time thereto, although travel outside Texas may be required. Your status
while performing duties hereunder will be that of an independent  contractor and
not that of a Company employee.

         B. Furtherance of Company Interests.  During the Consulting Period, you
will use your best  efforts to enhance the image of the  Company,  its  business
units  and their  respective  managements  (provided  that  such  efforts,  when
combined  with the  services  specified in paragraph A of this Section II do not
require you to devote more than  one-third of your time  thereto) and to refrain
from taking any action or making any statements inconsistent therewith.

         C. Entering  Into  Competition  and Conflicts of Interest.  Without the
prior written approval of the Chief Executive  Officer of the Company,  you will
not, during the Consulting  Period,  accept payment from, be employed by, become
an officer, director,  partner,  principal,  employee or consultant to or have a
substantial  equity  ownership in, any  corporation,  partnership or business in
competition with the Company or any of its affiliated  companies.  Once granted,
any such approval may be  subsequently  withdrawn if (i) it is determined by the
Chief Executive Officer of the Company, in his sole discretion,  that the nature
of your  relationship  with such competitor is in conflict with the Company's or
any of its  affiliates'  interests;  (ii) you are  notified  in  writing of such
determination and (iii) you do not immediately  following receipt of such notice
terminate  your  relationship  with such  competitor.  Upon  withdrawal  of such
approval,  the  Company's  obligation  to pay  consulting  fees as set  forth in
paragraph E below will terminate. Because of the nature and scope of your duties
with the Company during your employment, we have agreed that it is necessary and
reasonable for the prohibition set forth in the first sentence of this paragraph
to be applied nationwide. After the end of the Consulting Period, you may engage
in the prohibited activities described in this paragraph to the extent that such
activities are consistent with your remaining  obligations  under paragraph D of
Section II of this agreement.  The purchase by you, directly or indirectly,  for
investment of the publicly traded stock of a competitor of the Company or any of
its  affiliates  representing  not  more  than  one  percent  (1%) of the  total
outstanding  stock of such  competitor or the holding thereof will not be deemed

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to constitute the  acquisition or holding of a substantial  equity  ownership in
such competitor for the purposes of this paragraph.

         D. Confidential  Information.  You  will  not  at any  time after  your
retirement, without prior written approval of the Chief Executive Officer of the
Company,  disclose  to any  unauthorized  person or competitor any  confidential
information  or  confidential  knowledge  as to the  business and affairs of the
Company or any of its affiliates which you have  received  during  the course of
your  employment  with  the Company  or  which  you may receive in the course of
consulting or advising hereunder.

         E. Consulting  Fees. In  consideration  of  the foregoing but expressly
subject to the provisions of paragraph F below,  during  the Consulting  Period,
you  will  receive  consulting  fees in  monthly payments of $20,834 on the last
business day in the month for which payment is to be made.

         F. Conditions   Precedent  to  Payment   of  Consulting  Fees;   Death.
Notwithstanding anything to the contrary contained in this agreement, payment of
consulting fees pursuant to paragraph E of this Section will be made only if the
conditions  set  forth in  paragraphs  A, B, C and D of this  Section  are fully
satisfied at the time the payment is payable.  Should you become  disabled  and,
therefore,  be unable to devote up to one-third of your time to the  performance
of consulting services as you may be required to perform pursuant to paragraph A
of this Section and such disability shall continue for a three-month period, the
Company's  obligation to pay consulting fees as set forth in paragraph E of this
Section will terminate at the end of such three-month period.

         If during  the  Consulting  Period,  you  should  die,  any  amounts of
consulting fees then unpaid for any period of time prior to your death,  will be
paid to your  estate or personal  representative,  plus the amount of any unpaid
expenses.

         G. Participation  in  Other Benefit  Programs.  Payments to be received
pursuant to Paragraph E of this Section II are in addition to any payments which
you may be  receiving  or which you are  entitled to receive  under the Deferred
Compensation  Plan,  the  Halliburton  Profit  Sharing  and  Savings  Plan,  the
Halliburton  Retirement Plan, the Elective Deferral Plan and the Performance Pay
Plan.

         H. Office Space, Secretarial Support, Club Memberships, Expenses,  Etc.
During  the  Consulting  Period  and expressly  contingent on  your not being in
breach of  any of the  conditions  specified in paragraphs A, B, C and D of this
Section II, you will be entitled to:

            1.   $1,750 per month as an allowance for office space and part-time
                 secretarial support.

            2.   Office furnishings and equipment (including  computer equipment
                 for access to the Company's network).

            3.   Retention,  at  the  Company's  expense, of  memberships in the
                 Dallas Country Club and the Dallas Petroleum Club.

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            4.   During each 12-month period, one customer trip to the Company's
                 facilities  at  Duck  Key,  Florida,  and one  hunting trip for
                 Company customers.

            5.   Reimbursement   for    reasonable    and    necessary   travel,
                 entertainment   and   office  expenses   which  you   incur  in
                 performance of  the duties  specified in paragraph  A  of  this
                 Section promptly following your submission to the Company of an
                 appropriately  documented  expense claim.

                                       III

                                     RELEASE

         A. Representation.  You represent,  warrant and agree that you have not
filed any claims, appeals, complaints,  charges or lawsuits against the Company,
its  affiliates  or any of  their  respective  employees,  officers,  directors,
shareholders,   agents  and  representatives  (collectively,   the  'Halliburton
Parties')  with any  governmental  agency or court and that you will not file or
permit to be filed or accept benefit from any claim, complaint or petition filed
with  any  court  by you or on your  behalf  at any  time  hereafter;  provided,
however,  this shall not limit you from filing an action for the sole purpose of
enforcing your rights under this agreement.  Further,  you represent and warrant
that no other person or entity has any interest in, or assignment of, any claims
or causes of action you may have against any Halliburton Party and which you now
release in their entirety.

         B. Release.  You  agree to release,  acquit and discharge and do hereby
release,  acquit and discharge the Company, its affiliates,  and all Halliburton
Parties, collectively and individually, from any and all claims and from any and
all causes of action, of any kind or character,  whether now known or not known,
you may have against any of them,  including,  but not limited to, (i) any claim
for  benefits,  compensation,  remuneration,  salary,  or wages,  and the costs,
damages and expenses  related  thereto;  and (ii) all claims or causes of action
arising  from  your  employment,  termination  of  employment,  or  any  alleged
discriminatory  employment  practices,  including but not limited to any and all
claims or causes of action  arising under the Age  Discrimination  in Employment
Act, as amended  ('ADEA'),  29 U.S.C. ss. 621, et seq. and any and all claims or
causes of action arising under any other federal, state or local laws pertaining
to discrimination in employment or equal employment opportunity; except that the
parties agree that your release,  acquittal and discharge  shall not relieve the
Company from its obligations under this agreement.  This release also applies to
any claims or causes of action of the types  specified  in clauses  (i) and (ii)
above which are brought by any person or agency or class  action under which you
may have a right or benefit.

                                       IV

                               GENERAL PROVISIONS

         A. Non-assignability. This agreement shall be binding upon and inure to
the benefit of the  respective  successors  in interests of the parties  hereto.

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Notwithstanding the foregoing, the rights to receive payments hereunder pursuant
to  Section  II  hereof  are  hereby   expressly   declared   to  be   personal,
non-assignable  and  non-transferable  except by will or  intestacy,  and in the
event of any attempted assignment or transfer of any such rights contrary to the
provisions  hereof, the Company will have no further liability for payments with
respect thereto hereunder.

         B. Injunctive  and Other Relief.  You recognize that the services to be
rendered  hereunder  are  unique  and that in the  event of your  breach  of the
conditions to be performed by you under  paragraphs A and B of Section II hereof
or in the event  that you take  such  actions  as are  prohibited  hereunder  in
paragraphs  C and D of such  Section,  the Company  will be  entitled,  if it so
elects,  to  institute  and  prosecute  proceedings  in any  court of  competent
jurisdiction,  in law or in  equity,  to obtain  damages  for any breach of this
agreement or to enforce the specific  performance  thereof or to enjoin you from
taking the actions prohibited in paragraphs C and D of Section II hereof.

         C. Governing  Law  and  Amendment.  This  letter  contains  the  entire
agreement between the parties and will be  governed under  the laws of the State
of Texas.  It may not be amended orally, but only by agreement in writing signed
by each of the parties.

         If you agree that the above constitutes our  understanding  relating to
your retirement and the performance of consulting services during the Consulting
Period,  please so indicate by dating and signing  both  duplicate  originals of
this letter and return one duplicate original to me.

                                  Very truly yours,




                                  /s/ Dick Cheney



ACCEPTED AND AGREED TO:



/s/  Dale P. Jones
--------------------------
     Dale P. Jones


Dated:   9/29/98
      --------------------