Retirement Agreement - Halliburton Co. and Ken R. LeSuer


                               September 29, 1998



Mr. Ken R. LeSuer
Vice Chairman
Halliburton Company
2500 Halliburton Center
5151 San Felipe
Houston, Texas 77056

Dear Ken:

         You have  announced your  intention to take early  retirement  from the
employ of the Company  effective  January 1, 1999. We appreciate  your almost 40
years of loyal and dedicated service to the Company. I especially appreciate the
advice and support you have given to me over the past three years since I joined
the Company.

         Our  discussions  have included the terms of your continued  employment
prior to your retirement,  the performance by you of certain consulting services
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 and its affiliates. It is our
mutual understanding that the terms of agreement are as hereinafter set forth.

                                        I

                     CONTINUED EMPLOYMENT; EARLY RETIREMENT

         A. Position and Salary; Retirement.  During the period from the date of
your execution of this agreement (the 'Effective Date') through the closing date
(the 'Closing Date') of the merger transaction with Dresser Industries, Inc. you
will  continue to be employed as Vice  Chairman of the Company and will continue
as a member of the Executive Committee of the Company.  Effective on the Closing
Date,  you 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.),
except for those which the Chief Executive  Officer of the Company  specifically
requests your service thereon to continue, but in no case after January 1, 1999.
Following the Closing Date,  you will be provided with an office  located on the
25th floor of Halliburton  Center and you will vacate your current office within
10 business days after being informed of the location of your new office. During
the period  beginning  with the Closing Date through  January 1, 1999,  you will
continue to be employed as an employee of the Company, on which latter date your
employment will terminate. Your salary during the period from the Effective Date


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hereof through  January 1, 1999 (the  'Employment  Period') will continue at the
present rate per month, payable twice monthly following  performance of service.
You will also be paid your accrued  vacation through December 31, 1998. 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 'Elective  Deferral Plan'). You acknowledge that the payments
made pursuant to this paragraph A and paragraph C below of this Section I are in
full  satisfaction  of all wages,  benefits and other  compensation  owed by the
Company and its  affiliates  for your  employment or service to your  retirement
date.

         Since your employment during 1999 will be limited to one day, you agree
to waive any right you may have for  vacation pay for 1999 and not to assert any
claim with respect thereto.  You further  understand and agree that you will not
be designated as a participant in the Performance Pay Plan (as defined below) or
the Deferred Compensation Plan (as defined below) for the 1999 plan year.

         As of the close of  business  on January  1, 1999,  you will take early
retirement  as an employee of the Company and  promptly  thereafter  vacate your
office space at Halliburton Center in Houston.

         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 $625,000 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 10-year period commencing after the 1998 allocations
to your SERP and ERISA Offset Accounts have been made.

         C. Annual  Performance  Pay  Plan.  You will  receive the amount of any
Reward that may be payable under the  Halliburton  Annual  Performance  Pay Plan
('Performance  Pay  Plan')  for the 1998 Plan  Year,  such  Reward to be paid in
accordance  with the  applicable  provisions of such Plan. 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.


                                       3


         F. Retiree  Medical  Plan.  Following  your  retirement,  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
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
January 2, 1999 and ending December 31, 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

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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
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,   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.    Office  space  and  part-time  secretarial  support in Company
                  owned  or leased  office space  as may  be  mutually agreeable
                  to you and the Company or, failing

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                  mutual  agreement at  any time as  to Company  owned or leased
                  space, $1,750  per  month  (prorated  as  appropriate)  as  an
                  allowance  for rental  office space  and part-time secretarial
                  support.

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

            3.    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.

         C. Further Release.  In recognition that your employment  will continue
through  January 1,  1999, you  agree to  execute and deliver on your retirement
date a separate  release  containing language substantially  similar to that set
forth  in  Paragraph  B of  this  Section,  in  order  to release any claim that
may arise during the Employment Period.

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                                       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.
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 employment  during the Employment  Period 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/ Ken R. LeSuer
----------------------------
      Ken R. LeSuer


Dated:  October 20, 1998
      ----------------------